Key domestic indices corrected on Thursday, snapping a three-day rising streak as weak global cues triggered profit booking. Selling was prominent in banks and financial shares. The main indices were volatile due to expiry of weekly index options.
The barometer index, the S&P BSE Sensex declined 394.40 points or 1.02% at 38,220.39. The Nifty 50 index lost 96.20 points or 0.84% at 11,312.20. Both these indices rose about 2% in the previous three sessions.
HDFC (up 2.35%), Bharti Airtel (up 1.98%), Reliance Industries (up 1.73%), ICICI Bank (up 1.72%) and HDFC Bank (up 0.82%) were major index shakers today.
The broader market bucked trend. The BSE Mid-Cap index rose 0.87% and the BSE Small-Cap index gained 0.72%.
Buyers outnumbered sellers. On the BSE, 1595 shares rose and 1169 shares fell. A total of 169 shares were unchanged.
COVID-19 Update:
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Total COVID-19 confirmed cases worldwide stood at 22,328,069 with 7,86,303 deaths. India reported 6,86,395 active cases of COVID-19 infection and 53,866 deaths while 20,96,664 patients have been discharged, according to the data from the Ministry of Health and Family Welfare, Government of India.
The Ministry of Health and Family Welfare informed that India is on the heels of crossing 3 crore cumulative COVID-19 tests and the total number of recoveries has crossed 2 million. Coupled with this is another achievement of highest ever single day recovery of 60,091 in the last 24 hours. With this high number of COVID-19 patients recovering and being discharged from the hospitals and home isolation (in case of mild and moderate cases), the Recovery Rate has scaled the twin peak of crossing 73% (73.64%). This has also led to the declining Case Fatality Rate, which stands at a new low of 1.91% today. The record high recoveries have ensured that the actual caseload of the country viz. the active cases has reduced and currently comprises less than 1/4th (only 24.45%) of the total positive cases. India has posted 13,61,356 more recoveries than the active cases (6,76,514).
RBI Minutes:
The Reserve Bank of India today released the minutes of the monetary policy committee (MPC) meeting held from 4 to 6 August 2020. In its growth outlook, the MPC observed that the recovery in the rural economy is expected to be robust, buoyed by the progress in kharif sowing. Manufacturing firms responding to the Reserve Bank's industrial outlook survey expect domestic demand to recover gradually from Q2 and to sustain through Q1:2021-22.
On the other hand, consumer confidence turned more pessimistic in July relative to the preceding round of RBI's survey. External demand is expected to remain anaemic under the weight of the global recession and contraction in global trade. Taking into consideration the above factors, real GDP growth in Q2-Q4 is expected to evolve along the lines noted in the May resolution. For the year 2020-21, as a whole, real GDP growth is expected to be negative. An early containment of the COVID-19 pandemic may impart an upside to the outlook. A more protracted spread of the pandemic, deviations from the forecast of a normal monsoon and global financial market volatility are the key downside risks, it said.
Numbers to Watch:
The yield on 10-year benchmark federal paper fell to 6.003% as compared with 6.008% at close in the previous trading session.
In the foreign exchange market, the rupee edged lower against the dollar. The partially convertible rupee was hovering at 75.0250, compared with its close of 74.8250 during the previous trading session.
In the commodities market, Brent crude for October 2020 settlement fell 48 cents at $44.89 a barrel. The contract fell 9 cents, or 0.20% to settle at $45.37 a barrel in the previous trading session.
Foreign Markets:
Shares in Europe and Asia declined on Thursday after the US Federal Reserve struck a pessimistic tone over the country's economic recovery prospects. Geopolitical tensions also spooked investors after US Secretary of State Mike Pompeo warned Russia and China not to contravene the reimposition of UN sanctions on Iran.
Markets in Indonesia and Malaysia are closed on Thursday for a holiday. Meanwhile, China announced no changes to its benchmark lending rate, with the one-year loan prime rate (LPR) kept at 3.85%, while the five-year LPR was on hold at 4.65%.
