Informist, Monday, Oct 25, 2021
By Ankika Biswas and Dhanya Nagasundaram
MUMBAI– On a day when most frontline sectors faced selling pressure on valuation concerns, the strong resilience shown by the banking pack on earnings euphoria helped domestic benchmark indices snap a four-day losing streak and close today’s choppy session in the green.
Sharp gains in shares of ICICI Bank after the lender reported robust Jul-Sep earnings with record low net non-performing asset ratio and the best-in-industry credit growth boosted investors’ appetite for the banking pack as a whole, as they hoped for a similar trend in other banks.
Led by strong gains in frontline banks such as ICICI Bank, Axis Bank and State Bank of India, the Nifty Bank closed over 2% higher at 41192.40 points, after scaling a lifetime high of 41829.60 points in early trade.
While banks held ground, the extent of selling pressure in the other frontline sectors also somewhat eased and helped the benchmark Nifty 50 close above the 18100-point mark, after falling below the key support of 18000 points in early trade.
The 50-stock index closed 0.1% higher at 18125.40 points, after falling to a low of 17968.50 points. Similarly, the Sensex closed 0.2% higher at 60967.05 points, off the day’s low of 60449.68 points.
Among the major sectors that witnessed prominent losses were the information technology, fast-moving consumer goods and automobiles as investors continued to book profits.
Further, profit booking was also seen in shares of Reliance Industries, as it gave up the strong opening gains of 2% and closed nearly 1% lower at 2,601.80 rupees. The oil-to-telecom conglomerate had reported better-than-expected earnings for Jul-Sep amid robust digital, retail and oil-to-chemicals business performance, which propelled several brokerage firms to raise their earnings estimates for the company.
Meanwhile, several companies reporting a hit to their operating margins as high raw material prices have pushed investors to refrain from taking any aggressive bets.
“Notably, high input costs have adversely impacted margins and profitability of select consumer and manufacturing companies despite steady volume and sales growth,” said Binod Modi, head strategy at Reliance Securities. “This essentially raises concerns about sustainability of earnings rebound in subsequent quarters, which has weighed on sentiments.
Shares of Tata Consumer Products fell nearly 3% today as increased advertisement and promotional spending weighed on the company’s profitability and saw consolidated net profit for the September quarter miss analysts’ estimate.
Similarly, shares of Crompton Greaves Consumer Electricals fell today as the company took a hit on its September quarter margins due to high cost of raw materials. Shares of Dodla Dairy also fell as the company’s net profit and operating margin declined on year due to high input cost.
Shares of Multi Commodity Exchange of India also slumped on sharp margin erosion in Jul-Sep.
On the other hand, shares of Tatva Chintan Pharma Chem surged over 16% and scaled a one-month high today as the company’s strong set of earnings for Jul-Sep led investors to lap up the stock, helping it buck the weak market trend.
Meanwhile, stocks in the mid-cap and small-cap space continued to witness selling pressure due to an uncertain outlook on Indian equities amid concerns of stretched valuations. Most mid-cap and small-cap indices on the NSE closed 0.8-3%
* Among Nifty 50 stocks, 11 rose, 39 fell
* Among Sensex stocks, 8 rose and 22 fell
* On the NSE, 535 stocks rose, 1,477 fell and 51 were unchanged
* On the BSE, 1,048 stocks rose, 2,312 fell and 170 were unchanged
* Nifty Bank: Up 2.2%; Nifty IT: Down 1.1%; Nifty Auto: Down 1.80%
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BSE National Stock Exchange
Sensex: 60967.05, up 145.43 pts (0.2%) Nifty 50: 18125.40, up 10.50 pts (0.1%)
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S&P BSE Sensitive Index Nifty 50
Lifetime High:62245.43 (Oct 19) : Lifetime High: 18604.45 (Oct 19)
Record Close High: 61765.59 (Oct 18) : Record Close High: 18477.05 (Oct 18)
2021 1st day close: 47868.98 (Jan 1) : 2021 1st day close: 14018.5 (Jan 1)
2021 Closing High: 61765.59 (Oct 18) : 2021 Closing High: 18477.05 (Oct 18)
2021 Closing Low: 46285.77 (Jan 29) : 2021 Closing Low: 13634.60 (Jan 29)
2021 High (intraday): 62245.43 (Oct 19) : 2021 High (intraday): 18604.45 (Oct 19)
2021 Low (intraday): 46160.46 (Jan 29) : 2021 Low (intraday): 13596.75 (Jan 29)
2020 Closing High: 47751.33 (Dec 31) : 2020 Closing High: 13981.95 (Dec 30)
2020 Closing Low: 25981.24 (Mar 23) : 2020 Closing Low: 7610.25 (Mar 23)
2020 High (intraday): 47896.97 (Dec 31) : 2020 High (intraday): 14024.85 (Dec 31)
2020 Low (intraday): 25638.90 (Mar 24) : 2020 Low (intraday): 7511.10 (Mar 24)
2019 High (intraday): 41809.96 (Dec 20) : 2019 High (intraday): 12293.90 (Dec 20)
2019 Low (intraday): 35287.16 (Feb 19) : 2019 Low (intraday): 10583.65 (Jan 29)
2018 High (intraday): 38938.91(Aug 28)) : 2018 High(intraday): 11760.20 (Aug 28)
2018 Low (intraday): 32483.8 (Mar 23) : 2018 Low (intraday): 9951.9 (Mar 23)
2017 High (intraday): 34005.37 (Dec 26) : 2017 High(intraday): 10515.10 (Dec 26)
End
Edited by Arshad Hussain
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Source: Cogencis