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Benchmark equity indices closed higher for the second week in a row on positive global cues and gains in banks as well as auto stocks. For the week, the Sensex closed 1.03% higher to 54,884.66 and the Nifty edged up 0.53% to 16,352.45.
In broader markets, Nifty Midcap 100 fell 0.8% and BSE Smallcap dropped 2.8% during the week.
Top gainers among Nifty sector indices were Bank [3.9%], Auto [3.3%] and PSU Bank [1.3%]. Top loser were Metal [-8.7%], Energy [-3.5%], Realty [-3.3%] and Pharma [-3.03%]
In cash segment, FIIs were net sellers and sold for Rs 9,688.6 crore, while DIIs were net buyers and bought for Rs 11,257.7 crore during the week. On a monthly basis, FIIs sold for Rs 53,791 crore and DIIs bought for Rs 47,465.9 crore in May 2022.
Nifty VIX, which indicates the volatility of the market, fell 7% in the week.
Company News
BPCL: The government withdrew its offer to sell its entire 52.98% in BPCL, saying two of the three companies that had shown interest in acquiring the public sector undertaking (PSU) withdrew their bids. The two companies have expressed their inability to participate in the current privatisation process due to prevailing conditions in the global energy market.
IT companies: Shares of Indian IT services companies fell after brokerge firm Nomura downgraded five of seven stocks in its coverage. Nomura expects tech spending to decline due to dynamic changes in macro-economic conditions and a hawkish Federal Reserve. The brokerage firm also estimates growth rates to decelerate due to revenue and earnings volatility.
Sugar stocks: Shares of sugar manufacturers declined after news reports said that Indian government planned to restrict sugar exports to prevent a surge in domestic prices, according to a government source. Government is planning to cap sugar exports at 10 million tonnes for the marketing year that runs through September, Bloomberg reported citing sources.
Aditya Birla Fashion and Retail Limited (ABFRL): The company’s board approved raising of up to Rs 2,195 crore by way of preferential issuance of equity and warrants to an affiliate of GIC, Singapore’s sovereign wealth fund, according to a media release.
GIC will invest Rs 770 crore now towards subscription of equity and warrants, followed by up to Rs 1,425 crore in one or more tranches within 18 months upon exercise of warrants. After the completion of the deal, GIC will own about 7.5% equity stake in ABFRL, and Aditya Birla Group will hold about 51.9% stake in the company.
Grasim Industries Ltd: The Aditya Birla group company is planning to raise up to Rs 2,000 crore through debentures to fund its capital expenditure programme. The company has lined up investment for foray into decorative paints with project cost estimated at Rs 10,000 crore by FY25.
Bharti Airtel: Singapore-based telecom firm Singtel is in talks with Airtel chairman Sunil Mittal to sell its 2-4% stake in Airtel. Meanwhile, Ratings agency Moody’s upgraded ratings of Bharti Airtel’s senior unsecured debt from “Ba1” to “Baa3” on basis of the telco’s continued strengthening of the company’s operational metrics and stabilisation of financial profile.
InterGlobe Aviation (IndiGo): The company said its losses widened to Rs 1,681.80 crore in the March quarter compared with Rs 1,147.20 crore in the corresponding quarter last year. The rise in losses was due to higher fuel costs. Its total income for the quarter jumped 29% YoY to Rs 8,207.50 crore from Rs 6,361.80 crore in the same quarter last year.
Oil and Natural Gas Corporation (ONGC): The company said it will invest Rs 31,000 crore over the next three years in exploring the Indian sedimentary basin for fuel reserves which could augment the nation’s production in its attempt to be self-reliant in the energy sector. ONGC said it also plans to leverage international collaborations with reputed global majors for this, for which talks are in an advanced stage.
Vodafone Idea: The telecom operator plans to raise Rs 20,000 crore in fresh funding, its CEO Ravinder Takkar told The Hindu Business Line. Out of the said amount, about Rs 10,000 crore will be equity and the remaining amount from fresh bank loans.
Hindustan Zinc: Shares of the company rose on Wednesday after media reports said that the Cabinet has approved 29.5% stake sale in the company. As of March 31, Vedanta held 64.92% stake in the company, while LIC owned 2.6%.
Adani Group: The company has signed a Memorandum of Understanding (MoU) with the government of Andhra Pradesh at the World Economic Forum with respect to an investment of Rs 60,000 crore by Adani Green Energy. It will set up a 3,700 MW Hydro Storage Plant and 10,000 MW solar energy project in Andhra Pradesh.
Indian Hotels Company (IHCL): The hospitality company unveiled its route map for profitable growth through ‘Ahvaan 2025’ plan. Under this, IHCL will re-engineer its margins, re-imagine its brandscape, and restructure its portfolio. The company aims to build a portfolio of 300 hotels, clock 33% earnings before interest, taxes, depreciation, and amortization (Ebitda) margin with 35% EBITDA share contribution from new businesses and management fees by FY25-26, to its press release.
In other news, the hospitality firm of Tata group said that its board has approved the re-appointment of Puneet Chhatwal as Managing Director and CEO for another term of five years. Chhatwal’s reappointment is for another term commencing from November 6, 2022 up to November 5, 2027 subject to shareholders’ approval.
Hindalco Industries: The flagship metals company of the Aditya Birla group said its consolidated net profit doubled year-on-year (YoY) to Rs 3,851 crore in Q4FY22. Hindalco’s consolidated revenue for Q4FY22 rose 37.66% to Rs 55,764 crore versus the year-ago period.
Adani Ports and Special Economic Zone Limited (APSEZ): The company has reported a 21.78% decline in consolidated net profit to Rs 1,033 crore for the fourth quarter ended March 2022. It had clocked a consolidated net profit of Rs 1,321 crore in the corresponding period of the previous fiscal. Consolidated total income of the company increased to Rs 4,417.87 crore for the fourth quarter of FY22 as against Rs 4,072.42 crore in the year-ago period.
Apollo Hospitals Enterprises: The hospital chain said its consolidated profit after tax declined by 46% to Rs 90 crore for the fourth quarter of FY22 as against a PAT of Rs 168 crore in the year-ago period. Revenue from operations rose to Rs 3,546 crore in the reported quarter as compared with Rs 2,868 crore in the year-ago period.
The company’s board recommended a dividend of Rs 11.75 per share of face value of Rs 5 each for the financial year ended March 2022. It also approved the re-appointment of Prathap C Reddy as a whole time director designated as an Executive Chairman for a period of two years with effect from June 25, 2022, subject to the approval of shareholders.
Global Markets
Major US stock indices closed higher on optimism that inflationary pressures could be peaking and the Federal Reserve will be able to tighten monetary policy without an economic recession. For the week, the S&P 500 rose 6.59%, the Dow jumped 6.24%, the Nasdaq surged 6.84%.
The S&P Global Flash U.S. PMI declined to 57.5 in May, from 59.2 in April. On the services side of the economy, the flash PMI reading came in at 53.5, down from 55.6 in the preceding month.
Japan’s stock market started the week positively, but fell on subsequent days on weak manufacturing data and fears of an economic slowdown due to supply chain concerns. However, Japanese stocks pared losses and closed higher, tracking the US markets on Friday as well as for the week. The Nikkei 225 registered a weekly gain of 0.16%, while the broader Topix ended 0.53% higher.
Chinese markets fell for the week due to worries over slowing growth that was worsened by the government’s zero-tolerance approach to the coronavirus. The Shanghai Composite index fell 0.5%, the blue chip CSI 300 index dropped 1.9 and Hang Seng slipped 0.1%.