Nifty hits lifetime high, Sensex up over 250 points; PSU banks, IT stocks lead
ONGC, HDFC twins, Reliance Industries and L&T were the top gainers on the Sensex rallying up to 2%
Indian benchmark equity indices began the June series on a positive note on May 28. Hitting lifetime highs, Nifty advanced 89 points or 0.57% to 15,427. Sensex climbed 263 points or 0.51% to 51,378 at open, amid strong global cues and a decline in domestic covid-19 cases.
“The best news for the economy and markets is coming from the Covid data which has shown a dip in fresh cases to 1.75 lakhs during the last 24 hours. This will certainly pave the way for the progressive removal of restrictions on economic activity. The global cues are positive with the US economy showing a rise in jobs indicating sharp economic recovery. An important trend in the market is the outperformance of midcaps (up around 24% YTD) vis-a-vis the Nifty ( up around 10% YTD),” said V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
Another trend is the increasing preference for value over growth as reflected in the sharp rise in PSUs like SBI, IOC & Coal India while the likes of HDFC Bank and Kotak Bank remain subdued. Such rotations happen during a bull run. Weakness in frontline private banking stocks may be used to accumulate them since these well-capitalised banks will continue to grab market share from the weaker players, particularly from weak PSU banks, added Vijayakumar.
ONGC, HDFC twins, Reliance Industries and L&T were the top gainers on the Sensex rallying up to 2%. On the other hand, Sun Pharma, Dr Reddy’s, M&M, Bajaj Auto & Nestle India were the laggards losing anywhere between 0.75-3%.
Barring Nifty Pharma all other sectoral indices were trading in the green with the Nifty Metal index leading the pack soaring 2.47%, followed by the Nifty Bank index jumping 0.76%. Similarly Nifty Realty rallying 0.72% while Nifty FMCG and Nifty Auto indices up around 0.60%.
The broader markets mirrored the gains in benchmark indices as BSE Midcap rose 0.47% and the BSE Smallcap index jumped 0.58%. Bulls have an upper hand in the markets as 1,210 stocks advanced versus 543 scrips declining and 356 shares remained unchanged.
GST meet
The 43rd Goods and Services Tax (GST) Council meeting is scheduled for 11 am. After nearly eight months, Union Finance Minister Nirmala Sitharaman will chair the meeting via video conferencing. The GST Council is likely to discuss a reduction in the tax rate on Covid medicines, vaccines and medical equipment, as well as means to make up for the shortfall in revenues, promised to states.
Meanwhile, the government is reportedly planning a stimulus package and direct, immediate relief for sectors such as hospitality and Medium, Small and Micro Enterprises (MSME), which are India’s biggest employers and have been battered by COVID-19.
Earnings today
Mahindra & Mahindra, Glenmark Pharmaceuticals, Indian Bank, Ipca Laboratories, 3M India, Camlin Fine Sciences, Dilip Buildcon, Deepak Fertilisers & Petrochemicals Corporation, Prataap Snacks, Force Motors, GMM Pfaudler, Gulf Oil Lubricants India, Heidelberg Cement India, ITD Cementation India, Jagran Prakashan, Jindal Poly Films, Max Healthcare Institute, Munoth Financial Services, Navkar Corporation, Nazara Technologies, NCC, NESCO, Sudarshan Chemical Industries, Sumitomo Chemical India, Ujjivan Financial Services, V-Mart Retail, Zuari Agro Chemicals amongst others will be declaring their financial results for the quarter ended March 2021 today.
Stocks in spotlight
Tata Consultancy Services (TCS) said that the company has completed the acquisition of GE’s stake in TCS Saudi Arabia on May 26.
Sun Pharmaceutical Industries’ net profit surged 123.62% to Rs 894.15 crore on a 4.13% increase in total revenue from operations to Rs 8,522.98 crore in Q4 March 2021 over Q4 March 2020. The profit was impacted by an exceptional loss worth Rs 672.80 crore related to various litigation settlements pertaining to some of its subsidiaries.
Eicher Motors’ net profit surged 72.91% to Rs 526.14 crore on 32.83% increase in total revenue to Rs 3,123.27 crore in Q4 March 2021 over Q4 March 2020.
Metropolis Healthcare’s net profit surged 296.06% to Rs 61.35 crore on 39.87% increase in total revenue to Rs 293.80 crore in Q4 March 2021 over Q4 March 2020.
NOCIL’s net profit surged 70.69% to Rs 37.33 crore on 50.31% increase in total revenue to Rs 324.33 crore in Q4 March 2021 over Q4 March 2020.
Hester Biosciences said that an MOU has been signed between Bharat Biotech International and GCVC towards contract manufacturing for the Drug Substance for COVAXIN. Hester has estimated an outlay of Rs 40 crore for this project.
Goodyear India said its standalone net profit surged 240.31% to Rs 43.22 crore on a 51.84% jump in revenue from operations to Rs 569.34 crore in Q4 March 2021 over Q4 March 2020. Meanwhile, the board has declared a final dividend of Rs 18 per equity share for FY 2020-21. The board has also approved a special dividend of Rs 80 per equity share.
IRB Infrastructure Developers said consolidated net profit dropped 36.84% to Rs 97.46 crore on a 1.34% rise in revenue from operations to Rs 1,605.84 crore in Q4 March 2021 over Q4 March 2020.
Gujarat Pipavav Port said consolidated net profit rose 20.80% to Rs 65.39 crore on a 19.43% rise in revenue from operations to Rs 193.42 crore in Q4 March 2021 over Q4 March 2020.
Global markets
Overseas, Asian stocks are trading higher on Friday after solid U.S. economic data and President Joe Biden’s federal spending plans spurred a rally on Wall Street in cyclical shares.
U.S. stocks advanced on Thursday, as data showing improvement in the labour market helped bolster expectations in the economic recovery and spurred a minor rotation towards stocks seen as more likely to benefit from the rebound.
On Thursday, Senate Republicans unveiled their $928 billion infrastructure counteroffer to President Joe Biden’s $1.7 trillion proposals. Republicans again rejected Biden’s call to raise corporate taxes, contending they could cover infrastructure costs with funds already allocated by Congress or with transportation user fees.
The number of Americans filing new claims for unemployment benefits dropped more than expected last week as layoffs subsided. Initial claims for state unemployment benefits fell 38,000 to a seasonally adjusted 406,000 for the week ended May 22, the Labor Department said. That was the lowest since mid-March 2020 and kept claims below 500,000 for three straight weeks.
In a separate report, the Commerce Department left its initial estimate on first-quarter gross domestic product unchanged at 6.4%