Trading for the week started on an upbeat note as the key indices drifted higher in early trade on buying demand in index pivotals. At 9:24 IST, the barometer index, the S&P BSE Sensex, was up 170.86 points or 0.44% at 38,907.09. The Nifty 50 index was up 50.75 points or 0.44% at 11,603.25. Shares of Infosys gained after the company increased FY20 revenue growth guidance.
The S&P BSE Mid-Cap index was up 0.17%. The S&P BSE Small-Cap index was up 0.21%. Both these indices underperformed the Sensex.
The market breadth, indicating the overall health of the market, was strong. On the BSE, 748 shares rose and 487 shares fell. A total of 72 shares were unchanged.
On the macro front, India's industrial production (base year 2011-12=100) rose at slower pace of 3.1% in May 2019, while showing moderation in growth from a six-month high of 4.3% in April 2019. However, the industrial production growth for April 2019 has been revised sharply upwards to 4.3% from 3.4% as reported provisionally. The data was released by the government after market hours on Friday, 12 July 2019.
The all-India general CPI inflation rose to 3.18% in June 2019 (new base 2012=100), compared with 3.05% in May 2019. The corresponding provisional inflation rate for rural area was 2.21% and urban area 4.33% in June 2019, as against 1.86% and 4.51% in May 2019. The core CPI inflation eased to 4.09% in June 2019 compared with 4.23% in May 2019. The data was released by the government after market hours on Friday, 12 July 2019.
Overseas, Asian stocks were trading lower as investors digested data showing Chinese economic growth slowed in the second quarter. Markets in Japan are closed on Monday for a holiday.
China released second-quarter figures showing that its economy slowed to 6.2%. From April to June, China's economy grew 6.2% from a year ago, the country's statistics bureau said on Monday.
US stocks posted record closing highs on Friday after Federal Reserve Chairman Jerome Powell in two days of congressional testimony bolstered investor expectations for an interest-rate cut at the end of the month. As per reports, the Fed will move at its July 30-31 meeting to cut its fed-funds rate by at least a quarter point and to potentially deliver further cuts before year-end.
Back home, IT major Infosys gained 4.11%. IT major Infosys announced that its net profit fell 6.8% to Rs 3802 crore on 1.23% increase in revenue from operations to Rs 21803 crore in Q1 June 2019 over Q4 March 2019. Operating profit fell 3.2% to Rs 4471 crore in Q1 June 2019 over Q4 March 2019. Operating margin was 20.5% in Q1 June 2019. The result was declared after market hours on Friday, 12 July 2019.
The company has increased FY20 revenue growth guidance to 8.5-10% in constant currency, while maintaining FY20 operating margin guidance in range of 21-23%.
"We had a strong start to FY20 with constant currency growth accelerating to 12.4% on year over year basis and digital revenue growth of 41.9%. This was achieved through our consistent client focus and investments which have strengthened our client relationships", said Salil Parekh, CEO and MD. "Consequently, we are raising our revenue guidance for the year from 7.5%-9.5% to 8.5%-10%."
Avenue Supermarts surged 5.11%. Avenue Supermarts' consolidated net profit rose 31.87% to Rs 323.09 crore on 26.94% rise in total income to Rs 5825.51 crore in Q1 June 2019 over Q1 June 2018. The result was announced on Saturday, 13 July 2019.
InterGlobe Aviation fell 0.83%. InterGlobe Aviation after market hours on Friday, 12 July 2019 clarified to a news item titled "IndiGo shareholder pact to be checked by Govt for violations". The company said that it has not received any official communication in relation to the matters referred to in the news report.
Adani Ports and Special Economic Zone rose 0.08%. Adani Ports and Special Economic Zone after market hours on Friday, 12 July 2019, announced that its board of directors has approved issuance of USD denominated foreign currency bonds (Bonds) which may be issued in one or more tranches overseas. The proceeds of the Bonds will be used for the refinancing of existing notes due in 2020 and other permissible end uses. The total amount raised will not exceed $700 million. The Bonds will be issued on a private placement basis or otherwise, to eligible persons, entities, bodies corporate, companies, banks, financial institutions and any other categories of eligible investors permitted to invest in the Bonds under applicable laws.
Bhel rose 0.54%. Bhel announced on Sunday, 14 July 2019, that it has won an order for setting up a 25 MW Floating Solar Photovoltaic (SPV) Power Plant on Engineering, Procurement and Construction (EPC) basis, at Simhadri in Andhra Pradesh. Valued at over Rs 100 crore, the order has been placed on Bhel by NTPC.
Dewan Housing Finance Corporation (DHFL) dropped 9.93%. DHFL reported a net loss of Rs 2223 crore in Q4 March 2019 as compared to a net profit of Rs 134 crore in Q4 March 2018. Total income rose 7.41% to Rs 3057 crore in Q4 March 2019 over Q4 March 2018. The result was announced on Saturday, 13 July 2019.
Allahabad Bank lost 10.29%. Allahabad Bank announced on Saturday, 13 July 2019, that on the basis of Forensic Audit Investigation findings and CBI filing FIR, on suo moto basis, against the company and its directors, alleging diversion of funds from banking system by the bank's borrower namely Bhushan Power and Steel (BPSL), a fraud of approximately Rs 1774.82 core has been reported by the bank to the Reserve Bank of India. The bank has already made provisions amounting to approximately Rs 900.20 crore against the exposure of the Bank in BPSL.
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