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Sensex, Nifty end almost flat amid high volatility
(15:49, 02 Aug 2022)

The domestic equity barometers ended a tad above the flat line after a volatile session on Tuesday. Negative global cues dampened the investors sentiment. PSU banks, FMCG and auto shares were in demand while realty, IT and metal stocks corrected.

As per provisional closing data, the barometer index, the S&P BSE Sensex, was up 20.86 points or 0.04% to 58,136.36. The Nifty 50 index rose 5.40 points or 0.03% to 17,345.45. Both the indices have climbed over 5% in five trading sessions.

The Nifty opened in the red and hit the day's low of 17,215.85 in the morning trade. It bounced back in mid-afternoon trade and hit the day's high of 17,390.15 in late trade.

The broader market outperformed the headline indices. The S&P BSE Mid-Cap index rose 0.50% while the S&P BSE Small-Cap index gained 0.34%.

The market breadth was positive. On the BSE, 1,882 shares rose and 1,489 shares fell. A total of 123 shares were unchanged.

Economy:

Finance Minister Nirmala Sitharaman said on Monday that India is still the fastest growing economy whose financial situation is much better than most other countries. Speaking during a debate on the issue of price hike in the Lok Sabha, Sitharaman said the global agencies have ranked India's economy higher than most countries and there is no sign of recession in the country. Sitharaman added that the government is making efforts to bring down retail inflation below 7%.

5G Spectrum Auction:

Communications Minister Ashwini Vaishnaw has said that the 5G telecom services is likely to be launched by October this year.

Briefing the media in New Delhi, Vaishnaw said, more than Rs 1.5 lakh crore of bids were received during the 5G auction, which commenced on 26th of last month. The spectrum will be assigned to the successful bidders for providing 5G services to the public and enterprises. The auction was held for spectrum in various Low, Medium, and High-frequency bands.

The Government of India had put 72,098 MHz spectrum to auction, of which 51,236 MHz (71% of the total) has been sold with bid amounting to Rs 1,50,173 crore.

Buzzing segment:

The Nifty Auto index rose 0.57% to 13,026.90, extending its winning streak for the fifth consecutive session. The index advanced 6.11% in five trading sessions.

Tube Investments of India (up 2.82%), Balkrishna Industries (up 2.26%), Maruti Suzuki India (up 2.01%), Eicher Motors (up 1.65%), MRF (up 1.6%), Mahindra & Mahindra (up 1.41%), TVS Motor Company (up 1.28%), Bosch (up 0.76%), Bajaj Auto (up 0.72%) and Bharat Forge (up 0.37%) edged higher.

On the other hand, Escorts Kubota (down 5.18%), Ashok Leyland (down 3.44%) and Hero MotoCorp (down 2.39%) declined.

Hero MotoCorp fell 2.39%. The company said that it had sold 445,580 units in July 2022, which is lower by 2% as compared with 454,398 units sold in July 2021. While sales in the domestic market rose marginally to 430,684 units, exports fell by 41% to 14,896 units in July 2022 over July 2021. The company sold 421,288 units of motorcycles (down 1% YoY) and 24,292 units of scooters (down 20% YoY) during the period under review.

TVS Motor Company rose 1.28%. The company's total sales rose by 13% in July 2022 with sales of 314,639 units as against 278,855 units in the month of July 2021. Total two-wheelers registered a growth of 14% in July 2022 with sales increasing from 262,728 units in July 2021 to 299,658 units in July 2022.

While domestic two-wheeler sales increased by 15% to 201,942 units, exports grew by 12% to 97,716 units in July 2022 as compared with July 2021. Three-wheeler of the company registered sales of 14,981 units in July 2022 as against sales of 16,127 units in July 2021. The company's total exports grew by 9% from 103,133 units in July 2021 to 112,032 units in July 2022.

Eicher Motors gained 1.65%. The company said that its unlisted subsidiary VE Commercial Vehicles had sold 5982 units of commercial vehicles in July 2022, which is higher by 40.10% as compared with 4271 units sold in July 2021.

Separately, Eicher Motors informed that it had recorded a growth of 26% in July 2022 with sales of 55,555 motorcycle units as against 44,038 units in the month of July 2021.

