Key benchmark indices extended gains and hit fresh intraday high in afternoon trade. Bank and metal stocks were in demand. The Nifty index traded above 11,750 level. ICICI Bank (up 2.42%), HDFC Bank (up 2.28%) and HDFC (up 1.62%) were the main contributors to the index.
The barometer index, the S&P BSE Sensex, rose 345.11 points or 0.87% at 40,073.52. The Nifty 50 index gained 76.25 points or 0.65% at 11,756.
In the broader market, the S&P BSE Mid-Cap index rose 0.93%. The S&P BSE Small-Cap index gained 0.53%.
The market breadth was positive. On the BSE, 1,265 shares rose and 1,151 shares fell. A total of 156 shares were unchanged. In Nifty 50 index, 40 stocks advanced while 10 stocks declined.
Foreign portfolio investors (FPIs) sold shares worth Rs 604.07 crore, while domestic institutional investors (DIIs), were also net sellers to the tune of Rs 808.29 crore in the Indian equity market on 15 October 2020, provisional data showed.
COVID-19 Update:
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Total COVID-19 confirmed cases worldwide stood at 3,89,25,204 with 10,98,378 deaths. India reported 8,04,528 active cases of COVID-19 infection and 1,12,161 deaths while 64,53,779 patients have been discharged, according to the data from the Ministry of Health and Family Welfare, Government of India.
Economy:
The Reserve Bank of India (RBI) on Friday announced Open Market Operations (OMOs) in State Developments Loans (SDLs) for Rs 10,000 crore on 22 October 2020.
Meanwhile, the central government will borrow up to Rs 1.1 lakh crore on behalf of the states to bridge the shortfall in GST collections, the Finance Ministry said on Thursday.
In a statement, the Union Finance Ministry said states were offered a special window to borrow Rs 1.1 lakh crore over and above their existing limits, to bridge the shortfall. "The amount so borrowed will be passed on to the states as a back-to-back loan in lieu of GST compensation cess releases," the ministry said.
"Under the Special Window, the estimated shortfall of Rs 1.1 lakh crore (assuming all States join) will be borrowed by Government of India in appropriate tranches," the statement said.
The Centre borrowing on behalf of states is likely to ensure that a single rate of borrowing is charged and this would also be easy to administer. The borrowing, the statement said, "will not have any impact on the fiscal deficit of the Government of India."
"The amounts will be reflected as the capital receipts of the State Governments and as part of the financing of its respective fiscal deficits," it said.
Credit rating agency Moody's Investors Service reportedly said on Thursday that India's fiscal position "remains very weak". The government's latest fiscal measures, it said, will have a minimal impact on the country's growth prospects and that the government's 'small scale' package is actually a credit negative as it reflects the country's 'limited budgetary firepower to support the economy'.
Moody's expects India's GDP to drop 11.5% in 2020-21, so the 0.5% of GDP gain expected by the government from these stimulus measures will provide only 'a small boost', it added.
Gainers & Losers:
Tata Steel (up 3.40%), BPCL (up 3.26%), JSW Steel (up 2.83%) and Divi's Laboratories (up 2.74%) were major gainers in Nifty 50 index.
Mahindra & Mahindra (M&M) (down 1.56%), Asian Paints (down 1.21%), Indian Oil Corporation (IOCL) (down 0.74%), SBI Life Insurance Company (down 0.63%) and Nestle India (down 0.54%) were major losers in Nifty 50 index.
Results Today:
Bajaj Consumer Care (up 2.12%), Phillips Carbon Black (up 2.18%), Shoppers Stop (up 1.34%), Tata Communications (up 3.78%) and Tinplate Company of India (up 2.61%) will announce its quarterly earnings today.
Earnings Impact:
HCL Technologies declined 3.58%. The IT firm's consolidated net profit soared 18.5% to Rs 3,142 crore on 6.1% increase in revenue to Rs 18,594 crore in Q2 September 2020 over Q2 September 2019. Sequentially, consolidated net profit rose 7.4% and revenue increased 4.2% in Q2 September 2020 (Q2FY21) over Q1 June 2020 (Q1FY21).
