“In spite of negative global cues, Indian benchmark indices gained strength as the day went on, powered by the IT index and Infosys in particular. Infosys reported better than expected numbers and was backed by good deal wins and decent outlook,” said Vinod Nair, head of research at Geojit Financial Services
Even as the frontline indices rallied, experts sounded caution, suggesting the situation on the ground was far from normal.
“Ground realities remained little changed, as the virus infections and geopolitical tensions created uncertainty on the global economic recovery. Investors need to remain stock specific and the earnings results and commentary should be watched out for,” he warned.
According to Ajit Mishra, VP – Research, Religare Broking, markets will continue to take cues from the global peers in the absence of any major domestic trigger. “While the mood in the global markets continues to remain buoyant, the rising number of cases in the US and India would remain a key cause of concern. Besides, the earnings announcements will further induce stock-specific volatility. Keeping all in mind, we reiterate our cautious stance on the markets and suggest preferring hedged trades,” Mishra said.
Sensex rose 420 points to close at 36,472 while peer Nifty climbed 122 points to 10,740.
Sensex winners & losers (Source: BSE)
A total of 18 of 30 Sensex stocks closed higher with Infosys contributing the most to its gains.
Infosys jumped as much as 14.5 per cent to log a new high of Rs 952 after investors gave a thumbs up to IT major’s Q1 numbers. It pared some gains and closed 9.56 per cent higher at Rs 910.90
Overall, the results of top IT firms including Tata Consultancy Services (TCS), Infosys and Wipro collectively reflect resilience and fast adaptability of their business models in the testing times. Among the three, Infosys stood out. It reported revenue dropped by 2.4 per cent sequentially to $ 3,121 million in the June quarter while its two peers recorded a steeper drop of over 7 per cent.
Private lenders HDFC Bank and Kotak Mahindra Bank followed next as they advanced 0.92 per cent and 2.47 per cent, respectively.
Even as the frontline indices rallied, the weakness was widespread in the overall market, with nearly three shares declining for every two shares that advanced on the BSE.
The broader market was mixed with the BSE Midcap index rising 0.71 per cent while BSE Smallcap index shed 0.13 per cent.
All sectoral indices, except three, logged gains. BSE IT was the top sectoral gainer as it rose 4.14 per cent while BSE Teck advanced 3.07 per cent.
BSE Telecom, Power and Utilities dropped 1.52 per cent, 0.96 per cent and 0.69 per cent, respectively.
FMCG firm Bajaj Consumer Care rallied 20 per cent as it reported a consolidated profit at Rs 54.23 crore for the quarter ended June 30, even as it was a decline of 4.35 per cent from a year ago.
Larsen & Toubro Infotech gained nearly 7 per cent after the company posted a 17.06 per cent year-on-year growth in its June quarter net profit.
Telecom major Vodafone Idea closed 9.02 per cent lower after the Telecommunications Dispute Settlement and Appellate Tribunal (TDSAT) on Thursday reserved its order to stay the sector regulator’s decision, asking the telecom firm to put on hold its RedX premium plan.
Foreign institutional investors (FIIs) have been net sellers of Indian equities in seven of first 10 sessions in July and have net sold $ 168.82 million or Rs 1,286.02 crore in the period, while domestic institutional investors (DIIs) have sold a net of Rs 2,790.49 crore of shares in the same period.
Markets at a glance:
- Sensex up 1.16% or 420 points at 36,472
- Nifty rises 1.15% or 122 points to 10,740
- 18 of 30 Sensex stocks close higher
- Infy top Sensex gainer; hits new high on robust Q1, up 9.56%
- Other Sensex gainers: M&M up 3.81%, Nestle 3.31%
- Top Sensex losers: TechM down 2.54%, ITC 2.34%
- Market breadth negative; advance-decline ratio 2:3
- Broader markets mixed; BSE Midcap up 0.71%, Smallcap down 0.13%
- BSE IT top sectoral gainer, up 4.14%; Infy leads, Mastek up 8.12%
- BSE Teck up 3.07%; Infy at the top, Oracle Financial up 5.43%
- BSE Telecom top loser, down 1.52%; Voda Idea down 9.02%, Infratel 6.96%
- Voda Idea down as TDSAT reserves order against co
- Bajaj Consumer Care up 20% on Q1 profit
- YES Bank down 5.87%, FPO filled in 44%
- L&T Infotech up 7% on robust Q1 net
Who moved my market
IT major Infosys was the top gainer and contributor to benchmark Sensex’s gains. It added 277 points after rallying 9.56 per cent. It even logged a new high of Rs 952. Brokerages too, gave thumbs up to Infosys after it ticked all the boxes on financial fronts in Q1 despite supply-side constraints, with strong deal wins and free cash flow generation. The company n Wednesday beat street view as it posted an 11.5 per cent year-on-year growth in its net profit for April-June period, in the quarter marked by Covid-19 pandemic, and provided FY 21 revenue growth guidance in the range of 0-2 per cent in constant currency terms. Analysts said healthy buying interest was seen in IT stocks on the back strong earnings from Infosys.
European shares opened lower on Thursday after Asian stocks faltered overnight, with risk appetite hit by deteriorating U.S.-China relations and worse-than-expected Chinese domestic consumption data, Reuters reported. Europe’s STOXX 600 was down 0.9 per cent. The MSCI world equity index, which tracks shares in 49 countries, was down 0.5 per cent.
- Continued record surge in Covid infections
India’s total coronavirus cases reached 9,68,876 as a record 32695 new coronavirus cases were reported in the last one day, according to the data released by the Union Ministry of Health and Family Welfare. The death toll rose to 24,915, including 606 fatalities in the last one day.
What to watch out for
- The coronavirus cases in India are yet to peak and are witnessing a record rise each day. This remains a major cause of worry.
- The direction of global markets will be closely watched as the domestic market tends to follow suit.
- Progress on a domestic as well as overseas vaccine for Covid-19 treatment will be closely watched.
- The ongoing June quarter corporate earnings season is providing a better picture of the damage caused by the pandemic-induced lockdown. More than the numbers for the quarter, the commentary and the outlook is key.