China on Thursday announced no changes to its benchmark lending rate, with the one-year loan prime rate (LPR) kept at 3.85%, while the five-year LPR was on hold at 4.65%.
In US, Wall Street finished lower on Wednesday after the Federal Reserve raised concerns that the US economic recovery from the devastating effects of the pandemic faced a highly uncertain path.
Apple became the first US-listed company to reach a $2 trillion market capitalisation on August 19, doubling in valuation in just over two years. The tech giant's shares have gained nearly 60% this year as the company overcame the shutdown of factories in China that produce the iPhone and the closure of its retail sales amid the coronavirus pandemic.
Federal Open Market Committee members agreed at their latest meeting in late July that the ongoing situation surrounding the coronavirus pandemic could weigh heavily on economic activity, employment, and inflation in the near term and was posing considerable risks to the economic outlook over the medium term, according to the meeting minutes. The U.S. central bank kept rates unchanged last month.
Buzzing Indian Segment:
The Nifty CPSE index jumped 3.39% to 1,542.95.
NHPC (up 12.92%), SJVN (up 6.17%), NBCC (up 4.58%), ONGC (up 3.33%), OIL (up 3.16%), Power Grid Corporation of India (up 2.59%) and Coal India (up 2.37%) advanced.
Stocks in Spotlight:
Aarti Drugs soared 17.76%. The company said its board approved issuing three bonus shares for each share held. The company said it will intimate the record date for determining eligible shareholders entitled to receive bonus share.
Larsen & Toubro (L&T) shed 1.30% while NTPC surged 6.87%.
L&T Hydrocarbon Engineering (LTHE) has signed a memorandum of understanding with NTPC to build a carbon dioxide to methanol demonstration plant. The plant will comprise of three sub-units namely carbon dioxide capture from flue gas, hydrogen production by electrolysis of water and catalytic conversion of carbon dioxide (CO2), and hydrogen to methanol.
Separately, NTPC announced that it would be able to reduce the transportation cost of coal to fuel to its NTPC Kudgi Super thermal power station in Karnataka, to around Rs 200-500 per metric tonnes (MT) thereby bringing down the cost of electricity generation and also reducing the transit time by 8-15 hours.
L&T Finance Holdings was up 2.38%. The committee of directors of L&T Finance Holdings on Wednesday, 19 August 2020, approved the offer and issuance of up to 2,000 unsecured, redeemable, non-convertible debentures (NCDs) of face value of Rs 10 lakh at par aggregating to nominal amount of up to Rs 200 crore on a private placement basis at the coupon/interest rate of 8% per annum payable annually. The NCDs will be listed on National Stock Exchange (NSE) and the tenure of the NCDs shall be 1095 days. NCDs will be redeemed at par on 28 August 2023. The announcement was made after market hours yesterday, 19 August 2020.
PNB Housing Finance gained 2.36%. The board of directors of the company has approved to raise equity capital aggregating upto Rs 1800 crore through preferential issue/rights issue. The announcement was made after market hours yesterday, 19 August 2020.
RBL Bank fell 1.43%. The board of the private lender approved issuing 8.84 crore equity shares on preferential basis at Rs 177 each, aggregating to Rs 1566 crore.
Ruchi Soya Industries declined 3.29% after the company reported a 12.6% fall in net profit to Rs 12.26 crore in Q1 June 2020 as against Rs 14.02 crore in Q1 June 2019. Revenue from operations in Q1 June 2020 stood at Rs 3,043.08 crore, falling 2.2% from Rs 3112 crore in the same period last year. Profit before tax came at Rs 12.26 crore in Q1 June 2020, 12.6% lower than Rs 14.02 in Q1 June 2019. The company did not pay an taxes in quarter ending in June 2020.
Meanwhile, the company announced that Acharya Balkrishna has resigned as managing director with effect from 18 August 2020 due to his pre-occupation. Ram Bharat has been designated as MD with effect from 19 August 2020 till 17 December 2022.
IIFL Wealth Management rose 0.66% after the board declared a one-time special interim dividend of Rs 40 per equity share of the face value of Rs 2 each.
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