Market Commentary - End-Session
Nifty blazes new trail, fueled by RBI's dividend cannon As on : 23-May-24  18:05

The domestic equity benchmarks rocketed higher today, with the Nifty50 breaching a fresh record and settling above 22,950. Banking and financial stocks led the charge, fueled by the RBI's surprise Rs 2.11 lakh crore dividend payout to the government. This windfall gives the government more elbow room, potentially translating to lower borrowing and interest rates. This scenario is a boon for banks, boosting their treasury income and paving the way for increased government infrastructure spending.

In the barometer index, the S&P BSE Sensex, surged 1,196.98 points or 1.61% to 75,418.04. The Nifty 50 index jumped 369.85 points or 1.64% to 22,967.65.

The Sensex and Nifty50 clocked an all-time high of 75,499.91 and 22,993.60, respectively, in late trade. Adani Enterprises (up 8%), HDFC Bank (up 2.22%) and Reliance Industries (up 1.8%) boosted the indices.

The Nifty Bank bounced from a two-day losing streak, surging nearly 1,000 points to close in at 48,768.

In the broader market, the S&P BSE Mid-Cap index added 0.58% and the S&P BSE Small-Cap index rose 0.27%.

The market breadth was negative. On the BSE, 1,762 shares rose and 2,071 shares fell. A total of 112 shares were unchanged.

Economy:

The Reserve Bank of India (RBI) announced a transfer of Rs 2.11 lakh crore to the government for the financial year 2023-24. This represents the highest surplus transfer on record by the central bank. This surplus will be reflected in the government's accounts for the financial year 2024-25, providing a significant boost to their fiscal position.

India's business activity continued to expand at a robust pace in May, according to the HSBC Flash India Composite Output Index. The index rose to 61.7, marking the third-strongest growth in nearly 14 years. This strength was driven by a sharp rise in services activity, which hit a four-month high.

HSBC Flash India Manufacturing PMI, however, slipped from 58.8 in April to 58.4 in May, showing the weakest improvement in the health of the sector for three months but one that remained strong by historical standards.

HSBC Flash India Services PMI Business Activity Index stood at 61.4 in May as against 60.8 in April.

Numbers to Track:

MCX Gold futures for 5 June 2024 settlement fell 0.85% to Rs 72,989.

The US Dollar index (DXY), which tracks the greenback's value against a basket of currencies, was down 0.18% to 104.75.

The United States 10-year bond yield declined 0.29% to 4.422.

In the commodities market, Brent crude for July 2024 settlement added 0.60 cents or 0.73% to $82.50 a barrel.

Global Markets:

European stocks advanced while Asian stocks ended mixed on Thursday following central banks' cautious stance on easing interest rates due to persistent inflation.

Investor anxiety was heightened with China conducting military drills near Taiwan. Japan's manufacturing sector showed a positive surprise, expanding to 50.5 in May.

Meanwhile, US stocks dipped after the Fed minutes revealed a gradual approach to curbing inflation, though Nvidia's upbeat revenue forecast lifted its share price.

Chip maker Nvidia reported a blowout quarter, with net income and revenue tripling year-over-year. They also announced a 10-for-1 stock split and a significant dividend increase. However, this positive news was overshadowed by the US Fed meeting minutes. The minutes revealed a hawkish stance from some Fed officials, indicating a willingness to raise interest rates due to concerns about inflation not subsiding as quickly as anticipated. This news sent US market lower.

Stocks in Spotlight:

The Nifty Auto index rallied 2.25% today and hit a record high of 23,874.75. Among the index components, M&M (up 3.53%), Eicher Motors (up 3.4%), Maruti Suzuki (up 2.86%), HeroMoto Corp (up 2.69%), Ashok Leyland (up 1.85%), Tata Motors (up 1.58%), TVS Motors (up 1.53%) and Bajaj Auto (up 1.49%) surged.

ITC rose 0.33%. The diversified conglomerate?s net profit declined marginally to Rs 5,020.20 crore in Q4 FY24 as against Rs 5,086.86 crore posted in Q4 FY23. Net revenue was at Rs 16,371 crore in the March quarter, up 1.4% from Rs 16,150 crore recorded in the corresponding quarter previous year.

Power Grid Corporation of India declined 1.86% after the company?s consolidated net profit declined 3.62% to Rs 4,166.33 crore on 2.5% fall in revenue from operations to Rs 11,978.11 crore in Q4 FY24 over Q4 FY23.

Grasim Industries rose 0.69%. The company?s consolidated net profit rose marginally to Rs 1,369.82 crore in Q4 FY24 from Rs 1,368.92 crore in Q4 FY23. Revenue from operations increased 12.75% year on year (YoY) to Rs 37,727.13 crore in the quarter ended 31 March 2024.

FSN E-Commerce Ventures (Nykaa) slipped 2.85%. The company reported consolidated net profit of Rs 90.71 crore in Q4 FY24, steeply higher than Rs 22.75 crore posted in Q4 FY23. Revenue from operations jumped 28% to Rs 1,667.98 crore in Q4 FY24 as compared with Rs 1,307.72 crore in Q4 FY23.

Gland Pharma jumped 4.76% after the company reported a consolidated net profit of Rs 192.42 crore in Q4 FY24, steeply higher than Rs 78.68 crore posted in Q4 FY23. Revenue from operations soared 95.85% to Rs 1,537.5 crore during the quarter as against Rs 785.01 crore recorded in Q4 FY23.

Garden Reach Shipbuilders & Engineers (GRSE) surged 20% after the company's net profit doubled to Rs 111.60 crore in Q4 FY24 as compared to Rs 55.30 crore in Q4 FY23. Revenue from operations jumped 68.96% year on year (YoY) to Rs 1,015.73 crore in the quarter ended 31 March 2024.

Saregama India zoomed 13.72% after the company reported 24% rise in net profit to Rs 53.9 crore on a 29% increase in revenue from operations to Rs 263.1 crore in Q4 FY24 over Q4 FY23.

GPT Infraprojects hit an upper circuit of 5% after the company has been declared L1 (First Lowest) by Rail Vikas Nigam (RVNL) for an aggregate value of Rs 554.94 crore.

Sundram Fasteners slipped 2.37%. The company reported 5.44% rise in consolidated net profit to Rs 134.41 crore in Q4 FY24 from Rs 127.47 crore in Q4 FY23. Revenue from operations increased 1.28% YoY to Rs 1,466.48 crore in the fourth quarter of FY24.

HEG tumbled 16% after the company's consolidated net profit slipped 67% to Rs 32.91 crore on 11.34% decline in revenue from operations to Rs 546.90 crore in Q4 FY24 over Q4 FY23.

New Listing:

Shares of Go Digit General Insurance were ended at Rs 305.50 on the BSE, representing a premium of 12.4% as compared with the issue price of Rs 272.

The scrip was listed at Rs 281.10, exhibiting a 8.68% premium to the issue price.

The stock has hit a high of 314.00 and a low of 281.10. On the BSE, over 18.56 lakh shares of the company were traded.

IPO Update:

The initial public offer (IPO) of Awfis Space Solutions received 3,68,85,732 bids for shares as against 86,29,670 shares on offer, according to stock exchange data at 17:00 IST on Thursday (23 May 2024). The issue was subscribed 4.27 times.

The issue opened for bidding on Wednesday (22 May 2024) and it will close on Monday (27 May 2024). The price band of the IPO is fixed between Rs 364 to Rs 383 per share. An investor can bid for a minimum of 39 equity shares and in multiples thereof.

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