Domestic equity barometers endured significant volatility and ended with minor gains on Tuesday. Positive global cues boosted sentiment. However, gains were capped due to profit selling after recent steep rise.
The barometer index, the S&P BSE Sensex, advanced 44.80 points or 0.12% at 38,843.88. The Nifty 50 index added 5.80 points or 0.05% at 11,472.25. The Nifty has risen 1.41% in three straight sessions.
The Nifty opened higher and hit the day's high of 11,525.90 in early trade. Selling emerged at higher levels, which dragged the benchmark below the flat line in mid-morning trade. While the index managed to recover in afternoon trade, it slipped once again to hit the day's low in mid-afternoon trade. Value buying emerged at lower levels, which pushed the index higher in late trade.
Bajaj Finance (up 4.39%) and ICICI Bank (up 1.58%) were major index movers while Reliance Industries (down 0.67%) and Infosys (down 0.93%) weighed on the indices.
In the broader market, the BSE Mid-Cap index rose 0.51% and the BSE Small-Cap index gained 0.11%. Both these indices outperformed the Sensex.
The market breadth favored the seller. On the BSE, 1353 shares rose and 1471 shares fell. A total of 153 shares were unchanged.
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Economy:
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.
Numbers to Watch:
The yield on 10-year benchmark federal paper fell to 6.157% as compared with 6.221% at close in the previous trading session.
In the foreign exchange market, the rupee edged lower against the dollar. The partially convertible rupee was hovering at 74.33, compared with its close of 74.32 during the previous trading session.
In the commodities market, Brent crude for October 2020 settlement rose 25 cents at $45.38 a barrel. The contract rose 78 cents, or 1.76% to settle at $45.13 a barrel in the previous trading session.
Foreign Markets:
The Dow Jones 30 Futures were up 191 points, indicating a higher start to the U.S. market later today.
Shares in Europe and Asia advanced on Tuesday following an overnight rally on Wall Street. The buying was triggered by 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.
Buzzing Indian Segment:
The Nifty PSU Bank index rose 1.34% to 1,506.75. The index has risen 3.41% in three sessions.
Bank of Maharashtra (up 4.76%), Canara Bank (up 3.29%), State Bank of India (up 3.28%), United Bank of India (up 1.56%), Bank of Baroda (up 0.52%) and Allahabad Bank (up 0.13%) advanced.
Stocks in Spotlight:
ONGC skid 0.80%. 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.
Axis Bank rose 1.36% while shares of Max Financial Services soared 12.73% to Rs 619.65. 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 proposes to 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.
Sun Pharmaceutical Industries fell 1.55%. 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.
Future Retail rose 4.38%. The company has paid the interest amount of $14 million due on the 5.60% senior secured notes due 2025 (dollar notes) after a grace period of 30 days, Future Retail said in the filing on Monday. It had informed the bourses on 22 July 2020 that it had missed the payment of interest on the dollar notes on account of liquidity crunch. The terms of issuance of the dollar Notes provides for an additional period of 30 days for payment of interest from the due date, in case same could not have been paid on the original due date.
LIC Housing Finance surged 8.06%. 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.
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.
The Phoenix Mills slumped 10.57% amid heavy volumes. On the BSE, 2.16 crore shares were traded in the counter as against a two-week average trading volume of 9773 shares. The media reported that the company's promoter have have sold shares via block deal today.
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