The domestic equity benchmarks ended with modest gains after a volatile session on Thursday. The Nifty, however, closed below the 15,800 mark. The bourses witnessed bouts of volatility on account of monthly F&O contracts expiry on the NSE today. While metal, PSU banks, realty and IT stocks edged higher, FMCG, pharma and auto shares edged lower.
As per provisional closing data, the barometer index, the S&P BSE Sensex, advanced 209.36 points or 0.40% to 52,653.07. The Nifty 50 index added 69.05 points or 0.44% to 15,778.45.
The NSE's India VIX, a gauge of market's expectation of volatility over the near term, dropped 5.45% to 12.95.
Broader markets were almost at par with the benchmark indices. The S&P BSE Mid-Cap index rose 0.39%. The S&P BSE Small-Cap index gained 0.90%.
Buyers outnumbered the sellers. On the BSE, 1947 shares rose and 1243 shares fell. A total of 147 shares were unchanged.
Investors cheered after US Fed decided to keep the key policy rates unchanged. Fed Chair Jerome Powell said the U.S. job market still had ”some ground to cover” before it would be time to pull back from the economic support the U.S. central bank put in place in the spring of 2020 to battle the coronavirus pandemic's economic shocks.
COVID-19 Update:
Total COVID-19 confirmed cases worldwide stood at 19,59,72,235 with 41,87,446 deaths. India reported 4,03,840 active cases of COVID-19 infection and 4,22,662 deaths while 3,07,01,612 patients have been discharged, according to the data from the Ministry of Health and Family Welfare, Government of India.
India has reported 43,509 fresh infections, 38,465 and 640 deaths in the last 24 hours. The country has 4,03,840 active cases.
Politics:
The Union Cabinet on Wednesday, 28 July 2021 held a press conference with Finance Minister Nirmala Sitharaman and I&B Minister Anurag Thakur and Minister of State L Murugan in New Delhi. During the press briefing, the Cabinet cleared Deposit Insurance and Credit Guarantee Corporation (DICGC) Bill and Limited Liability Partnership Amendment Bill.
The Finance Minister (FM) said that as per the DICGC bill, depositors of troubled banks would get back amounts below Rs 5 lakh within 90 days, even if a bank is put under moratorium by the Reserve Bank of India (RBI). The FM further added that the bill increases deposit insurance coverage and reduces the time taken for depositors to recover sums if a bank comes under financial stress.
At a virtual event organised by BASE University, Chief Economic Advisor (CEA) KV Subramanian reportedly said that India is likely to hit a growth rate of 6.5%-7% starting FY23. It will then move up to 8% on the back of government reforms.
“Our projection is that from FY23, we should be hitting a growth of 6.5-7%… accelerating from there onwards hitting between 7.5%-8% as the impact of all these reforms is felt both on the investment rate, which will start touching 40%, and the incremental capital output ratio, basically productivity, which will also improve,” reportedly he said.
New Listing:
Shares of Tatva Chintan Pharma Chem settled at Rs 2,310.25, at a premium of 113.32% compared with the issue price of Rs 1,083 per share. The scrip was listed at a price of Rs 2,111.80 per share, at a premium of 95% to the initial public offer (IPO) price.
The stock has hit a high of Rs 2,486.30 and a low of Rs 2,111.80 so far. On the BSE, 8.99 lakh shares of the company were traded in the counter.
Buzzing Index:
The Nifty FMCG index fell 1.05% to 35,979.60, extending losses for fourth day. The index had declined by 1.58% in the past four sessions.
ITC (down 1.48%), Godrej Consumer (down 1.39%),Hindustan Unilever (down 1.24%), Varun Beverages (down 0.96%), Varun Beverages (down 0.94%), Emami (down 0.52%), Britannia Industries (down 0.50%) and Marico (down 0.47%) declined.
Jubilant FoodWorks (up 1.88%), United Spirits (up 0.35%) and Procter & Gamble Hygiene (up 0.29%) bucked the trend.
Earnings Impact:
Route Mobile fell 4.63% to Rs 2074. The company's consolidated net profit jumped 27.4% to Rs 34.32 crore on a 21.9% increase in net sales to Rs 377.52 crore in Q1 June 2021 (Q1 FY22) over Q1 June 2020 (Q1 FY21). Consolidated profit before tax surged 29% to Rs 42.93 crore in Q1 FY22 as against Rs 33.29 crore in Q1 FY21.
