Benchmark indices continued to trade with modest gains in afternoon trade. The barometer index, the S&P BSE Sensex, advanced 276.23 points or 0.71% at 39,389.70. The Nifty 50 index gained 68.65 points or 0.59% at 11,627.90.
The broader market was positive. The S&P BSE Mid-Cap index rose 0.49%. The S&P BSE Small-Cap index fell 0.11%.
Sellers outnumbered buyers. On the BSE, 1,253 shares rose and 1,456 shares fell. A total of 155 shares were unchanged. In Nifty 50 index, 24 stocks advanced while 26 stocks declined.
Foreign portfolio investors (FPIs) bought shares worth Rs 1,164.32 crore, while domestic institutional investors (DIIs), were net sellers to the tune of Rs 809.27 crore in the Indian equity market on 27 August 2020, provisional data showed.
COVID-19 Update:
Total COVID-19 confirmed cases worldwide stood at 2,44,65,706 with 8,31,615 deaths. India reported 7,42,023 active cases of COVID-19 infection and 61,529 deaths while 25,83,948 patients have been discharged, according to the data from the Ministry of Health and Family Welfare, Government of India.
Economy:
At the 41st GST Council meet on Thursday, Finance Minister Nirmala Sitharaman gave states two options to bridge the funding gap created due to economic losses caused by COVID-19. States have been demanding compensation from the government to meet the shortfall in revenue caused by lockdowns to curb spread of COVID-19. The compensation gap of Rs 2.35 lakh crore this year is due to COVID-19 as well and the shortfall in compensation due to the implementation of GST has been estimated to be Rs 97,000 crore.
In a big push for 'Make in India' for the defence sector, Finance Minister Nirmala Sitharaman yesterday announced raising the Foreign Direct Investment (FDI) limit in the defence sector under the automatic route from 49% to 74%. She also said that the import of some weapons and platforms will not be allowed.
Gainers & Losers:
Axis Bank (up 6.97%), Bharti Infratel (up 5.30%), IndusInd Bank (up 4.60%), ICICI Bank (up 4.08%) and Grasim Industries (up 3.72%) were major gainers.
JSW Steel (down 2.21%), Tata Motors (down 1.73%), Hero MotoCorp (down 1.48%), Dr Reddy's Laboratories (down 1.07%) and PowerGrid Corporation of India (down 0.86%) were major losers.
Results Today:
Apex Frozen Foods (down 0.54%), Filatex India (down 0.69%), Khadim India (up 0.32%) and SJVN (down 0.97%) will announce their quarterly earnings today.
Earnings Impact:
Edelweiss Financial Services was up 0.18%. The company reported a consolidated net loss of Rs 263.67 crore in Q1 June 2020 as against net profit of Rs 134.49 crore in Q1 June 2019. Total income slumped 25.7% to Rs 1,919.68 crore in Q1 FY21 over Q1 FY20.
Separately, Edelweiss said that its board has approved sale of 51% stake in its wealth management business to Pacific Alliance Group (PAG). The deal will be completed at a post-money valuation of Rs 4,400 crore. The transaction is expected to close in the next 4 to 6 months.
NMDC jumped 10.94%. The board of directors of the company at their meeting held on 27 August 2020, have accorded in-principle approval to the proposal to demerge its NMDC Iron & Steel Plant (NISP) at Nagarnar in Chhattisgarh, the company said in an exchange filing.
NMDC reported 54.67% slide in net profit to Rs 531.01 crore on 40.67% fall in total income to Rs 2,009.27 crore in Q1 June 2020 over Q1 June 2019. NMDC said the COVID-19 had an impact on the operations of the company during the current quarter ended 30 June 2020. There has been a loss of around 18.23 lakh tonne of production and 23.94 lakh tonne of sales of iron ore.
GMR Infrastructure rose 0.01% after the company reported a consolidated net loss stood at Rs 833.87 crore in Q1 June 2020, higher than net loss of Rs 336.12 crore in Q1 June 2019. Consolidated net sales slumped 43.7% to Rs 1,006.43 crore in Q1 June 2020 over Q1 June 2019. Pre-tax loss stood at Rs 984.95 crore in Q1 June 2020 as against pre-tax loss of Rs 280 crore in Q1 June 2019.
Meanwhile, the board of GMR Infra along with other Group companies - GMR Power Infra (GPIL) and GMR Power and Urban Infra (GPUIL) has announced a composite scheme of arrangement involving vertical split demerger of the non-airport business (Energy, EPC, Urban Infrastructure etc.) of GIL into GPUIL, as a going concern, along-side amalgamation of GPIL with GIL, as a step preceding demerger.
The scheme to create mirror shareholding of GIL in GPUIL with all existing shareholders of GIL becoming shareholder of GPUIL in the same proportion. The scheme envisages issue of 1 additional share of Rs 5 each of GPUIL for every 10 shares in GIL of Re 1 each as on the record date. Post scheme, GIL will emerge as India's only pure-play listed airports company. All existing shareholders of GIL would continue their same shareholding in GIL.
Stocks in Spotlight:
ACC gained 0.28% after the cement manufacturer appointed Yatin Malhotra as chief financial officer (CFO) of the company with effect from 1 September 2020 and is designated as key managerial personnel of the company. Malhotra takes over from Rajani Kesari who has relinquished as CFO with effect from close of business hours of 31 August 2020 to take a new role within the LafargeHolcim Group.
Ambuja Cements fell 0.34% after its board approved the appointment of Rajani Kesari as the new chief financial officer (CFO) and key managerial personnel (KMP) of Ambuja Cements with effect from 1 September 2020. Sonal Shrivastava, the current CFO of Ambuja Cements is moving to a new role in the LafargeHolcim Group and will therefore demit her office as the CFO from the close of the business hours on 31 August 2020.
Global Markets:
European shares opened lower while Asian shares were mixed on Friday as investors react to recent developments from the US Federal Reserve.
Japanese stocks tumbled following a report from Japanese broadcaster NHK that the country's Prime Minister, Shinzo Abe, is set to resign due to "health issues." The Nikkei 225 index dropped 1.41%.
In US, the S&P 500 and the Dow advanced but the Nasdaq closed lower on Thursday as investors digested the US Federal Reserve's new strategy to adopt an average inflation target and restore the United States to full employment, as well as a promising development in the fight to contain the coronavirus pandemic.
Setting out the central bank's aggressive new strategy at a virtual Jackson Hole symposium, Fed chief Jerome Powell said it would offset below-2% periods with higher inflation "for some time," and ensure employment doesn't fall short of its maximum level. The Fed also adjusted its view of full employment to allow gains in the labor market to run more broadly. That indicated that the central bank will be less inclined to raise interest rates when the unemployment rate falls, as long as inflation does not creep up as well.
Data on Thursday showed weekly jobless claims hovered around 1 million last week, suggesting the labor market recovery was stalling.
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