Sensex rallies 760 pts, Nifty above 16,270; NSE VIX drops to 17.16

The frontline indices ended near the day`s high with robust gains on Monday, tracking positive global cues. The Nifty ended above the 16,250 level. IT shares rallied, snapping a five-day losing streak. Meanwhile, autos and healthcare stocks corrected.

The benchmark S&P BSE Sensex, gained 760.37 points or 1.41% to 54,521.15. The Nifty 50 index added 229.30 points or 1.43% to 16,278.50.

Indusind Bank (up 4.36%), Bajaj Finserv (up 3.46%), Axis Bank (up 3.31%) and Kotak Mahindra Bank (up 3.25%) boosted the indices.

In the broader market, the S&P BSE Mid-Cap index rose 1.49% while the S&P BSE Small-Cap index added 1.39%.

The market breadth was strong. On the BSE, 2,350 shares rose and 1,095 shares fell. A total of 167 shares were unchanged.

The NSE`s VIX index, a gauge of the market`s expectation of volatility over the near term, dropped 2.48% to 17.16.

Economy:

India`s foreign exchange reserves declined by $8.062 billion to a 15-month low of $580.252 billion in the week ended 8 July 2022, according to the Reserve Bank of India`s Weekly Statistical Supplement released on Friday, 15 July 2022.

During the reporting week ended 8 July 2022, the decrease in the reserves was on account of a fall in the Foreign Currency Assets (FCA), a major component of the overall reserves, and in the gold reserves, RBI said. FCA was down by $6.656 billion to $518.089 billion in the reporting week. FCA includes the effect of appreciation or depreciation of non-US units like the euro, pound and yen held in the foreign exchange reserves. Gold reserves fell by $1.236 billion to $39.186 billion.

In the reported week, the Special Drawing Rights (SDRs) with the International Monetary Fund (IMF) dropped by $122 million to $18.012 billion. The country`s reserve position with IMF decreased by $49 million to $4.966 billion in the reporting week, the RBI data showed.

Numbers to Track:

The yield on India`s 10-year benchmark federal paper rose to 7.437% as compared with 7.438% at close in the previous trading session.

In the foreign exchange market, the rupee was lower against the dollar. The partially convertible rupee was hovering at 79.9800, compared with its close of 79.8200 during the previous trading session.

MCX Gold futures for 5 August 2022 settlement rose 0.66% to Rs 50,437.

The US Dollar index (DXY), which tracks the greenback`s value against a basket of currencies, declined 0.64% to 107.37.

In the commodities market, Brent crude for September 2022 settlement rose $1.84 or 1.86% at $100.94 a barrel.

Global Markets:

The Dow Jones futures were up 304 points, indicating a positive opening to equities on Wall Street today.

Shares in Europe and Asia advanced on Monday as investors looked ahead to announcements later in the week. Japan`s market was closed for a holiday on Monday. Oil prices dropped as China`s rising COVID cases renew fuel demand concerns.

US stocks closed sharply higher on Friday fueled by upbeat earnings, strong economic data and easing fears of a larger-than-expected interest rate hike by the Federal Reserve.

Finance chiefs at the Group of 20 meeting in Bali "strongly condemned" the war in Ukraine and expressed concern over an "alarming increase of food and energy insecurity." Many members agreed that the recovery of the global economy has slowed and is facing a major setback as a result of Russia`s war against Ukraine, which was strongly condemned. Broadly, all G-20 central banks agreed to tackle inflation and calibrate monetary policies that would rein in soaring prices.

Global interest rates will likely keep rising until 2023 when heated prices will begin to cool in response to the actions from central banks, according to Kristalina Georgieva, managing director of the International Monetary Fund. Commodity prices, such as oil, may have leveled out and started sliding in recent months, but Georgieva said that they will do so in response to recession risks and not necessarily because inflation has been tamed.

Buzzing Segment:

The Nifty IT index jumped 3.17% to 27,322.95. The index slumped 6.25% in the past five sessions.

Larsen & Toubro Infotech (up 6.2%), Mindtree (up 5.48%), Infosys (up 4.22%), Tech Mahindra (up 3.72%), Wipro (up 2.81%), TCS (up 2.38%), Coforge (up 2.02%), HCL Technologies (up 2.02%) and Mphasis (up 0.86%) surged.

L&T Technology Services (LTTS) rose 2.75%. LTTS reported a 4.7% rise in consolidated net profit to Rs 274.20 crore on 6.7% increase in revenue to Rs 1,873.70 crore in Q1 FY23 over Q4 FY22. As compared to Q1 FY22, the company`s consolidated net profit and revenue surged by 26.9% and 23.4%, respectively. EBITDA rose 5.4% quarter on quarter (QoQ) and 26.2% year on year (YoY) to Rs 401 crore in Q1 FY23. EBITDA margin stood at 21.4% as in Q1 FY23 as against 21.7% in Q4 FY22 and 20.9% in Q1 FY22. EBIT margin was at 18.3% as in Q1 FY23 as against 18.6% in Q4 FY22 and 17.3% in Q1 FY22.

Stocks in Spotlight:

HDFC Bank fell 1.19%. The private lender`s net profit rose 18.97% to Rs 9,195.99 crore on 13.02% increase in total income to Rs 41,560.27 crore in Q1 FY23 over Q1 FY22. The bank`s provisions and contingencies (excluding tax provisions) declined 34.01% to Rs 3,187.73 crore in Q1 FY23 over Q1 FY22. The bank`s gross non-performing assets (NPAs) stood at Rs 18,033.67 crore as on 30 June 2022 as against Rs 16,140.96 crore as on 31 March 2022 and Rs 17,098.51 crore as on 30 June 2021.

