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Informist, Friday, May 23, 2025

By Akash Mandal

MUMBAI – The benchmark indices ended sharply higher Friday, with some market participants believing foreign investors returned to the Indian equity market after selling heavily in the previous two sessions, and others believing that the rally was driven by domestic investors. Financial services stocks led the gains in the Nifty 50, with HDFC Life Insurance Co., Jio Financial Services, and SBI Life Insurance Co. ending 2-3% higher.

Foreign investors had net sold shares worth nearly INR 156 billion during three of the past four trading sessions with sentiment weighed down by worries about the rising US government debt. While US President Donald Trump's proposal for tax cuts was passed by the US House of Representatives by the slimmest of margins late Thursday, the 10-year benchmark US Treasury yield eased 4 basis points to 4.54% Thursday. Wednesday, this had risen to its highest level since February.

The rupee gained 92 paise to end at 85.21 to the dollar. The surge in the rupee was likely on account of foreign portfolio inflows into domestic equities, market participants said.

With only two stocks ending in the red, the Nifty 50 closed at 24853.15 points, up 243.45 points or 1%. Despite the rise, the index is still around 170 points lower than at the end of last week. The two stocks which ended lower were Sun Pharmaceutical Industries and Grasim Industries. Sun Pharma ended over 2% lower after its bottom line for the March quarter missed analysts' estimates. Following this, brokerages Prabhudas Lilladher and Nirmal Bang Institutional Equities reduced their target price for the stock by 12% and 11%, respectively, to INR 2,000 and INR 1,969, while maintaing a 'buy' rating. Higher costs of research and development and continued pricing pressure in the US generics business are some near-term concerns for the company, the brokerages said.

Grasim Industries reversed gains and ended lower after its net loss for the quarter was higher than what the Street had expected. The company's earnings before interest, taxes, depreciation, and amortisation also more than halved on year. The stock ended lower for the sixth straight session, falling nearly 6% in that period. The BSE Sensex closed 769.09 points or 1% higher at 81721.08 points.

Barring the Nifty Pharma and Nifty Healthcare, all other sectoral indices ended in positive territory. Information technology stocks ended higher, pushing the Nifty IT up 1%, after international brokerage Bernstein said the domestic IT sector may see a revival amid a stable demand outlook and rising deal activity, according to a report by Moneycontrol. Large IT players said their outlook remains relatively stable and their clients do not expect demand to fall suddenly, as per the report. Persistent Systems, Infosys, and HCL Technologies each ended around 1% higher.

Shares of Trent ended nearly 2% higher after news that the stock would be added to the BSE Sensex from Jun. 23. The stock is anticipated to get equity inflows of $278 million, or around INR 24 billion, representing 2.5 times its average daily volume, NDTV Profit quoted IIFL Alternate Desk as saying.

Shares of Ola Electric rose over 7% earlier in the session but gave up some of the gains to end 3% higher. The company's board late Thursday approved raising up to INR 17 billion through term loans, working capital facilities, and issuance of non-convertible debentures or any other eligible debt securities. The stock has risen since May 20, when the company said its board would meet Thursday to discuss fundraising.

ITC ended over 2% higher despite its net profit for the quarter, adjusted for a huge one-time income of INR 151.79 billion, missing the Street's view. However, some brokerages expect the company's profitability to improve in the financial year 2025-26 (Apr-Mar) due to falling costs of raw materials such as palm oil. Brokerage Prabhudas Lilladher upgraded its rating on the stock to 'buy' from 'accumulate' and raised its target price on the stock by 3% to INR 538.

Honasa Consumer ended at its 20% upper circuit of INR 330.19 as brokerages were bullish on the company's earnings recovery despite its bottom line for the March quarter falling on year. "Honasa is starting FY26 on a good note. 4QFY25 (Jan-Mar) had strong recovery... even as elevated brand-building investments weighed on profitability," ICICI Securities said in a report. Emcure Pharmaceuticals extended gains for the second straight session after reporting strong earnings for the quarter during market hours Thursday. The stock has gained nearly 20% in these two sessions.

Waaree Energies and Premier Energies ended 8% and 2% lower, respectively, weighed down by the new US tax bill which could reduce incentives for utility-scale and rooftop solar installations by a large margin, CNBC-TV18 reported. Container Corp. of India ended over 2% lower after its bottom line for the March quarter came in lower than analysts' estimates. GMR Airports also fell over 2% after its consolidated net loss for the quarter widened on year.

* Of the Nifty 50 stocks, 48 rose and 2 fell

* Of the Sensex stocks, 29 rose and 1 fell

* On the NSE, 1,731 stocks rose, 1,132 fell, and 84 were unchanged

* On the BSE, 2,357 stocks rose, 1,594 fell, and 155 were unchanged

* Nifty FMCG: up 1.7%; Nifty Private Bank: up 1.6%; Nifty Pharma: down 0.4%

BSE                                               NSE

Sensex: 81721.08, up 769.09 points or 1%          Nifty 50: 24853.15, up 243.45 points or 1%

End

Edited by Rajeev Pai

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