Market this week 22-7-2022

Market this week 22-7-2022

Prior to June quarter earnings, Nifty Auto reaches a record high.

With the exception of sporadic corrections, the relentless purchasing pushed the Nifty Auto index to a new high on July 18 ahead of the June quarter earnings and the management commentary regarding the future outlook. Auto stocks continued to move quickly.

The index’s top three gainers, Tata Motors, Amara Raja Batteries, and Bharat Forge, each saw a 2 percent increase, were followed by MRF, Bajaj Auto, TVS Motor Company, Tube Investment, Hero MotoCorp, and Ashok Leyland.

The Nifty Auto index saw moderate gains of 0.4 percent at 12,408.7, the record closing level, after rising as much as 0.76 percent to an intraday record high of 12,455.85. However, higher levels of the index experienced some selling pressure.

Hot Stocks | Maithan Alloys, Titagarh Wagons, and Ador Welding might provide a quick 15% return

After a retreat in which it managed to close above its prior swing high of 16,275, Nifty is resuming its bullish momentum this week, which could cause the market to gain further strength. The immediate target levels on the upside are 16,500 and 16,600, while the gap area at 16,050 will serve as a strong support level on the downside. The relative strength index (RSI), a momentum indicator, has also risen over the 60 level, which will inspire confidence in the bulls.

We might anticipate a move towards 36,000-36,300 levels because Bank Nifty is outperforming and managed to close over 35,500. The range between 35,500 and 35,250 will function as a strong demand zone on the downside.

Although the market will still be driven by global cues, the earnings session is crucial for the Indian markets. Other significant determinants are the price of crude oil, the dollar index, and the actions of FIIs. According to the derivative data, there is still room for a short covering rally because FIIs’ long exposure to the index future is less than 20%.

RIL and ONGC rise on rumours that the government may lower the excise tax

On July 12, after ET Now reported that the government may consider decreasing the excise charge on export of refining goods as well as the special additional excise duty on production of crude oil, shares of Reliance Industries and Oil and Natural Gas Corporation soared.

To make up for the revenue lost as a result of consecutive retail fuel excise duty cuts, the government unexpectedly imposed a special excise levy of Rs 13 per litre on diesel exports and Rs 6 per litre on petroleum exports earlier this month.

In order to take a piece of the alleged windfall profits gained by producers as the price of crude oil rose to eight-year highs globally, the government additionally slapped a $240 per tonne special additional excise charge on the production of crude oil in the nation. Companies like Reliance Industries, which is the largest exporter of refining goods in the nation, and ONGC, which is the largest producer of oil in the nation, suffered as a result of the changes.

With profits exceeding expectations and global brokerages raising goals, Hindustan Unilever is up.

The share price of Hindustan Unilever Ltd (HUL), which reported profits on July 19, increased by 1% in the morning session.

The largest fast-moving consumer goods (FMCG) firm in India announced on July 19 that its consolidated net profit for the three months ending in June increased by 13.85 percent year over year (YoY) to Rs 2,391 crore, exceeding analysts’ expectations of Rs 2,191.3 crore. A standalone net profit of Rs 2,289 crore increased by 11% year over year.

For the reported quarter, revenue from operations increased by 19.46 percent to Rs 14,331 crore, exceeding experts’ predictions of Rs 13,438.5 crore. According to the business, volume growth overall increased by 6%. The quarter’s core profit margin was 23.2%, a 110 basis point year-over-year decrease. The reported quarter saw significant cost pressure across the board in the FMCG industry due to inflation.

Vedanta rises on the second interim dividend and the reduction of the windfall gains tax

The following day, July 19, the business declared a sizable second interim dividend, and shares of Vedanta spiked in morning trading. The government’s choice to reduce the additional excise charge levied on the production of crude oil also helped the stock.
Vedanta declared a second interim dividend of Rs 19.5 per share, for a total dividend payment of Rs 7,250 crore. The entire dividend payment made by the corporation year 2022–2023 is currently very around Rs 19,000 crore.

The significant dividend payment is crucial for Vedanta’s promoter Vedanta Resources, which is struggling with a heavy debt load at a time when interest rates are rising dramatically worldwide. Prior to its now-failed delisting offer in 2020, Vedanta’s promoter had aggressively taken on debt from investors.

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