Key equity benchmarks ended with tepid gains on Friday. The barometer index, the BSE Sensex rose 58.09 points or 0.14% to 40,187.14, as per the provisional closing data. The Nifty 50 index rose 16.15 points or 0.14% to 11,893.60, as per the provisional closing data. Gains were capped as weak domestic economic data spoiled sentiment. Domestic shares have seen steady gains in the last few sessions supported by better-than-expected Q2 results.
The broader market outperformed the key benchmarks. The S&P BSE Mid-Cap index rose 0.18% while the S&P BSE Small-Cap index rose 0.32%.
The market breadth was positive. On the BSE, 1430 shares rose and 1163 shares fell. A total of 174 shares were unchanged. In Nifty 50 index, 26 stocks advanced and 24 stocks declined.
The Nifty edged higher in early trade but soon witnessed profit booking at higher level. Selling pressure in morning trade dragged the index lower as it hit the day's low of 11,843.55. The 50-unit recovered from lows in early afternoon trade and remained range bound for most part of the day. The Nifty finally managed to end a tad below 11,900-mark.
Index pivotal Reliance Industries (RIL) (down 0.48%) and IT major TCS (down 2.91%) weighed on the benchmark indices.
Macro data:
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India's unemployment rate in October rose to 8.5%, the highest since August 2016, and up from 7.2% in September, according to data released by the Centre for Monitoring Indian Economy (CMIE) on Friday, reflecting the impact of a slowdown in the economy.
The headline seasonally adjusted IHS Markit India Manufacturing PMI fell to a two-year low of 50.6 in October 2019 from 51.4 in September. The indices vary between 0 and 100, with a reading above 50 indicating an overall increase compared to the previous month, and below 50 an overall decrease.
India's fiscal deficit reached nearly 93% of the budget estimate at Rs 6.52 lakh crore at the end of September in the current financial year, government data showed on Thursday. In absolute terms, the fiscal deficit or the gap between expenditure and revenue was Rs 6,51,554 crore as on 30 September, according to the data released by the Controller General of Accounts (CGA). The deficit stood at 95.3% of the 2018-19 budget estimate (BE) in the corresponding month a year ago. The government has pegged the fiscal deficit for the current financial year at Rs 7.03 trillion, aiming to restrict the deficit at 3.3% of the gross domestic product (GDP).
The output of the core sector fell a record 5.2% in September, with production by seven of the eight industries declining. In September 2018, it had risen 4.3%, and 0.1% in August 2019. The Eight Core Industries comprise 40.27% of the weight of items included in the Index of Industrial Production (IIP) and includes industries like coal, crude oil, natural gas refinery products, fertilizers, steel, cement and electricity.
Q2 earnings:
Dr. Reddy's Laboratories fell 0.9%. The company reported 117% jump in net profit to Rs 1,093 crore on a 26% increase in revenue to Rs 4,801 crore in Q2 September 2019 over Q2 September 2018. The drugmaker's revenue was aided by a tax write-back of Rs 330 crore and a licence fee worth Rs 720 crore for selling territory rights for two neurology brands to U.S.-based Upsher-Smith Laboratories, the filing said.
Bank India (BOI) fell 0.49%. The bank announced its Q2 2019 earnings during market hours today. The bank reported a net profit of Rs 266 crore in Q2 September 2019 as against a net loss of Rs 1156 crore in Q2 September 2018. The bank's total income rose 10.97% to Rs 11985.50 crore YoY basis. The ratio of gross NPAs to gross advances stood at 16.31% as on 30 September 2019 as against 16.50% as on 30 June 2019 and 16.36% as on 30 September 2018. The bank's provisions and contingencies fell 38.61% to Rs 2052.27 crore in Q2 September 2019 over Q2 September 2018. The bank's capital adequacy ratio improved to 14.09% in Q2 2019 as against 10.93% in Q2 2018.
Blue Dart Express rose 0.75%. The company's net profit soared 144.40% to Rs 14.64 crore on 1.69% increase in net sales to Rs 802.17 crore in Q2 September 2019 over Q1 June 2019. Consolidated net profit, however, declined 35% to Rs 14.64 crore on a 0.3% rise in net sales to Rs 802.17 crore in Q2 September 2019 over Q2 September 2018. The announcement was made after trading hours yesterday, 31 October 2019. Effective 1 April 2019, Blue Dart adopted the Ind AS 116 new accounting standard due to which there is higher impact on profit as these are long term leases related to air infrastructure.
