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Domestic equity indices fell during the week as investors were worried over rising inflation and aggressive rate hike by global central banks amid volatility in crude prices. For the week, the Sensex declined 1.32% to 53,760.78 and the Nifty 50 index lost 1.06% to 16,049.20.
Broader markets outperformed headline index. The BSE Midcap index rose 0.88% to 22,854.62 and the BSE Smallcap index gained 0.54% to 25,779.56.
Top losers among Nifty sectoral indices were IT [-6.3%], Bank [-1.3%], Pvt Bank [-1%], PSU Bank [-0.8%]. Top gainers were Energy [2.5%], Consumer Durables [2.4%], Pharma [2.3%] and Realty [2.2%] and Auto [2%].
In cash segment, FIIs sold for Rs 5916 crore and the DIIs bought for Rs 2146 crore during the week.
The Indian rupee continued to depreciate during the week and touched a record low of 79.96 against the US dollar. The rupee declined 62 paise to end at 79.87 per dollar on Friday.
The WTI Crude price stood at $97.59 per barrel, while the Brent Crude stood at $101.16 a barrel.
Company News
Adani Ports and SEZ: Israel said that it will sell Haifa Port, a major trade hub on its Mediterranean coast, to winning bidders Adani Ports and local chemicals and logistics group Gadot for $1.18 billion, Reuters reported. Adani will have a majority 70% stake and Gadot will hold the remaining 30%, according to an industry official.
In other news, the company has clocked a cargo throughput of 100 MMT in the first 99 days of FY23, compared to 100 MMT cargo throughput in 109 days in the previous year. The improvement in time and efficiency was driven by tech-based innovations to integrate conventional business processes with new-age digital technologies.
Infosys: The company said that it will acquire Denmark-based BASE life science for about 110 million euros (Rs 875 crore) in an all-cash deal. The acquisition will deepen Infosys’ expertise in life sciences domain as well as strengthen its footprint across Europe. The deal is expected to close during the second quarter of current fiscal.
HDFC Ltd: The company will issue bonds on a private placement basis to raise up to Rs 5,000 crore, the company said. The secured redeemable non-convertible debentures (NCDs) will bear interest rate at 7.77%, payable annually and has a tenor of 4 years 11 months and 10 days, HDFC said in a regulatory filing.
ACC: The cement maker reported a 60 per cent year-on-year decline in consolidated profit after tax (PAT) to Rs 227 crore for the quarter ended June 30, 2022. In the corresponding period last year, consolidated PAT stood at Rs 569 crore. Consolidated revenue for the quarter grew 15% year-on-year to Rs 4,468 crore, up from Rs 3,885 crore in the year-ago period. The decline was attributed to higher prices of power and pet coke as well as moderation in demand.
HCL Technologies: The IT company reported a net profit of Rs 3,283 crore, up 2.4% year-on-year (YoY), but was down 8.6% sequentially for the quarter ended June 2022. Revenue for the first quarter of FY23 stood at Rs 23,646 crore, up 16.9% YoY. The growth was 3.8% sequentially. The company’s growth was driven by its engineering and R&D segment, which grew 23% YoY and 3.7% sequentially. The IT and services business grew by 18.1% YoY.
Bharti Airtel: The company allotted 7.1 crore shares at Rs 734 per share, totalling around Rs 5,250 crore to Google. With this, Google owns 1.2% of the company and the allotment is a part of the Rs 7,500-crore deal signed between Google and Airtel in January.
Larsen & Toubro (L&T): The company’s Buildings & Factories (B&F) business has secured significant contracts from various clients. According to L&T’s classification, the value of the significant project range between Rs 1,000 crore and Rs 2,500 crore. It has secured orders from renowned data center service providers to construct data centers of a total capacity of 10.8 megawatt (MW) at Mumbai and Navi Mumbai.
Coal India: The company said its capex jumped to Rs 3,034 crore in Q1FY2024 compared to Rs 1,193 crore in Q1FY2022. The capex increase came on the back of strong spending in acquiring land and strengthening transport infrastructure in its coalfields under first mile connectivity projects, Coal India said.
Larsen and Toubro Infotech (LTI): The IT company on Thursday posted a 28% increase in consolidated net profit at Rs 633.5 crore in the first quarter ended June 30, 2022. It had registered a profit of Rs 496.3 crore in the same period a year ago, the company said in a regulatory filing. The consolidated income from operations increased by 30.62% to Rs 4,522.8 crore during the reported quarter from Rs 3,462.5 crore in the June quarter last year.
