Market rises for 5th day

The market extended its winning run for the fifth consecutive session on Tuesday. Banks and IT stocks rallied. Easing of lockdown curbs, impressive recovery rate from coronavirus and decent Q1 operating performance by banks boosted sentiment.

As per provisional closing, the barometer S&P BSE Sensex gained 187.24 points or 0.51% at 36,674.52. The Nifty 50 index added 22.55 points or 0.33% at 10,799.65

The Nifty opened higher at 10,802.85. It soon reversed trend and hit an intraday low of 10,689.70 in mid-morning trade. The index firmed up once again and briefly crossed 10,800 in mid-afternoon session.

In the broader market, the S&P BSE Mid-Cap index rose 0.58% while the S&P BSE Small-Cap index gained 0.57%.

The market breadth was negative. On the BSE, 1,327 shares rose and 1395 shares fell. A total of 159 shares were unchanged on the BSE. In Nifty 50 index, 19 stocks advanced while 31 stocks declined.

COVID-19 Update:

India reported 2,59,557 active cases of COVID-19 infection and 20,160 deaths, according to the data from the Ministry of Health and Family Welfare, Government of India. Total coronavirus cases worldwide stood at 11,622,741 with 538,079 deaths so far, according to data from Johns Hopkins University.

Economy:

The World Bank and the Government of India signed the $750 million agreement for the MSME Emergency Response Programme to support increased flow of finance into the hands of micro, small, and medium enterprises (MSMEs), severely impacted by the COVID-19 crisis. The World Bank's MSME Emergency Response Programme will address the immediate liquidity and credit needs of some 1.5 million viable MSMEs to help them withstand the impact of the current shock and protect millions of jobs. This is the first step among a broader set of reforms that are needed to propel the MSME sector over time.

Buzzing Segment:

Shares of hotel companies rose after the Maharashtra government allowed hotels to reopen with 33% capacity from 8 July. Kamat Hotels (up 20%), Chalet Hotels (up 10%), EIH Associated Hotels (up 6.36%), Lemon Tree Hotels (up 5%), TajGVK Hotels (up 3.66%), Indian Hotels Company (up 4.73%), EIH (up 2.8%) and ITDC (up 1.54%) advanced.

Stocks in Spotlight:

Bajaj Finance gained 7.6% after the company's asset under management (AUM) under moratorium reduced to about 15.5% as of 30 June from 27% as of end April. The company's customer franchise stood at 43 million as of 30 June 2020, up by 16.5% or 0.5 million from 36.9 million as on 30 June 2019. New loans booked during Q1 FY21 were down by 76.7% to 1.7 million as compared to 7.3 million in Q1 FY20. Assets under management (AUM) increased by 7.8% to approximately Rs 1.38 lakh crore as of 30 June 2020 as compared to approximately Rs 1.28 lakh crore as of 30 June 2019. The company continues to remain well capitalized with capital adequacy ratio (CRAR) of approximately 26.4% as of 30 June 2020, the NBFC said. With consolidated liquidity surplus of approximately Rs 17,600 crore as of 30 June 2020, the company's liquidity position remains very strong, it added. Bajaj Finance's deposit book grew 32.6% to Rs 20,000 crore in Q1 FY21 from Rs 15,084 crore in Q1 FY20.

Punjab National Bank (PNB) fell 0.67%. The bank said that its board will meet on Thursday (9 July 2020) to consider a proposal to raise capital through a mix of both equity and debt. The board will consider proposal for raising capital through issue of Basel-III-compliant tier-1 bonds, tier-2 bonds and equity shares by way of private placement, qualified institutions placement, follow-on public offering, rights issue or any other mode or through a combination, it said. Following the board approval, the resolution will be put for the shareholders' nod, the bank added.

