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Nifty ends above 17,150; metal stocks outperform
(15:43, 29 Jul 2022)

The headline equity indices ended near the day's high after a strong session on Friday. The Nifty managed to close above 17,150 level. Metals, consumer durables and media shares advanced while PSU banks, pharma and healthcare stocks declined.

As per provisional closing data, the barometer index, the S&P BSE Sensex, jumped 712.46 points or 1.25% to 57,570.25. The Nifty 50 index advanced 228.65 points or 1.35% to 17,158.25.

In the broader market, the S&P BSE Mid-Cap index rose 1.01% while the S&P BSE Small-Cap index gained 1.38%.

The market breadth was strong. On the BSE, 2,095 shares rose and 1,229 shares fell. A total of 147 shares were unchanged.

Investors cheered US economy data. The data released on Thursday showed that the US economy shrunk for the second consecutive quarter, fuelling speculations that the Fed may not undertake aggressive interest rate hikes. The data also raised the possibility of the US economy approaching a recession.

Buzzing Index:

The Nifty Metal index jumped 3.87% to 5,486.55. The index has added 6.46% in three sessions.

Tata Steel (up 6.98%), Welspun Corp (up 6.33%), Hindalco Industries (up 5.59%), Steel Authority of India (up 4.67%) and Jindal Stainless (up 3.76%) were the top gainers.

Among the other gainers were APL Apollo Tubes (up 3.74%), Hindustan Copper (up 3.26%), National Aluminium Company (up 3.19%) and Jindal Steel & Power (up 3.13%).

Earnings Impact:

Housing Development Finance Corporation added 2.47%. The corporation reported 22% YoY increase in net profit to Rs 3,669 crore in Q1 FY23. The net interest income (NII) for the quarter ended 30 June 2022 stood at Rs 4,447 crore compared to Rs 4,125 crore in the previous year. The reported NIM during the quarter ended 30 June 2022 was 3.4%.

Ashok Leyland rose 2.13%. The company reported a standalone net profit of Rs 68 crore in Q1 FY23 as against a net loss of Rs 282 crore in Q1 FY22. Revenue in the first quarter jumped to Rs 7,223 crore from Rs 2,951 crore recorded in the same period last year.

Sun Pharmaceutical Industries jumped 5.62%. The company 42.7% rise in consolidated net profit to Rs 2,060.9 crore on a 10.1% increase in gross sales to Rs 10,644 crore in Q1 FY23 over Q1 FY22.

Vedanta rose 3.46%. On consolidated basis, Vedanta's net profit rose 6% to Rs 5,592 crore on 36% increase in net sales to Rs 38,251 crore in Q1 FY23 over Q1 FY22. The mining company said that the increase in revenue was supported by higher sales volume across businesses, commodity prices and strategic hedging gains.

Dr. Reddy's Laboratories slipped 3.90%. On consolidated basis, Dr. Reddy's Laboratories' net profit rose 108% to Rs 1188 crore on 6% increase in revenue to Rs 5215 crore in Q1 FY23 over Q1 FY22.

SBI Life Insurance Company gained 8.81%. The company's net profit rose 17.8% to Rs 262.85 crore from Rs 223.16 crore in Q1 FY23 over Q1 FY22. The company reported a negative income from investment of Rs 6,405.66 crore in Q1 FY23 as against an income from investment of Rs 7,409.91 crore posted in Q1 FY22.

TVS Motor Company gained 4.45%. The company reported a standalone net profit of Rs 321 crore in Q1 FY23 as against a net profit of Rs 53 crore in Q1 FY22. The company recorded operating revenue of Rs 6,009 crore for the quarter ended June 2022 as against Rs 3,934 crore reported in the quarter ended June 2021, up 52.7% YoY.

IIFL Securities tumbled 6.27%. On consolidated basis, the company's net profit fell 39% to Rs 42.10 crore on 10% increase in total income to Rs 294.80 crore in Q1 FY23 over Q1 FY22.

GMM Pfaudler hit an upper circuit of 20%. The company's consolidated net profit surged to Rs 44.51 crore in Q1 June 2022 as against Rs 2.59 crore in Q1 June 2021. Net sales rose 34% to Rs 739.24 crore in Q1 June 2022 over Q1 June 2021 on the back of strong execution.

Global Markets:

Shares in Europe advanced while Asian stocks traded mixed on Friday after a rally on Wall Street. That followed a negative US gross domestic product report, which suggests the Fed would be less aggressive in its tightening cycle.

Japan's industrial output jumped 8.9% in June from the previous month, the ministry of economy, trade and industry said Friday. The print surprised to the upside after falling in May.

US stocks on Thursday rallied for a second day, with all three major indices ending up more than 1% as data showing a second consecutive quarterly contraction in the economy fueled investor speculation the Federal Reserve may not need to be as aggressive with interest rate hikes as some had feared.

The US economy shrank from April through June for a second straight quarter. U.S. economic growth fell 0.9% in the second quarter, the Bureau of Economic Analysis reported Thursday. First-quarter GDP declined by 1.6%.

President Joe Biden insisted Thursday that the US economy was on the right path, with solid job growth, despite a second straight quarter of contraction that has deepened fears of a recession.

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