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Market rallies for 4th day, Nifty settle above 17,300
(15:48, 01 Aug 2022)

The key equity indices ended near the day's high with robust gains on Monday. The Nifty opened at 17,243.20 and marched higher as the session progressed to settle above the 17,300 level. Barring the Nifty Pharma index, all the sectoral indices on the NSE ended in green with auto, media and oil & gas stocks gaining the most.

As per provisional closing data, the barometer index, the S&P BSE Sensex, was up 545.25 points or 0.95% to 58,115.50. The Nifty 50 index gained 181.80 points or 1.06% to 17,340.05. Both the indices have climbed over 5% in four trading sessions.

The broader market outperformed the frontline indices. The S&P BSE Mid-Cap index rose 1.51% while the S&P BSE Small-Cap index gained 1.47%.

The market breadth was strong. On the BSE, 2,306 shares rose and 1,154 shares fell. A total of 196 shares were unchanged

Economy:

India collected Rs 1,48,995 crore as Goods and Services Tax (GST) in July, posting an increase of 28% from the same month last year, the finance ministry said on 1 August. This is second highest revenue since introduction of GST. Compared to the money collected in June, the July GST mop-up was 3% higher.

Of the total GST collections, Central GST was Rs 25,751 crore, while State GST was Rs 32,807 crore. Integrated GST was Rs 79,518 crore and cess was Rs 10,920 crore.

India's factory activity rose at its fastest pace in eight months in July. The Manufacturing Purchasing Managers' Index (PMI), compiled by S&P Global, jumped to 56.4 in July from June's 53.9, remaining above the 50-level separating growth from contraction for a thirteenth month. The surge was driven by solid growth in new orders and output as demand continued to improve on the back of easing price pressures.

Meanwhile, India's eight core sectors recorded a growth of 12.7% in June, slowing from an upwardly revised 19.3% in May, the commerce ministry said yesterday. Output in seven of the eight core sectors grew in June. Production of coal rose 31.1% year on year in June, and electricity generation rose 15.5%. Refinery products output grew 15.1% while fertilisers production gained 8.2% in June from a year earlier. Cement production rose 19.4% while steel output gained 3.3%in June. Crude oil output declined 1.7% from a year earlier. Natural gas output gained 1.2% in June.

Buzzing Index:

The Nifty Bank index rose 1.02% to 37,875.10. The index added 4.03% in four trading sessions.

IDFC First Bank (up 11.85%), Punjab National Bank (up 6.06%), Kotak Mahindra Bank (up 2.74%), Bandhan Bank (up 2.06%) and AU Small Finance Bank (up 1.94%) State Bank of India (up 0.89%), HDFC Bank (up 0.85%), Axis Bank (up 0.68%), ICICI Bank (up 0.49%) and Federal Bank (up 0.05%) advanced.

On the other hand, IndusInd Bank (down 0.53%) and Bank of Baroda (down 0.13%), edged lower.

Bank of Baroda shed 0.13%. On standalone basis, Bank of Baroda's net profit surged 79.39% to Rs 2,168.13 crore on 1.02% rise in total income to Rs 20,119.52 crore in Q1 FY23 over Q1 FY22.

IDFC First Bank jumped 11.85% after the bank reported a net profit of Rs 474 crore in Q1 FY23 as against a net loss of Rs 630 crore in Q1 FY22. Total income during the quarter increased by 17% YoY to Rs 5,777 crore.

Fee and Other Income increased by 100% YoY to Rs 899 crore in Q1 FY23 from Rs 449 crore in Q1 FY22. Of this, share of wealth management & 3rd party distribution was 11% while that of credit card & toll was 16%. The increase on YoY basis was relatively higher on account of low base affect in Q1 FY22 due to lower business volumes caused by COVID impact. AUM of wealth management business has grown 92% YoY to reach Rs 6,693 crore as on 30 June 2022.

Yes Bank gained 3.28% after the private lender on Friday (29 July 2022) announced raising equity capital of about $1.1 billion (~ Rs 8,900 crore) from funds affiliated with two global private equity investors - Carlyle and Advent International, with each investor potentially acquiring upto a 10% stake in Yes Bank. This will be raised through a combination of ~$640 million (~Rs 5,100 crore) in equity shares and ~$475 million (~Rs 3,800 crore) through equity share warrants.

July Auto Sales Impact:

Tata Motors jumped 6.77% after the company's sales in the domestic & international market for July 2022 stood at 81,790 vehicles, up by 51% as compared to 54,119 units during July 2021. Total domestic sales increased by 52% YoY to 78,978 units in July 2022. While total domestic commercial vehicle sales rose by 44% to 31,473 units, total sales of passenger vehicles jumped 57% to 47,505 units in July 2022 over July 2021.

Total sales for MH&ICV Domestic & International Business in July 2022, including trucks and buses, stood at 12,974 units compared to 8,749 units in July 2021.

Bajaj Auto added 1.77% after the auto major recorded total sales of 3,54,670 units in July 2022, which is lower by 4% as compared with 3,69,116 units sold in July 2021. Sales in the domestic market increased by 9% YoY to 1,82,956 units during the period under review. Exports, however, contracted by 15% to 1,71,714 units in July 2022 as compared with the same period last year.Two-wheeler sales declined by 5% to 3,15,054 units while commercial vehicles sales rose by 3% to 39,616 units in July 2022 over July 2021.

