Market Update
India Movers: IndiGo, ICICI Bank, IndusInd Bank, NTPC, Power Grid
Arun Goswami
29 Jul, 2024
Mumbai
Market indexes in Mumbai opened higher, and investors reacted to a fresh batch of earnings.
Indian government bond yields were in focus ahead of monetary policy decisions from major central banks in the U.S., U.K., and Japan.
The Sensex index increased by 0.5% to 81,706.71, and the Nifty index rose by 0.4% to 24,930.25.
On the Mumbai stock exchange, 122 stocks traded at their 52-week highs, and 7 stocks traded at their 52-week lows.
The yield on the 10-year Indian government bonds inched higher to 6.94%, and the Indian rupee edged higher to ₹83.71 against the U.S. dollar.
Power Grid decreased o.6% to ₹342.15, and the company reported a slight decline in revenue in the June quarter.
Revenue eased to ₹11,006.2 crore from ₹11,048 crore, and net profit increased 3.5% to ₹3,723.9 crore from ₹3,597.6 crore a year ago.
NTPC Ltd. increased 1% to ₹399.50, and the power producer reported an increase in sales and earnings in the June quarter.
Revenue increased 12.6% to ₹48,521 crore from ₹43,075 crore, and net income advanced 12.2% to ₹5,506 crore from ₹4,907 crore a year ago.
Interglobe Aviation declined 1.6% to ₹4,421.0, and the parent company of IndiGo reported a decline in profit in the June quarter due to a rise in fuel costs and higher maintenance costs.
Consolidated revenue increased 17.3% to ₹19,571 crore from ₹16,683 crore, and net income declined 11.7% to ₹2,728.8 crore from ₹3,090.8 crore.
ICICI Bank jumped 2% to ₹1,232.05, and the financial service company reported higher net interest income and net profit due to robust loan growth and strong treasury management.
Net interest income increased 7.4% to ₹19,553 crore from ₹18,226 crore, and net income advanced 14.6% to ₹11,059 crore from ₹9,648 crore from a year ago , respectively.
Net interest margin decreased to 4.3% from 4.78% in the previous year and 4.40% in the previous quarter.
Total loans by 15.9% from a year ago, with the gross non-performing assets ratio rose to 2.15% from 2.16% at the end of the prior three months in 2024.
The net NPA edged up slightly to 0.43%, compared to 0.42 per cent in the previous quarter ending in March.
IndusInd Bank added 1.5% to ₹1,425.0 after the financial service company reported an increase in net interest income in the June quarter.
Net interest income advanced 11% to ₹5,408 crore, net income advanced 2% to ₹2,171 crore, and gross non-performing asset ratio edged up 10 basis points to 2.02%.
U.S. Market Rotation to Small Cap Stocks Continues After Alternative Measures of Inflation Eases
Barry Adams
26 Jul, 2024
New York City
Stocks rebounded in Friday's trading, and market indexes trimmed weekly losses as investors reviewed the latest update on an alternative measure of inflation.
The S&P 500 index and the Nasdaq Composite jumped more than 0.7%, but the small-cap-focused Russell 2000 jumped nearly 2% as investors rotated out of megacap stocks.
Friday's market rally was powered by a benign inflation report that showed waning inflationary pressures.
The persona consumption expenditures price index rose 0.1% on the month and eased to 2.5% from 2.6% from a year ago in June, according to a report by the Bureau of Economic Analysis on Friday.
The core PCE price index, which excludes volatile food and energy prices, gained 0.2% on the month but held steady at 2.6% from a year ago.
The PCE price index is preferred by the Fed's policymakers, but the index is controversial as it significantly understates the inflation experienced by most urban families.
The inflation data arrived on the final day of the volatile week, as investors reacted to the flood of corporate results and continued to participate in a market rotation that favors smaller companies and cyclical sectors of the economy.
Investor expectations remain high for a possible rate cut at the end of the Fed's next policy meeting in September. Policymakers continue to send mixed signals, stressing that inflation is on a downward trajectory, but more evidence of the sustainable downward trend may be needed.
U.S. Indexes and Treasury Yields
The S&P 500 index increased 0.9% to 5,447.37, the Nasdaq Composite jumped 0.7% to 17,301.72, and the Russell 2000 index rose 1.9% to 2,264.21.
