Nifty50: 16,520 ▲ 180 (+1.1%)
Sensex: 55,397 ▲ 629 (+1.1%)
Howdy folks,
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- Taking cues from positive global markets, benchmark indices rallied for the fourth straight day.
- In all, 34 of the Nifty50 stocks closed in the green.
- Investors await the European Central Bank’s statement on the current economic conditions and its interest rate decision to be released on Thursday.
Among the Nifty sectoral indices, IT (+2.9%) and FMCG (+1.1%) saw the most gains. Whereas, Media (-0.4%) and Auto (-0.2%) indices were the top losers.
| Top gainers | Today's change |
| ONGC | 132 ▲ 4.7 (+3.7%) |
| Tech Mahindra | 1,044 ▲ 36 (+3.6%) |
| TCS | 3,161 ▲ 86 (+2.8%) |
| Top losers | Today's change |
| HDFC Life | 525 ▼ 10 (-1.9%) |
| M&M | 1,164 ▼ 21 (-1.8%) |
| Sun Pharma | 865 ▼ 9.8 (-1.1%) |
What’s trending
⭐ HUL cautious about inflation 📈
HUL (NSE): 2,610 ▲ 42 (+1.6%)
FMCG major Hindustan Unilever said inflation and volatile market conditions continue to remain a challenge. The company reported a 5% quarter-on-quarter decline in volumes in Q1 of FY23. The firm said that its 20% year-on-year growth in Q1 revenues to ₹14,624 crore was primarily due to price hikes. Meanwhile, its net profit rose 13.8% to ₹2,391 crore.
⭐ IndusInd Bank’s profits rise 👍
INDUSINDBK (NSE): 878 ▲ 9.9 (+1.1%)
IndusInd Bank reported a 60% year-on-year rise in consolidated net profits to ₹1,631 crore, which was above market estimates. The profit growth was supported by a 15.8% YoY increase in net interest income to ₹4,125 crore. Further, the bank’s gross NPA improved to 2.35% from 2.88% reported during the same period last year.
⭐ L&T Finance posts strong results 💪
L&TFH (NSE): 70.9 ▼ 1.4 (-2.0%)
L&T Finance Holdings posted a 47% year-on-year rise in its Q1 net profit to ₹261 crore. This company reported its highest-ever quarterly retail disbursements, which were up 148% at ₹8,938 crore. Meanwhile, total income stood at ₹3,135 crore, marginally higher than the ₹3,115 crore in the same period a year ago.
⭐ UK inflation touches new high 📈
Inflation in the UK is touching new highs. The rate touched 9.4% in June against 9.1% in May. This is mainly due to increasing food and energy prices. To tackle inflation, the Bank of England is expected to consider a 50-basis-point hike in its next meeting.
⭐ Google, Oracle data centres get ‘heat stroke’ 💻
The ongoing heatwave in the UK led to Google Cloud and Oracle Cloud outages after cooling systems failed at the companies’ data centres. Britain recorded its highest-ever temperature of 40℃ in London on Tuesday as the heatwave across Europe intensified. Google said it was powering down some parts of its cloud services to prevent damage to machines and an extended outage.
In Focus
Windfall tax cut brings cheers to oil stocks
Oil stocks have had a chaotic run in July, and some of them are down as much as 26%! However, on 20 July, these companies got some respite, which led to a bounceback. What's it 'oil' about? Let's dig in.
The Indian government has announced a cut in a windfall tax it introduced about three weeks ago. This triggered buying interest in oil producers and refiners such as Reliance Industries (+2.5%), ONGC (+3.7%), and Chennai Petroleum (+8.6%).
But what is a windfall tax? A windfall tax is a one-off tax levied on companies deemed to have made unusually high profits in recent times due to favourable market conditions. In the case of oil exporting companies, the rise in crude oil prices in the international market led to high profits on exports.
On 1 July, the centre had announced a windfall tax of ₹23,250 per tonne on domestically produced crude. Following this announcement, shares of major oil companies like Reliance and ONGC witnessed a fall of 6-15% till 19 July.
However, a steady decline in crude oil prices in recent weeks owing to a fear of a global slowdown has eroded the profit margins for oil producers and refiners. Thus, the government decided to reduce the windfall tax by 27% to ₹17,000 per tonne.
Further, it has also scrapped the ₹6 per litre tax imposed on the export of petrol and reduced the levy by ₹2 per litre on diesel and aviation turbine fuel (ATF). Following the announcement, major energy stocks shot up, resulting in 1% gain in oil and gas index. The government’s review of the windfall tax was welcomed by investors. The timely intervention will help protect the margins of oil & gas companies.
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Good to know
What is FDI?
A foreign direct investment (FDI) is the investment made by an individual or a firm in a company located in another country. Investors can make an FDI in many ways. It could be by establishing a subsidiary in another company, acquiring or merging with another company, or buying a stake in a company. This should not be confused with foreign portfolio investment (FPI), which refers to the purchase of securities like shares or bonds in another country.
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