Spandana Sphoorty Financial rose 1.24%. The company announced a decent Q2 result after market hours yesterday. Microfinance institution Spandana Sphoorty reported a drop in net profit on the back of rising deferred tax expense. Net profit fell 42.2% to Rs 42.50 crore on a 40.1% rise in total income to Rs 360.54 crore in Q2 September 2019 as against Q2 September 2018. The company's Deferred Tax Expense rose 262% to Rs 144.81 crore in Q2 September 2019 shrinking company's net profit drastically. Deferred tax impact on company's P&L during Q2 2019 was notionally high since the actual tax outflow in Q2 2018 was only Rs 39.94 crore.
Laurus Labs advanced 2.92%. The company reported 248.86% rise in consolidated net profit to Rs 56.55 crore on 19.2% rise in total income to Rs 713.78 crore in Q2 September 2019 over Q2 September 2018.
Stocks in Spotlight:
TVS Motor Company fell 3.59% to Rs 467. The company registered sales of 3.23 lakh units in October 2019 as against sales of 3.98 lakh units in the month of October 2018, registering a decline of 18.83%. The auto maker, however, witnessed 2.53% increase in auto sales as compared with 3.15 lakh units in September 2019.
Bajaj Auto reported a 9% decline in total auto sales, selling 4.63 lakh units in October 2019 as against 5.06 lakh units October 2018. However, the total auto sales rose 15% on a month-on-month basis from 4.02 lakh units in September 2019. Total domestic sales fell 13% to 2.78 lakh units in October 2019 as against 3.19 lakh units in October 2018. Total exports fell 1% to 1.84 lakh units in October 2019 as against 1.86 lakh units in October 2018. The announcement was made during market hours today, 1 November 2019.
Shares of commercial manufacturer Escorts were trading 0.18% lower after the company announced a rise in October 2019 sales. Domestic tractor sales grew 1.3% to 13,034 units in October 2019 as against 12,867 units in October 2018. Exports surged 16.8% for the month of Ocrober 2019 to 319 tractors as against 273 tractors sold in October 2018.
Ashok Leyland fell 10.78% to Rs 76.1. The auto company reported a 35% fall in total vehicle sales to 9857 units in October 2019 as against 15149 units in October 2018. The company's net sales grew 12.27% to 9857 in October 2019 as against 8,780 units in September 2019.
Maruti Suzuki India rose 0.63% to Rs 7,604.85 after the car major reported 25.11% increase in total sales in October 2019 compared with 1.22 lakh units in September 2019. The company's total auto sales rose 4.5% to 1.53 lakh units in October 2019 over October 2019.
Mahindra & Mahindra (M&M) fell 2.89%. M&M reported 11% decline in total auto sales, selling 51,896 units in October 2019 as against 58,416 units in October 2018. M&M recorded 19.73% increase in total sales from 43,343 units in September 2019. M&M's Farm Equipment Sector (FES) reported 4% fall in total tractor sales to 47,376 units in October 2019 as against 45,433 units in October 2018.
SML Isuzu declined 1.3% after the auto maker reported a major drop in October monthly sales. Total sales tumbled 37.9% to 515 units in October 2019 over 829 units in October 2018. With respect to YTD, sales fell by 11.8% to 6,945 units in April-October 2019 as against 7,871 units in April-October 2018.
Ahluwalia Contracts (India) surged 3.18% after the company secured three new orders. The company won an order of Rs 208 crore for construction of NICL Work at Corporate Office Building in Kolkata. The company secured another new order of Rs 161 crore for construction of Parivahan Parisar at Patna, Bihar. The company secured third order of Rs 152.71 crore for Construction of Bluegrass Residences in Pune. The company reported that total order inflow during the FY 2019- 20 stood at Rs 1449.30 crore.
Foreign market:
European stocks were trading higher as investors await corporate earnings and monitor global trade developments.
Asian stocks ended mostly higher Friday amid renewed concerns over the potential for a long-term trade deal between China and the U.S.
A private survey of factory activity in China showed manufacturing activity in the country expanded more than expected in October. The Caixin/Markit Purchasing Managers's Index (PMI) for the manufacturing sector rose from 51.4 in September to 51.7 in October.
The US stock market finished session lower on Thursday, 31 October 2019, on skepticism about a U.S.-China trade truce deal and weakening manufacturing data. Concerns around trade and the economy dampened the enthusiasm around strong earnings from Apple and Facebook.
Concerns over trade tensions resurfaced after reports that Chinese officials are doubtful that they will be able to reach a comprehensive, long-term trade deal with the U.S. The preliminary deal was meant to be signed at the APEC meeting in Chile, but the South American country announced this week that it will no longer be hosting. President Donald Trump tweeted Thursday "China and the USA are working on selecting a new site for signing of Phase One of Trade Agreement, about 60% of total deal."
The tariff war between the world's two biggest economies has disrupted supply chains and roiled financial markets for more than a year
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