The yield on 2-year Treasury notes edged lower to 4.39%, 10-year Treasury notes decreased to 4.20%, and 30-year Treasury bonds edged lower to 4.46%.
WTI crude oil decreased $0.87 to $77.40 a barrel, and natural gas prices edged down 1 cent to $2.02 a thermal unit.
Gold decreased by $13.44 to $2,377.11 an ounce, and silver declined by $0.05 to $27.77.
The dollar index, which weighs the US currency against a basket of foreign currencies, edged lower to 104.27.
U.S. Stock Movers
3M jumped 15.7% to $119.65 after the diversified healthcare and consumer goods company reported better-than-expected earnings in its latest quarter and raised its full-year earnings per share outlook.
Coursera jumped 45% to $10.76 after the online course provider reported better-than-expected quarterly revenue of $170 million.
DexCom plunged 40.2% to $64.26, after the medical device maker reported weaker-than-expected second quarter revenue.
Boston Beer increased 4.5% to $282.71 after the maker of craft beer and beverages reported better-than-expected second-quarter sales of $579 million and earnings per share of $4.39.
Europe Movers: Babcock International, Capgemini, EssilorLuxottica, Hermes, Mercedes Benz
Inga Muller
26 Jul, 2024
Frankfurt
European markets extended weekly gains as investors reviewed the latest quarterly results from Hermes, EssilorLuxottica, Babcock International, and Mercedes Benz.
The DAX index increased by 0.5% to 18,384.67; the CAC-40 index rose by 0.9% to 7,493.91; and the FTSE 100 index advanced by 0.8% to 8,253.60.
For the week, the DAX index gained 0.7%, the CAC 40 index fell 1.2%, and the FTSE 100 index advanced 1.4%.
The yield on 10-year German bonds edged higher to 2.44%, French bonds inched higher to 3.13%, the UK gilts inched higher to 4.12%, and Italian bonds increased to 3.79%.
Hermes International SCA rose 2.9% to €2,066.0 after the French luxury goods maker said sales increased 13% in the second quarter, defying weak results from its peers.
Babcock International soared 8.3% to 529.0 pence after the defense and aerospace company reported stronger-than-expected fiscal 2024 results.
EssilorLuxottica jumped 8.3% to €208.90, and the Italian eyewear company reported better-than-expected first-half results.
Capgemini SE declined 6.5% to €181.15 after the information technology service company revised its annual revenue outlook.
The company estimated annual revenue to range between a decline of 0.5% and 1.5% from the previous estimate of an increase between zero and 3%.
Mercedes-Benz Group was nearly unchanged at €62.95 after the German luxury vehicle maker lowered its annual profit outlook for its core passenger car unit.
European Markets Extend Weekly Gains; Eurostar and SNCF Face Arson Attacks
Bridgette Randall
26 Jul, 2024
London
European markets rebounded and extended their weekly gains as investors reviewed the latest batch of earnings.
Market sentiment recovered after Hermes reported an increase in sales, EssilorLuxottica and Babcock International reported strong results, and Mercedes-Benz trimmed its annual outlook.
Investors were unnerved after Eurostar canceled about 25% of its high-speed rail service following overnight arson and other "malicious attacks" ahead of the opening ceremony of the Olympic Games later this evening.
SNCF confirmed in a statement that its railway network experienced several attacks early Friday morning, with several facilities and fiber optic lines damaged by fire.
"This is a massive attack on a large scale to paralyze the TGV network," SNCF told AFP, adding that several train services may be canceled this weekend, affecting hundreds of thousands of travelers.
Europe Indexes and Yields
The DAX index increased by 0.5% to 18,384.67; the CAC-40 index rose by 0.9% to 7,493.91; and the FTSE 100 index advanced by 0.8% to 8,253.60.
For the week, the DAX index gained 0.7%, the CAC 40 index fell 1.2%, and the FTSE 100 index advanced 1.4%.
The yield on 10-year German bonds edged higher to 2.44%, French bonds inched higher to 3.13%, the UK gilts inched higher to 4.12%, and Italian bonds increased to 3.79%.
The euro edged lower to $1.08; the British pound inched lower to $1.286; and the U.S. dollar weakened to 88.27 Swiss cents.
