The benchmark indices traded with modest gains in afternoon trade. The Nifty was trading above the 12,000 level. At 13:23 IST, the S&P BSE Sensex, was up 136.41 points or 0.33% at 40,925.79. The Nifty 50 index was up 39.85 points or 0.33% at 12,019.50. Investors were cautious ahead of the Reserve Bank of India (RBI)'s policy outcome tomorrow.
The broader market outperformed the Sensex. The S&P BSE Mid-Cap index was up 0.96% while the S&P BSE Small-Cap index added 0.46%.
The market breadth was positive. On the BSE, 1209 shares rose and 1060 shares fell. A total of 173 shares were unchanged. In Nifty 50 index, 27 stocks advanced while 20 stocks declined. 3 stocks remained unchanged.
Economy:
The Reserve Bank of India (RBI)'s monetary policy committee (MPC) began its sixth bi-monthly monetary policy meeting on Tuesday (4 February). It will conclude on Thursday (6 February). The resolution of the MPC will be placed on the RBI website at 11:45 IST on 6 February 2020.
Meanwhile, the IHS Markit India Services Business Activity jumped to 55.5 in January from 53.3 in December, signalling the strongest upturn in output for seven years. The rebound largely stemmed from favourable market conditions and better underlying demand. A reading below 50 indicates contraction in activity, while a number above it signals expansion.
"The Indian service sector sprung to life at the start of 2020, defying expectations of fragility and building on to the momentum gained at the end of 2019. Strong domestic demand led to expansions in new business and output not seen for seven years. With business revenues rising, service providers continued to increase capacity to meet further strong growth in sales. This is good news for jobseekers, particularly when we consider the results from the manufacturing industry which showed the steepest upturn in employment since August 2012. One worrying development, however, was the trend for inflation. The service survey pointed to the sharpest increase in input prices in just under seven years, with companies mostly absorbing the added cost burdens themselves instead of fully passing these on to their customers. This may translate into quicker increases in selling prices in months to come, which may curb sales. Firms could also choose to restrict hiring in order to protect profit margins," said Pollyanna de Lima, Principal Economist at IHS Markit.
Stocks in Spotlight:
Also Read
Among the Nifty 50 stocks, Cipla (down 0.19%) will announce its Q3 2019 earnings today.
Telecom major Bharti Airtel rose 1.89% to Rs 528.90. The telecom major reported a consolidated net loss of Rs 1035.20 crore against a net profit of Rs 86.20 crore on 2.05% rise in total income to Rs 22,173.90 crore in Q3 December 2019 over Q3 December 2018. The company added around 21 Mn 4G customers to its mobile network. Overall customer base stood at 419 million across 16 countries.
Drug major Sun Pharmaceutical Industries fell 0.36% to Rs 424.05. The company's wholly owned subsidiaries has launched ABSORICA LD (isotretinoin) capsules in US for the management of severe recalcitrant nodular acne in patients 12 years of age and older. ABSORICA LD is the only isotretinoin formulation to feature Sun Pharma's micronization technology, which utilizes micronized particles to optimize absorption at a 20% lower dose. ABSORICA LD can be taken with or without food.
Global Markets:
European stocks opened lower while Asian shares traded higher on Wednesday. Investors continued to weight the impact of China's effort to stimulate its economy and mitigate the coronavirus outbreak concerns.
China's central bank lowered interest rates on reverse repurchase agreements a tool used by central banks to add money to the money supply on Monday to ensure adequate liquidity supply in the system as the country tackles to contain the virus outbreak. The People's Bank of China reduced the 7-day reverse repo rate by 10 basis points from 2.50% to 2.40%, and the 14-day rate was slashed from 2.65% to 2.55%.
PBOC injected 1.7 trillion yuan (approx. $242 billion) into money markets through reverse repurchase operations on Monday and Tuesday. On Wednesday, the central bank said it decided not to conduct open market operations for the day because there was adequate liquidity in the current banking system, which is sufficient to meet the market demand.
As per reports, the fast-spreading infection is already starting to have an impact on China: travel numbers have declined due to restrictions and quarantines, businesses are feeling the impact from falling demand, and large swathes of the country remain shut, including many factories.
The coronavirus has infected more than 20,000 people in China and claimed 465 lives, according to China's National Health Commission.
South Korea's Hyundai Motor reportedly said on Tuesday it decided to temporarily suspend production assembly lines from operating at all of its plants in the country due to disruptions in the supply of parts from China.
The US equity market finished higher for second straight session on Tuesday, 04 February 2020, as investors risk sentiments lifted by the People's Bank of China and actions by Beijing to combat the economic impact of a deadly coronavirus. Adding to the optimism was data that showed new orders for U.S.-made goods rose better than expected rose 1.8% in December.
Powered by Capital Market - Live News
Disclaimer: No Business Standard Journalist was involved in creation of this content