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Nifty hovers near 8900; defense stocks in demand

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Capital Market
Last Updated : May 18 2020 | 2:51 PM IST
Key barometers continued to trade sideways with huge losses in mid-afternoon trade. The Nifty hovered around the decisive 8900 mark. At 14:27 IST, the barometer index, the S&P BSE Sensex, was down 814.26 points or 2.62% at 30,283.47. The Nifty 50 index lost 242.20 points or 2.65% at 8,894.40.

Investors were unimpressed by the government's economic relief measures. A steady rise in coronavirus cases in India also spooked investors. Extension of the nationwide lockdown further hurt sentiment.

In the broader market, the S&P BSE Mid-Cap index was down 3.3% while the S&P BSE Small-Cap index fell 2.45%.

The market breadth was weak. On the BSE, 556 shares rose and 1670 shares fell. A total of 146 shares were unchanged. In the Nifty 50 index, 10 shares advanced while 40 stocks declined.

COVID-19 Update:

Total COVID-19 confirmed cases worldwide stood at 47,13,769 far with 3,15,187 deaths. India reported 56,316 active cases of COVID-19 infection and 3,029 deaths, according to the data from the Ministry of Health and Family Welfare, Government of India.

Meanwhile, in a bid to contain the spread of the novel coronavirus pandemic, the Centre on 17 May 2020 extended the nationwide lockdown till 31 May 2020. According to the new guidelines, the delineation of red, orange and green zones will be decided by respective states and Union Territory governments after taking into consideration the parameters shared by the Union Ministry of Health and Family Welfare.

Buzzing Index:

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The Nifty Metal declined 2.79% to 1,694. The index surged 3.95% last week.

Steel Authority of India (down 5.45%), Coal India (down 4.67%), Jindal Steel & Power (down 4.66%), JSW Steel (down 3.82%), National Aluminium Company (down 3.29%), Hindalco Industries (down 2.47%), NMDC (down 2.23%), Hindustan Zinc (down 1.79%) and Tata Steel (down 1.76%) were top losers in metal segment.

Numbers to Track:

The yield on 10-year benchmark federal paper fell to 6.060% compared with previous closing of 6.081% in the previous trading session.

In the foreign exchange market, the partially convertible rupee edged lower to 75.9125 compared with its previous closing of 75.58.

In the commodities market, Brent crude for July 2020 settlement was up $1.21 to $33.73 a barrel. The contract surged 4.4% to settle at $32.5 a barrel in the previous trading session.

MCX Gold futures for 5 June 2020 settlement jumped 0.96% to Rs 47,838.

Stocks in Spotlight:

Shares of companies engaged in defence sector edged higher, in an otherwise weak market, after the government hiked foreign direct investment (FDI) via automatic route from 49% to 74%. Hindustan Aeronautics (up 5.21%), Bharat Dynamics (up 0.65%) and Premier Explosives (up 0.2%) advanced. Meanwhile, Bharat Electronics was down 3.32%.

Coal India (CIL) slumped 4.9% after Finance Minister Nirmala Sitharaman on Saturday (16 May) allowed commercial mining of coal by the private sector, ending government monopoly on the sector. FM said introduction of private players in commercial mining will be done on revenue sharing mechanism instead of the regime of fixed rupee/tonne. She further said that nearly 50 blocks will be offered for bidding.

Reliance Industries (RIL) was up 0.2%. RIL and Jio Platforms on 17 May 2020 announced an investment of Rs 6,598.38 crore by General Atlantic, a leading global growth equity firm. This investment values Jio Platforms at an equity value of Rs 4.91 lakh crore and an enterprise value of Rs 5.16 lakh crore. General Atlantic's investment will translate into a 1.34% equity stake in Jio Platforms on a fully diluted basis. The transaction is subject to regulatory and other customary approvals.

With this investment, Jio Platforms has raised Rs 67,194.75 crore from leading technology investors including Facebook, Silver Lake, Vista Equity Partners and General Atlantic in less than four weeks.

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First Published: May 18 2020 | 2:27 PM IST

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