Sensex opens 262 points higher, Nifty near 15,900; banks, financials lead

Benchmark equity indices opened in the green on Tuesday tracking positive global cues, as investor ignored the rising inflation and eyed US Federal Reserve’s two-day policy meeting. In opening trade, Sensex advanced 262 points or 0.50% to 52,813, while Nifty 50 stood at 15,883, up 71 points or 0.45%.

As many as 29 of 30 Sensex stocks opened in the green. IndusInd Bank led the pack with gains of 1.92%, Tech Mahindra gained 1.47%, Asian Paints advanced 1.27%, PowerGrid rose 0.86% and HCL Tech was up 0.79%. On the downside, Dr Reddy’s slipped by 0.79%.

“Rising inflation can constrain RBI’s pro-growth accommodative monetary policy. INR depreciation has become another tailwind for the performing IT index which has outperformed Nifty by 35 % during the last 12 months. It makes sense to remain invested in IT, pharma & metal stocks which are unlikely to be impacted by negative macros like rising inflation,” said V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.

Globally markets will be keenly watching the Fed meeting outcome on Wednesday, particularly clues regarding possible timing of tapering. US 10-year yield hovering around a 3-month low of 1.48% indicate that the market doesn’t expect any major market-moving announcement from the Fed, added V K Vijayakumar.

Barring Nifty Pharma all sectoral indices were trading in the green. Nifty Realty index advanced 0.98%, Nifty Bank climbed 0.80%. Whereas Nifty IT, Nifty FMCG and Nifty Auto indices were trading in the range 0.34-0.60%.

The broader market mirrored gains in benchmark indices. BSE MidCap rose 0.26% at 22,830 and the BSE SmallCap index at 25,226 surged 0.60% .

Economy
Consumer Price Index-based inflation (CPI) for the month of May came in at 6.30%, higher than April’s 4.23%. The higher inflation month-on-month was primarily on the back of a substantial hardening of food prices.

Earnings today
Jubilant FoodWorks, Power Finance Corporation, Whirlpool Of India, LIC Housing Finance, Lemon Tree Hotels, Easy Trip Planners, BLS International Services, Entertainment Network (India), Spencer Retail, Salzer Electronics among others will be declaring their quarterly results today.

Stocks in spotlight
Coal India reported a 1.1% fall in consolidated net profit to Rs 4,586.78 crore on a 5.11% fall in total income to Rs 27,974.12 crore in Q4 FY21 over Q4 FY20.

Adani Group stocks will be in focus as the accounts of three foreign funds that are big stakeholders of Adani group companies are not frozen, a top official of the National Securities Depository Ltd (NSDL) informed the port-to-energy conglomerate. To be sure, the NSDL website still shows that the accounts of the three so-called foreign portfolio investors (FPIs) are frozen. But this punitive action pertains to older cases.

Strides Pharma Science said its Singapore-based subsidiary has joined hands with US-based Ennaid Therapeutics to produce an oral medication to treat patients with mild and asymptomatic COVID-19.

Indian Overseas Bank reported an over two-fold rise in its profit-after-tax at Rs 350 crore in the three months to March 2021, helped by higher growth in other income and on improvement in asset quality. In the quarter ended March 2020, the lender had registered a profit-after-tax of Rs 144 crore after being in red for 18 consecutive quarters.

NHPC has signed a Memorandum of Understanding (MoU) with Bihar State Hydro-Electric Power Corporation (BSHPCL) for execution of Dagmara HE Project (130.1 MW) in the State of Bihar by NHPC on ownership basis.

Sagar Cements said that a meeting of the board of directors of the company will be held on 1 July 2021, to consider a proposal to sub-divide (split) the face value of the equity shares of the company.

Jaiprakash Power Ventures reported a consolidated net loss of Rs 12.33 crore in Q4 FY21 as against a net loss of Rs 1,819.58 crore in Q4 FY20. Total income during the quarter increased by 12.9% year-on-year (YoY) to Rs 993.98 crore.

JSW Ispat Special Products said that promoter AION Investments Private II to sell up to 9.94 crore shares, representing 21.18% of the total equity share capital through an offer for sale. The floor price of Rs 27 per share. The OFS opens for non-retail investors today and for retail investors tomorrow.

Satin Creditcare Network reported a 189.14% surge in consolidated net profit to Rs 37.82 crore on a 0.79% fall in total income to Rs 406.04 crore in Q4 FY21 over Q4 FY20.

Uttam Sugar Mills reported a 20.33% fall in standalone net profit to Rs 27.83 crore on 0.27% fall in total income to Rs 557.05 crore in Q4 FY21 over Q4 FY20.

Global markets
Overseas, Asian stocks are trading mixed on Tuesday after their U.S. peers closed at a record on Monday ahead of a key Federal Reserve meeting.

The Nasdaq Composite jumped to a record high on Monday as investors rotated back into growth-oriented stocks ahead of a key Federal Reserve meeting. Overnight on Wall Street, the Nasdaq Composite gained 0.74% to an all-time closing high of 14,174.14. The S&P 500 also cruised to another record close, rising 0.18% to 4,255.15. The Dow Jones Industrial Average lagged, dipping 85.85 points to 34,393.75.

The Fed’s two-day policy meeting will likely dominate investor behaviour this week. Although the central bank is not expected to take any action, its forecasts for interest rates, inflation and the economy could move the markets. Fed Chairman Jerome Powell will speak to the press after the central bank issues its statement Wednesday.