Markets hit choppy waters

Nifty50: 18,315 ▲ 49 (+0.2%)
Sensex: 61,940 ▲ 178 (+0.2%)

Howdy, friends !

In a bizarre incident, a famous art piece, which is nothing more than a banana taped to a wall, fell victim to the hunger pangs of a South Korean college student. Noh Huyn had skipped breakfast and when hunger struck, he simply yanked the $120,000 art piece from the wall and ate it. Don't worry, the artist didn't mind as the banana is replaced frequently to keep it "fresh". Besides, it was perhaps a fitting end to an art installation titled Comedian.

Speaking of hunger, foreign investors have been hungry for Indian equities, gobbling up shares worth ₹9,600 crore so far this month. More on that below. As for the overall market, it recovered well after encountering choppy waters initially. Let's have a look.

• Markets recovered from initial volatility to close higher
• In all, 35 of the Nifty50 stocks closed in the green
• Markets await US inflation numbers

Among the Nifty sectoral indices, Media (+1.3%) and Realty (+0.8%) were the top gainers, while Metal (-0.2%) and IT (0.1%) were the top losers.

What’s trending

⭐ L&T Q4 profits up

The construction company reported profit growth of 10% YoY this quarter, achieving a net profit of ₹3,987 crore. Its consolidated revenues for Q4 stood at ₹58,335 crore, also up 10% YoY, with international revenues accounting for 39% of this number. The company's board has recommended a final dividend of ₹24 per equity share.

⭐ Dr Reddy's Q4 profit zooms

Pharmaceutical giant Dr Reddy's Lab (-1.3%) reported a 10-fold rise in its net profit at ₹959.2 crore for Q4FY23. Its net profit in the comparable quarter last year was ₹87.5 crore. Meanwhile, revenues for the quarter stood at ₹6,297 crore, up 16% from ₹5,437 crore in the same period last year. The company’s board has recommended a dividend of ₹40 per share.

⭐ Cera Sanitaryware net profit up

Cera Sanitaryware (+1.7%) reported a growth of 18.3% YoY in consolidated net profit at ₹63.1 crore for Q4FY23. Its net profit in the corresponding quarter last year was ₹53.3 crore. The company's revenue also grew 20.8% to ₹532.5 crore this quarter, 88% of which came from its Sanitaryware and Faucetware divisions. The company’s board has recommended a dividend of ₹50 per share.

⭐ Nazara posts robust results

Digital gaming company Nazara Technologies (-3.6%) reported a 92% rise in its net profit to ₹9.4 crore in Q4FY23 compared to ₹4.9 crore in Q4FY22. Its revenue grew by 65% to ₹289.3 crore as against ₹175.1 crore in Q4FY22. Its FY23 revenues surpassed the ₹1,000 crore mark for the first time ever at ₹1,091.

In Focus

Foreign investors on a shopping spree in India

Foreign investors have bought Indian equities worth around ₹9,600 crore this month on a net basis. In April too, they were net buyers and had acquired shares worth ₹5,700 crore. This has been one of the key catalysts for the recent surge in the Indian markets. The Nifty50 index has risen around 5% since April. 

So, why are foreign institutional investors (FIIs) gravitating towards Indian equities? Let’s take a look.

Cooling prices

In India, inflation is showing signs of cooling off. In March 2023, retail inflation dropped to a 16-month low of 5.6% – driven by a decline in food prices. This means that inflation has fallen below the RBI’s target of 6%. So, experts believe that the rates have peaked out in India. Overall, these are positive signs for consumption and companies. 

A growing economy  

While fears of a global slowdown rise, the Indian economy is expected to remain on the growth path. According to the IMF, India’s GDP is expected to grow at 6.1%, which is higher than the estimate for China. This makes India an attractive destination for FIIs. 

Capex revival on cards

Experts believe that corporate India will ramp up its capacity expansion plans in the current financial year. Capital expenditure is expected to be higher than the previous two financial years. Government policies, focus on localisation and multinationals’ bid to reduce dependence on China could fuel the capex.  

Strong consumption 

After the pandemic, the demand for goods and services has rapidly recovered in India. This has been reflected in the robust earnings growth of banks and automobile companies. Not surprisingly, these two sectors received the major chunk of FII inflows in April. 

With multiple factors in favour of India, it remains to be seen whether FIIs continue to pump more money into Indian markets.

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