Domestic barometers ended with strong gains on Friday, extending their winning streak for third consecutive session. Significant buying in the final hour of trade pushed the indices near their day's high. Reliance Industries, HDFC Bank and ICICI Bank were the major index movers.
As per provisional closing, the barometer S&P BSE Sensex surged 548.46 points or 1.50% at 37,020.14. The Nifty 50 index jumped 161.75 points or 1.51% at 10,901.70.
The Nifty managed to close above its 200-day simple moving average placed at 10,868.81.
In the broader market, the S&P BSE Mid-Cap index rose 1.55% while the S&P BSE Small-Cap index gained 1.11%.
Buyers outnumbered sellers. On the BSE, 1656 shares rose and 986 shares fell. A total of 157 shares were unchanged.
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Buzzing Index:
The Nifty IT index slipped 0.80% to 16,791.40 on profit taking after a strong rally in the past two days. The index jumped 8.22% in the past two sessions while the benchmark Nifty 50 index rose 1.25% during the same period.
Among the index constituents, Mphasis (down 3.32%), TCS (down 1.74%), Larsen & Toubro Infotech (down 1.15%), Infosys (down 0.91%), Wipro (down 0.15%) and Tech Mahindra (down 0.02%) declined.
Info Edge India (up 1.67%), MindTree (up 1.39%) and NIIT Technologies (up 1.38%) advanced.
HCL Technologies rose 1% to Rs 633.70 after the company's consolidated net profit rose 31.7% to Rs 2,925 crore on 8.6% increase in revenue to Rs 17,841 crore in Q1 June 2020 over Q1 June 2019.
On a sequential basis, net profit declined 7.3% and revenue fell 4% in Q1 June 2020 over Q4 March 2020.
EBIT margin stood at 20.5% in Q1 June 2020, lower than 20.9% in Q4 March 2020 and higher than 17.1% in Q1 June 2019.
The company's revenue in constant currency was down 7.2% QoQ & up 1% YoY. The company expects revenue to increase QoQ by an average of 1.5% to 2.5% in constant currency for the next 3 quarters. It expects operating margin between 19.5% and 20.5% for FY21.
Meanwhile, the company appointed Roshni Nadar Malhotra, non-executive director as the chairperson of the Board of Directors w.e.f. 17 July 2020, in place of Shiv Nadar who expressed his desire to step down from the position of the Chairman.
Stocks in Spotlight :
Britannia Industries slipped 0.98% to Rs 3816. The company's consolidated net profit surged to Rs 545.70 crore in Q1 June 2020 from Rs 251.03 crore in Q1 June 2019. Total revenue from operations rose 26.68% year-on-year to Rs 3,420.67 crore during the quarter.
Varun Berry, the company's managing director, said: As soon as the lockdown was eased, we focused on getting our distribution back to the pre-Covid levels and increasing our rural & hinterland reach. During this period, we also launched 'Winkin Cow Lassi' & a Rs. 5 Layer Cake pack to expand our reach. All the adjacent businesses too delivered a healthy profitable growth.
On the cost front, we witnessed moderate inflation in the prices of key raw materials and expect the prices to be stable going forward given the positive outlook on monsoon & harvest.
We also rationalized media spends considering the constraints of inventories due to higher market demand. These measures helped us improve the shape of our business and record a massive 670 bps increase in operating profit during the quarter.
L&T Technology Services (LTTS) fell 4.19% to Rs 1378.90 after the company's consolidated net profit declined 42.5% to Rs 117.20 crore on a 3.9% fall in net sales to Rs 1294.70 crore in Q1 June 2020 over Q1 June 2019. EBITDA margin stood at 15.9% in Q1 June 2020, lower than 20.2% in Q1 June 2019.
Meanwhile, LTTS has executed a definitive agreement to acquire 100% stake in Orchestra Technology, a specialist technology solutions provider for the telecom industry.
L&T Finance Holdings rose 3.18% to Rs 61.70. The company's consolidated net profit tanked 73.2% to Rs 147.44 crore on 1.8% slip in total income to Rs 3,623.14 crore in Q1 June 2020 over Q1 June 2019. An exceptional item during the quarter ended 30 June 2020 represents net gain of Rs 225.61 crore on the divestment of entire stake in the subsidiary company, L&T Capital Market concluded on 24 April 2020.
The company created an incremental provision of Rs 577 crore against its standard assets book in this quarter. The COVID-19 provision was at Rs 277 crore in Q1FY21 (5% of 1-90 DPD book with moratorium, along with Rs 209 crore in Q4 FY20). Its macro-prudential provisions was at Rs 300 crore during the quarter. The Average Assets under Management (AAUM) of the Investment Management business stood at Rs 58,362 crore in Q1 FY21.
State-run oil marketing companies (PSU OMCs) were in demand as crude oil prices declined. Bharat Petroleum Corporation (up 12.45%), Hindustan Petroleum Corporation (up 6.56%) and Indian Oil Corporation (up 3.26%) advanced.
Crude oil prices fell on Thursday after OPEC+ reportedly agreed to ease record supply curbs and as new infections of the novel coronavirus continue to surge in the United States. Lower crude oil prices could reduce under-recoveries of PSU OMCs on domestic sale of LPG and kerosene at controlled prices.
In the commodities market, Brent crude for September 2020 settlement was down 41 cents at $42.96 a barrel. The contract fell 0.96% to settle at $43.37 a barrel during the previous trading session.
Global Markets:
Most shares in Europe and Asia advanced on Friday. European leaders will meet in Brussels on Friday to look forward to a deal on the proposed 750 billion euro ($853.8 billion), which could face opposition from the four member-states, namely, Austria, Denmark, Sweden and the Netherlands. The bill may also be subject to a veto from Hungary, which has opposed linking the distribution of funds with the upholding of the EU's democratic values.
The ECB, for the time being, has made no changes to its asset-buying program or to interest rates at a meeting Thursday. Global debt surged to a record $258 trillion in the first quarter of 2020.
In Asia, Singapore's trade data reportedly released on Friday showed that non-oil domestic exports (NODX) for June soared to 16.1% as compared to a year ago, helped by shipments of pharmaceuticals, specialised machinery and electronics.
The US stock market finished session lower on Thursday, 16 July 2020, with the Dow Jones Industrial Average snapping a four-day winning streak, as elevated levels of unemployment claims heightened concerns about the economic toll from rising coronavirus cases. Meanwhile, US-China tensions also weighed down stocks.
A jump in cases of the virus has forced California and other states to shut down again, sparking fears of more business damage and slowing the pace of a Wall Street rally.
US first-time claims for unemployment benefits slipped to 1.300 million in the week ended July 11th, a report released by the Labor Department on Thursday showed. A decrease of 10,000 from the previous week's revised level 1.310 million. Jobless claims fell for the fifteenth consecutive week, although the pace of decline has slowed considerably from April and May.
US retail sales soared by 7.5% in June after skyrocketing by an upwardly revised 18.2% in May, reflecting the reopening of businesses following the coronavirus-induced lockdowns, the Commerce Department reported on Thursday.
Meanwhile, investor focus is turning towards the action the United States might adopt further stimulus to help steer the world's largest economy through a worsening coronavirus pandemic.
As per media reports, the US Congress is set to begin debating such a package next week, as several states in the South and West implement fresh lockdown measures to curb cases. While May and June U.S. retail sales continued to show signs of recovery, questions, however, remain as to how long this recovery could last for.
US President Donald Trump's administration is also reportedly mulling a stateside travel ban on all members of the ruling Chinese Communist Party (CCP) and their families.
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