Maruti Suzuki India rose 2.38% after the automobile major recorded total sales of 175,916 units in July 2022, recording a growth of 8.28% from 162,462 units sold in July 2021. Total sales in the month include domestic sales of 145,666 units, sales to other OEM of 9,939 units and exports of 20,311 units. Total domestic sales increased by 10.17% year on year to 155,605 units in July 2022. Total Exports declined 4.3% to 20,311 units in July 2022 over July 2021.

Escorts Kubota fell 1.26% after the compay said that its Agri Machinery Segment had sold 5,360 tractors in July 2022, which is lower by 18.3% as compared 6,564 tractors sold in July 2021. While domestic tractor sales declined by 22.3% to 4,704 in July 2022, tractor exports increased by 28.9% to 656 units in July 2022 over July 2021.

Ashok Leyland added 3.35% to Rs 154.05 after the company's total vehicle sales increased by 58% to 13,625 units in July 2022 from 8,650 units in July 2021. Total M&HCV sales jumped to 8,148 units in July 2022 from 3,822 units in July 2021. LCV sales during the period under review rose by 13% YoY to 5,477 units.

Mahindra & Mahindra (M&M) jumped 6.29% after the company announced that its overall auto sales for the month of July 2022 stood at 56148 vehicles. In the utility vehicles segment, M&M sold 27854 vehicles in July 2022 (up 34% YoY). The passenger vehicles segment (which includes UVs, cars and vans) sold 28053 vehicles in July 2022 (up 33% YoY). Exports for the month were at 2798 vehicles (up 32%). In the commercial vehicles segment, M&M sold 20946 vehicles in July 2022.

Steel Strips Wheels (SSWL) advanced 4.51% after the company's net turnover increased by 18.57% to Rs 363.03 crore in July 2022 from Rs 306.12 crore in July 2021. Gross turnover in July 2022 was Rs 446.11 crore as against Rs 372.22 crore in July 2021, thereby recording a growth of 19.85% YoY.

Stocks in Spotlight:

Housing Development Finance Corporation (HDFC) remained unchanged as compared to its closing on Friday, 29 July 2022. HDFC said that it has entered into a share purchase agreement (SPA) with State Bank of India (SBI) for acquiring of 97,500 equity shares of HDFC Venture Capital (HVCL). The corporation holds 80.50% of the paid-up equity share capital of HVCL, a subsidiary of the corporation. The SPA is for the acquisition of 97,500 equity shares of HVCL representing 19.50% of its paid-up share equity capital at a per share price of Rs 10, aggregating to a total consideration of Rs 9.75 lakh.

Cipla gained 2.55%. The drug major's consolidated net profit slipped 4% to Rs 686.40 crore on 2.3% decline in total revenue from operations to Rs 5,375.19 crore in Q1 FY23 over Q1 FY22.

Dr. Reddy's Laboratories rose 0.44% after the pharma major said that it has entered into a licensing agreement with Slayback Pharma to obtain exclusive rights in the first-to-file ANDA for the private label version of Lumify in the U.S.

Varun Beverages rallied 5.02% after the company's consolidated net profit climbed 151.57% to Rs 802.01 crore in Q2 CY22 from Rs 318.80 crore recorded in Q2 CY21. Revenue from operations (net of excise / GST) grew by 102% YoY to Rs 4,954.8 crore in the quarter ended 30 June 2022 as against Rs 2,449.84 crore posted in Q2 CY21. The rise in revenue was mainly driven by robust volume growth over last year and higher realization.

DLF declined 0.34%. The realty major's consolidated net profit rose 39.9% to Rs 469.57 crore on a 26.5% increase in net sales to Rs 1,441.63 crore in Q1 FY23 over Q1 FY22.

Nazara Technologies locked in an upper circuit of 20%. Nazara Technologies' consolidated net profit rose 22.2% to Rs 16.50 crore on 70% jump in net sales to Rs 223.10 crore in Q1 FY23 over Q1 FY22.

CreditAccess Grameen fell 1.68%. The company's consolidated net profit surged to Rs 139.56 crore in Q1 FY23 as against Rs 20.29 crore recorded in Q1 FY22. The microfinance lender's total income jumped 23.2% to Rs 760.52 crore in Q1 FY23 from Rs 617.37 crore reported in the corresponding quarter previous year.

Global Markets:

Shares in Europe and Asia advanced on Monday. Investors digested a fresh swathe of corporate earnings and key economic data out of the euro zone last week.

China's factory activity actually contracted in July as fresh virus flare-ups weighed on demand. The official manufacturing purchasing managers' Index (PMI) fell to 49.0 in July. The official non-manufacturing PMI in July fell to 53.8 from 54.7 in June. The official composite PMI, which includes manufacturing and services, fell to 52.5 from 54.1.

US stocks climbed for a third consecutive session on Friday as investors digested strong tech earnings and looked past concerns about high inflation and a recessionary environment.

On Friday, investors also got the final reading of the University of Michigan Consumer Sentiment Index, which came in at 51.5 for July. That's a slight improvement over the preliminary reading and up from the June all-time low of 50.

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