Key indices settled the week with robust gains. Broader markets, however, underperformed the key indices. The Nifty settled above the 17,500 level. Positive global cues and healthy Q2 earnings supported buying. Indices logged gains in all five trading days in the week. In the week ended on Friday, 21 October 2022, the Sensex advanced 1,387.18 points or 2.39% to settle at 59,307.15. The Nifty 50 index gained 390.60 points or 2.27% to settle at 17,576.30. The BSE Mid-Cap index rose 0.39% to settle at 24,805.15. The BSE Small-Cap index rose 0.15% to settle at 28,566.82. Weekly Index Movement:

Domestic headline equity indices ended with strong gains on Monday, mirroring positive global cues. The barometer index, the S&P BSE Sensex, jumped 491.01 points or 0.85% to 58,410.98. The Nifty 50 index gained 126.10 points or 0.73% to 17,311.80.

The domestic stock market ended with strong gains on Tuesday, amid favorable global & domestic cues. Sliding crude oil prices and upside prospects to Q2 corporate earnings boosted investors sentiment. The S&P BSE Sensex surged 549.62 points or 0.94% to 58,960.60. The Nifty 50 index gained 175.15 points or 1.01% to 17,486.95.

Domestic equity benchmarks ended with steady gains on Wednesday, rising for the fourth straight session. Healthy Q2 earnings and softer crude oil prices supported buying. The barometer index, the S&P BSE Sensex, rose 146.59 points or 0.25% to 59,107.19. The Nifty 50 index gained 25.30 points or 0.14% to 17,512.25.

The equity benchmark indices rose for the fifth straight session on Thursday. Global stocks were mixed as traders assessed rate hike expectations and recession fears. The barometer index, the S&P BSE Sensex, rose 95.71 points or 0.16% to 59,202.90. The Nifty 50 index gained 51.70 points or 0.30% to 17,563.95.

The equity benchmarks ended slightly higher on Friday, extending gains for the sixth trading session. The uptrend was supported by banks and financial stocks. However, metals, pharma and healthcare shares dragged. The barometer index, the S&P BSE Sensex, rose 104.25 points or 0.18% to 59,307.15. The Nifty 50 index gained 12.35 points or 0.07% to 17,576.30.

Stocks in Spotlight:

Axis Bank surged 12.48%. The private lender's net profit surged 70% to Rs 5,329.77 crore on 20% increase in total income to Rs 24,180.08 crore in Q2 FY23 over Q2 FY22. Net interest income (NII) increased by 31% YoY and 10% QoQ to Rs 10,360 crore. Net interest margin (NIM) for Q2 FY23 stood at 3.96%, up 57 basis points YoY and 36 basis points QoQ.

ITC rose 4.07%. The company's standalone net profit rose 20.8% to Rs 4,466 crore on 27.4% increase in net revenue to Rs 15,976 crore in Q2 September 2022 over Q2 September 2021.

HDFC Bank shed 0.19%. The private lender's net profit rose 20.1% to Rs 10605.78 crore on 19.2% increase in total income to Rs 46181.96 crore in Q2 FY23 over Q2 FY22. Net interest income (interest earned less interest expended) for the quarter ended 30 September 2022 grew by 18.9% to 21,021.2 crore from 17,684.4 crore for the quarter ended 30 September 2021. Core net interest margin was at 4.1% on total assets, and 4.3% based on interest earning assets.

Bajaj Auto gained 2.81%. The two-wheeler maker's consolidated net profit dropped 15.71% to Rs 1,719.44 crore in Q2 FY23 as against Rs 2,039.86 crore recorded in Q2 FY22. Revenue from operations jumped 16.44% to Rs 10,202.71 in the quarter ended 30 September 2022 from Rs 8,762.18 crore posted in the same period a year ago.

