Key equity barometers advanced for third straight session on Wednesday. Sentiment was boosted by hopes that the government will spend more to support economy. A rising recovery rate among Covid-19 patients in India also supported buying. PSU banks and media shares rallied.
The barometer index, the S&P BSE Sensex rose 86.47 points or 0.22% at 38,614.79. The Nifty 50 index added 23.05 points or 0.2% at 11,408.40. Both these indices rose about 2% in three days.
The Nifty opened higher at 11,452.15, but quickly pared gains. The index traded sideways for most part of the session above 11,400 mark. The index firmed up in mid-afternoon trade and managed to settle with decent gains.
Bharti Airtel (up 1.77%), ICICI Bank (up 1.34%) and HDFC Bank (up 1.04%) were major market movers.
The broader market was upbeat. The BSE Mid-Cap index rose 0.58% and the BSE Small-Cap index gained 1.16%.
Buyers outnumbered sellers. On the BSE, 1792 shares rose and 998 shares fell. A total of 164 shares were unchanged.
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Investors awaited minutes from the US Federal Reserve's recent meeting due on Wednesday which may provide some insight into how the central bank sees the recovery playing out. The Fed has cut rates to near zero to bolster business through the pandemic.
COVID-19 Update:
Total COVID-19 confirmed cases worldwide stood at 22,059,933 with 7,79,557 deaths. India reported 6,76,514 active cases of COVID-19 infection and 52,889 deaths while 20,37,870 patients have been discharged, according to the data from the Ministry of Health and Family Welfare, Government of India.
Numbers to Watch:
The yield on 10-year benchmark federal paper rose to 6.010% as compared with 5.986% 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 74.8250, compared with its close of 74.76 during the previous trading session.
In the commodities market, Brent crude for October 2020 settlement fell 47 cents at $44.99 a barrel. The contract rose 9 cents, or 0.20% to settle at $45.46 a barrel in the previous trading session.
Foreign Markets:
European shares advanced while Asian stocks ended mixed on Wednesday. Japan's exports in July declined 19.2% as compared to a year ago, according to provisional trade statistics from the country's Ministry of Finance released Wednesday.
In Europe, UK inflation jumped unexpectedly last month to its highest rate since March, as clothing stores refrained from their usual summer discounts as they reopened after the coronavirus lockdown, official data showed on Wednesday.
Annual consumer price inflation rose to 1.0% in July from 0.6% in June, the Office for National Statistics (ONS) said. Clothing and footwear prices were the biggest contributor to the rise in inflation, the ONS said.
In US, the S&P 500 closed at a record high on Tuesday, rebounding from huge losses triggered by the coronavirus pandemic. Amazon, which rose 4.1%, was the largest gainer in the S&P 500. Strong sales growth was reported by major US retailers including Walmart, Kohl's and Home Depot. Meanwhile, Nasdaq clocked a record closing high.
The Dow Jones Industrial Average fell 66.84 points, or 0.24%, to 27,778.07, the S&P 500 gained 7.79 points, or 0.23%, to 3,389.78 and the Nasdaq Composite added 81.12 points, or 0.73%, to 11,210.84.
Data on Tuesday showed US homebuilding accelerated by the most in nearly four years in July in the latest sign the housing sector is emerging as one of the few areas of strength in an economy suffering a record slowdown. That further added to market optimism.
Buzzing Indian Segments:
The Nifty PSU Bank index gained 2.36% to 1,462.45. The index gained 3.29% in two days.
Bank of India, Punjab National Bank, Canara Bank, Union Bank of India, Bank of Baroda and State Bank of India rose by 1.03% to 4.52%.
The Nifty Media index rose 5.36% to 1,550.50. The index gained 10.76% in three days.
Zee Entertainment Enterprises (ZEEL) jumped 14.06%. The company posted a 95% fall in consolidated net profit to Rs 29.28 crore in Q1 June 2020 as against Rs 529.76 crore in Q1 June 2019. Consolidated operating revenue for Q1 June 2020 stood at Rs 1,312 crore, falling 34.7% from Rs 2,008 crore in Q1 June 2019.
