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Market hits day's high; pharma stocks in demand

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Capital Market
Last Updated : Apr 07 2020 | 11:50 AM IST
The market extended gains and hit fresh intraday high in mid-morning trade. The Nifty regained the crucial 8500 mark. Sentiment was firm amid positive global cues, buoyed by tentative signs the coronavirus crisis may be leveling off in New York and receding in Europe. Pharma stocks witnessed strong buying interest.

At 11:25 IST, the barometer index, the S&P BSE Sensex, was up 1484.40 points or 5.38% at 29,075.35. The Nifty 50 index was up 432.35 points or 5.35% at 8,516.15.

The broader market underperformed the benchmark indices. The S&P BSE Mid-Cap index was up 3.39% while the S&P BSE Small-Cap index was jumped 3.01%.

The market breadth was strong. On the BSE, 1543 shares rose and 431 shares fell. A total of 159 shares were unchanged. In Nifty 50 index, 47 stocks advanced while 3 stocks declined.

Buzzing Index:

The Nifty Pharma index soared 7.83% to 7,937.95, extending its winning run to second consecutive session. The index has jumped 13% in two trading session from its previous closing low of 7026.70 posted on 1 April 2020.

Cadila Healthcare (up 13.82%), Dr. Reddy's Laboratories (up 10%), Aurobindo Pharma (up 9.99%), Cipla (up 9.34%), Glenmark Pharmaceuticals (up 8.73%), Sun Pharmaceutical Inds (up 8.19%), Lupin (up 8.1%), Biocon (up 7.48%), Divi's Laboratories (up 5.73%) and Piramal Enterprises (up 0.13%) were top gainers in pharmaceutical space.

The government has allowed export of a dozen active pharmaceutical ingredients (API), including antibiotics, vitamins and hormones as well as their formulations, that were placed under restriction early last month to avoid a domestic shortage due to the Covid-19 outbreak.

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The media reported that India has partially eased restrictions on the export of anti-malarial drug hydroxychloroquine and paracetamol, cited by some as key to the fight against Covid-19, to fulfil existing orders and to meet the needs of neighbouring countries. India, the largest producer of hydroxychloroquine, initially banned exports of the drug on March 25 to ensure adequate domestic supplies.

Stocks in Spotlight:

AU Small Finance Bank reported its business update for March 2020 yesterday, 6 April 2020. The bank reported a 34% jump in aggregate deposit to Rs 26,163 crore in 31 March 2020 as compared to Rs 19,422 crore in 31 March 2019. The bank's CASA ratio declined to 16% in March 2020 from 21% posted in March 2019. The ratio of gross NPAs to gross advances stood at 1.9% as on 31 March 2020 as against 1.88% as on 31 December 2019 and 2.04% as on 31 March 2019. The ratio of net NPAs to net advances stood at 0.97% as on 31 March 2020 as against 1.01% as on 31 December 2019 and 1.29% as on 31 March 2019. Shares of AU Small Fin Bank were down 1.5% at Rs 460.

Larsen & Toubro (L&T) advanced 3.99% to Rs 805.75 after a unit of L&T Construction secured a large order from the Indian Army for unified network management system. As per the L&T's classification, the valuation of the 'large' order stands between Rs 2,500 and 5,000 crore. The announcement was made during market hours today, 7 April 2020.

Meanwhile, on Friday (3 April), depository institutions CDSL and NSDL notified changes to the foreign investment limits in individual companies, raising the same to their respective sectoral caps. Higher foreign investment limits in Indian companies would lead to MSCI (Morgan Stanley Capital Investment) to raise Indian companies' weightage on its indices. L&T is one of the stocks which could see an increase in MSCI weightage.

Moreover, L&T on Monday (6 April) said its board will meet on 9 April 2020 to consider raising funds, including through issue of debt securities.

Global Markets:

Asian stocks advanced on Tuesday on rising hopes the spread of the global coronavirus pandemic may be slowing. South Korea reported less 50 new cases of infection for the second day on Tuesday. China also posted no new deaths as of 6 April for the first time since January when it started publishing daily updates.

In US, stocks rocketed higher, after a fall in the daily death toll in New York, the country's biggest coronavirus hot spot, fueled optimism a leveling off of the pandemic was on the horizon.

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First Published: Apr 07 2020 | 11:26 AM IST

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