HCL's provision for tax rose 7.53% to 999 crore in Q2FY21 from Rs 929 crore in Q1FY21. Consolidated EBITDA grew by 8.4% to Rs 4,951 crore in Q2FY21 from Rs 4,566 crore in Q1FY21. EBITDA margin improved to 26.6% in Q2FY21 from 25.6% in Q1FY21.
Mindtree dropped 9.03%. The IT firm's consolidated net profit jumped 88% to Rs 253.70 crore on a 0.61% rise in revenue to Rs 1,926 crore in Q2 September 2020 over Q2 September 2019.
Sequentially, consolidated net profit rose 19% and revenue increased 0.9% in Q2 September 2020 (Q2FY21) over Q1 June 2020 (Q1FY21). Consolidated profit before tax (PBT) stood at Rs 344.70 crore in Q2FY21, rising 19% from Rs 289.80 crore in Q1FY21. Current tax expense rose 18.49% to Rs 91 in Q2FY21 over Q1FY21.
Consolidated EBITDA grew by 8.8% to Rs 378.40 crore in Q2FY21 over Q1FY21. EBITDA margin stood at 19.6% during Q2FY21 over 18.2% in Q1FY21. Meanwhile, the company has declared a dividend of Rs 7.5 per equity share. The record date for payment is 27 October 2020 and the dividend will be paid on 11 November 2020.
Cyient advanced 3.94% after the company's consolidated net profit rose 3.07% to Rs 83.90 crore on 1.16% increase in revenue from operations to Rs 1,003.30 crore in Q2 September 2020 (Q2FY21) over Q1 June 2020 (Q1FY21). The PAT increased mainly from higher operating income driven by higher volume and efficiency. Consolidated profit before tax (PBT) stood at Rs 109 crore in Q2FY21, gaining 0.46% from Rs 108.60 crore in Q1FY21. Total tax expense dropped 7.72% to Rs 25.10 crore in Q2FY21 over Q1FY21. Services revenue stood at $114.10 million, registering a growth of 1.7% QoQ and a drop of 18.7% year-on-year (YoY). DLM revenue was at $20.90 million, recording a growth of 13.3% QoQ and a 12.3% fall YoY. Order intake in Q2FY21 is at $127.3 million, increased by 9% QoQ.
Stock in Spotlight:
UPL tumbled 6.98% after KPMG resigned as the auditor with effect from 8 October 2020 for the company's material arm in Mauritius, UPL Corporation. In order to re-organize the audit process to improve productivity, at the request of the company, KPMG Mauritius has resigned as statutory auditors of UPL Corporation, Mauritius. "There are no circumstances connected with our resignation which we consider should be brought to the notice of the members," KPMG said in a statement.
Global Markets:
Shares in Europe advanced while Asia indices were mixed on Friday as coronavirus fears surge again. Meanwhile, the US dollar strengthened as uncertainty rose with investors flocking to the haven currency.
The US stock market finished session in negative territory on Thursday as the rise in weekly jobless claims compounded worries about a stalling economic recovery.
A Labor Department report showed initial jobless claims climbed to 898,000, an increase of 53,000 from the previous week's revised level of 845,000.
Selling pressure was also generated amid uncertainty about a new stimulus bill after Treasury Secretary Steven Mnuchin suggested on Wednesday that a new relief package is not likely to pass before next month's elections. Senate Majority Leader Mitch McConnell has also cast doubts on whether a bill can pass before the elections and recently announced plans to vote on a more limited relief package.
In economic news, the pace of growth in regional manufacturing activity jumped to 32.3 in October from 15.0 in September, a report released by the Federal Reserve Bank of Philadelphia on Thursday showed. With the much bigger than expected increase, the Philly Fed Index spiked to its highest level since before the coronavirus- lockdowns. The sharp increase by the headline index came as the new orders index soared to 42.6 in October from 25.5 in September and the shipments index surged up to 46.5 from 36.6.
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