Key equity barometers ended with decent gains on Thursday after oscillating between gains and losses for the first half of the trading session. The Nifty 50 index managed to close above the 11,850 level. Trading was volatile due to weekly expiry of index options. Sentiment was embittered after Moody's cut India's GDP growth forecast to 5.6% for 2019.
The barometer index, the BSE Sensex, rose 170.42 points or 0.42% to close at a 40,286.48, as per the provisional closing data. The Nifty 50 index rose 30 points or 0.25% to 11,870.45, as per the provisional closing data.
In the broader market, the S&P BSE Mid-Cap index rose 0.14% while the S&P BSE Small-Cap index ended 0.01% lower.
The market breadth was weak. On the BSE, 1006 shares rose and 1506 shares fell. A total of 170 shares were unchanged.
Domestic Macro:
Moody's Investors Service on Thursday cut India's economic growth forecast for current year to 5.6% from 5.8% estimated earlier, saying GDP slowdown is lasting longer than previously expected. It expected economic activity to pick up in 2020 and 2021 to 6.6% and 6.7%, respectively, but the pace to remain lower than in the recent past.
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India's wholesale inflation, or Wholesale Price index (WPI), dipped marginally for the month of October at 0.16% compared to 0.33% in September 2019 and 5.28% in October 2018. The index was supported by higher food prices which prevented the index from falling into negative territory.
India's retail inflation for the month of October breached the Reserve Bank of India's (RBI) medium-term target of 4% for the first time since July 2018 due to higher food prices. The all-India general consumer price index (CPI) inflation touched 4.62% in October, according to the data released by the statistics office on Wednesday, compared to 3.99% in September. The CPI was 3.38% in October last year.
Buzzing Index:
The Nifty IT index was up 0.94% to 15,384.05, reversing its three-day losing streak. The index had fallen by 2.45% to 15,240.95 at yesterday's close, from a recent closing at 15,624.40 on 7 November 2019.
Persistent Systems (up 6.16%), Infosys (up 1.97%), Hexaware Technologies (up 1.14%), MindTree (up 0.84%), TCS (up 0.76%), MphasiS (up 0.36%), Tech Mahindra (up 0.35%) and HCL Technologies (up 0.32%) advanced.
Oracle Financial Services Software (down 2.27%) and Wipro (down 0.04%) declined.
Stocks in Spotlight:
Reliance Industries declined 0.95% to Rs 1458. Moody's Investors Service has affirmed Reliance Industries' (RIL) Baa2 domestic long-term issuer rating and foreign currency senior unsecured rating.
At the same time, Moody's has affirmed the Baa2 backed domestic currency senior unsecured debt ratings on the USD denominated bonds issued by Reliance Holding USA, Inc., with a guarantee from RIL. The outlook on the ratings above is stable.
Aurobindo Pharma fell 8.86% to Rs 395. The U.S. Food and Drug Administration (USFDA) inspected the company's unit IV, a general injectable formulation manufacturing facility situated at Pashamylaram, Hyderabad, from 4th to 13th November 2019. At the end of the inspection, the company has been issued a 'Form 483' with 14 observations. The pharma company said that it will respond to the USFDA within the stipulated timeline.
Cadila Healthcare rose 4.21% to Rs 234.10. On a consolidated basis, net profit fell by 74.3% to Rs 107.20 crore in Q2 September 2019 from Rs 417.50 crore in Q2 September 2018. Net sales, however, recorded a growth of 14.1% to Rs 3244.20 in Q2 September 2019 over Q2 September 2018.
SpiceJet fell 6.02% to Rs 106.85. The airline company reported a consolidated net loss of Rs 461.21 crore in Q2 September 2019 as against a net loss of Rs 382.71 crore in Q2 September 2018. Revenue from operations for quarter ending September 2019 jumped by 51% to Rs 2848 crore on YoY basis.
IRCTC fell 2.29% to Rs 910.45. IRCTC announced its first ever quarterly result after getting listed on exchanges on 14 October 2019. IRCTC's net profit rose 14.01% to Rs 172.15 crore on 3.77% rise in net sales to Rs 972.61 crore in H1FY2020 over H1FY2019.
