Key benchmark indices firmed up further and hit fresh intraday high in the afternoon trade. The barometer index, the S&P BSE Sensex, rose 480.62 points or 1.24% at 39,108.91. The Nifty 50 index gained 133.65 points or 1.17% at 11,521.15.
Bharti Airtel (up 7.35%), Reliance Industries (up 1.54%), HDFC Bank (up 2%) and HDFC (up 2.09%) were major index movers.
The broader indices lagged the benchmarks. The S&P BSE Mid-Cap index rose 0.41%. The S&P BSE Small-Cap index gained 0.01%.
Sellers outpaced buyers. On the BSE, 922 shares rose and 1,557 shares fell. A total of 141 shares were unchanged. In Nifty 50 index, 31 stocks advanced while 19 stocks declined.
Foreign portfolio investors (FPIs) sold shares worth Rs 3,395.49 crore, while domestic institutional investors (DIIs), were net buyers to the tune of Rs 680.88 crore in the Indian equity market on 31 August 2020, provisional data showed.
COVID-19 Update:
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Total COVID-19 confirmed cases worldwide stood at 2,54,88,239 with 8,50,596 deaths. India reported 7,85,996 active cases of COVID-19 infection and 65,288 deaths while 28,39,882 patients have been discharged, according to the data from the Ministry of Health and Family Welfare, Government of India.
Economy:
The headline seasonally adjusted IHS Markit India Manufacturing Purchasing Managers' Index stood at 52 in August 2020 from 46.0 in July signalling an improvement in operating conditions across the manufacturing sector following four consecutive months of contraction.
Commenting on the latest survey results, Shreeya Patel, Economist at IHS Markit said, "August data highlighted positive developments in the health of the Indian manufacturing sector, signalling moves towards a recovery from the second quarter downturn. The pick-up in demand from domestic markets gave rise to upturns in production and input buying. However, not all was positive in August, delivery times lengthened to another marked rate amid ongoing COVID-19 disruption. Meanwhile, employment continued to fall despite signs of capacity pressures, as firms struggled to find suitable workers. The rate of input price inflation was solid, following four monthly declines in cost burdens. Firms, however, continued in their efforts to drive sales amid greater competitive pressure and reduced their selling prices further."
Meanwhile, India's GDP contracted 23.9% in Q1 June 2020 compared to the same period last year, showed official data released by the National Statistics Office (NSO) on Monday. This was mainly on account of limited economic activity in the country during the quarter amid lockdowns to control the spread of the coronavirus pandemic. The economy expanded 3.1% year-on-year in the quarter ended March 2020.
India's fiscal deficit stood at Rs 8.21 lakh crore, or 103.1% of the budgeted target for the current fiscal year up to the end of July 2020 exceeding its target in first four months of FY21. The Government of India has received Rs 2,32,860 crore (10.4% of corresponding BE 2020-21 of Total Receipts) up to July, 2020 comprising Rs 2,02,788 crore Tax Revenue (Net to Centre), Rs 24,614 crore of Non-Tax Revenue and Rs 5,458 crore of Non-Debt Capital Receipts.
Gainers & Losers:
Bajaj Finance (up 4.97%), Hindalco Industries (up 4.89%), JSW Steel (up 4.78%) and Asian Paints (up 3.68%) were other major index gainers.
Indian Oil Corporation (down 1.57%), Coal India (down 1.45%), Adani Ports & Special Economic Zones (down 1.43%), UPL (down 1.03%) and Infosys (down 0.80%) were prominent index losers.
Results Today:
ONGC (down 3.96%), Shalimar Paints (down 2.38%), Nalco (up 1.39%) and NLC India (down 0.67%) are some of the companies that will announce their quarterly results today.