L&T Technology Services (LTTS) slipped 2.92%. The company reported 3% rise in consolidated net profit to Rs 282.4 crore on a 6.5% rise in revenue to Rs 1,995.1 crore in Q2 FY23 over Q1 FY23. As compared with Q2 FY22, the company's net profit and revenue are higher by 22.8% and 24.1%, respectively. During the quarter, LTTS won $60 million plus deal and a deal with total contract value (TCV) of $10 million.

UltraTech Cement rose 2.81%. The cement major's consolidated net profit tumbled 42.47% to Rs 756 crore on 15.78% increase in net sales to Rs 13,596 crore in Q2 September 2022 over Q2 September 2021. Profit before tax (PBT) stood at Rs 1,103 crore in Q2 September 2022, down 43.35% year-on-year (YoY). EBITDA fell 29.49% YoY to Rs 2,013 crore in Q2 FY23. Energy cost increased 58% and raw material cost rose 18% YoY. UltraTech achieved capacity utilisation of 76% as against 71% during Q2FY22. Domestic sales volume grew 9.6% on year-on-year basis, despite heavy monsoons through the quarter.

Economy:

The Reserve Bank of India's (RBI) monetary policy committee may lean more on data in deciding the key interest rate going ahead, minutes of its September meeting suggested on Friday, 14 October 2022.

The MPC raised its benchmark repo rate by 50 basis points late last month, the fourth straight increase to tame high inflation.

"Going forward, monetary policy needs to remain watchful and nimble, based on incoming data and evolving conditions," RBI governor Shaktikanta Das wrote in the minutes. "The need of the hour is calibrated monetary policy action, with a clear understanding that it is required for sustaining our medium-term growth prospects," Das said.

Minutes from two external members Ashima Goyal and Jayant Varma, however, showed their preference for a tapering of the rate-hike cycle going ahead.

In its monthly bulletin, the Reserve Bank of India (RBI) stated that retail inflation is set to ease from September highs, whereas economic activity is expected to expand.

In its article titled "State of the Economy", RBI stated that headline inflation is set to ease from its September high, albeit stubbornly. The fight against inflation will be dogged and prolonged, given the long and variable lags with which monetary policy operates. The expected easing in inflation would likely be driven by the food and beverages, which has undergone repeated shocks in the first half of the year.

The central bank added that the persistence of headline inflation above the mandated tolerance band of 2% to 6% for three consecutive quarters will also be triggering the mandated accountability processes. However, monetary policy remains focused on re-aligning inflation with the target.

Global Markets:

The People's Bank of China rolled over its medium-term lending facility (MLF) loans and kept its interest rate unchanged at 2.75%, according to a statement. The central bank announced it would keep the one-year rate unchanged for a second month and injected 500 billion yuan ($70 billion) through the MLF.

Chinese President Xi Jinping affirmed Sunday the country's recent shift away from rapid growth and greater focus on national self-sufficiency, especially in technology. Xi briefly mentioned in that opening section how the country's Covid policy has achieved "positive results" in coordination with economic development.

Production at US factories spiked in September. Manufacturing output rose 0.4% last month, keeping pace with an upwardly revised 0.4% gain in August, the Federal Reserve said on Tuesday. Output increased 4.7% from a year earlier.

Meanwhile, British Prime Minister Liz Truss resigned Thursday, bringing to a close a brief 44-day tenure mired by "mini-budget" chaos, economic turmoil and political infighting. Truss said she will remain in place as caretaker prime minister until a successor is named, with a leadership contest expected to take place over the next week. Rishi Sunak, Penny Mordaunt and even former Prime Minister Boris Johnson are among the likely frontrunners to replace Truss.

Britain's new finance minister Jeremy Hunt scrapped Prime Minister Liz Truss's proposed tax cuts and reined in her energy subsidies, while Bank of America Corp posted consensus-beating third quarter results, having benefited from a spate of interest rate hikes from the Federal Reserve.

The U.K. reported a rise in the consumer price index to 10.1% in September, matching the 40-year high posted by the Office for National Statistics in July. Food, energy and transport prices drove the increase.