Domestic equity benchmarks ended near the day's high after a volatile session on Wednesday. The Nifty managed to close above the 11,900 mark. Pharma and IT shares climbed while realty and metal shares declined. Trading was choppy amid a tight U.S. presidential race that may not be decided right away. A close election could result in litigation over voting and ballot-counting procedures in battleground states.
The barometer index, the S&P BSE Sensex, rose 355.01 points or 0.88% at 40,616.14. It hit a low of 40,076.47 in afternoon trade and a high of 40,693.51 in late trade. The 30-unit index has advanced 2.53% in three sessions.
The Nifty 50 index added 95 points or 0.80% at 11,908.50. It hovered between 11,756.40 and 11,929.65 during the day. The 50-unit index has risen 2.29% in three days.
Reliance Industries (up 3.46%) and Infosys (up 3.02%) boosted the indices while HDFC (down 2.02%) ICICI Bank (down 1.58%) dragged.
In the broader market, the BSE Mid-Cap index rose 0.43% and the BSE Small-Cap index gained 0.33%. Both these indices underperformed the Sensex.
The market breadth was negative. On the BSE, 1283 shares rose and 1310 shares fell. A total of 202 shares were unchanged.
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Derivatives:
The NSE's India VIX, a gauge of market's expectation of volatility over the near term, slumped 4.29% to 23.2. The Nifty November 2020 futures were at 11,907.60, a discount of 0.9 points compared with the Nifty's spot closing of 11,908.50.
The Nifty option chain for 26 November 2020 expiry showed maximum call OI of 18.43 lakh contracts at the 12,000 strike price. Maximum put OI of 25.72 lakh contracts was seen at 11,000 strike price.
COVID-19:
Total COVID-19 confirmed cases worldwide stood at 4,74,05,395 with 12,13,735 deaths.
India reported 5,33,787 active cases of COVID-19 infection and 1,23,611 deaths while 76,56,478 patients have been discharged, according to the data from the Ministry of Health and Family Welfare, Government of India.
US Election 2020:
In-person voting is still on in many parts of the United States. But, early results are pouring in from states where polling has closed. So far, Democratic Party candidate and former vice president Joe Biden has won 238 electoral votes while President Donald Trump has won 213 electoral votes. A candidate needs 270 electoral votes to win the election.
The US Dow Jones Futures were currently down 49 points and Nasdaq futures were up 259 points.
Economy:
IHS Markit India Services PMI rose to 54.1 in October, from 49.8 in September. The figure came above the 50 no-change mark for the first time since February. The latest reading pointed to a solid rate of growth in output that was stronger than its long-run average. The upturn was supported by improved market conditions amid the loosening of COVID-19 restrictions.
The Composite PMI Output Index rose from 54.6 in September to 58 in October, signalling the strongest increase in private sector output in close to nine years. A sharp rise in factory production was accompanied by a return to growth of services activity. (Composite indices are weighted averages of comparable manufacturing and services indices.)
Meanwhile, India's trade deficit narrowed to $8.78 billion in October 2020, compared with trade deficit of $11.76 billion, an improvement by 25.34% YoY.
India's merchandise exports in October 2020 were $24.82 billion, as compared to $26.23 billion in October 2019, showing a fall of 5.4%. The value of India's merchandise imports in October 2020 was $33.6 billion, as compared to $37.99 billion in October 2019, a decline of 11.56%.
Numbers to Watch:
The yield on 10-year benchmark federal paper fell to 5.889% as compared with 5.898% 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 74.76, compared with its close of 74.4125 during the previous trading session.
In the commodities market, Brent crude for January 2021 settlement rose 81 cents at $40.52 a barrel. The contract rose 74 cents, or 1.90% to settle at $39.71 a barrel in the previous trading session.
Foreign Markets:
Shares in Europe and Asia advanced on Wednesday as investors around the world keep watch on the outcome of the U.S. election.
A private survey showed China's service sector activity growing in October, with the Caixin/Markit services Purchasing Managers' index coming in at 56.8.
Hong Kong-listed shares of Alibaba tanked on Wednesday after the anticipated initial public offering of affiliate Ant Group was suspended amid regulatory concerns.
In US, stocks jumped on Tuesday as investors hoped a clear winner would emerge from the U.S. presidential election and a delayed, or contested, result would be avoided.
Heading into Tuesday's vote, former Vice President Joe Biden held a lead in national polling over President Donald Trump. In swing states, where the election will be decided, polling averages are tighter than the national polls.
Buzzing Indian Segment:
The Nifty Pharma index rose 2.18% to 11,608.65. The index has risen 3.88% in two sessions.
Divi's Laboratories (up 3.39%), Glenmark Pharmaceuticals (up 3.39%), Cipla (up 2.84%), Ipca Laboratories (up 2.22%), Aurobindo Pharma (up 1.57%), Alkem Laboratories (up 1.5%), Dr. Reddy's Laboratories (up 1.02%), Lupin (up 0.78%), Abbott India (up 0.43%) and Cadila Healthcare (up 0.33%) rose.
