Friday vibes

Nifty50: 15,699 ▲ 142 (+0.9%)
Sensex: 52,727 ▲ 462 (+0.8%)

Wassup, people!

Ahh it's Friday again, and the markets didn't disappoint. The weekend beckons. Most of us would think of retiring early, but have you ever heard of anyone working till they've hit a century? A 100-year old man in Scotland still works three days a week! He said he couldn't bear sitting at home, doing nothing. 

Speaking of jobs, Netflix has laid off 300 employees, which accounts for 4% of its workforce. The streaming giant, which recently reported a drop in subscriptions and poor earnings, had already cut 150 jobs in May. It has hinted at more rounds of layoffs this year. Yikes!

• Taking cues from global peers, Indian markets closed higher for the second consecutive day.
• In all, 39 of the Nifty50 stocks closed in the green.
• Global IT firm Accenture’s revenue beat street estimates, but Indian IT stocks witnessed a slump on Friday.

Among the Nifty sectoral indices, Media (+2.5%) and PSU Bank (+1.9%) saw gains, while IT (-0.8%) was the sole loser.

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What’s trending

⭐ Inflation impacting demand, warns HUL 🍞

HINDUNILVR (NSE): 2,302 ▲ 50 (+2.2%)

Hindustan Unilever's chairman Nitin Paranjpe said that persistent inflation is beginning to impact demand, adding that India is facing "probably the most difficult economic situation". He explained that volume growth has turned negative in the short term.

⭐ M&M hits new high 🚜

M&M (NSE): 1,072 ▲ 44 (+4.3%)

Mahindra & Mahindra zoomed up 3% to touch an all-time high of ₹1,066.7 intraday. Investors are anticipating a strong demand outlook for the utility vehicles and tractor maker. The company plans to launch newer versions of its Scorpio and Bolero models ahead of the festive season.

⭐ Tata Power to build EV charging stations 🟢

TATAPOWER (NSE): 207 ▲ 4.4 (+2.1%)

Tata power is all set to start its nationwide plan of setting up electric vehicle (EV) charging stations. This will be done in the next 3-5 years. The company’s management said that the move is part of its transformation programme ‘Tata Power 2.0’, which focuses on customer centricity, sustainability, and digitalisation.

⭐ Macrotech enters Bengaluru 🏗️

LODHA (NSE): 1,011 ▼ 10 (-1.0%)

Realty major Macrotech Developers, which markets its properties under the Lodha brand, has entered the Bengaluru market. It will develop its first housing project in the city, by acquiring 100% stake in G Corp Homes. The project is estimated to have a sales bookings value of ₹1,200 crore.

⭐ RBI says inflation may remain high 😯

RBI governor Shaktikanta Das said retail inflation is expected to remain over 6% till December. The central bank’s analysis shows that consumer inflation over 6% is negative for growth, he said. However, the RBI has stepped up efforts to tackle inflation. It hiked rates by 0.4% in May, and 0.5% in June, to raise the repo rate to 4.9%.

In Focus

Investors hit backspace on IT after Accenture results

US-listed tech firm Accenture has reported a 22% year-on-year rise in its Q3 revenues, better than what the street has estimated. However, the management has forecasted a weak Q4. Meanwhile, stocks of Indian IT bigwigs were closed lower today. But what's the connection? Let's find out.

Accenture's earnings are often indicative of the performance of the Indian IT sector. Accenture follows a September-August financial year. Its results are announced just a few weeks before the quarterly results of the Indian IT companies.

With that out of the way, let's jump back to the earnings. Accenture earns more than half of its revenue from locations outside the US. Hence, the consistent rise in the US dollar against other currencies is expected to put a dent on Accenture’s earnings due to the foreign exchange impact. As a result, the company expects lower revenue in the fourth quarter. On the flip side, a stronger US dollar is a positive for Indian IT firms, as it translates to higher rupee earnings. 

Further, during the quarter, Accenture's attrition rate rose to 20%, compared to 18% in Q2. The rising attrition rate has been a big concern for IT companies. Attrition rate at TCS stood at 17.4%, while it was 27.7% for Infosys during the March 2022 quarter. In service-based companies such as IT firms, the workforce is critical to driving growth. And losing key talent is considered a negative.

Amid this, it will be interesting to see the earnings trend of Indian IT firms, which are expected to announce their Q1 results from the second week of July.

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Good to know

What is a spot price?

The spot price is the current price at which an asset—such as a stock, commodity or currency—can be bought and sold for immediate delivery. Stocks always trade at the spot price, which means you can buy or sell them at the quoted price. On the other hand, a futures price is the price agreed upon for the future delivery of an asset. The futures price is determined based on the spot price of that asset.

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