ZEEL's advertising revenue tumbled 64.5% to Rs 421.06 crore in Q1 June 2020 from Rs 1,186.71 crore in same period previous year. Subscription revenue in quarter ending June 2020 stood at Rs 744.34 crore, registering a rise of 5% from Rs 708.77 crore in quarter ending June 2019.
Multiplex operators Inox Leisure surged 7.83% and PVR jumped 6.33%.
The media reported that the government may open multiplexes from September with limited viewers and strict social distancing rules. Cinema hall operations have been shut since the lockdown was first announced in the last week of March.
Stocks in Spotlight:
Index heavyweight Reliance Industries (RIL) rose 0.68%. RIL announced that its subsidiary Reliance Retail Ventures (RRVL) has acquired a majority equity stake in Vitalic Health (Vitalic) and its subsidiaries (collectively known as 'Netmeds') for approximately Rs 620 crore. This investment represents 60% holding in the equity share capital of Vitalic and 100% direct equity ownership of its subsidiaries, viz: Tresara Health, Netmeds Market Place and Dadha Pharma Distribution.
Muthoot Finance rose 1.32% after the company's net profit rose 53.5% to Rs 853.51 crore on a 25.8% increase in total income to Rs 2,606.81 crore in Q1 FY21 over Q1 FY20. Profit before tax in Q1 June 2020 stood at Rs 1,151.48 crore, up by 33.3% from Rs 863.64 crore in Q1 June 2019. Current tax expenses decreased by 8.5% year-on-year (YoY) to Rs 276.89 crore during the quarter.
Consolidated loan assets under management achieved a YoY increase of 16% to Rs 46,501 crore as at Q1 FY21 as against last year of Rs 40,228 crore. Sequentially, consolidated loan assets under management decreased by Rs 370 crore.
On a standalone basis, Muthoot Finance registered an increase in net profit of 59% at Rs 841 crore for Q1FY21 as against Rs 530 crore for Q1FY20. Loan assets stood at Rs 41,296 crore compared to Rs 35,816 crore previous year, Y-o-Y growth of 15%. Sequentially, loan assets decreased by Rs 315 crore in Q1FY21 on account of closure of branches during April 2020 due to pan-India lockdown in the wake of Covid-19 pandemic.
CSB Bank spurted 13.23% after net profit surged 174.10% to Rs 53.56 crore on a 28.84% jump in total income to Rs 496.88 crore in Q1 June 2020 over Q1 June 2019. Profit before tax (PBT) soared 138.21% to Rs 71.56 crore in Q1 FY21 as against Rs 30.04 crore in Q1 FY20. Tax expense surged 71.42% to Rs 18 crore during Q1 June 2020 compared with Rs 10.50 crore Q1 June 2019. The result was declared during trading hours today, 19 August 2020.
The bank's provisions and contingencies soared 471.30% to Rs 57.53 crore in Q1FY21 over Rs 10.07 crore in Q1FY20. Provision Coverage Ratio (PCR) improved to 81.7% as on 30 June 2020 from 79.9% as on 30 June 2019 and 80% as on 31 March 2020.
Strides Pharma Science rose 1.42% after the company said its Puducherry facility successfully completed UK drug regulator's inspection. The UK Medicines and Healthcare products Regulatory Agency (UK MHRA) conducted the inspection between between 15th and 18th of October 2019. The company has now received the renewed GMP (Good Manufacturing Practices) certificate thereby confirming the successful closure of the inspection.
Yes Bank hit an upper circuit of 5% at Rs 15.78 after the private lender said it has repaid Rs 35,000 crore to the RBI out of the total special liquidity facility (SLF) of Rs 50,000 crore drawn for interim support.
In its FY20 annual report, Yes Bank's chairman Sunil Mehta said, "In addition to the Special Liquidity Facility (SLF) of Rs 50,000 crore extended by RBI, the bank has since then received strong customer liquidity inflows. I am pleased to report that the bank has, as of date repaid Rs 35,000 crore of SLF and the balance will be repaid within the timelines set by RBI."
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