ARSS Infrastructure Projects hit 5% upper circuit at Rs 25.20. The company has received a work order of Rs 75.42 crore from Rail Vikas Nigam.
National Aluminium Company (Nalco) fell 2.99% to Rs 42.20. On consolidated basis, company reported a net loss of Rs 28.25 crore in Q2 September 2019 compared with net profit of Rs 510.55 crore in Q2 September 2018. Consolidated net sales tumbled 22.27% to Rs 2,363.55 crore in Q2 September 2019 over Q2 September 2018.
IRCON International declined 6.93% to Rs 407.80 after consolidated net profit fell 4.35% to Rs 82.82 crore on 26.43% increase in net sales to Rs 1,237.36 crore in Q2 September 2019 over Q2 September 2018.
Telecom stocks fell after media reported suggested that the department of telecommunications (DoT) has issued a notice to telecom operators to pay their adjusted gross revenue (AGR) dues within three months as directed by the Supreme Court.
The Supreme Court (SC) on 24 October 2019 ruled in favor of the government on the AGR (adjusted gross revenue) issue, with grave revenue implications to the tune of over Rs 92,000 crore for the ailing telecom sector.
Bharti Airtel was trading 1.51% lower at Rs 362.95. The telecom operator will be in focus as it will announce its Q2 2019 earnings today.
Vodafone Idea fell 20.81% to Rs 2.93. Grasim Industries slipped 0.93% to Rs 732.20. Grasim Industries has exposure to the telecom sector via its 11.55% stake in Vodafone Idea.
Grasim Industries reported a consolidated net profit of Rs 1002 crore in Q2 September 2019 as against a net loss of Rs 1468 crore in Q2 September 2018. Net revenue rose 3% to Rs 18,430 crore while EBITDA increased by 7% to Rs 3,180 crore in Q2 September 2019 over Q2 September 2018.
Vedanta fell 2.87% to Rs 144. On consolidated basis, net profit soared 43.68% to Rs 2,730 crore on a 3.08% decline in net sales to Rs 21,739 crore in Q2 September 2019 over Q2 September 2018.
Vedanta, in a separate announcement said that it had participated in and emerged as the highest bidder for the Jamkhani coal block in Sundargarh district, Odisha, in the 10th tranche of the captive coal block auction conducted by Ministry of Coal, Government of India.
The approved per annum capacity of the mine is 2.6 million tonnes. It has an extractable reserve of 114 million tonnes. Once operational, it will provide fuel security, improve power availability and further strengthen the company's aluminum operations and performance.
Foreign Markets:
Overseas, most shares in Europe and Asia declined after China's October industrial production data missed expectations. Sentiment was soured after trade negotiations between the U.S. and China are understood to have hit a roadblock.
German GDP (gross domestic product) grew by 0.1% in the third quarter, exceeding the -0.1% contraction expected and narrowly avoiding a technical recession.
Chinese industrial production data for October grew 4.7% year-on-year as compared against expectations of a 5.4% growth, media reports said.
Japan's economic growth touched a 1-year low in the third quarter, the media reported on Thursday citing government data. GDP grew 0.2% on an annualized rate in the third quarter, well lower than a median market forecast of a 0.8% rise.
The US stock market finished session modest higher on Wednesday, 13 November 2019, on the back of Federal Reserve Chair Jerome Powell testimony that U.S. central bankers see a sustained expansion ahead for the country's economy. Also, factors supporting the rally include the resumption of short dated debt buying to add liquidity to money markets and a surge in government spending. However, market gains were capped amid lingering uncertainty about a potential U.S.-China trade deal.
In U.S. economic news, the Labor Department released a report showing consumer price index climbed by 0.4% in October after coming in unchanged in September. Excluding food and energy prices, core consumer prices edged up by 0.2% in October after a 0.1% uptick in September.
The U.S. federal government's budget deficit in October rose 34% from a year earlier to $134.5 billion, putting the U.S. on course to top the $1 trillion mark in fiscal 2020 for the first time in eight years, or nearly 5% of gross domestic product.
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