Sun Pharmaceutical Industries jumped 3.96%. The counter saw a strong demand after the drug major posted Q2 September 2020 results on Tuesday (3 November 2020). The company's consolidated net profit surged 70.36% to Rs 1,812.79 crore on a 6.41% increase in revenue from operations to Rs 8,458.77 crore in Q2 September 2020 over Q2 September 2019.
Consolidated profit before tax (PBT) soared 33.75% to Rs 1,917.18 crore in Q2 September 2020 as against Rs 1,433.38 crore in Q2 September 2019. Current tax expense for the quarter fell 3.36% to Rs 257.08 crore as against Rs 266.03 crore in Q2 September 2019. The firm said it continues to monitor the impact of COVID-19 on its business, including its impact on customers, supply-chain, employees and logistics.
Eris Lifesciences fell 2.54%. The company reported 16.2% rise in consolidated net profit to Rs 107.7 crore on 16% increase in net sales to Rs 325.27 crore in Q2 FY21 over Q2 FY20. Profit before tax (PBT) in Q2 September 2020 stood at Rs 115.84 crore, up by 12.7% from Rs 102.77 crore in Q2 September 2019. Tax expense during the quarter declined 19.4% year-on-year (YoY) to Rs 81 crore.
Ajanta Pharma fell 0.08%. On a consolidated basis, the company's net profit increased 46.29% to Rs 170.22 crore on a 11.38% rise in revenue from operations to Rs 715.91 crore in Q2 September 2020 over Q2 September 2019. The drug company's India sales were at Rs 202 crore, down 1%. Total exports in Q2 September 2020 were at Rs 499 crore, a growth of 12% year-on-year. During Q2 September 2020, R&D expenses declined 27.5% to Rs 29 crore (4% of revenue) from Rs 40 crore in Q2 September 2019.
Ajanta Pharma's board approved a proposal to buyback fully paid-up equity share. The company aims to buyback upto 7.35 lakh shares (0.84% of the total number of fully paid-up equity shares) at Rs 1,850 per share. The buyback will be on a proportionate basis through a tender offer route. The company has fixed 13 November 2020 as the record date for the purpose of ascertaining the eligibility of shareholders for buyback of equity shares.
Stocks in Spotlight:
State Bank of India (SBI) rose 1.12%. The PSU bank's net profit jumped 52% to Rs 4,574.16 crore in Q2 September 2020 from Rs 3,011.73 crore in Q2 September 2019. Total income rose 3.42% to Rs 75,341.80 crore in Q2 September 2020 over Q2 September 2019.
Provision and contingencies fell by 23% to Rs 10,118.31 crore in Q2 FY21 from Rs 13,138.93 crore in Q2 FY20. During the quarter ending September 2020, the bank said it made an additional provision of Rs 239 crore on COVID-19 related accounts. The bank now holds a total of Rs 3,247 crore COVID-19 related provisions. The Provisioning Coverage Ratio as at 30 September 2020 works out to 88.19%.
Adani Gas rose 3.48% after the company's standalone net profit rose 12.7% to Rs 135.67 crore on a 11.6% decline in net sales to Rs 417.86 crore in Q2 FY21 over Q2 FY20. EBITDA has increased by 48% YoY to Rs 218 crore versus Q2 FY20 EBITDA of Rs 147 crore. Total sales volume declined 10% year-on-year (YoY) to 131 million standard cubic meters (mmscm) during the quarter. CNG sales volume stood at 59 mmscm (down 21% YoY) and PNG sales were at 72 mmscm (up 2% YoY) in the second quarter.
Adani Enterprises gained 1.93% after the company's net profit surged to Rs 362.37 crore in Q2 September 2020, compared with Rs 49.50 crore in Q2 September 2019. The net profit in the same quarter last year was impacted by exceptional write off of Rs 129.73 crore. Revenue from operations stood at Rs 9,126.42 crore in Q2 September 2020, rising nearly 8% from Rs 8,464.19 crore in the same period last year. The result was announced during market hours today, 4 November 2020. The EBIDTA for Q2 FY21 increased by healthy 76% year-on-year at Rs 951 crore, owing to better volumes in mining services and solar manufacturing businesses.
PVR rose 1.11%. The multiplex chain operator posted a consolidated net loss of Rs 183.95 crore in Q2 September 2020 compared with net profit of Rs 47.88 crore recorded in Q2 September 2019. Revenue from operations tumbled nearly 96% to Rs 40.45 crore in Q2 September 2020 from Rs 973 crore in the same period last year. EBITDA loss for Q2 September 2020 was Rs 14 crore as against a positive EBITDA of Rs 324 crore in the same period last year.
NMDC fell 0.18%. The state-owned iron ore miner hiked prices of iron ore (lump ore and fines) with effect from Wednesday, 4 November 2020. NMDC increased lump ore prices by 4.35% to Rs 3600 per tonne in November 2020 from Rs 3450 per tonne in October 2020. Prices of fines were hiked by 4.75% to Rs 3,310 per tonne in November 2020 as against Rs 3,160 per tonne in October 2020. The new rates came into effect from 4 November 2020.
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