A trader reacts as he works at his computer screens. (Photographer: Hannelore Foerster/Bloomberg)

Weekly Wrap: Sensex, Nifty Rebound As Focus Shifts To Earnings

Indian equity benchmarks rebounded in the second week of 2019 paced by gains in Axis Bank Ltd., Tata Motors Ltd. and ITC Ltd. as investor shifted focus to the December quarter earnings.

The S&P BSE Sensex rose 0.88 percent to 36,010 and the NSE Nifty 50 Index climbed 0.63 percent to 10,795.

Corporate earnings kicked off this week with IndusInd Bank Ltd., Tata Consultancy Services Ltd. and Infosys Ltd. among the Nifty 50 companies reporting their third-quarter numbers.

“Investor focus is shifting towards earnings and good thing is banks and quality NBFCs are holding up”, Vijay Chopra of Enoch Ventures told BloombergQuint over phone.

Indian markets rose on global cues after dovish comments from U.S. Federal Reserve Chairman Jerome Powell. Meanwhile, there can be a 200-300-point rally in Nifty towards 11,000-11,100 ahead of interim Budget but risk reward will not be in favour of going long around those levels, he said.

Weekly Wrap: Sensex, Nifty Rebound As Focus Shifts To Earnings

Big Stock Moves Of The Week

  • Gruh Finance Ltd. plunged 24 percent to Rs 242.25 after the boards of Gruh Finance and Bandhan Bank approved the “merger co-operation agreement”. Shareholders of Gruh Finance will receive 568 shares of Bandhan Bank for every 1,000 shares of the housing finance company.
  • Praj Industries Ltd. was the top Nifty 500 gainer after it rose 26 percent to Rs 152.10, also its highest level in since September 2008, after it expanded its bio-energy basket by adding compressed bio-gas technology to its portfolio. The company said it was on track with the execution of three bio-refinery projects based on proprietary 2G technology.
  • BPCL and HPCL fell six percent during the week after Brent crude rose 8.38 percent to $62 per barrel.

Earnings Reaction

  • TCS declined 1.83 percent to Rs 1,842.55 after its margins contacted by 90 basis points over the previous quarter to 25.6 percent in the October-December period, its exchange filing showed. That was lower than estimates and also below its guided range of 26-28 percent.
  • Infosys rose 3.4 percent to Rs 689.80 after it raised its revenue growth projection aided by strong deal wins even as India’s second-largest IT firm’s profit and margin missed analyst expectations. The board also approved another share buyback proposal worth Rs 8,260 crore at Rs 800 per share, at a premium of 17 percent as per today’s closing price.
  • IndusInd Bank declined 2.13 percent to Rs 1,515 after it met its third-quarter profit estimates, despite making provisions for its exposure to the IL&FS Group, with net profit rising 5.23 percent year-on-year to Rs 985 crore.

Nine of 11 sectoral gauges compiled by National Stock Exchange ended higher led by the Nifty FMCG Index’s 1.88 percent gain. On the flipside, Nifty Metal Index was the top loser, down 1 percent.

Weekly Wrap: Sensex, Nifty Rebound As Focus Shifts To Earnings

The rupee declined after Brent crude climbed above $60 per barrel mark. A rebound in prices of oil, the nation’s top import, and concerns about an expensive bailout for farmers before general elections to be held in May has caused the rupee to miss out on a revival in emerging currencies.

The home unit fell 1 percent, or 76 paise, to 70.49 per dollar making it the worst currency in Asia.

Also read: What India’s Top Five Mutual Funds Bought And Sold In December