Key equity barometers ended with small losses on Thursday. Trading was volatile on account of weekly index options expiry today. Traders keenly watched the Assembly election results in Maharashtra and Haryana. Risk appetite was affected as BJP was seen struggling to reach majority mark of 46 seats in Haryana.
The barometer index, the BSE Sensex, fell 38.44 points or 0.10% to 39,020.39. The Nifty 50 index declined 21.50 points or 0.19% to 11,582.60.
The market breadth was negative. On the BSE, 1078 shares rose and 1378 shares fell. A total of 163 shares were unchanged.
In the broader market, the BSE Mid-Cap index fell 0.39% and the BSE Small-Cap index fell 0.14%.
After opening higher, the Nifty pared gains in early trade and slipped below 11,600 mark in mid-morning session. The 50-unit index struggled to regain 11,600 mark in early afternoon trade. Selling picked up pace in afternoon session as Nifty hit the day's low of 11,537. Bargain hunting emerged in the last hour of trade, which pushed index near 11,580 level.
On the political front, the Election Commission (EC) is set to declare the results for the Haryana and Maharashtra assembly elections. In Haryana, Congress is leading on 21 seats and won 12 seats; BJP is ahead on 21 seats and won 15 seat. Jannayak Janta Party is leading on 7 seats and won 3 seat.
In Maharashtra, official trends showed BJP leading in 68 constituencies and won 33 seats; Shiv Sena leading in 38 constituencies and won 20 seats; NCP leading in 37 constituencies and won 16 seats; and Indian National Congress in 31 and won 14 seats. Shiv Sena leader Sanjay Raut said the 50:50 formula of ruling decided on before elections will be followed.
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Voting in Maharashtra's 288 constituencies and Haryana's 90 constituencies was held on 21 October. In Maharashtra, 61.3% voters turned up to cast their vote while the voter turnout in Haryana was 68.31%.
On the domestic macro front, India has moved 14 places to be 63rd among 190 nations in the World Bank's ease of doing business ranking released on Thursday on the back of multiple economic reforms by the Narendra Modi government. The country's score improved from 67.3 last year to 71.0 this year, as per The Doing Business 2020 study, released by the World Bank on Thursday morning. However, it failed to achieve government's target of being at 50th place.
The Cabinet Committee on Economic Affairs (CCEA) chaired by Prime Minister Narendra Modi on Wednesday, 23 October 2019, approved the increase in the Minimum Support Prices (MSPs) for all mandated Rabi crops (the crop which are grown in winter and harvested in the spring) of 2019-20 to be marketed in Rabi Marketing Season (RMS) 2020-21.
The increase in MSP for Rabi Crops for RMS 2020-21 is in line with the principle of fixing the MSPs at a level of at least 1.5 times of the all India weighted average cost of production (CoP), which was announced in the Union Budget 2018-19. This MSP policy whereby the farmers are assured of a minimum of 50% as margin of profit is one of the important and progressive steps towards doubling farmers' income by 2022 and improving their welfare substantively.
In the foreign exchange market, the rupee edged lower against the dollar. The partially convertible rupee was hovering at 71.01, compared with its close of 70.91 during the previous trading session.
In the commodities market, Brent crude for December 2019 settlement was down 23 cents at $60.94 a barrel. The contract rose $1.40 or 2.34% to settle at $61.04 a barrel during the previous trading session.
Overseas, European stocks traded higher as corporate earnings season gathers pace. Traders remain in limbo over an expected delay to the U.K.'s departure from the European Union. Investors, meanwhile, look ahead to the European Central Bank meeting on Thursday.
Asian stock markets ended higher as bullish sentiments engulfed the world markets with Japanese index, Nikkei hitting a year-high during the afternoon trade.
Corporate earnings buffeted trading as investors remained anxious about the business impact of the Sino-U.S. trade war while Brexit uncertainties kept overall sentiment in check.
U.S. stocks edged higher on Wednesday as investors shrugged off lackluster quarterly reports from industrial bellwethers Boeing Co and Caterpillar Inc.
EU member states on Wednesday delayed a decision on whether to grant Britain a three-month Brexit extension. Prime Minister Boris Johnson said if the deadline is deferred to the end of January, he would call an election.
On the equity front back home, telecom shares were in spotlight. Vodafone Idea tanked 23.36% to Rs 4.33.
Bharti Airtel rose 3.31% to Rs 372.45. It fell as much as 9.68% to hit an intraday low of Rs 325.60.
The Supreme Court (SC) on Thursday ruled in favour of the government on the AGR (adjusted gross revenue) issue. This comes as major blow for telecom operators like Bharti Airtel and Vodafone Idea, as the companies will have to shell out a massive Rs 50,000 crore of the AGR.
The Supreme Court on Thursday ruled in favour of the government on the AGR (adjusted gross revenue) issue, with grave revenue implications to the tune of over Rs 92000 crore for the ailing telecom sector.
Grasim Industries fell 4.93%. Grasim Industries has exposure to the telecom sector via its 11.55% stake in Vodafone Idea.
