The headline equity indices ended near the flat line with small gains on Friday. IT, banks and financial services stocks were in demand. On the other hand, auto, consumer durables and media stocks were under pressure. Weak European shares put pressure on domestic shares. Meanwhile, the Reserve Bank of India (RBI) increased the interest rate by 50 basis points to 5.4% and retained the FY23 GDP growth forecast at 7.2%.
As per provisional closing data, the barometer index, the S&P BSE Sensex, was up 89.13 points or 0.15% to 58,387.93. The Nifty 50 index gained 15.50 points or 0.09% to 17,397.50.
The Nifty opened higher and traded with modest gains for most part of the session. It briefly slipped into the negative terrain to hit the day's low of 17,348.75 in the mid-afternoon trade. It bounced back in late trade and ended with small gains.
In the broader market, the S&P BSE Mid-Cap index rose 0.09% while the S&P BSE Small-Cap index added 0.23%.
The market breadth was positive. On the BSE, 1,865 shares rose and 1,488 shares fell. A total of 144 shares were unchanged.
Economy:
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On the basis of an assessment of the current and evolving macroeconomic situation, the RBI's Monetary Policy Committee (MPC) at its meeting today (5 August 2022) decided to increase the policy repo rate under the liquidity adjustment facility (LAF) by 50 basis points to 5.40% with immediate effect.
Consequently, the standing deposit facility (SDF) rate stands adjusted to 5.15% and the marginal standing facility (MSF) rate and the Bank Rate to 5.65%.
The MPC has retained the real GDP growth projection for the ongoing financial year 2022-23 at 7.2% and the quarterly growth forecast figures in its policy outcome on Friday.
The committee has also maintained its retail inflation projection for the current financial year at 6.7%, which was revised from 5.7% in the preceding monetary policy review in June.
The MPC decided to remain focused on withdrawal of accommodation to ensure that inflation remains within the target going forward, while supporting growth.
RBI Governor Shaktikanta Das, while delivering the outcome of the bi-monthly policy meet, said, "Headline inflation has recently flattened and the supply outlook is improving, helped by some easing of global supply constraints.
Buzzing Index:
The Nifty Consumer Durables index declined 1.15% to 26,000.15. The index rose 0.63% in the past trading session.
Amber Enterprises India (down 4.68%), Crompton Greaves Consumer Electricals (down 3.69%), Voltas (down 2.47%), Relaxo Footwears (down 1.65%), Blue Star (down 1.61%), Havells India (down 1.28%), Orient Electric (down 1.16%), Kajaria Ceramics (down 1.16%), TTK Prestige (down 1.07%) and V-Guard Industries (down 0.92%) edged lower.
On the other hand, Titan Company (up 0.52%), Dixon Technologies (India) (up 0.03%) advanced.
Titan Company rose 0.52% after the branded jewellery maker reported a steep rise in its Q1 FY23 net profit at Rs 793 crore compared with Rs 61 crore in the same quarter last year. Total income for the quarter was Rs 8,649 crore, a growth of 199%, compared to Rs 2,890 crore of Q1 FY22 (excluding bullion sale).
The company's Jewellery business registered an income of Rs 7,600 crore in Q1 FY23 compared to Rs 2,467 crore in Q1 FY22 (excluding bullion sale), a growth of 208% riding on a good Akshaya Tritiya sales and a bett er studded mix compared to the same quarter previous year.
Blue Star shed 1.61%. The company's net profit surged to Rs 74.25 crore in Q1 FY23 from Rs 12.69 crore recorded in Q1 FY22. Consolidated net sales climbed 87.3% to Rs 1,970.32 crore in Q1 FY23 as against Rs 1,052.04 crore posted in the corresponding quarter previous year.
