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Sensex, Nifty bounce; Europe opens higher

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Last Updated : Aug 25 2020 | 1:51 PM IST
Key benchmark indices bounced back in positive terrain in afternoon trade as buying emerged at lower levels. Positive global cues boosted sentiment. The Nifty traded near the crucial 11,500 mark. Gains in banks and financial services stocks were negated by correction in metal and pharmaceutical shares.

At 13:24 IST, the barometer index, the S&P BSE Sensex, added 100.38 points or 0.26% at 38,899.09. The Nifty 50 index was up 20.65 points or 0.18% at 11,487.35.

In the broader market, the S&P BSE Mid-Cap index rose 0.47% while the S&P BSE Small-Cap index gained 0.30%.

The market breadth was negative. On the BSE, 1280 shares rose and 1402 shares fell. A total of 147 shares were unchanged.

Foreign portfolio investors (FPIs) bought shares worth Rs 219.07 crore, while domestic institutional investors (DIIs), were net sellers to the tune of Rs 335.64 crore in the Indian equity market on 24 August, provisional data showed.

COVID-19 Update:

Total COVID-19 confirmed cases worldwide stood at 23,657,550 with 813,257 deaths. India reported 7,04,348 active cases of COVID-19 infection and 58,390 deaths while 24,04,585 patients have been discharged, according to the data from the Ministry of Health and Family Welfare, Government of India.

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RBI Announces Special Open Market Operations (OMOs):

The Reserve Bank of India (RBI) on Tuesday said it has decided to conduct yet another round of simultaneous purchase and sale of government securities under Open Market Operation (OMO) for an aggregate amount of Rs 20,000 crore. These auctions will be done in two tranches of Rs 10,000 crore each. The auctions would be conducted on 27 August 2020 and 3 September 2020.

Separately, RBI in its annual report on Tuesday said Indian government consumption will continue to support current economic demand while private consumption will likely lead the recovery when it takes hold after the COVID-19 outbreak eases.

"The upticks that became visible in May and June after the lockdown was eased in several parts of the country, appear to have lost strength in July and August, mainly due to reimposition or stricter imposition of lockdowns, suggesting that contraction in economic activity will likely prolong into Q2," the RBI said.

More protracted spread of the coronavirus pandemic, deviations of the monsoon from the predicted normal rains and global financial market volatility are key downside risks to growth, the central bank said.

Meanwhile, the balance sheet size of RBI increased by 30.02% as on 30 June 2020. The gross total income for the year 2019-20 amounted to Rs 1,49,672 crore as compared to Rs 1,93,036 crore in 2018-19. The expenditure of RBI for the year 2019-20 is Rs 92,540 crore which includes a risk provision of Rs 73,615 crore towards contingency fund as compared to an expenditure of Rs 17,045 crore in 2018-19. The year ended with an overall surplus of Rs 57,128 crore.

Earnings Today:

Atul Auto (up 7.74%), Can Fin Homes (up 2.44%), Federal-Mogul Goetze (up 1.11%), IRCON International (up 1.09%), Procter Gamble Hygiene Health Care (up 0.07%) and Phillips Carbon Black (up 7.51%) are some of the companies that will announce their quarterly earnings today.

Stocks in Spotlight:

Axis Bank was up 1.86% while shares of Max Financial Services soared nearly 14%. As per the deal struck in April, Axis Bank was to raise its stake in Max Life from 1% to 30% for Rs 1,592 crore, elevating their bancassurance partnership to a JV. As per the revised deal, Axis Bank will acquire 17.002% of the equity share capital of Max Life, resulting in total ownership of 18% post the transaction. The parties have executed the definitive agreements for the same. Axis Bank and Max Life Insurance Company will shortly approach the respective regulatory authorities, with revised applications for their consideration and approval.

ONGC was up 0.06%. The state-owned oil major on Monday said its board will meet on 1 September 2020 to consider raising funds of up to Rs 45,000 crore. The board will also consider and approve the company's Q1 June 2020 results on the said date.

LIC Housing Finance jumped 9.07%. The housing finance company posted a 35% jump in consolidated net profit to Rs 824.08 crore in Q1 June 2020 from Rs 609 crore in Q1 June 2019. Total income for Q1 June 2020 stood at Rs 4,986 crore, 3.5% higher than Rs 4,816 crore registered in Q1 June 2019.

Lupin added 0.73%. The drug maker said that it had received approval from the US drug regulator for its Albuterol Sulfate inhalation aerosol, which is a generic version of ProAir. The pharma major said that the drug will be manufactured at its Indore (Unit III) facility in India.

Globus Spirits hit an upper circuit of 5% at Rs 169.25 after the company's consolidated net profit surged 169.3% to Rs 18.69 crore on 22.3% drop in net sales to Rs 230.09 crore in Q1 June 2020 over Q1 June 2019.

Sun Pharmaceutical Industries shed 0.81%. The drug major on Tuesday said its arm DUSA Pharmaceuticals has reached a resolution with the US Department of Justice (DOJ) concerning the promotion of Levulan Kerastick and BLU-U on payment of $20.75 million.

Allcargo Logistics hit an upper cicuit of 20% at Rs 130.80. The company said that promoter group, including Shashi Kiran Shetty and Talentos Entertainment, have intimated the company of their plans to delist the firm from the bourses. As on 30 June 2020, the promoter & promoter group held 70.01% in the company while the Public shareholders held the remaining 29.99% stake.

Global Markets:

European markets opened higher while most Asian stocks advanced on Tuesday following an overnight rally on Wall Street. The positive investor sentiment in Asia on Tuesday follows reports that top U.S. and Chinese officials see progress in resolving concerns around the Phase 1 trade deal reached between the two countries in January. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin spoke with Chinese Vice Premier Liu He, the U.S. Treasury said in a statement on Tuesday, during a "regularly scheduled call".

The US stocks finished session higher on Monday, 24 August 2020, with the Nasdaq and the S&P 500 scaled new highs, as the U.S. Food and Drug Administration's approval for the emergency use of blood plasma in COVID-19 patients treatment and the speeding up of a vaccine candidate buoyed investors' optimism about a potential treatment for coronavirus and bets of a quicker economic recovery.

On Sunday, the U.S. Food and Drug Administration issued an emergency use authorization of convalescent plasma for hospitalized Covid-19 patients, a treatment that uses blood plasma donated by people who've recovered from the virus. President Donald Trump said at a news conference Sunday that the plasma treatment cuts the mortality rate by 35%.

Aiding market sentiment was a report the Trump administration is considering fast-tracking an experimental COVID-19 vaccine developed by AstraZeneca Plc and Oxford University for use in the United States ahead of the nation's upcoming presidential election.

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First Published: Aug 25 2020 | 1:21 PM IST

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