BSE Sensex had gained 665 points in the previous three sessions. Photo: PTI
New Delhi: Overcoming a wobbly start, Sensex and Nifty managed to close marginally higher on Wednesday, led by a surge in TCS shares. The Sensex rose as much as 122 points to 36362.30 at day’s high, which is less than 100 points away from its all-time high. In January this year, the Sensex had hit a record high of 36,443. The Sensex had gained 665 points in the previous three sessions on sustained buying by domestic institutional investors (DIIs). At the close of market trading today, the Sensex settled 26 points higher at 36,265 while Nifty finished 1 point higher at 10,948.
Here are 10 key updates from stock markets today:
1) Propelling today’s gains in the stock market is Tata Consultancy Services Ltd, which rose as much as 6% today. TCS shares hit a new high of ₹ 1995 on BSE after India’s biggest software services firm came out with strong third quarter earnings. TCS shares settled 5.5% higher at Rs 1,979, with its market capitalisation zooming by Rs 39,282 crore to Rs 7.57 lakh crore.
2) TCS expects growth in its key vertical—banking, financial services and insurance (BFSI)—to remain strong in the next one to two years as it posted a record net profit.
3) TCS’ revenue from digital services such as cloud, analytics and big data grew about 44.8% from a year earlier, while overall revenue jumped about 16%.
4) So far this year, TCS shares have significantly outperformed the broader markets, rising over 45% year to date. However, some analysts remain cautious on TCS shares after the sharp run-up this year. “We believe the optimism is largely reflected in the price and find the stock expensive at nearly 23 times estimated FY20 earnings,” says Nomura.
5) Private sector lender IndusInd Bank also came out with strong results on Tuesday, boosting optimism about an earnings recovery. IndusInd Bank shares ended 1% lower at Rs 1,914 today despite analysts maintaining positive stance on the lender’s shares.
6) Nomura has raised its target price on IndusInd Bank shares to Rs 2,250, citing strong growth momentum and strong asset quality.
7) Despite emerging markets being roiled at a time of heightened trade tensions between US and China, the earnings picture in India is improving, say analysts from Morgan Stanley, which expects companies in the BSE Sensex to report a 23% increase in net income in the June quarter from a year earlier.
8) That would mark a third straight quarter of double-digit growth, according to data compiled by Bloomberg.
9) “Results should show some recovery and broadening of earnings growth,” Morgan Stanley analysts Sheela Rathi and Ridham Desai said in a 5 July report. India’s economic growth has picked up in recent months, with GDP or gross domestic product growth accelerating to 7.7% in the March quarter.
10) Despite the Sensex nearing its all-time high, the broader markets, midcap and smallcap stocks, have suffered a sharp correction this year. For example, the BSE midcap index is down over 15% from its all-time highs. The BSE midcap and smallcap indices today ended 0.6% and 0.3% lower today.