Earnings Impact:
Mahindra & Mahindra (M&M) fell 2.16%. The automobile major reported 66.9% rise in standalone net profit to Rs 1,430 crore on a 66.7% jump in revenue to Rs 19,613 crore in Q1 FY23 over Q1 FY22. While the revenue from the Auto segment was Rs 12,306 crore (up 103.4% YoY), Farm Equipment Sector (FES) revenue was Rs 6,689 crore (up 25.8% YoY) in Q1 FY23. Total Vehicles sold in Q1 FY23 was 1,49,803 units, up 74% YoY. Total Tractors sold rose by 18% YoY to 1,17,413 units during the period under review.
Berger Paints India added 0.94% after the company's consolidated net profit increased by 80.60% to Rs 253.71 crore in Q1 FY23 from Rs 140.48 crore recorded in Q1 FY22. Revenue from operations for the quarter ended 30 June 2022 was Rs 2,759.70 crore as against Rs 1,798.49 crore in the corresponding quarter of the last year, representing an increase of 53.44% over the corresponding quarter of last year.
BEML declined 1.17% after the company reported a consolidated net loss of Rs 82.36 crore in Q1 FY23 as against a net loss of Rs 94.01 crore in Q1 FY22. Net sales during the quarter jumped 48.4% YoY to Rs 669.18 crore. The company's order book stood at Rs 9,100 crore as on 30 June 2022 as against Rs 11,211 crore as 30 June 2021. The defense firm said it executed orders worth Rs 663 crore in quarter ended June 2022.
Adani Enterprises shed 0.90%. The company's consolidated net profit jumped 72.9% to Rs 469.46 crore in Q1 FY23 as against Rs 271.46 crore in Q1 FY22. Net sales in the first quarter stood at Rs 40,844.25 crore, surged 224.7% from Rs 12,578.77 crore reported in the same period last year.
Separately, Adani Enterprises has signed a Share Purchase Agreement with MAIF Investments India PTE Limited and MAIF Investments India 3 PTE Limited (collectively as "MAIF") in connection with its proposed acquisition of 100% stake in Swarna Tollway Private Limited and 56.8% stake in Gujarat Road and Infrastructure Company.
Alkem Laboratories fell 1.42% after the drug maker's consolidated net profit declined 72.62% to Rs 131.45 crore on 5.7% decline in revenue from operations to Rs 2,576.38 crore in Q1 FY23 over Q1 FY22.
Balkrishna Industries tumbled 6.93% after the company reported 3% fall in standalone net profit to Rs 320 crore despite a 21% increase in revenue from operations to Rs 2,646 crore in Q1 FY23 over Q1 FY22.
Bayer CropScience advanced 3.69% after the company's net profit rose 19.3% to Rs 302.60 crore on 17.8% rise in net sales to Rs 1667.40 crore in Q1 June 2022 over Q1 June 2021.
Thomas Cook (India) rallied 3.79% after the company's consolidated net loss narrowed to Rs 5.87 crore in Q1 June 2022 as against net loss of Rs 83.43 crore in Q1 June 2021. Net sales surged 238.9% year-on-year to Rs 976.17 crore in Q1 June 2022. Net sales jumped 86.98% compared with Q4 FY22 (QoQ).
Global Markets:
European shares slumped while Asian stocks rose across the board on Friday as investors look ahead to the U.S. jobs report.
Wall Street stocks ended mixed, with gains for high-growth stocks offset by the drag from energy shares, as a key US jobs report loomed on Friday.
The Bank of England (BoE) has hiked UK interest rates by 50 basis points to 1.75% as it looks to combat runaway inflation. The move was widely expected by economists and financial markets, and comes amid mounting pressure to pick up the pace of interest rate rises.
The BoE raised interest rates by the most in 27 years, despite warning that a long recession is on its way, as it rushed to smother a rise in inflation which is now set to top 13%. Reeling from a surge in energy prices caused by Russia's invasion of Ukraine, the BoE's Monetary Policy Committee voted 8-1 for a half percentage point rise in Bank Rate to 1.75% - its highest level since late 2008 - from 1.25%.
The MPC now projects that the U.K. will enter recession from the fourth quarter of 2022, and that the recession will last five quarters as real household post-tax income falls sharply in 2022 and 2023 and consumption begins to contract.
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