Car major Maruti Suzuki India fell 0.66% after consolidated net profit fell 39.4% to Rs 1358.60 crore on 25.2% decline in net sales to Rs 16120.40 crore in Q2 September 2019 over Q2 September 2018. The announcement was made during market hours today, 24 October 2019.
Net profit declined on account of lower sales volume, higher sales promotion expenses and higher depreciation expenses, partially offset by cost reduction efforts, higher fair value gains on invested surplus and reduction in corporate tax rate.
Larsen & Toubro (L&T) rose 0.07%. L&T reported 13.31% rise in consolidated net profit to Rs 2527.26 crore on 14.67% rise in total income to Rs 36143.65 crore in Q2 September 2019 over Q2 September 2018. The result was announced after market hours yesterday, 23 October 2019.
Hero MotoCorp shed 0.58%. The company reported 9.98% fall in consolidated net profit to Rs 879.45 crore on 16.53% fall in total income to Rs 7838.83 crore in Q2 September 2019 over Q2 September 2018. The result was announced after market hours yesterday, 23 October 2019.
HCL Technologies advanced 2.09%. The company reported 19.4% rise in net income to Rs 2651 crore on 6.7% rise in revenue to Rs 17528 crore in Q2 September 2019 over Q1 June 2019. The board of directors also recommended issue of one bonus share for every one equity share held by the equity shareholders of the company. The announcement was made after market hours yesterday, 23 October 2019.
MTNL hit 5% upper circuit at Rs 6.19. The Union Cabinet on Wednesday, 23 October 2019, approved the proposal for revival of BSNL and MTNL by administrative allotment of spectrum for 4G services, debt restructuring by raising of bonds with sovereign guarantee, reducing employee costs, monetisation of assets and in-principle approval of merger of BSNL & MTNL.
The Nifty Bank index fell 1.19% to 29,107.95, snapping its four-day winning streak. Among the private sector banks, Yes Bank (down 5.76%), IndusInd Bank (down 3.78%), RBL Bank (down 2.84%), Federal Bank (down 2.76%), Axis Bank (down 1.03%), City Union Bank (down 0.91%), HDFC Bank (down 0.44%) and ICICI Bank (down 0.12%) declined.
Bandhan Bank rose 2.62% after net profit jumped 99.28% to Rs 971.79 crore on a 66.15% rise in total income to Rs 3,050.54 crore in Q2 September 2019 over Q2 September 2018. The ratio of gross NPAs to gross advances stood at 1.76% as on 30 September 2019 as against 1.7% as on 30 June 2019 and 1.29% as on 30 September 2018. The ratio of net NPAs to net advances stood at 0.56% as on 30 September 2019 as against 0.59% as on 30 June 2019 and 0.69% as on 30 September 2018.
Among the public sector banks, Indian Bank (down 13.44%), State Bank of India (down 4.65%), United Bank of India (down 4.44%), Union Bank of India (down 4.1%), Bank of India (down 3.24%) and Bank of Baroda (down 2.86%) tumbled.
IT major Infosys fell 2.36%. An anonymous whistleblowers accused the chief executive officer (CEO) Salil Parekh and chief financial officer (CFO) Nilanjan Roy of unethical practices.
Infosys clarified that consistent with company's practice and whistleblower policy, complaints are presented to the audit committee of the board and thoroughly reviewed and appropriately dealt with. While dealing with these complaints, the company evaluates the requirements of various regulations including disclosures. As disclosed in the company's stock exchange filings made on 22 October 2019, the anonymous whistleblower complaints have been placed before the audit committee who has retained the law firm of Shardul Amarchand Mangaldas & Co. to conduct an independent investigation. Before conclusion of the investigation of the generalized allegations in the complaints, a disclosure was not required. The disclosure made on 22 October 2019 was to respond to multiple media inquiries and reports. The company undertakes to continue making timely disclosures.
Infosys added that it has been in touch with the Securities and Exchange Commission (SEC) regarding the anonymous whistleblower complaints (Anonymous Complaints) and has learnt that the SEC has initiated an investigation into this matter. The company will cooperate with the SEC's investigation. Also, Securities and Exchange Board of India ("Sebi") has requested additional information from the company concerning the anonymous complaints. The company will provide the information as per SEBI's request. The company is also aware of a securities class action lawsuit that has been filed against the Company in federal court in the United States based on the generalized allegations in the anonymous complaints. The company intends to defend itself vigorously in such a lawsuit.
Biocon fell 5.15% after the company announced its Q2 earnings after market hours yesterday, 23 October 2019. On a consolidated basis, the company's net profit fell 24.6% to Rs 148.20 crore on a 19% increase in net sales to Rs 1572.20 crore in Q2 September 2019 over Q2 September 2018. Biocon's standalone net profit, however, rose 17.5% to Rs 106.10 crore on a 14.7% increase in net sales to Rs 523.90 crore in Q2 September 2019 over Q2 September 2018.
Agro-chemicals major, P I Industries advanced 7.03% after the company reported its Q2 numbers. The stock also hit a 52-week high of Rs 1427.65 today. On consolidated basis, the company's net profit rose 30.2% to Rs 123.20 crore on a 25.5% rise in net sales to Rs 907.40 crore in Q2 September 2019 as against Q2 September 2018.
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