Brent crude decreased $0.55 to $81.81 a barrel, and the Dutch TTF natural gas fell by €0.68 to €32.69 per MWh.
Europe Stock Movers
Hermes International SCA rose 2.9% to €2,066.0 after the French luxury goods maker said sales increased 13% in the second quarter, defying weak results from its peers.
Babcock International soared 8.3% to 529.0 pence after the defense and aerospace company reported stronger-than-expected fiscal 2024 results.
EssilorLuxottica jumped 8.3% to €208.90, and the Italian eyewear company reported better-than-expected first-half results.
Capgemini SE declined 6.5% to €181.15 after the information technology service company revised its annual revenue outlook.
The company estimated annual revenue to range between a decline of 0.5% and 1.5% from the previous estimate of an increase between zero and 3%.
Mercedes-Benz Group was nearly unchanged at €62.95 after the German luxury vehicle maker lowered its annual profit outlook for its core passenger car unit.
Nikkei Extends Two Week Losses to 11% Amid Rate Path Uncertainty, Tokyo Area Inflation Accelerates
Akira Ito
26 Jul, 2024
Tokyo
Stocks in Tokyo extended losses for the eighth session in a row as investors unwind artificial intelligence-linked bets.
Investors stayed on the sidelines ahead of the Bank of Japan's monetary policy decisions on July 31 amid rising optimism that the central bank may be ready to lift rates and significantly cut its government bond purchase plan.
The Nikkei extended weekly losses to 5.1% and the Topix fell 2.9%, and both indexes fell for the second week in a row.
Moreover, Tokyo area core inflation accelerated for the third month in July, the Ministry of Internal Affairs reported Friday.
Core inflation, which excludes fresh food prices, increased to 2.2% from 2.1% in June as the ending of the government subsidy increased energy prices by 19.7% from a year ago.
Food prices rose at a slower pace, and hotel price inflation weakened as the government ended its subsidies a year ago and demand from foreign tourists supported the price increase.
Tokyo area inflation is seen as a leading indicator of nationwide trend, and Japan's consumer price data are scheduled to be released in about three weeks.
A day ago, a survey showed service prices in June for businesses soared at the fastest pace in 33 years, stoking broader inflationary pressures.
However, businesses are struggling to pass higher prices to consumers amid weak domestic demand.
The yen continued to rally for the second week in a row and traded at 154.24 against the U.S. dollar in the hope that the central bank will start raising rates as early as next week and narrow the wide yield gap between the U.S. and Japanese bonds.
Japan Stock Movers
Japan stocks declined on Friday and extended weekly losses after losses in technology, shipbuilding, communication, and electric machinery led the decliners.
The Nikkei 225 stock average declined 0.5% to 37,667.41, and the Topix index dropped 0.4% to 2,699.54.
Tokyo Electron, Advantest, Renesas Electronics, Screen Holdings, and Lasertec declined between 3% and 6%.
Hino Motors advanced 12.8% to ¥453.40, Canon gained 6.7% to ¥4,622.0, and Fujitsu Ltd. soared 10.9% to ¥2,700.0.
China Markets Extend Weekly Losses Amid Weak Domestic Demand and Earnings Outlook
Li Chen
26 Jul, 2024
Hong Kong
Stock market indexes in Shanghai and Hong Kong continued to look down amid weak market sentiment ahead of the Politburo meeting later in the month.
The Hang Seng index and the CSI 300 index dropped 0.2%, and both indexes are set to extend weekly losses for the second week in a row.
For the week, the Hang Seng index fell 2.4% and the CSI index dropped 3.4%.
The People's Bank of China unexpectedly cut its one-year loan prime rate, the reference rate for property mortgage lending, by 10 basis points on Thursday.
The surprise move underscored the need to support the fragile economic recovery with additional measures as the world's second-largest economy struggles to achieve the government's annual economic growth target rate of 5%.
China's policymakers are showing little interest in supporting the property market rebound amid widespread overbuilding and shoddy construction.
Policymakers are looking to provide assistance to companies pursuing advanced manufacturing, renewable energy, and modernizing military capabilities.
With the shift in focus, Chinese leaders are not likely to announce financial market supportive measures, which requires additional spending, as the government is struggling with record high debt of 300% of gross domestic product, the highest among leading economies of the world.
