Nifty above 18,300; PSU banks rally

Benchmark indices traded near the day's high with small gains in mid morning trade. At 11:31 IST, the barometer index, the S&P BSE Sensex, was up 174.79 points or 0.28% to 61,525.85. The Nifty 50 index rose 56.45 points or 0.31% to 18,324.35.

The broader indices outperformed the benchmarks. The S&P BSE Mid-Cap index gained 0.6% while the S&P BSE Small-Cap index added 0.84%.

The market breadth, indicating the overall health of the market, was strong. On the BSE, 2049 shares rose and 1033 shares fell. A total of 139 shares were unchanged.

Buzzing Index:

The Nifty PSU Bank index added 2.03% to 2,937.70, rising for third trading session in a row. The PSU Bank index rallied 4% in three trading sessions.

J&K Bank (up 6.7%), Canara Bank (up 4.53%), Bank of India (up 2.75%), SBI (up 1.98%), Bank of Maharashtra (up 1.83%), Indian Bank (up 1.77%) and UCO Bank (up 1.69%) were top gainers in PSU banking space.

Earnings Impact:

Mahanagar Gas fell 0.3%. The gas distributor reported 41.5% rise in net profit to Rs 204.29 crore on a 63.8% increase in net sales to Rs 830.14 crore in Q2 FY22 over Q2 FY21. Profit before tax in Q2 FY22 stood at Rs 275.05 crore, up by 41% from Rs 195.03 crore in Q2 FY21. While the company's net profit has remained flat, net sales increased by 34.88% in Q2 FY22 as compared with Q1 FY22.

Sanofi India rose 1.47% after the company's standalone net profit surged 298.64% to Rs 529.80 crore on a 9.88% rise in revenue from operations to Rs 754.50 crore in Q3 September 2021 over Q3 September 2020. Profit before tax jumped 270.03% to Rs 687.90 crore in Q3 September 2021 as against Rs 185.90 crore in Q3 September 2020.

Persistent Systems advanced 3.28% after the company reported 6.9% rise in consolidated net profit to Rs 161.75 crore on a 9.9% increase in revenue to Rs 1,351.24 crore in Q2 FY22 over Q1 FY22. EBITDA improved by 11.4% to Rs 224.39 crore in Q2 FY22 from Rs 201.52 crore in Q1 FY22. EBITDA margin was 16.6% as on 30 September 2021 as against 16.4% as on 30 June 2021. Profit before tax in Q2 FY22 stood at Rs 217.63 crore, up by 7.2% from Rs 203.05 crore in Q1 FY22. In dollar terms, the company's revenue in the second quarter was $182.32 million (up 9.3% QoQ and up 34% YoY). The IT firm's net profit and revenue has risen by 58.6% and 34.1%, respectively, in Q2 FY22 as compared with Q2 FY21.

Zensar Technologies jumped 6.19%. The company's consolidated net profit fell 6.53% to Rs 94.40 crore on 12.15% increase in net sales to Rs 1,050.60 crore in Q2 FY22 over Q1 FY22. Earnings before interest, tax, depreciation and amortization (EBITDA) fell 6.5% to Rs 161.30 crore in Q2 FY22 over Q1 FY22. EBITDA margin stood at 15.3% in Q2 FY22 lower than 18.4% in Q1 FY22 and 19.4% in Q2 FY21. In Q2FY22, the company reported revenue of $141.9 million, a constant currency sequential QoQ growth of 12.3%.

Global Markets:

Asian stocks were trading lower on Wednesday as traders weighed the latest U.S. earnings reports amid lingering concerns about growth risks from elevated inflation and China's indebted property sector.

Profits at China's industrial firms rose at a faster pace in September even as surging raw material prices and supply bottlenecks squeezed margins and weighed on factory activity. Profits jumped 16.3% on-year to 738.74 billion yuan ($115.72 billion), the statistics bureau said on Wednesday, quickening from the 10.1% gain reported in August.

Australia's consumer price index rose 0.8% in the September 2021 quarter, data from the country's Bureau of Statistics showed Wednesday.

U.S. stocks climbed to record levels on Tuesday as major corporations continued to turn in solid quarterly results, but major averages closed off their highs of the day with some major tech names rolling over.

On the data front, US consumer confidence unexpectedly rose in October as concerns about high inflation were offset by improving labor market prospects. The consumer confidence index increased to a reading of 113.8 this month from 109.8 in September.

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