Nifty ends higher on good start to Q1 earnings, macro data and global cues

Nifty posted the best week in over a month, aided by strong macro data and favourable cues from the Asian markets. The week also saw interesting IPOs, and marked a great start to the earnings season.

The Nifty started off on a flat note on Monday, as the index gave up gains towards the end of the session due to profit booking.  Important macro data such as IIP and inflation showed that the economy is progressing towards a recovery. Nifty soared higher on Tuesday, tracking positive macro data and strong cues from the Asian markets. Covid-19 numbers fell to the lowest in 4 months. (at 30,000 cases a day).

Nifty continued its rally on Wednesday, led by a rally in IT stocks. The Nifty IT index gained more than 3% in the day, after IT major Infosys’ strong earnings Apr-Jun 21 period, leading to hopes for good earnings in the sector.

On Thursday too, the index continued its strong rally, ending at record high levels. Nifty hit a fresh high of 15,952.35 in the session, led by strong rally in IT and Realty stocks. 

Markets traded lacklustre on Friday and ended almost unchanged, snapping a 3-day gaining streak. Nifty ended the week with gains of 1.50%.

Top gainers and losers

• Nifty Realty, Nifty IT and Nifty Metal were the biggest gainers in the week, jumping up to 8.6%. 
• Wipro, L&T, Tech Mahindra, Grasim and Ultratech Cement were the top Nifty gainers for the week
• Adani Ports, Eicher, BPCL, Maruti, Bajaj Auto, Titan were the top Nifty losers, shedding up to 5.6%.

Here is a quick recap of the market moving developments:

• Strong start to earnings season: IT majors TCS, Infosys, Wipro and Mindtree have reported results for Apr-Jun 21 period, kicking off the earnings season on a strong note. The companies have also reported a very good revenue guidance, improving the outlook for the entire sector. You can read detailed analysis of earnings of TCS, Infosys, Wipro and Mindtree. 
• IPO euphoria continues: Zomato’s IPO, which opened on Wednesday, was subscribed by more than 38 times, backed by strong demand across all categories. Zomato’s IPO is indeed a very big moment for startups, as the listing would mark the first meaningful Internet listing in India. You can read our analysis on the IPO here. Tatva Chintan IPO which opened for subscription on Friday, had already been subscribed by 4.5 times at the end of Day 1. 
• Macro data: IIP for the month of May-21 rose 29.3% in May from the previous year, mainly on the back of a lower base in May-20 due to lockdowns. Meanwhile, CPI Inflation moderated to 6.26% in June-21 from 6.30% in May. This is the second consecutive month where inflation has stayed outside RBI’s upper tolerance band of 6%. 
• S&P retains India’s rating at ‘BBB-’:  S&P Global Ratings has retained India’s ‘BBB-’ sovereign rating with a stable outlook. This is the lowest investment grade. The agency said that India’s strong external settings will act as a buffer against the risks associated with high government deficit and debt. S&P predicts that India’s recovery will gain pace through the second half of FY22 and into the following year. We expect real GDP growth to rebound to 9.5% in FY22 on continued normalization of activity and progressively higher vaccination rates.

Check out our other analysis on important market developments!

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