Nestle India shed 0.30% to Rs 17959.05. The FMCG major's standalone net profit rose 10.7% to Rs 538.58 crore on a 13.8% rise in net sales to Rs 3,462.35 crore in Q2 June 2021 over Q2 June 2020. Domestic and Export Sales achieved double digit growth largely driven by volume & mix. Key products Maggi Noodles, Kitkat, Nestlé Munch, Maggi Sauces, Maggi Masala-Ae-Magic posted strong double-digit growth. E-Commerce channels grew 105% and contributed 6.4% of domestic sales. In recent times, commodity prices have been rising across oils and packaging materials.
Separately, the company's board has considered and accorded in-principle approval for disinvestment of its entire minority stake of 19.98% in Sahyadri Agro and Dairy (formerly Indocon Agro and Allied Activities), a company engaged in milk collection business in western India, due to change in the business scenario.
Colgate-Palmolive (India) tumbled 4.77% to Rs 1706.75. The company reported 18% growth in net profit to Rs 233.2 crore on a 12% increase in net sales to Rs 1,157.8 crore in Q1 FY22 over Q1 FY21. While the company's gross margins rose by 300 bps to 68.9%, EBITDA margin improved by 90 bps to 30.7% in Q1 FY22 over Q1 FY21.
Mahanagar Gas lost 1.04% to Rs 1107.60. The PSU company reported a 351% jump in net profit to Rs 204.08 crore on 135% rise in net sales to Rs 615.49 crore in Q1 FY22 over Q1 FY21. On a sequential basis, the company's net profit declined 4% while its net sales fell 14% in Q1 FY22 over Q4 FY21. The company's total sales volume declined 16.14% to 218.25 SCM (standard cubic metre) million in Q1 FY22 from 260.25 SCM posted in Q4 FY21.
Happiest Minds Technologies slipped 3.02% to Rs 1345.90. The IT company's consolidated net profit fell 28.8% to Rs 35.73 on a 38.2% rise in net sales to Rs 244.61 crore in Q1 FY22 over Q1 FY21. On a sequential basis, the company's net profit fell nearly 1% while its net sales rose 10.8% in Q1 FY22 as compared to Q4 FY21. The company added 18 new customers in the quarter and total client based now stands at 180 as of 30 June 2021. The IT major's attrition rate (on TTM basis) stood at 14.7%.
ABB India shed 0.41% to Rs 1689.30. On a standalone basis, ABB India's net profit jumped 331.60% to Rs 70.26 crore on a 45.2% rise in net sales to Rs 1,412.90 crore in Q2 June 2021 over Q2 June 2020. The company strong revenues for the quarter as a result of strong backlog execution and solid customer-connect and service business supported a recovery in June 2021, which to a large extent compensated for the muted offtake in first months of the quarter. All divisions witnessed a growth during the period under review. However, on a sequential basis, there was a decline of 12.5% primarily due to interruptions caused by the second wave of pandemic.
Total orders for the quarter were at Rs 1,689 crore as compared to Rs 1,200 crore in Q2 2020, recording a growth of 41%. The month of June 2021 witnessed a gradual bounce back in orders by most businesses despite various state level lockdowns in the first two months of the quarter. There was a marginal dip in orders sequentially with businesses impacted by localized impact of the second wave.
United Breweries declined 1.53% to Rs 1424. The company reported a consolidated net profit of Rs 30.89 crore in Q1 FY22 as against a net loss of Rs 114.40 crore in Q1 FY21. Net revenue from operations rose 120.6% to Rs 1,119.47 crore in the first quarter as compared with the same period las year.
UTI Asset Management Company added 3.41% to Rs 989.80. The company posted a 53% jump in consolidated net profit to Rs 155 crore on a 29.5% rise in total income to Rs 350.11 crore in Q1 FY22 over Q1 FY21. Revenue from operation stood at Rs 344 crore, rising 32% year on year, which included sale of services of Rs 261 crore.
Global Markets:
European market and Asian stocks, both rallied across the board on Thursday after the U.S. Federal Reserve left its benchmark interest rate near zero. Meanwhile, shares in Hong Kong witnessed a rebound from a two-day slump earlier in the week.
England scrapped its quarantine requirements for fully-vaccinated EU and U.S. visitors after 2 August 2021, offering a boost to European travel and airline stocks. However, France has been excluded.
U.S. stocks slipped on Wednesday in listless trade after the Federal Reserve gave no clue about when it might start reducing its purchases of government bonds, even as it said the economic recovery is on track.
The Federal Open Committee ended its two-day meeting by keeping interest rates in a target range between zero and 0.25%. Fed Chairman Jerome Powell said the U.S. central bank is nowhere near considering a rate hike despite the optimism over the U.S. economy.
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