Uncertainty Continues to Prevail
The market capitalisation of Infosys crossed Rs 7.45 lakh crore i.e. USD 100 billion, making it India’s fourth company to enter the USD 100 billion club.
Bulls took charge of the frontline indices during the fortnight as Sensex and Nifty recorded fresh all-time highs of 56,118.57 and 16,701.85, respectively. According to the Union Health Ministry, the cumulative number of vaccine doses administered in the country has gone past the 58 crore mark, reaching a new milestone. The Nomura India Business Resumption Index (NIBRI), which measures business activity on a weekly basis with the pre-pandemic levels being the base, rose to 101.2 for the week ended August 15 as compared to 99.6 in the previous week. This is the first time business activity has breached the pre-pandemic base.
The icing on the cake was that the Consumer Price Index (CPI) for July eased to a three-month low of 5.59 per cent on the back of softening food prices while the Consumer Food Price Index (CFPI) for July shrunk to 3.96 per cent as compared to 5.15 per cent in June. In the first half of the fortnight, BSE announced additional surveillance measures with intentions to curb excessive price movement in securities listed on their trading platform. This triggered a dramatic selloff. The mid-cap and small-cap indices fell by 2.09 per cent and 4.89 per cent, respectively, underperforming the broader market indices.
The IT index was the top gainer, climbing by 6.34 per cent during the fortnight and recording a new lifetime high of 34,108.84. The market capitalisation of Infosys crossed Rs 7.45 lakh crore i.e. USD 100 billion, making it India’s fourth company to enter the USD 100 billion club. FMCG and Power indices also ended in the green territory, gaining 3.72 per cent and 1.16 per cent, respectively.
The Auto index plunged by 4.55 per cent. Automobile manufacturers’ profit margins are bearing the brunt of high commodity prices and inflation scares. Maruti Suzuki’s operating margin in Q1FY22 was the lowest in a decade due to higher input costs and low sales volumes. The Bankex index dipped 2.69 per cent during the fortnight.
The Q1FY22 earnings’ season saw most private banks reporting fresh slippage from the retail segment. Metal and Realty indices experienced a sharp correction during the fortnight and plummeted by more than 7.5 per cent each. Earlier than expected monetary tightening by the US Federal Reserve, reverberations of geopolitical discord in Afghanistan, soaring commodity prices, hike in input costs, weak demand and an unanticipated third wave of the corona virus in the country are some factors that could possibly upset the stock markets in the near future. Trading data shows that FIIs were net buyers to the tune of Rs 4,542.42 crore while DIIs were also net buyers to the tune of Rs 1,745.13 crore during the fortnight.