ICICI Prudential Life Insurance Company rose 1.07%. The life insurance company reported a consolidated net profit of Rs 156 crore for Q1 FY23 as compared to a loss of Rs 186 crore for Q1 FY22, primarily due to significantly lower claims and provisions due to COVID-19. Net premium earned increased by 4.3% to Rs 6,884 crore in Q1 FY23 from Rs 6,602 crore in Q1 FY22. The company reported a negative investment income of Rs 8,496 crore in Q1 FY23 as against a positive investment income of Rs 9,609 crore in Q1 FY22. Total expenses (including commission) increased by 16.1% to Rs 1,411 crore in Q1 FY23 from Rs 1215 crore in Q1 FY22.

Jindal Steel & Power (JSPL) rose 1.80%. The company reported a standalone net profit of Rs 6,623.08 crore in Q1 FY23 as compared with a net profit of Rs 2,660.73 crore in Q1 FY22. Net sales during the quarter increased 25.1% to Rs 13,015.21 crore. Profit before tax in Q1 FY23 stood at Rs 8,338.88 crore, which is significantly compared with Rs 3,554.13 crore in Q1 FY22. In the first quarter, production of steel was 1.99 million tonnes (MT) (down 1% YoY) while that of pellets was 1.92 MT (down 11.1% YoY).

Bharat Electronics (BEL) advanced 3.69% after the PSU company reported a standalone net profit of Rs 431.49 crore in Q1 FY23, steeply higher from Rs 11.15 crore in Q1 FY22. On a standalone basis, the company`s net sales soared 95.8% to Rs 3,063.58 crore for the quarter ended 30 June 2022 compared with Rs 1,564.34 crore in the same quarter a year ago. Bharat electronics` reported a profit before tax of Rs 578.10 crore in Q1 FY23 as against Rs 15.17 crore recorded in the corresponding period of the previous year.

Oberoi Realty rose 0.87%. The Mumbai-based real estate developer has reported a consolidated net profit of Rs 403.08 crore in Q1 FY23 as against a net profit of Rs 80.63 crore in Q1 FY22. Revenue from operations increased 221.2% YoY to Rs 913.11 crore during the quarter. As compared with Q4 FY22, the company`s net profit and revenue are higher by 73.5% and 10.9%, respectively. EBITDA was at Rs 513.87 crore for Q1 FY23 as compared with Rs 135.39 crore for Q1 FY22.

Bhansali Engineering Polymers (BEPL) slumped 4.59% after the company`s consolidated net profit tumbled 38.3% to Rs 47.74 crore in Q1 FY23 as against Rs 77.38 crore in Q1 FY22. On consolidated basis, revenue from operations soared 45.49% to Rs 337.41 crore compared with Rs 231.91 crore in the same period last year. Profit before tax stood at Rs 64.81 crore in Q1 FY23, down by 37.35% compared with Rs 103.45 crore in in Q1 FY22. The company`s total expense spiked 109.3% to Rs 279.65 crore in Q1 FY23 over Q1 FY22.

Just Dial fell 1.36%. On a consolidated basis, Just Dial reported a net loss of Rs 48.36 crore in Q1 FY23 compared with net loss of Rs 3.52 crore in Q1 FY22. The loss was driven by other income which stood at Rs 60 crore for the quarter due to mark-to-market (MTM) losses on treasury portfolio owing to significant increase in bond yields (135-150 bps QoQ for 2-3 year AAA bonds) during the quarter. Net sales was at Rs 185.60 crore for the quarter ended 30 June 2022 as against Rs 165.41 crore during the same period in the previous year, registering a growth of 12.2%. On a sequential basis, net sales rose 11.4% to Rs 185.60 crore in Q1 FY23 over Q1 FY22.

Lloyds Metals and Energy rose 2.12%. The sponge iron manufacturer reported a net loss of Rs 930.33 crore in Q1 FY23 as against a net loss of Rs 0.18 crore posted in the corresponding quarter previous year. Revenue from operations jumped 780% year on year to Rs 842.68 crore in the quarter ended 30 June 2022. Total expenses surged 468.7% YoY to Rs 591.23 crore and cost of raw materials consumed rose 55% YoY to Rs 119.46 crore in Q1 FY23. Employees` benefits expense was up 78.6% YoY to Rs 7.18 crore in the quarter ended 30 June 2022.

Den Networks shed 4.70%. The cable TV distribution company reported a 68.8% decline in consolidated net profit to Rs 12.83 crore on 6.5% fall in net sales to Rs 283.36 crore in Q1 FY23 over Q1 FY22. Consolidated profit before tax tumbled 66.7% to Rs 13.75 crore in Q1 FY23 from Rs 41.32 crore in in Q1 FY22. Total expenses rose 7.14% to Rs 274.3 crore in Q1 FY23 over Q1 FY22. EBITDA dropped 14% to Rs 41 crore in Q1 FY23 from Rs 48 crore posted in the same quarter previous year. EBITDA margin decreased to 14% in Q1 FY23 compared with 16% in Q1 FY22. As on Q1 FY23, cash and cash equivalents stood at Rs 2,545 crore.

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