Escorts Kubota slipped 5.18% after the company's standalone net profit tumbled 20.4% to Rs 147.5 crore on a 20.1% jump in revenue from operations to Rs 2,014.85 crore in Q1 FY23 over Q1 FY22.

Stocks in Spotlight:

ITC rose 0.54% after the company's standalone net profit rose 38.4% to Rs 4,169 crore on 41.9% increase in net revenue to Rs 17,217 crore in Q1 June 2022 over Q1 June 2021. The counter hit 52 week high of Rs 316.65, extending its winning run to second consecutive trading session.

Total FMCG segment revenue increased 25% YoY to Rs 11060 crore during the period under review. In the FMCG segment, cigarettes revenue rose by 29% YoY to Rs 6609 crore while the revenue from other FMCG segment improved by 19% YoY to Rs 4451 crore during the quarter. Hotel business revenue stood at Rs 555 crore (up 336% YoY), agri-business revenue was at Rs 7473 crore (up 83% YoY) and paperboards, paper & packaging revenues were at Rs 2267 crore (up 43% YoY) in the frist quarter of FY23.

Adani Ports and Special Economic Zone (APSEZ) shed 0.25%. The company said that it handled a record cargo volume of 31.23 million metric tonnes (MMT) in July 2022, implying a 13% YoY growth. In the initial four months of FY23, the company managed 122.12 MMT of cargo, rising 9% YoY over a strong April-July 21, that saw the post COVID volume surge.

Mundra (12% YoY), Krishnapatnam (16% YoY), Tuna (81% YoY), Kattupalli & Ennore combined (87% YoY), and Dahej (69% YoY) were the key ports that helped drive this monthly volume growth, the company said.

Zomato locked in an uppercircuit of 20% after the online food delivery platform reported a consolidated net loss of Rs 186 crore in Q1 June 2022, as against net loss of Rs 360.70 crore in Q1 June 2021. Zomato reported a net loss of Rs 359.70 crore in Q4 March 2022. Revenue from operations stood at Rs 1,413.9 crore in Q1 June 2022, up 67.44% from Rs 844.4 crore reported in Q1 June 2021.

Growth in revenue was driven by ~10% QoQ growth in Gross Order Value (GOV) to Rs 6,430 crore in Q1 FY23 and growth in revenue per order. GOV growth was in turn driven by robust growth in order volumes and mild growth in average order values as compared to the previous quarter.

Bank of India added 2.34% after the bank reported 22% drop in standalone net profit to Rs 561 crore on a 4% fall in total income to Rs 11,124 crore in Q1 FY23 over Q1 FY22. Net Interest Income (NII) increased by 29% to Rs 4,072 crore in Q1 FY23 from Rs 3,146 crore in Q1 FY22. Net Interest Margin (NIM) was 2.55% in Q1 FY23 as against 2.16% in Q1 FY22. Operating profit fell 21% YoY to Rs 2,183 crore in the first quarter.

Yes Bank surged 13.17% after the media reported that former HDFC Bank MD Aditya Puri is likely to get a board seat in Yes Bank on behalf of the Carlyle Group.

Aditya Puri is a senior advisor to the Carlyle Group's Asia private equity team. Puri was the CEO and managing director of HDFC Bank from its inception in 1994 until October 2020. Over his 26 tenure leading the business, Puri grew HDFC Bank into the largest private sector bank in India with over $210 billion of assets (as of 30 September 2020), and the most valuable bank in India with a market cap of over $90 billion (as of October 2020). The media reported that Yes Bank MD and CEO Prashant Kumar will continue to lead the bank, post the deal.

Global Markets:

The Dow Jones index futures were down 150 points, indicating a negative opening in the US stocks today.

Shares in Europe and Asia declined on Tuesday as South Korea's inflation rose and investors look ahead to the Reserve Bank of Australia's interest rate decision.

The Reserve Bank of Australia is expected to hike rates after official data showed prices in Australia rose 6.1% in the second quarter compared with a year ago.

Consumer prices in South Korea rose 6.3% in July compared with the same period in 2021, official data showed on Tuesday.

Wall Street ended a three-day winning streak and crude prices plunged on Monday as economic data from the US, Europe and China showed demand weakening under inflation pressures, while the looming possibility of recession curbed risk appetite.

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