Flying high

Nifty50: 16,929 ▲ 287 (+1.7%)
Sensex: 56,857 ▲ 1,041 (+1.8%)

Wassup people!

Still stoked over that perfect foamy cup of Dalgona coffee you made during the lockdown? Or that three-tier cake you posted all over Insta? Well, a man from Kerala built an aircraft. He is now flying across Europe with his family!

Speaking of flying high, the Nifty50 touched a high not seen in months! More on that later.

• After a strong gap-up opening, benchmark indices scaled to three-month high.
• In all, 40 of the Nifty50 stocks closed in the green.
• To combat inflation, the US Fed hiked interest rates by 75 basis points on Wednesday, in line with the street estimates.

All of the Nifty sectoral indices closed in the green with IT (+2.8%) and Financial Services (+2.3%) seeing maximum gains.

What’s trending

⭐ BPCL’s big Brazil investment 🛢

BPCL (NSE): 325 ▲ 1.1 (+0.3%)

The state-owned oil and gas explorer and producer has received approval from the cabinet to invest an additional $1.6 billion (₹12,738 crore) in a Brazilian oil block. The company’s subsidiary has a 40% stake in the oil block, which will start production from 2026-27. The approval will reportedly help India to strengthen its energy security and diversify its crude oil supply.

⭐ United Breweries posts strong results 🍸

UBL (NSE): 1,627 ▼ 11 (-0.6%)  

Beverage maker United Breweries' net profit jumped five-fold to ₹162 crore in the June quarter. The growth was mainly led by rising volumes. The company, which is controlled by Dutch multinational brewing company Heineken NV, reported a 96% rise in revenues to ₹5,196 crore in Q1.

⭐ HAL joins hands with Honeywell 🤝

HAL (NSE): 2,029 ▲ 89 (+4.6%)

State-owned aerospace company Hindustan Aeronautics (HAL) has signed a $100 million contract with US engine-maker Honeywell. The contract is for supply, manufacture and maintenance of 88 aircraft engines to Honeywell.

⭐ Shriram City in the fast lane 🏦

SHRIRAMCIT (NSE): 1,970 ▲ 20 (+1.0%)

India’s largest two-wheeler financier, Shriram City reported 55% year-on-year rise in net profit to ₹323 crore in Q1FY23  The bottom line was boosted by a 26% YoY rise in net interest income to ₹1,162 crore. In the same period, the provisioning for bad loans fell by 21%. The management said that the revival in the MSME ecosystem has resulted in strong demand for credit.  

⭐ Just dropped: Meta’s revenue 😟

Facebook is finding that life is tough in this universe. It’s parent company Meta has reported its first-ever drop in revenue in the June quarter. Revenues fell 1% to $28.8 billion, missing street estimates. The company witnessed a decline in its core online digital business, increasing competition from rival TikTok, escalating inflation and recession fears. The company said it expects its third quarter revenue to fall further.

In Focus

Nifty stands tall

The Nifty50 has shown great resilience in July. It is up over 7% this month, which makes it the biggest monthly gain since August 2021! Even the Nifty Midcap (+10%) and Nifty Smallcap (+7%) have done well. But what's triggering this investor interest? 

A key factor that's driving the surge is the upbeat commentary from the US Federal Reserve. On Wednesday, even as the US Fed hiked the interest rate by 0.75% (which was along expected lines), the Fed chairman also hinted at a slowdown in rate hikes going forward. Chances of a recession were also dismissed.

Back home, net selling by FIIs has reduced in July. This has also boosted investor confidence. FIIs have sold Indian stocks worth about ₹7,614 crore so far this month, as compared to over ₹58,112 crore in June 2022.

In addition to the above, India Inc has fared well this quarter despite inflationary pressures. For instance, some of the banks have logged the best Q1 in several years. The banking sector is considered the backbone of the country’s economy and any improvement in the performance of banks indicates a return to economic stability. 

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Good to know

What is net interest income?

Net interest income is a measure of the financial performance of a bank. It is the difference between the interest the bank earns on loans and the interest the bank pays for deposits. The amount of net interest income a bank generates depends on factors such as the quality of its loan portfolio, and whether its loans carry a fixed or variable rate.

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