Business News: HCL Tech Surges, Gold Prices Dip: Market Highlights Include SBI Rate Hike, Budget 2024 Expectations

After its better-than-expected Q1FY25 earnings, the stock of HCL Tech surged by 4 per cent where net profit increased by 6.8 per cent sequentially to Rs 4,257 crore. Its sales in USD terms dipped 1.9 per cent compared to the previous quarter, which was cushioned by good performance in the telecom sector. On analyst sentiment, CLSA has downgraded it to "hold," Jefferies has maintained "hold," Nomura at "buy," while JPMorgan and UBS remain cautious over management comments that indicate some demand outlook and margin challenges. Sumeet Bagadia of Choice Broking kept a 'buy' tag with a target price of Rs 1680 as technical indicators remained upbeat.

The prices of gold in India remained close to Rs 73,000 per 10 grams where 24-carat was INR 73,740 and 22-carat gold stand at INR 67,590 per 10 grams. Silver stood at INR 95,400 per kilogram. All this together, retail gold rates for today in major cities were at, Delhi; rupees 67,740 per 22-carat and rupees 73,890 per 24-carat, Chennai at rupees 68,040 and rupees. 74,230 respectively. These rates get influenced by global trends and India's cultural demand for the metal during festivals and weddings.

Indian equity opened strong today, powered by gains in HCL Tech, Ultratech Cement, and Infosys. BSE Sensex added 157 points or 0.19 percent to 80,676, and NSE Nifty50 gained 85 points or 0.35 percent at 24,588. Coming over now to the sector-wise performance: the NIFTY IT resumed its journey northward and surged another 1 percent today. On the other hand, NIFTY Pharma rose by 0.6 percent. The Indian IT sector, to most analysts, seems optimistic against the backdrop of stratospheric valuations and unremarkably low growth estimates at a juncture when global trends have improved.

SBI increased the benchmark marginal cost of lending rate by 5 to 10 basis points with effect from 15 July 2024. Following this revision in MCLR, the interest on Loans would also go up and the EMI on linked loans would rise. For instance, SBI's 1-year MCLR is 8.85 percent now, up by 10 bps. For 3-month and 6-month and 2-year tenures, the respective MCLRs are now fixed at 8.4 percent, 8.75 percent, and 8.95 percent, respectively.

The Union Budget 2024 will be presented by Union Finance Minister Ms. Nirmala Sitharaman on July 5, and it will be the first full budget to be presented by the Modi-led NDA government at the Centre. The expected themes would be fiscal consolidation through the lowering of the FY25 deficit target to 5 percent of GDP and measures to boost consumption, social sectors, incentive spurring in manufacturing through enhanced infrastructure spending, and a vision for India's economic future. Because right in front of this budget is a challenge: it is going to have to strike a balance between the requirements of coalition demands and the requirement to indicate continuation of stability and reforms.

Domestic markets closed out the week on a strong note, with Nifty and Sensex closing at record highs. Stock Watch HCL Tech, DMart, Jio Financial, HDFC Life, Kotak Bank The opening day of the week-long trading session will have the stocks of these companies in focus ahead of Q1 results. Some of the notable outperformances include the 6.8 per cent growth in net profit by HCL Tech, spurt in profit by 30.2 per cent for IREDA, while DMart posted 17.5 per cent growth in profit. Other key developments last week were pharmaceutical-related successes, strategic bank tie-ups, and the large QIP fundraise of Jupiter Wagons.

The National Skill Development Corporation has written a letter to the Finance Ministry seeking tax parity between educational and skill development services. It wants amendments in the Income Tax Act and GST supporting its demand for bringing skill training within the ambit of educational exemption, deduction in fees paid for skill institutes, and reduction of GST rates to 5% from 18% on employment services. NSDC focuses on building employability through skilling, especially within the budding industries in high-growth sectors like electronic manufacturing.

A section in the government is worried on the MTNL financial state of affairs where bulk of its debt is sovereign guaranteed. In case MTNL fails to pay its debt, the government may have to use public money to repay such liabilities. The other state-owned operator, Mahanagar Telephone Network Limited, has approached the central government seeking financial support as it does not have enough to meet the jumbo interest payments totaling Rs 120 crore starting July 20 onwards, followed more in other months, as the concern is that if it fails to meet those, the lenders may invoke the sovereign guarantee attached to MTNL debt. This development epitomizes the watchful mindset of the government, particularly in highlighting the fiscal implications that will have to be countered in the event MTNL does not live up to its financial commitments and needs to call on state goodwill to forestall larger economic impacts.