China Stock Movers
The Hang Seng index increased 0.2% to 17,036.73 and the CSI 300 index rose 0.2% to 3,406.96.
Tech and e-commerce stocks were in focus and traded volatile as investors worried about the upcoming earnings in the next few weeks.
Tencent Holdings increased 1.3% to HK $354.80, Baidu decreased 1.1% to HK $87.79, Alibaba Group decreased 0.1% to HK $73.25, and Meituan added 0.7% to HK $107.80.
BYD increased 1.2% to HK $237.0, and Li Auto jumped 1.4% to HK $74.20.
Ugreen Group doubled on the first day of trading in Shenzhen to 42.50 yuan, and the consumer products company raised 1.5 billion yuan.
India Movers: Ashok Leyland, Canara Bank, Sobha Ltd, Tech Mahindra, Texmaco Rail
Arun Goswami
26 Jul, 2024
Mumbai
India indexes erased weekly losses as investors reviewed the latest earnings update. Market sentiment has been weak after the central government proposed to increase capital gains and securities transaction tax rates.
The Sensex index increased by 0.7% to 80,622.56, and the Nifty index rose by 0.8% to 24,602.90.
On the Mumbai stock exchange, 236 stocks traded at their 52-week highs, and 12 stocks traded at their 52-week lows.
Canara Bank decreased 0.1% to ₹111.75, and the financial service company reported mixed results in the June quarter.
Net interest income increased 6% to ₹9,166 crore from ₹8,666 crore, and net income rose 10.5% to ₹3,905 crore from ₹3,535 crore.
Asset quality, measured by the percentage of non-performing loans, improved in the quarter from a year ago.
The net non-performing asset ratio improved to 1.24% from 1.57% a year ago and eased to 1.27% in the March quarter.
Total domestic deposits increased 11.5% from a year ago to 12.31 lakh crore from ₹11.05 lakh crore, and domestic gross advances rose 9.2% to ₹9.21 lakh crore.
Tech Mahindra Ltd. declined 1.1% to ₹1,513.10, despite the tech services provider reporting a surge in net profit in the June quarter.
Revenue increased 10% to ₹13,005 crore and net income advanced 23% to ₹851.5 crore from a year ago, respectively.
New contracts in the quarter increased to $534 million from $500 million in the previous quarter.
The company's total staff increased by 677 from a year ago to 147,200.
Ashok Leyland rose 6.3% to ₹247.0 despite the commercial vehicle maker reporting a decline in earnings in the June quarter.
Standalone revenue increased 5% to ₹8,599 crore from ₹8,189 core, and net income declined 9% to ₹526 crore from ₹576 crore a year ago.
Sobha Ltd. declined 3.1% to ₹1,804.85 on a report that a subsidiary of the Godrej family plans to cut its stake in the company by half through a block deal transaction.
Anamudi Real Estates LLP plans to cut its stake in the company from 9% to 5% and raise as much as $100 million.
Texmaco Rail & Engineering Ltd. increased 0.5% to ₹277.57, and the company agreed to acquire Jindal Rail Infra for ₹615 crore.
U.S. GDP Growth Accelerated In Second Quarter
Brian Turner
25 Jul, 2024
Washington, D.C.
Gross domestic product expanded at an annual rate of 2.8% in the second quarter, adjusted for seasonal factors and inflation, and faster than the annual pace of 1.4% in the first quarter, the U.S. Bureau of Economic Analysis showed Thursday.
Consumer spending accelerated to 2.3% from 1.5%, and the increase in private inventories added 0.82 percentage points to the economic growth in the quarter. Nonresidential fixed investment accelerated to 5.2% from 4.4%.
On the other hand, residential investment contracted for the first time in a year by 1.4% from a rise of 16%, and international trade continued to drag on economic growth after imp76orts accelerated to 6.9% from 6.1%, faster than the increase in exports to 2% from 1.6%.
Investor expectations are high that the Federal Reserve will slow inflation towards its target rate of 2% without causing a recession, despite multiple interest rate hikes over 2022 and 2023.
A separate economic report showed, new orders for durable goods declined 6.6% from the previous month in June to $264.5 billion, after rising for four months in a row, the U.S. Census Bureau reported Thursday.