Equity barometers trimmed gains in mid-morning trade amid profit taking. At 11:22 IST, the barometer index, the S&P BSE Sensex, gained 279.42 points or 0.74% at 37,967.16. The Nifty 50 index was up 85.15 points or 0.77% at 11,180.40.
In the broader market, the S&P BSE Mid-Cap index was up 0.95% while the S&P BSE Small-Cap index added 1.06%.
The market breadth was strong. On the BSE, 1560 shares rose and 716 shares fell. A total of 135 shares were unchanged.
COVID-19 Update:
Total COVID-19 confirmed cases worldwide stood at 18,480,000 with 700,647 deaths. India reported 5,86,244 active cases of COVID-19 infection and 39,795 deaths while 12,82,215 patients have been discharged, according to the data from the Ministry of Health and Family Welfare, Government of India.
Economy:
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The IHS Markit India Services Business Activity Index registered 34.2 in July, and despite rising slightly from 33.7 in June, signalled a further rapid reduction in service sector output. Moreover, the latest reading was among the lowest recorded in nearly 15 years of data collection, surpassed only by the unprecedented falls in the previous three months. With overall demand conditions severely muted, service providers made further job cuts in July
The Composite PMI Output Index, which measures combined services and manufacturing output, signalled a further rapid contraction in private sector business activity in July. Falling from 37.8 in June 2020 to 37.2 in July 2020.
Commenting on the latest survey results, Lewis Cooper, Economist at IHS Markit said, The coronavirus pandemic and subsequent introduction of "lockdown" measures continued to weigh heavily on the Indian service sector in July. Business activity and new orders dropped again, with the rates of decline remaining rapid overall. Panellists frequently reported temporary company closures and weak demand as a result of the pandemic. "With demand severely restricted, July data highlighted another round of job cuts, with the latest reduction the most marked on record, while firms' output expectations in the year ahead remained pessimistic. "July data, as a whole, provide no real signs that the downturn is slowing down. That's not surprising with lockdown measures still in force, but undoubtedly these will have to be loosened and companies reopen before the sector can move towards stabilisation. With such a prolonged and significant downturn, any substantial recovery will take many months, if not years. Latest IHS Markit estimates point to an annual contraction in GDP of over 6% in the year ending March 2021.
Earnings Today:
Adani Gas (up 0.16%), Apollo Tyres (up 0.39%), Cadila Healthcare (up 1.04%), Canara Bank (up 0.1%), DLF (down 0.07%), Eid-Parry (down 0.31%), Godrej Properties (down 0.05%), Hawkins Cookers (up 5.06%), INOX Leisure (up 0.21%), JK Lakshmi Cement (up 1.93%), Jyothy Labs (up 2.14%) and Strides Pharma (up 4.38%) are some of the companies that will announce their quarterly results today.
Earnings Impact:
Tata Consumer Products was down 0.63%. The company reported an 82% jump in consolidated net profit to Rs 346 crore on 13% rise in revenue to Rs 2,714 crore in Q1 FY21 over Q1 FY20. EBITDA increased by 37% to Rs 486 crore in the June quarter (from Rs 354 crore reported in the corresponding period last year) as a result of higher sales, gross margin improvement and rationalization of discretionary expenditure. EBITDA margin stood at 17.9% as on 30 June 2020 as against 14.8% as on 30 June 2019. The company recorded an exceptional income of Rs 63 crore during the quarter. "Exceptional item for the current quarter represent gain of Rs 84 crore on conversion of a joint venture into a subsidiary and costs relating to the business integration of foods business Rs 21 crore", the company said.
Gujarat Gas declined 1.78% to Rs 304.15 after consolidated net profit slumped 74.8% to Rs 59.07 crore on 58.6% drop in net sales to Rs 1,082.92 crore in Q1 June 2020 over Q1 June 2019. Gujarat Gas' total gas sales volume for the quarter was at 4.14 million metric standard cubic meters per day (MMSCMD). During the quarter, company commercialised 13 new CNG stations. The company's gas sales volume has shown a robust recovery post lockdown. The company is currently flowing total volume close to 9.5 MMSCMD as against FY20 average sales of 9.44 MMSCMD. As of now, all the offices are functioning normally with highest standard of safety precautions. The firm said it currently has a comfortable liquidity position and continues to service its debt obligations.
Astral Poly Technik was up 0.54%. On a consolidated basis, the company's net profit tanked 57.5% to Rs 20.30 crore on 33.4% decline in net sales to Rs 403.90 crore in Q1 June 2020 over Q1 June 2019. Consolidated EBITDA dropped 42.62% to Rs 57.20 crore in Q1 FY21 as against Rs 99.70 crore in Q1 FY20. EBITDA margin stood at 14.16% in Q1 FY21 lower than 16.44% in Q1 FY20. The pipe business segment reported 33.01% decline in revenue from operations to Rs 316.50 crore in Q1 June 2020 over Q1 June 2019. The adhesive vertical posted 36.92% fall in revenue from operations to Rs 91.20 crore in Q1 June 2020 over Q1 June 2019.
Global Markets:
Most Asian stocks were trading higher on Wednesday as uncertainty remains over the state of coronavirus relief stateside.
Growth in China's services sector slowed in July from a decade high the previous month. The Caixin/Markit services Purchasing Managers' Index (PMI) fell to 54.1 from June's 58.4, which was the highest reading since April 2010. The 50-mark separates growth from contraction on a monthly basis.
US stock market ended higher after a choppy session on Tuesday, lifted by Apple and energy stocks but limited by declines in AIG and Microsoft.
White House negotiators late Tuesday vowed to work around the clock to reach a spending deal by the end of the week, but the Treasury Secretary warned they were not going anywhere close to the $3.4 trillion Democratic leaders sought.
Meanwhile, senior U.S. and Chinese officials will reportedly review the implementation of their Phase 1 trade deal and likely air mutual grievances in an increasingly tense relationship during an August 15 videoconference. U.S. Trade Representative Robert Lighthizer and Chinese Vice Premier Liu He, the principal negotiators for the two countries, will participate in the meeting, an initial six-month review of the pact activated on February 15.
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