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Domestic Economy
The domestic equity benchmarks ended the week with strong gains during the week. Positive global cues and a reversal in foreign fund selling in the Indian market boosted the sentiment. The key indices logged gains in all five trading sessions of the week.
| | Index | Latest Close | Weekly % | MTD % | YTD % | | NIFTY 50 | 16,719 | 4.20% | 6.00% | -3.70% | | Nifty Midcap 150 | 10,992 | 3.80% | 9.40% | -4.80% | | Nifty Smallcap 250 | 8,728 | 4.00% | 7.90% | -11.30% | | S&P BSE Mid-Cap | 23,660 | 3.50% | 9.00% | -5.20% | | S&P BSE SENSEX | 56,072 | 4.30% | 5.80% | -3.70% | | S&P BSE Small-Cap | 26,773 | 3.90% | 8.00% | -9.10% |
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Weekly Leader Board
BSE Top Gainers | Stock | Change (%) | | IndusInd Bank Ltd | ▲ 15.7 % | | Shriram Transport Finance | ▲ 13.8 % | | Vedanta Ltd | ▲ 13.4 % | | Larsen & Toubro Infotech | ▲ 13.3 % | | Mindtree Ltd | ▲ 12.5 % |
| BSE Top Losers | Stock | Change (%) | | Crompton Greaves Consumer | ▼ (4.1) % | | Dr Reddys Laboratories Lt | ▼ (3.7) % | | ICICI Lombard General Ins | ▼ (3.2) % | | Indus Towers Ltd | ▼ (2.6) % | | Havells India Ltd | ▼ (2.3) % |
| | Indian Economy: Events & Perspectives
- The central government reined its debt at 56.29 per cent of gross domestic product (GDP) at the end of 2021-22, lower than the revised estimates (RE) of 59.9 per cent for the fiscal. The ratio turned out to be lower on two counts. Firstly, market borrowings were lower by an approximate Rs.780 billion. Secondly, the GDP grew at a faster clip than anticipated.
- Automobile companies are expected to invest more than USD 3 billion or Rs.270 billion on capital expenditure in the year 2022-23, posting a growth of 24 per cent. The amount will be more than pre-Covid capex peak of Rs.268 billion in 2019-20. The upgrade in capex is mainly led by Mahindra & Mahindra and Tata Motors, which together increased budgets by around Rs.40 billion from the previous fiscal.
- India witnessed net foreign investment inflows of USD 711 million in May 2022, as compared to net inflows of USD 801 million in the preceding month. Net inflows of foreign direct investment (FDI) inched down to USD 4.92 billion from USD 4.96 billion in April 2022. Foreign portfolio investments (FPI) continued to see outflows. The outflows in May 2022 at USD 4.2 billion were almost the same as that seen in April 2022. During April-May 2022, net foreign investment inflows amounted to USD 1.5 billion, with net FDI inflows of USD 9.9 billion and net FPI outflows of USD 8.4 billion.
- Foreign direct investment (FDI) inflows into the research and development (R&D) sector climbed to USD 343.6 million in 2021 from USD 55.7 million in 2020, informed the Centre. In the aforementioned industry, FDI is allowed via a 100 per cent automatic route, subject to any applicable laws, regulations, security requirements and other restrictions.
- FMCG companies have seen a revival in rural demand with improvement in volume sales of daily essentials and groceries. Reportedly, Parle Products has seen a 10 per cent growth in sales volumes of value packs of biscuits in the last 4-5 weeks, whereas, sales of small packs of premium range has grown by five per cent. India’s villages, which contribute 35% to overall FMCG sector sales, saw growth declining from September as steep inflation of food, daily essentials and fuel and declining wages forced consumers to buy cheaper products or stop buying altogether.
