The benchmark indices continued to trade with strong gains in mid morning trade. The Nifty traded below the 16.500 mark. IT shares extended gains for second consecutive session. Investors sentiment improved after India's retail inflation fell below the Reserve bank of India (RBI)'s threshold of 6% in July 2021.
At 11:22 IST, the barometer index, the S&P BSE Sensex, was up 383.39 points or 0.70% to 55,227.37. The Nifty 50 index added 109.55 points or 0.67% to 16,473.95.
In the broader market, the S&P BSE Mid-Cap index rose 0.31% while the S&P BSE Small-Cap index gained 0.52%.
The market breadth was strong. On the BSE, 1806 shares rose and 1176 shares fell. A total of 129 shares were unchanged.
Economy:
India's retail inflation eased to a three-month low in July on the back of softening food prices. The consumer price index (CPI) based inflation cooled to 5.59% in the last month from 6.26% in June, government data released on Thursday showed. Food inflation fell substantially to 3.96% in July from 5.15% in June.
Meanwhile, India's industrial activity was affected due to the nationwide Covid lockdown last year in April and May but had picked up June onwards. Industrial output for the month of June rose 13.6%. Factory output, measured by the Index of Industrial Production (IIP) had contracted 16.6% in the same month of last year and rose by 29.3% in May.
COVID-19 Update:
Total COVID-19 confirmed cases worldwide stood at 205,374,018 with 4,334,186 global deaths.
India reported 385,227 active cases of COVID-19 infection and 430,254 deaths, according to the data from the Ministry of Health and Family Welfare, Government of India.
India achieves its highest ever recovery rate of 97.46%. 40,120 daily new cases were reported in the last 24 hours. Daily positivity rate (2.04%) is less than 3% for last 18 days. India's Active caseload (3,85,227) presently constitute 1.20% of total cases.
Buzzing Index:
The Nifty IT index rose 0.79% to 32,499.20. The index has added 2.62% in two sessions.
HCL Tech (up 1.84%), TCS (up 1.62%), Oracle Financial Services Software (up 1.44%), Infosys (up 0.82%), Wipro (up 0.57%), Larsen & Toubro Infotech (up 0.16%), Mphasis (up 0.06%) advanced. However, Tech Mahindra declined 0.52%.
Earnings Impact:
Tata Steel shed 0.45% to Rs 1428.60. The steel major's consolidated net profit stood at Rs 9,768.34 crore in Q1 June 2021 (Q1 FY22) compared with net loss of Rs 4,648.13 crore in Q1 June 2020 (Q1 FY21). Consolidated revenue from operations surged 109.51% to Rs 53,371.81 crore in Q1 FY22 as against Rs 25,474.52 crore in Q1 FY21.
On a consolidated basis, production grew 42.23% to 7.88 million tonnes in Q1 FY22 from 5.54 million tonnes in Q1 FY21. Deliveries climbed 33.14% to 7.11 million tonnes in Q1 FY22 from 5.34 million tonnes in Q1 FY21.
Consolidated EBITDA increased 13.3% QoQ and 25.7x YoY to Rs 16,185 crore with improved realization across key entities. Consolidated free cash flow stood at Rs 3,553 crore during Q1 FY22 despite working capital absorption of Rs 8,272 crore. The company spent Rs 2,011 crore on capex during the quarter, spending on Pellet plant, the Cold Roll Mill complex and the ongoing 5 million tonnes per annum (MTPA) expansion at Kalinganagar. Gross debt decreased to Rs 84,237 crore with a debt repayment of Rs 5,894 crore. Net debt declined to Rs 73,973 crore.
Eicher Motors fell 2.41% to Rs 2552.30. The company posted a consolidated net profit of Rs 237 crore in Q1 FY22 compared with net loss of Rs 55.18 crore in Q1 FY21. Total revenue from operations was recorded at Rs 1,974 crore, up 141% compared with Rs 818 crore in the corresponding quarter of FY 2020-21.
Royal Enfield sold 122,170 motorcycles in the quarter, an increase of 109% from 58,383 motorcycles sold over the same period in FY 2020-21. VE Commercial Vehicles (VECV), the unlisted subsidiary of Eicher Motors, sold 5,806 trucks and buses in the quarter, a notable increase of 173% from 2,129 trucks and buses sold over the same period in the last financial year.
Global Markets:
Most Asian stocks edged lower on Friday as the spread of the delta COVID-19 variant and China's regulatory curbs restrained sentiment despite another record high close on Wall Street.
The focus in China remains on Beijing's push to exert more control over a range of industries. In real estate, the nation is suspending private equity funds from raising money to invest in residential property development. Separately, a partial shutdown of a major Chinese port due to a virus outbreak stoked concerns about a repeat of last year's pandemic shipping woes.
In US, the Dow and S&P 500 jumped to record closes for a third straight day on Thursday, with mega-cap technology stocks driving the market higher as investors warmed to jobs data showing a steady U.S. economic recovery.
The Labor Department reported Thursday morning that initial jobless claims declined slightly last week as the U.S. labor market continues its recovery from last year's recession. There were 375,000 claims last week. The prior reading came in at 385,000 claims, but was revised to 387,000.
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