Shares rally on positive global cues; breadth remains strong

The key equity indices marched higher and hit the day`s high in afternoon trade, mirroring positive global cues. The Nifty was trading above the 16,200 level. All the sectoral indices on the NSE were trading in the green. The sentiment got a boost after China cut its key lending rates and India`s Finance Minister projected 8.9% GDP growth for FY23.

At 13:24 IST, the barometer index, S&P BSE Sensex was up 1372.09 points or 2.60% to 54,164.32. The Nifty 50 index gained 413.30 points or 2.61% to 16,222.70.

In the broader market, the S&P BSE Mid-Cap index rose 1.77% while the S&P BSE Small-Cap index gained 1.79%.

Buyers outnumbered sellers. On the BSE, 2,481 shares rose while 750 shares fell. A total of 152 shares were unchanged.

IPO Update:

ETHOS: The initial public offer (IPO) of ETHOS received bids for 21,62,264 shares as against 39,79,957 shares on offer, according to stock exchange data at 12:57 IST on Friday (20 May 2022). The issue was subscribed 54%.

The issue opened for bidding on Wednesday (18 May 2022) and it will close on Friday (20 May 2022). The price band of the IPO is fixed at Rs 836-878 per share. An investor can bid for a minimum of 17 equity shares and in multiples thereof.

Economy:

Finance Minister Nirmala Sitharaman on Thursday said that India`s economic growth in the current financial year has been robust and is estimated to be 8.9% which is the highest among all large economies. This reflects India`s strong resilience and speedy recovery, Sitharaman said while expressing confidence that India will continue to achieve a high growth rate in the current and next financial year. Sitharaman was addressing the 7th Annual Meeting of Board of Governors of New Development Bank (NDB) through video-conference in New Delhi on Thursday.

The Finance Minister, in her statement, underscored the importance of multilateralism and the spirit of global cooperation for economic recovery. The Union Finance Minister also appreciated the progress made towards setting up of the India Regional Office in Gift City, Gujarat.

Gainers & Losers:

Dr.Reddy`s Laboratories (up 7.70%), Nestle India (up 5%), Tata Motors (up 4.4%), Cipla (up 4.08) and JSW Steel (up 4.04%) were major Nifty gainers.

Shree Cement (down 1.30%), UPL (down 2.22%) and Power Grid Corporation Of India (down 0.13%) were majority Nifty losers.

Earnings Impact:

Ashok Leyland rallied 5% after the company reported a sharply higher standalone net profit of Rs 901.37 crore in Q4 FY22 as compared to Rs 241.17 crore posted in Q4 FY21. Standalone revenue from operations stood at Rs 8744.29crore for the quarter ended 31 March 2022 as against Rs 7,000.49 crore during the same period in the previous year, registering a growth of nearly 25%.

Godrej Consumer Products (GCPL) fell 3.45% after the company reported a consolidated net profit of Rs 363.24 crore in Q4 FY22, which is lower by 0.7% as compared with Rs 365.84 crore recorded in Q4 FY21. Revenue from operations rose 7% to Rs 2,894.15 crore in Q4FY22 over Q4FY21.

Hindustan Petroleum Corporation (HPCL) rose 0.69%. The company reported a 40.5% fall in standalone net profit to Rs 1,795.26 crore in Q4 FY22 from Rs 3,017.96 crore posted in Q4 FY21. Net sales surged 30.4% to Rs 97,226.51 crore for the quarter ended 31 March 2022 from Rs 74,544.62 crore posted in the corresponding quarter last year.

Gland Pharma declined 1.80%. The company reported 10% rise in consolidated net profit to Rs 285.9 crore on a 24% increase in revenue from operations to Rs 1,103 crore in Q4 FY22 over Q4 FY21. The growth in consolidated revenue during the year was driven by the launch of new products and robust volume growth in existing products.

Container Corporation Of India (CONCOR) tumbled 5.45% after the PSU company reported a sharply higher consolidated net profit of Rs 257.56 crore in Q4 FY22 as compared to Rs 25.64 crore posted in Q4 FY21.Consolidated net sales rose 5.2% to Rs 2,057.56 crore in Q4 FY22 from Rs 1,956.69 crore reported in Q4 FY21. Profit before tax soared 744.9% to Rs 332.28 crore in Q4 FY22 from Rs 39.33 crore registered during the same period last year.

Global Markets:

The Dow Jones index futures were up 280 points, indicating a positive opening in the US stocks later today.

Shares in Europe and Asia advanced on Friday after China cut its benchmark reference rate for mortgages by an unexpectedly wide margin on Friday (20 May 2022). This is its second reduction this year as Beijing seeks to revive the ailing housing sector to prop up the economy. China, in a monthly fixing, lowered the five-year loan prime rate (LPR) by 15 basis points to 4.45%. The one-year LPR was unchanged at 3.7%.

Global investors continue to track the war in Ukraine and its geopolitical implications, which have fed into soaring energy and food prices worldwide. The World Food Programme has said failure to reopen Ukrainian ports would be a declaration of war on global food security. Finance ministers and central bankers from the Group of Seven leading industrial nations are currently meeting in Bonn, Germany, to discuss efforts to support Ukraine and global economic challenges arising from the conflict.

Wall Street ended lower after a volatile session on Thursday, with Cisco Systems slumping after giving a dismal outlook, while investors fretted about inflation and rising interest rates. Shares of the networking gear maker slumped 13.73% as it lowered 2022 revenue growth outlook, taking a hit from Russia exit as well as component shortage due to China lockdowns.

New claims for U.S. unemployment benefits unexpectedly rose last week. Initial claims for state unemployment benefits increased 21,000 to a seasonally adjusted 218,000 for the week ended 14 May 2022, the highest level since January, the Labor Department said on Thursday.

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