Sensex rallies 789 pts, Nifty crosses 16900 mark

The domestic equity benchmarks extended gains and hit fresh intraday high in morning trade. Global cues were positive after the US Federal Reserve`s latest policy decision was on expected lines, averting concerns of larger-than-expected hikes. The Nifty was trading above 16,800 mark. All the sectoral indices on the NSE edged higher. Banks, autos and IT shares were in demand.

At 10:25 IST, the barometer index, S&P BSE Sensex was up 788.81 points or 1.42% to 56,457.84. The Nifty 50 index rose 241.85 points or 1.45% to 16,919.45.

In the broader market, the S&P BSE Mid-Cap index rose 1.14% while the S&P BSE Small-Cap index gained 1%.

The market breadth, indicating the overall health of the market, was strong. On the BSE, 2187 shares rose while 833 shares fell. A total of 123 shares were unchanged.

India Services PMI:

The seasonally adjusted S&P Global India Services PMI Business Activity Index rose to 57.9 in April, up from 53.6 in March. The expansion was the fastest since last November. The output was boosted by higher bookings, the easing of pandemic-related restrictions and favourable demand conditions.

Pollyanna De Lima, Economics Associate Director at S&P Global, said: "The Indian service economy followed manufacturing in gaining growth momentum at the start of fiscal year 2022/23.

�In isolation, the PMI data for the service sector were mostly encouraging, as surging demand underpinned quicker increases in new business inflows and output. Employment rose for the first time in five months, but business sentiment was restrained by inflation concerns.

"On this front, the latest results showed a resurgence in price pressures during April. Service providers reported having paid more for food, fuel and materials, with some mentions of higher wage costs also pushing up overall expenses. The overall rate of inflation quickened to the second-highest in the survey history, leading companies to hike their selling prices to the greatest extent in close to five years.

"Consumer Services and Finance & Insurance were the top-performing areas of the service economy, while Real Estate & Business Services was the only sub-sector to post contractions in sales and output."

US Fed Policy Action:

The United States Federal Reserve raised its benchmark short-term interest rate by 50 basis point on Wednesday, its most aggressive move since 2000. This triggered a relief rally across global stocks as investors were worried that Fed might shock markets with a 75 bps hike.

Fed Chairman Jerome Powell said half-point rises remain on the table for the next couple of meetings. Powell talked about a strong economy, but also the pain consumers have been feeling at the grocery store and gas pump, in afternoon news conference, saying higher interest rates are the cure.

The Fed also outlined plans to reduce its near $9 trillion balance sheet, first by $47.5 billion a month starting in June, but ramping up to $95 billion a month. This will result in a nearly $3 trillion reduction in its record size over the next three years.

LIC IPO:

The initial public offering (IPO) of insurance behemoth Life Insurance Corporation (LIC) of India received bids for 11,58,24,825 shares as against 16,20,78,067 shares on offer, according to stock exchange data at 10:18 IST on Thursday (5 May 2022). The issue was subscribed 71%.

The issue opened on 4 May 2022 and it will close on 9 May 2022. The IPO price band is Rs 902 to Rs 949 per equity share. An investor can bid for a minimum of 15 equity shares and in multiples thereof. The company will offer a discount of Rs 60 per share to LIC policyholders. For retail investors and eligible employees, the discount will be Rs 45 per share.

Buzzing Segment:

The Nifty PSU Bank index was up 1.62% at 2711.95. The index fell 4.87% in the past three sessions.

Canara Bank (up 2.47%), State Bank of India (up 2.21%), Indian Overseas Bank (up 1.96%), Bank of Maharashtra (up 1.74%), Indian Bank (up 1.45%), Central Bank of India (up 1.37%), Bank of Baroda (up 1.11%), Punjab & Sind Bank (up 0.94%), Punjab National Bank (up 0.87%) and UCO Bank (up 0.86%) advanced.

Stocks in Spotlight:

Angel One fell 1.62%. The brokerage company`s client base stood at 9.64 million in the month April 2022 as against 4.42 millions in the month of April 2021, registering a jump of 118% year-on-year. On a sequential basis, the company`s client base rose by 4.6% month on month from 9.21 million clients in March 2022.

Gross client acquisition stood at 0.44 million in April 2022 compared with 0.48 million in March 2022 (down 7.3%) and 0.31 million in April 2021 (up 41.5%).

Deepak Nitrite slipped 1.35% after the company reported 7.9% decline in consolidated net profit to Rs 267.21 crore on 28% rise in net sales to Rs 1872.35 crore in Q4 FY22 over Q4 FY21. Profit before tax slipped 7.1% to Rs 362.19 crore in Q4 FY22 from Rs 389.94 crore registered in Q4 FY21. EBITDA declined 10% year on year to Rs 414 crore in the quarter ended 31 March 2022. EBITDA margin fell to 22% in Q4 FY22 from 31% in Q4 FY21.

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