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Mid Session Commentary

Barometers trade near the day's high; IT shares in demand

(11:29, 31 Mar 2023)

The domestic equity barometers continued to trade near the day's high in mid-morning trade. The Nifty managed to hold above the 17,250 mark. IT shares extended gains for second consecutive session.

At 11:28 IST, the barometer index, the S&P BSE Sensex, was up 625.62 points or 1.08% to 58,585.71. The Nifty 50 index gained 175.25 points or 1.03% to 17,255.95.

In the broader market, the S&P BSE Mid-Cap index added 1.04% while the S&P BSE Small-Cap index advanced 1.46%.

The market breadth was strong. On the BSE, 2524 shares rose and 799 shares fell. A total of 126 shares were unchanged.

Investor sentiment was upbeat as concerns of further banking turmoil receded. However, markets remained cautious following a higher-than-expected German CPI, adding pressure on the European Central Bank to further tighten monetary policy.

Buzzing Index:

The Nifty IT index advanced 1.29% to 28,371.80. The index has gained 2.41% in two sessions.

Mphasis (up 2.43%), Coforge (up 2.37%), Tech Mahindra (up 1.87%), HCL Technologies (up 1.62%) and Infosys (up 1.5%) were the top gainers.

Among the other gainers were LTI Mindtree (up 1.31%), Wipro (up 1.16%), Tata Consultancy Services (up 0.99%), L&T Technology Services (up 0.89%) and Persistent Systems (up 0.46%).

Stocks in Spotlight:

Reliance Industries (RIL) added 3.32%. The company initiated the process of demerging its financial services business.

RIL has convened a meeting of creditors and shareholders on 2 May 2023 to seek their approvals for demerging its financial services business into a separate entity and subsequent listing it on the stock exchanges. The voting will commence on 27 April 2023 and end on 1 May 2023, RIL said in a regulatory update. The conglomerate's board had approved the demerger in November 2022.

At present, Reliance Strategic Investments (RSIL) is a wholly-owned subsidiary of RIL and is an RBI-registered non-deposit-taking systemically important non-banking financial company. Post demerger, RSIL will be rechristened to Jio Financial Services (JFSL).

According to the contours of the deal, RIL will issue one share of the demerged company with a value of Rs 10 each for every one share held in RIL. The appointed date for the demerger is 31 March 2023. Upon the scheme becoming effective, the name of the demerged firm will be changed to JFSL and the new firm will be listed on the Indian bourses.

Alembic Pharmaceuticals zoomed 6.98%. The company on Thursday announced that it has received final approval from the US Food & Drug Administration (USFDA) for its abbreviated new drug application (ANDA), Brimonidine Tartrate Ophthalmic solution.

Aether Industries rose 2.62%. The company said that it has executed a letter of intent (LoI), effective on 29 March 2023 with Saudi Aramco Technologies Company, Saudi Arabia. The letter of intent (LoI) captures the preliminary terms regarding the finalization of a detailed licensing polyols agreement towards the manufacturing and commercialization at Aether of the Converge technology and product series, the manufacturing process for which has been previously jointly developed and validated at commercial scale by Aramco and Aether.

Global Markets:

Asian stocks traded higher on Friday as technology stocks continued to see renewed interest and led gains on Wall Street, with some shaking off concerns of a further banking crisis.

US stocks rose on Thursday as investors are looking towards more clarity from US regulatory agencies on struggling banks and shares of technology and bank stocks mostly remained flat.

President Joe Biden urged federal regulators Thursday to take up a set of reforms to safeguard the banking system, following the failures of Silicon Valley Bank and Signature Bank.

The administration wants regulators to take a range of steps to reinstate safeguards for banks with assets between $100 billion and $250 billion and “strengthen oversight and regulation of larger banks so that we are not in this position again,” the White House said on Thursday.

In major political development, Donald Trump was indicted by a Manhattan grand jury on Thursday in a probe of hush money payments to a porn star during his 2016 campaign — a historic event in American law and politics that is certain to divide an already polarized society and electorate.

The 45th president, the first former Oval Office occupant to be indicted, will be fingerprinted and have his mug shot taken like any criminal defendant when he comes to New York State Supreme Court in Manhattan to face the charges, court officials have reportedly said.