Bandhan Bank jumped 10.5% on reporting strong growth in advances and deposits in Q1 June 2020. The private lender's loans & advances (on book+off book+TLTRO investments) jumped 18% year-on-year to Rs 74,325 crore (merged) in Q1 June 2020 as against Rs 63,164 crore in Q1 June 2019. Total deposits rose 35% to Rs 60,602 in Q1 June 2020 from Rs 44,796 crore in Q1 June 2018. Retail to total deposits were flat at 78% in Q1 June 2020 over Q1 June 2019. CASA deposits were reported at Rs 22,473 crore during the quarter, rising 47% from Rs 15,257 crore in the corresponding quarter last year. CASA ratio improved to 37.1% in Q1 June 2020 from 34.1% in the same quarter last year.

Gujarat Pipavav Port surged 7% after JP Morgan Funds purchased 0.63% stake in the company worth Rs 23.62 crore via block deal on Monday. On Monday (6 July), JP Morgan Funds purchased 30.34 lakh equity shares, or 0.63% stake, of Gujarat Pipavav Port at an average price of Rs 77.85 per share via block deal on the BSE. JP Morgan Funds acquired the shares from Flagship Indian Investment Company (Mauritius).

Shares of Godrej Consumer Products fell 0.46%. The company on Monday (6 July) said that it expected to post mid single-digit sales growth in Q1 June 2020 in India, driven by higher volumes.

SH Kelkar and Company jumped 5.71% after the company said it further reduced its net debt to between Rs 254 to 258 crore as on 30 June 2020 from Rs 299 crore as on 31 March 2020. The company in its business update on Monday (6 July) said the nationwide lockdown significantly affected production and sales in the domestic market during April and May. The firm witnessed encouraging demand pick-up from the last week of May 2020 continuing into June 2020. The revenues in Q1 FY21 stood between Rs 190 to 192 crore (provisional and unaudited figure). The management continues to very closely monitor the operating environment and actively engage with its customers to build demand. From June 2020 onwards, the company said it has been witnessing initial signs of recovery in the FMCG industry and a gradual normalization of the supply chain system. Accordingly, the firm is taking all necessary steps to ensure optimal production levels are maintained throughout the year.

Suzlon Energy hit a lower circuit of 5% at Rs 5.33 after the company reported consolidated net loss of Rs 823.53 crore in Q4 March 2020, higher than net loss of Rs 292.60 crore in Q4 March 2019. Net sales declined 54.7% year-on-year (YoY) to Rs 643.39 crore in the March quarter. Pre-tax loss in Q4 March 2020 stood at Rs 828.78 crore as against a pre-tax loss of Rs 288.88 crore in Q4 March 2019. Current tax expense jumped 18.1% YoY to Rs 5.36 crore in the fourth quarter.

NBCC jumped 9%. The company's consolidated net profit fell 42.3% to Rs 78.98 crore on 16.8% decline in net sales to Rs 2568.73 crore in Q4 March 2020 over Q4 March 2019. Profit before tax in Q4 FY20 stood at Rs 99.57 crore, down by 53.2% from Rs 212.93 crore in Q4 FY19. Current tax expenses declined 83.5% on a year-on-year (YoY) basis to Rs 16.76 crore in the fourth quarter. The project management consultancy (PMC) segment revenue stood at Rs 2,324.34 crore (down 17.5%) and real estate segment revenue was at Rs 123.35 crore (down 20.5%) while engineering, procurement and construction (EPC) segment revenues were at Rs 121.03 crore (up 6.5%) in the March quarter.

Global Markets:

Shares in Europe and Asia declined on Tuesday as concerns over rising COVID-19 cases in the US dimmed hopes of a faster economic recovery.

German industrial production rose to 7.8% in May, following a 17.5% contraction in April.

In US, stocks finished sharply higher Monday, with the Nasdaq scoring a record close, as a rebound in U.S. services industry activity in June and expectations of a revival in China's economy boosted optimism, helping investors look past a surge in new coronavirus cases in the United States. The gains came despite a record surge in new COVID-19 cases in 16 states in the United States this month that could further hamper reopening plans and create a risk to the economic recovery.

Amazon.com rose 5.8% to close at $3,057 a share, topping the $3,000 level for the first time in its history and clinching a $1.5 trillion valuation.

The Institute for Supply Management's (ISM) non-manufacturing activity index almost returned to its pre-COVID-19 pandemic levels last month, jumping to a reading of 57.1, the highest since February, from 45.4 in May, a report showed.

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