Tata Motors Drives Nifty to New High; Infosys Q2 Results Beat Estimates

Today’s Action

Nifty, +0.9%; Sensex, +0.8%; Nifty Midcap, +1.5%; Nifty Smallcap, 0.0%; Model Portfolio, +0.1%.

Market Pulse: Confirmed Uptrend

Distribution Day Count: Three

Today, Nifty gapped higher, crossing 18,000. It continued to gradually advance throughout the day and made a high of 18,198. It closed in the top quartile of the day’s range. Tata Motors was the top rider on D-street, gaining more than 20%. The other Tata Group stocks also enjoyed the ride. Tata Power and Tata Chemical advanced 14% each. Though the benchmark and Midcap indices were moving higher, Smallcap was lagging. The advance-decline ratio was close to one. Of 2,065 stocks traded, 1,035 stocks advanced, 952 declined, and the remaining closed flat. On the sectoral front, barring Nifty Realty (-0.3%), all indices closed higher. Nifty Auto (+3.5%) was the top gainer. Nifty FMCG, IT, and Metal closed 0.8–1.5% higher.

The distribution day count currently stands at three. Further, Nifty is trading above all its key moving averages. We would like the index to continue trading above its key moving averages. We maintain a positive view on the market, but if the index adds a couple of distribution days, stages a reversal, or breaches its key moving averages, we may change the market status to an Uptrend Under Pressure. Reducing exposure to stocks breaking below their 21- or 50-DMA on higher volume is important.

Key News

-PM Modi launched a Rs 100 lakh crore Gati Shakti Mission to provide multi-modal connectivity to more than 1,200 industrial clusters, including two defense corridors across the country.

Mindtree (Nse)’s Q2 FY22 results beat estimates on all fronts. Revenue grew 13% q/q while PAT grew 16% q/q. Margin expanded 40bps q/q.

Infosys’s Q2 FY22 revenue was in line with estimates, growing 6.1% q/q. PAT and margin came in above estimates. PAT grew 4.4% q/q, but margin contracted 10bps q/q. Growth guidance for FY22 was raised to 16.5–17.5% from 14–16%.

Wipro (Nse)’s Q2 FY22 revenue was in line with estimates, advancing 6.9% q/q. PAT and margin came in above estimates. PAT grew 7.6% q/q, while margin contracted 180bps q/q.