BSE Mid-Cap, Small-Cap indices outshine Sensex

Stocks once again regained strength in afternoon trade after trading in a small range in early afternoon trade. At 13:25 IST, the barometer index, the S&P BSE Sensex, was up 68.23 points or 0.19% at 36,392. The Nifty 50 index was up 40.30 points or 0.37% at 10,977.15. Shares of FMCG major Hindustan Unilever (HUL) retreated from record high on profit booking after declaring good Q1 result.

After opening lower, the indices firmed up as the session proceeded. Indices pared gains in mid-morning trade and hovered in a narrow range with small gains in early afternoon trade.

Among secondary barometers, the BSE Mid-Cap index was up 1.5%. The BSE Small-Cap index was up 0.64%. Both these indices outperformed the Sensex.

The market breadth, indicating the overall health of the market, was positive. On BSE, 1232 shares rose and 1142 shares fell. A total of 135 shares were unchanged.

Sun Pharmaceutical Industries (up 2.53%), Tata Motors (up 2.39%) and Tata Steel (up 2.35%) edged higher from the Sensex pack.

IndusInd Bank (down 1.24%), Bharti Airtel (down 1.21%) and NTPC (down 0.77%) edged lower from the Sensex pack.

FMCG major Hindustan Unilever (HUL) lost 3.21% to Rs 1,697.50 on profit booking after the company declared good Q1 June 2018 result after market hours yesterday, 16 July 2018. The stock had hit a record high of Rs 1,779.95 in intraday trade today, 17 July 2018. Ahead of the result, shares of HUL had gained 3.94% to settle at Rs 1,753.85 on 16 July 2018 from its close of Rs 1,687.25 on 10 July 2018.

HUL reported 19.17% rise in net profit to Rs 1529 crore on 11.37% rise in net sales to Rs 9356 crore in Q1 June 2018 over Q1 June 2017. The financial results for the quarter have been prepared in compliance with the Indian Accounting Standards (Ind AS). The company has integrated Foods and Refreshment divisions in this quarter. Accordingly, the company will report its results in the following three operating segments viz. Home Care, Beauty & Personal Care and Foods & Refreshment, along with a residual segment for 'Others'.

HUL said that cost of goods sold were lower on account of mix, judicious pricing and a strong savings program. Advertising and promotions were stepped up to support innovations, activations and respond to competitive actions in the market place. Earnings before interest, tax, depreciation and amortisation (EBITDA) at Rs 2251 crores was up by 21%. Profit after tax before exceptional items, PAT (bei), at Rs 1567 crore was up by 21%.

Sanjiv Mehta, Chairman and Managing Director, HUL said that the company achieved double digit volume growth across all three divisions and further improvement in margins. In the near term, the company sees a gradual improvement in demand and focus will continue to be on innovations and market development. Crude volatility and currency led inflation are key risks going ahead and the company will continue to manage our business dynamically while driving operational efficiencies.

On the economic front, the IMF has cut India's growth forecast by 10 basis points to 7.3% for the current year and by 30 basis points to 7.5% for 2019, citing faster-than-anticipated monetary tightening and higher crude prices. The international body had projected 7.4% and 7.8% growth for 2018 and 2019, respectively in its April forecast.

Overseas, stocks in Europe hovered around the flatline as investors awaited further corporate results and remarks by Federal Reserve Chairman Jerome Powell. Most Asian stocks declined as energy stock came under selling pressure amid overnight fall in crude oil prices.

The International Monetary Fund (IMF) on Monday warned that there was an increased risk of "worse outcomes" amid recent international trade tensions, although it kept its forecasts for global growth this year the same at 3.9%.

In US, the Dow industrials bucked the trend of an otherwise downbeat session on Monday as upbeat economic data and a fresh round of quarterly results failed to stoke buying appetite. Investors also watched President Donald Trump and Russian President Vladimir Putin convene for a summit in Helsinki, Finland but reaction to a joint conference with the two leaders was muted.

On the US data front, US retail sales rose 0.5% in June. Separately, the Empire State Index fell 2.4 points to 22.6 in July. Business inventories in the US rose 0.4% in May, the Commerce Department said. Sales jumped 1.4% in the month.

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