Tata Elxsi: The company clocked 63% YoY growth in profit to Rs 184.7 crore Q1FY23 due to strong operating profit and topline growth. Revenues from operations grew 30% YoY to Rs 725.9 crore and EBITDA was up 58.8% YoY to 238.2 crore in Q1FY23.
Mindtree: The mid-tier IT services company reported a net profit of Rs 472 crore, up 37% year-on-year, in the Q1FY23. Revenue for the quarter grew 36.2% YoY at Rs 3,121 crore. The company signed a total contract value of $570 million during the quarter.
Federal Bank: The lender reported a 63.5% increase in net profit to Rs 600.66 croreo in the April-June quarter of FY23, aided by lower provisions and a healthy rise in net interest income (NII). It had posted Rs 367.29 crore in the year-ago period. Its NII rose 13.1% to Rs 1,604.5 crore in Q1FY23 and other income was down 30.2% YoY to Rs 453 crore. Net interest margin stood at 3.22% , up 7 basis points YoY.
Telecom Equipment companies: Shares of telecom equipment makers such as ITI, Tejas Networks and Indus Towers rose after the government amended Unified Access Services License Agreement (UASL) with respect to procurement of telecommunication equipment. After the amendment, wireless service providers have been mandated to buy only from suppliers designated as trusted sources by the government.
One 97 Communications (Paytm): The fintech company, in an exchange filing, said that the number of loans disbursed through the company’s platform grew 492% y-o-y to 8.5 million loans in the quarter ending June 2022, while the value of loans disbursed grew 779% y-o-y to Rs 5,554 crore. The company had disbursed 14.33 lakh loans worth Rs 632 crore in the year-ago period. The company said that it is seeing increases in average ticket size due to the scale-up of the personal loans business in particular.
Economy News
India’s inflation based on Consumer Price Index (CPI), also know as retail inflation, stood at 7.01% in June 2022 compared with 7.04% in May 2022, according to India’s statistics agency.
India’s inflation based on wholesale price index (WPI) stood at 15.18% in June 2022 compared with 12.07% in June 2021.The WPI grew 15.88% in May 2022. The Ministry of Commerce & Industry said that the high rate of inflation in June 2022 is primarily due to rise in prices of mineral oils, food articles, crude petroleum & natural gas, basic metals, chemicals & chemical products and food products.
India’s factory output, measured by Index of Industrial Production (IIP), grew 19.6% in May 2022 compared to 7.1% growth in April 2022. The manufacturing sector recorded a growth of 20.6% in May, while the mining sector rose 10.9% and the electricity sector jumped 23.5%.
India’s merchandise exports in June 2022 were $40.13 billion, up 23.52% to $32.49 billion in June 2021, Merchandise imports in June 2022 were $66.31 billion, a rise of 57.55% over imports of $42.09 billion in June 2021.The merchandise trade deficit in June 2022 was at $26.18 billion as against $9.60 billion in June 2021.
Global Markets
The US markets ended lower during a choppy week as the labour department reported the country’s record high CPI inflation numbers. For the week, the S&P fell 0.93%, the Dow lost 0.16% and the Nasdaq shed 1.57%.
The Labor Department reported that the inflaation based on consumer price index (CPI) rose by 9.1% over the 12 months ended in June, the highest increase since 1981.
Meanwhile, headline producer price inflation rose 1.1% in June, more than expected and its highest pace since March.
The yield on the benchmark 10-year US Treasury note fell over the week. Besides, the closely watched 2-year/10-year segment of the Treasury yield curve, which is considered to be a recession signal, reached its widest level since 2000.
Japan’s stock market closed the week with positive returns. The Nikkei 225 index rose 1.02% and the broader Topix index was up 0.27%.
Bank of Japan (BoJ) Governor Haruhiko Kuroda reiterated that the central bank will continue its ultra-loose monetary policy, and will not hesitate to take additional easing steps to support its economy.
Chinese markets fell as data showed that the economy slowed sharply in the second quarter and a growing number of homebuyers stopped paying their mortgages that hurt property and banking shares. The Shanghai Composite index slumped 3.8%, the CSI 300 index tanked 4.1% and Hang Seng fell 2.19%.
China’s GDP for the June quarter grew at an abysmal 0.4% from a year earlier, compared to a 4.8% expansion recorded in the first quarter, according to government data. Industrial production grew 3.9% in June from a year earlier, up from May’s 0.7% rise, while fixed asset investment increased 6.1% in the first six months of the calendar year from the year-ago period. Retail sales rose 3.1% year on year in June