Shares snap 4-day losses; Nifty crosses 12,100

The market snapped four day losing streak on Wednesday, supported by positive global shares. Sentiment also improved after the finance minister said the government would unveil measures to limit the impact of the coronavirus outbreak. Strong gains in index pivotals Reliance Industries, Hindustan Unilever and HDFC twins boosted indices higher.

The S&P BSE Sensex, surged 428.62 points or 1.05% at 41,323. The Nifty 50 index jumped 137.80 points or 1.15% at 12,130.30.

The BSE Mid-Cap index rose 1.34% and the BSE Small-Cap index rose 1.41%. Both these indices outperformed the Sensex.

The market breadth was strong. On the BSE, 1518 shares rose and 1010 shares fell. A total of 179 shares were unchanged.

Economy:

The Union Cabinet on Wednesday approved Rs 4,460 crore for dairy farming. The government has also decided to increase the interest subvention to 2.5% from 2% earlier. Interest subvention is a subsidy provided to farmers on the interest rates on loans through the Kisan Credit Card (KCC) scheme.

Briefing reporters about the decisions taken by the cabinet, Information and Broadcasting Minister Prakash Javadekar also announced that an empowered technology group will be set up to give suggestions on policy and procurement to ministries, PSUs and even industries.

The second phase of Swachh Bharat will start soon, he added. The cabinet also approved the creation of the 22nd Law Commission, which plays an advisory role to the government on complex legal issues. The term of the previous law panel had ended in August 2019. With the cabinet approval, the law ministry will now notify the new panel, which will have a term of three years.

Meanwhile, Finance Minister Nirmala Sitharaman on Tuesday said that the Indian government will soon announce measures to deal with the impact of deadly Coronavirus outbreak on the domestic industry and the economy. The minister's statement came after a comprehensive consultation on the effects of the Coronavirus in a review meeting of the Ministry of Finance in the national capital. Sitharaman said she would hold a meeting with the secretaires of different ministries on Wednesday and then announce steps to deal with the situation in consultation with the Prime Minister's Office (PMO). FM also said there were no reports of shortage of medicines or medical equipment, instead the pharma industry is asking for lifting of ban on exports of certain items. However, there could be some disruptions in supplies and concerns have been expressed by the representative of pharma, solar and chemical industries, she said.

Foreign Markets:

European shares extended gains while Asian markets ended higher on Wednesday as investors tried to shake off concerns over the coronavirus epidemic following a slight decline in the number of new cases.

China's National Health Commission said that as of Tuesday night, a total of 74,185 cases of the new coronavirus had been confirmed in the country and 2,004 people have died.

In US, the Nasdaq Composite index eked out a record finish on Tuesday, even though other major stock benchmarks fell after Apple Inc. said its second-quarter earnings would take a hit from the viral outbreak in China, reigniting fears that the disease may disrupt manufacturing supply chains and have broad implications for the global economy and financial markets.

Apple said revenue in the current quarter won't reach its target range of between $63 billion and $67 billion due to the impact of the infectious disease.

In the commodities market, Brent crude for April 2020 settlement rose 81 cents to $58.56 a barrel.

Buzzing Indian Index:

The Nifty Pharma index rose 2.32% to 8,388.70, outperforming the other sectoral indices on the NSE.

Wockhardt (up 9.63%), Ipca Laboratories (up 7.19%), Strides Pharma Science (up 3.58%), Cadila Healthcare (up 3.08%), Piramal Enterprises (up 2.99%), Cipla (up 2.71%), Glenmark Pharmaceuticals (up 1.91%), Dr. Reddy's Laboratories (up 1.07%), Divi's Laboratories (up 0.85%), Lupin (up 0.43%) and Alkem Laboratories (up 0.1%) advanced.

Sun Pharmaceutical Industries (down 1.33%) and GlaxoSmithKline Pharmaceuticals (down 0.19%) declined.

Aurobindo Pharma surged 20.40%. The drug maker said that with regard to the United States Food and Drug Administration (USFDA) inspection of unit IV, a general injectable formulation manufacturing facility of the company, the company has received the Establishment Inspection Report (EIR) with Voluntary Action Initiated (VAI) status from USFDA.

In an exchange filing made on 13 November, Aurobindo Pharma had announced that USFDA inspected company's unit IV, a general injectable formulation manufacturing facility situated at Pashamylaram, Hyderabad, from 4 to 13 November 2019. At the end of the inspection, the company was issued a 'Form 483' with 14 observations.

The media reported that the street was expecting a more severe classification such as an Official Action Indicated, which would mean higher chances of a Warning Letter and greater delay in new approvals.

Stocks in Spotlight:

Index heavyweight Reliance Industries rose 2.60% to Rs 1504.20.

Hindustan Unilever (up 2.74%), HDFC (up 2.32%) and HDFC Bank (up 1.11%) advanced.

Shree Cement (up 2.55%) will replace private lender Yes Bank (up 0.71%) in the benchmark index Nifty 50 from 27 March 2020, NSE Indices, a subsidiary of the National Stock Exchange (NSE), said on Tuesday, 18 February 2020 after market hours.

Coal India (CIL) jumped 3.25% after Union Minister of Coal and Mines, Pralhad Joshi said the country will stop importing thermal coal from financial year 2023-24. The Minister also said that various ways and means were discussed with key stakeholders to achieve 1 billion tonnes (BT) coal production target by CIL by Financial Year 2023-24.

IDFC First Bank rose 3.64% after CRISIL assigned its 'CRISIL AA rating with a stable outlook to its Rs 2,000 crore Tier II bonds (Under Basel III) of the bank. The credit rating agency said that ratings reflects the bank's healthy capitalisation, increased focus on retailisation of the loan book and expectation of improvement in earnings profile going forward. These strengths are partially offset by the relatively low, albeit increasing, proportion of current account and savings account (CASA) deposits in borrowings.

Balkrishna Industries rose 1.93%. HDFC Mutual Fund reduced its aggregate holding in the auto parts maker to 5.99% from 8.06% earlier. The fund house sold 2.07% stake in Balkrishna Industries in the open market on 17 February 2020.

SpiceJet surged 4.28% after the media reported that the low cost airliner has launched 20 new flights scheduled to commence operations from 29 March onward.

Man Industries (India) added 2.83%. The company has received new export order of approximately Rs 300 crore from MENA Region. With this the total unexecuted order book of the company stands at approximately Rs 1,600 crore.

Trigyn Technologies added 1.34%. Ontario Education Collaborative Marketplace (OECM) awarded a deal to Trigyn Technologies to provide IT technical resource augmentation services in the East and West of Ontario, Canada. The services will be provided to OECM customers, which include Ontario's publicly funded education institutions, and broader public sector organizations, including municipalities, hospitals, community care access centers, developmental services organizations, crown corporations, as well as not-for-profit organizations. The award is for a period of three years, with an option to extend for an additional two years, bringing the potential term to five years.

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