Good Earnings Fuel Stock Specific Rallies; Nifty At 10,600

Good Earnings Fuel Stock Specific Rallies; Nifty At 10,600

Market At 2 Months High

Our Analysis

This week, some of the big companies like Hero Motocorp, Kotak Bank, DHFL, MRF reported strong numbers. However, the management commentary of HCL Tech upset the market sentiment. The market this week reacted strongly to the global cues mainly on Fed Meet Outcome & US-China trade talks. Also, domestic data continued to be on the positive side as manufacturing index was high while GST collection crossed Rs.1 trillion. Metal, Pharma, PSU Bank & Realty stocks remained under selling pressure. Sectors like midcap IT, Realty, Infra, Fertilisers gave plenty of opportunities to gain in the volatile market.

This Weeks Market Highlights:

Benchmark Indices:

1. The benchmark indices opened on a higher note.

2. Sensex surged nearly 200 points while Nifty closed above 10,700 after the Reserve Bank of India liberalised ECB policy.

3. All sectoral indices closed in green led by PSU Bank, Realty, IT & FMCG. All the indices were up over 1%. Nifty midcap was up .0.80%.

4. On Wednesday, the market closed flat after a rangebound session, Nifty remained above 10,700, ahead of Fed Meet outcome.

5. On Thursday, equity indices remained volatile as Sensex fell 73 points while Nifty closed below 10,700, amid weak global cues.

6. On Friday, the market traded lower due to weakness in the global peers amid US-China trade talks.

Sectoral Index:

- This week broader market underperformed fronliners as from Monday, selling pressure was seen in the midcap & smallcap stocks. On the sectoral index Metal, IT, Pharma & banking stocks remained under selling pressure.

- This week global market remained under selling pressure after a choppy session due to disappointing earnings reported by several companies offset strong economic data. Also, ahead of US Payrolls data, Asian markets also remained mix.

Movers & Shakers

Today, Equitas Holdings Ltd reported an over five-fold jump in its consolidated net profit at Rs.34.89 crore for Q4 2018 against 6.91 crores in last fiscal year. "As a strategy, we have looked to reduce micro-loan portfolio and we have grown our secured loan portfolio to 72%, said P N Vasudevan managing director Equitas Holdings. The share price of the company surged nearly 20% this week.

Shares of HCL Technologies have dipped around 15% this week after the company reported PAT for Q4FY18 was marginally below expectation. Revenue in Rupee terms grew by 2.9% QoQ to Rs.13,179 crore. PAT grew by 1.5% QoQ to Rs.2,227 crore against consensus estimate of Rs.2,252 crore. The managements subdued commentary, especially for organic revenue growth, for FY19 indicates that pressure on its legacy business is yet to be countered by traction in digital and intellectual property (IP) led businesses.

Key Market Drivers

Goods and services tax (GST) collections touched a record Rs.1.03 trillion in April. It is the first time the number has crossed the 1 trillion-mark in any month since the new tax regime debuted on 1 July. Of the total revenue of Rs.1.03 trillion collected in April, Rs.18,652 crore was central GST, Rs.25,704 crore was stated GST and Rs.50,548 crore was integrated GST, the finance ministry statement said. The cess was Rs.8,554 crore.

Federal Reserve officials left the interest rates unchanged, acknowledging inflation is close to target without indicating any intention to veer from their gradual path of interest-rate increases. "Inflation on a 12-month basis is expected to run near the committees symmetric 2 percent objective over the medium term, the policy setting FOMC said in a statement Wednesday in Washington.

Event Watch

Indias Cumulative Industrial Production (March), Industrial Production (YoY, March) & Manufacturing Output (MoM, March) will release on 11th May 2018.

Q4FY18 Earnings - Titan, Asian Paints, ZEEL, Avenue Supermarts, Tata Chemicals, Exide Industries, Godrej Consumer, Eicher Motors, JSPL, Federal Bank, Canara Bank.

On The Global Front - US core CPI for April (MoM & YoY) will be released on 10th May 2018.

Stocks To Watch

L&T Finance is on the upside while JSW Energy is on the downside.

 

ABOUT AUTHOR

Niveza Editorial Desk : We are a team of stock market nerds trying to stay ahead of the herd. We spend our grey cells everyday to a pave a smooth road for our clients in the shaky world of stock market. While tracking the mood swings of the market we bring our clients the most rewarding deals.

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