Earnings Impact:
Spandana Sphoorty Financial dropped 4.45% after the microfinance company reported a 36.9% decline in consolidated net profit to Rs 59 crore in Q1 June 2020 from Rs 93.4 crore in Q1 June 2019. Provision and write-off related to COVID-19 and others was Rs 89.30 crore in Q1 June 2020. The company's total income grew by 7.2% to Rs 327 crore in quarter ended 30 June 2020 from Rs 304.90 crore posted in quarter ended 30 June 2019. Consolidated profit before tax came at Rs 78 crore in Q1 June 2020, lower than Rs 143 crore in Q1 June 2019. The company's net interest income came at Rs 264 crore in Q1 June 2020 which is 37% higher than Rs 193 crore posted in Q1 June 2019. Net interest margin declined to 15.5% in Q1 June 2020 from 16.5% reported in the same period last year.
Gujarat Narmada Valley Fertilizers & Chemicals (GNFC) slumped 6.34% after the company's net profit slumped 95.7% to Rs 2.97 crore on 42.1% decline in net sales to Rs 700.23 crore in Q1 FY21 over Q1 FY20. Revenue from fertilizers segment stood at Rs 331.29 crore (down 21.9% YoY) and revenue from chemicals segment was at Rs 354.11 crore (down 53.7% YoY) in the first quarter.
Stocks in Spotlight:
Larsen & Toubro (L&T) gained 1.53%. L&T announced the closure of the strategic divestment of its Electrical & Automation (L&T E&A) business to Schneider Electric, a global player in energy management and automation. The significant and complex divestment deal, announced in May 2018 has been completed after receiving the requisite regulatory approvals and fulfilment of necessary conditions.
Escorts rose 0.44% after the tractor maker on Tuesday, 1 September 2020 said it sold 7,268 tractors in August 2020, registering a growth of 80% as against 4,035 tractors sold in August 2019. Domestic tractor sales in August 2020 was at 6,750 tractors registering a growth of 79.4% as against 3,763 tractors in August 2019. Escorts said market sentiment continued to be highly positive with good monsoons, better Kharif sowing, crop prices holding up well and good supply of retail finance.
Maruti Suzuki India advanced 2.08% after the company's total vehicles sales rose 17.1% to 1,24,624 units in August 2020 from 1,06,413 units in August 2019. While the total domestic sales jumped 20.2% to 1,16,704 units, total export sales declined by 15.3% to 7,920 units in August 2020 over August 2019. Sequentially, the total sales have increased 15.3% from 1,08,064 units sold in July 2020.
Global Markets:
Most European indices opened higher while Asian markets continued trading higher on Tuesday after the latest data from China showed manufacturing activity in the world's second-largest economy expanded at its fastest rate in nearly 10 years.
The Caixin/Markit manufacturing Purchasing Managers' Index (PMI) came in at 53.1 for August, compared to 52.8 in July. PMI readings above 50 indicate expansion, while those below that signal contraction.
Japan's factory activity contracted at the slowest pace in six months in August. Tuesday's final au Jibun Bank Manufacturing Purchasing Managers' Index (PMI) rose to a seasonally adjusted 47.2 in August from 45.2 in July. It marked the slowest contraction since February, and also eclipsed a preliminary reading of 46.6.
South Korea's manufacturing activity shrank at the slowest pace in six months in August. The IHS Markit purchasing managers' index (PMI) rose to 48.5 in August from 46.9 in July.
In US, stocks were mixed on Monday. Declines in bank stocks pressured both the Dow and S&P 500. The Dow slid 223.82 points, or 0.8%, to 28,430.05 and the S&P 500 dipped 0.2% to close at 3,500.31. JPMorgan Chase, Citigroup, Bank of America and Wells Fargo were all down more than 2%, following Treasury yields lower.
The Nasdaq Composite outperformed with a 0.7% gain and ended the day at 11,775.46. The Nasdaq got a lift after two big stock splits took effect Monday. Apple shares gained 3.4% as a 4-for-1 split took effect. Tesla shares added 12.6% following its 5-for-1 split.
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