| BSE Sectoral Indices | Index | 1W % | 1M % | 6M % | 1Y % | | S&P BSE Auto | 1.6 % | 9.6 % | 11.4 % | 28.0 % | | BSE BANKEX | 3.7 % | 9.6 % | (1.8) % | 6.6 % | | S&P BSE Basic Material | 3.6 % | 11.4 % | (8.8) % | (10.2) % | | S&P BSE Cons. Disc. | 1.7 % | 9.8 % | (0.8) % | 10.1 % | | S&P BSE Energy | 1.8 % | 5.2 % | 5.8 % | 22.3 % | | S&P BSE Finance | 3.3 % | 8.3 % | (5.1) % | 0.0 % | | S&P BSE Indus. | 2.2 % | 11.5 % | 0.3 % | 21.3 % | | S&P BSE Infra. | 1.2 % | 8.7 % | (4.5) % | 12.1 % | | BSE Power | 0.3 % | 13.9 % | 13.3 % | 67.2 % | | BSE Realty Index | 3.4 % | 14.8 % | (6.1) % | 10.6 % | | S&P BSE Telecom | 1.3 % | 4.6 % | (8.6) % | 17.9 % | | S&P BSE Utilities | 0.1 % | 12.8 % | 10.0 % | 49.8 % | | BSE Cons Durables | 0.9 % | 10.6 % | (6.8) % | 8.0 % | | BSE Cap Goods | 3.0 % | 14.4 % | (0.5) % | 22.2 % | | BSE FMCG Sector | 2.4 % | 12.1 % | 15.3 % | 13.3 % | | BSE Healthcare | 0.1 % | 4.5 % | (5.7) % | (14.5) % | | BSE IT Sector | 2.8 % | 2.1 % | (17.0) % | (6.3) % | | BSE PSU | 2.3 % | 7.4 % | (3.3) % | 9.5 % | | BSE Tech | 2.2 % | 1.6 % | (15.0) % | (2.0) % | | BSE Metal | 2.8 % | 10.1 % | (11.5) % | (13.8) % | | BSE Oil & Gas | 1.1 % | 6.7 % | 0.6 % | 18.5 % |
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BSE Bankex indices rallied after some banks posted good quarterly results. Another positive is that banks are in a much better position to absorb the impact of upward movement in G-Sec yields compared to the past cycles.
| Stocks in news
- IT major Wipro rose 4.3%. The IT major’s consolidated net profit dropped 16.96% to Rs 2,563.6 crore in Q1 FY23 as against Rs 3,087.3 crore in Q4 FY22. Revenue from operations increased 3.21% quarter on quarter (QoQ) to Rs 21,528.6 in Q1 FY23 over Q4 FY22. On a year on year (YoY) basis, the IT firm’s net profit tumbled 20.68% while revenue jumped 17.95% in Q1 FY23.
- Hindustan Unilever rose 2.79%. The company reported 11% rise in standalone net profit to Rs 2,289 crore on a 19% increase in revenue from sale of products to Rs 14,016 crore in Q1 FY23 over Q1 FY22. The company recorded an underlying volume growth of 6%. As per Nielsen FMCG market share report May 2022, HUL continued to grow significantly ahead of the market, gaining value and volume market shares.
- HDFC Bank rose 2.13%. 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 Bank clocked 50 percent year-on-year growth in standalone profit at Rs 6,905 crore for the quarter ended June 2022, as bad loan provisions declined sharply. Net interest income for the June quarter increased by 20.8 percent to Rs 13,210 crore, compared to Rs 10,936 crore reported in corresponding period previous fiscal, with 21 percent growth in advances and 13 percent increased in deposits YoY.
- HDFC AMC share price declined after reports emerged that Prashant Jain has stepped down as the chief investment officer of the company.
| Commodities
- Gold fell near its lowest level in almost a year. The yellow metal also faced pressure from a firm dollar overseas but some downside support emerged as investors clung to the safe haven asset amid rising prices and heightened recession risks. The yellow metal is lingering around $1700 per ounce. Indian demand remains muted amid heavy rainfall across the country and a busy sowing season which traditionally keeps retail buyers away from purchases, particularly in the rural areas.
- Crude oil saw a mild recovery following a slump led by energy demand concerns. WTI oil futures for August tanked near $94 per barrel as rising crude and gasoline stockpiles and global inflation risks further added to demand woes. Fresh Covid-related curbs in several parts of China and the dollar’s sharp uptick also weighed on oil prices. The growing outbreak in the region has fuelled fears the commercial hub is headed back into a mass lockdown, just weeks after its residents emerged from two months of home confinement.
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