Key domestic equity benchmarks ended with decent gains after a volatile session on Monday. The Sensex and the Nifty sharply came off the day's high as profit booking emerged at higher levels. Global stock markets were upbeat as an improvement in Chinese factory data calmed nerves.
The barometer index, the S&P BSE Sensex, was rose 141.51 points or 0.37% at 38,182.08. The Nifty 50 index added 56.10 points or 0.5% at 11,270.15. Both these indices witnessed profit selling in afternoon trade after rising over 1% in mid-morning trade.
Larsen & Toubro (up 4.81%), ICICI Bank (up 1.61%), HDFC (up 1.17%), HDFC Bank (up 0.67%) and Mahindra & Mahindra (up 4.75%) were major index movers.
The broader market outperformed the key benchmarks. The BSE Mid-Cap index rose 1.42% and the BSE Small-Cap index gained 1.47%.
Buyers outnumbered sellers. On the BSE, 1763 shares rose and 999 shares fell. A total of 169 shares were unchanged.
COVID-19 update:
Total COVID-19 confirmed cases worldwide stood at 19,862,599 with 731,349 deaths. India reported 6,34,945 active cases of COVID-19 infection and 44,386 deaths while 15,35,743 patients have been discharged, according to the data from the Ministry of Health and Family Welfare, Government of India.
Economy:
Prime Minister Narendra Modi on Sunday launched a Rs 1 lakh crore Agriculture Infrastructure Fund to support community farming assets across the country and said this would enhance India's ability to compete globally in the agriculture sector. The farm infrastructure will enable farmers get higher value for their produce as they will be able to store and sell at better prices as per market conditions, reduce wastage and increase processing and value addition. PM also released Rs 17,000 crore to nearly 8.5 crore farmers under the sixth installment of the PM-Kisan scheme.
AGR Case Hearing:
India's Supreme Court (SC) today (10 August) reportedly adjourned the hearing on telecom companies under insolvency to 14 August, while observing that the government must come prepared with a plan for recovery of dues from the telcos under insolvency.
While Bharti Airtel and Vodafone Idea had sought 15 years' time for repayment of dues, the government had suggested a time-frame of 20 years. The SC had on 20 July reserved its order on permitting telecom companies to make staggered payments over 15 years.
Shares of Bharti Airtel fell 0.40%) while Vodafone Idea rose 2.94% in today's trade.
Numbers to Watch:
The yield on 10-year benchmark federal paper rose to 5.895% as compared with 5.886% at close in the previous trading session.
In the foreign exchange market, the rupee edged higher against the dollar. The partially convertible rupee was hovering at 74.90, compared with its close of 74.93 during the previous trading session.
In the commodities market, Brent crude for October 2020 settlement rose 45 cents at $44.85 a barrel. The contract fell 69 cents, or 1.53% to settle at $44.40 a barrel in the previous trading session.
Foreign Markets:
Most markets in Europe and Asia edged higher on Monday, brushing off tensions between the US and China. Japanese and Singaporean markets were closed for public holidays.
Data showed Chinese factory deflation slowing in July. The producer price index (PPI) fell 2.4% from a year earlier in July, the National Bureau of Statistics (NBS) said in a statement on Monday. However, PPI rose 0.4% on a monthly basis, unchanged from the increase in June.
International investors are also keeping an eye on stimulus measures in the US. House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin on Sunday signaled a willingness to restart negotiations on a new coronavirus relief bill.
In US, the S&P 500 retreated from a near six-month high in choppy trading on Friday with data showing a sharp slowdown in US employment growth, while US-China tensions escalated with President Donald Trump's move to ban WeChat and TikTok.
US President Donald Trump signed two executive orders banning WeChat, owned by Chinese tech giant Tencent, and TikTok in 45 days' time while announcing sanctions on 11 Chinese and Hong Kong officials.
Trump signed a series of executive orders to extend unemployment benefits after talks with Congress broke down. The orders would provide an extra $400 per week in unemployment payments, less than the $600 per week passed earlier in the crisis.
Buzzing Segment:
Shares of eight defence companies rose by 2.94% to 10% after defence minister Rajnath Singh on Sunday announced import ban on 101 defence items.
Dynamatic Technologies (up 10%), Bharat Electronics (up 9.17%), Hindustan Aeronautics (up 8.74%), Astra Microwave Products (up 5.48%), Bharat Dynamics (up 4.16%), Premier Explosives (up 4.04%), BEML (up 3.42%) and Bharat Forge (up 2.94%) advanced.
The defence ministry has decided to put 101 items put on embargo to boost indigenisation of defence production. The embargo on imports is planned to be progressively implemented between 2020 and 2024. The deadline has been set for December 2025. The list of 101 embargoed items comprises some high technology weapon systems like artillery guns, assault rifles, corvettes, sonar systems, transport aircraft, light combat helicopters (LCHs), radars and many other items.
Stocks In Spotlight:
Cipla jumped 9.20% after the company's net profit rose 21% to Rs 578 crore on 9% increase in total revenue from operations to Rs 4,346 crore in Q1 FY21 over Q1 FY20. EBITDA margin stood at 24.1% as 30 June 2020 as against 22.7% as 30 June 2019. Cipla said that it has achieved zero net debt position led by strong collections and improved EBITDA.
India business grew by 16% YoY with strong growth across the three businesses. Overall South African business continued the strong growth momentum to deliver growth of 17% on a YoY basis in local currency; private business continues to outpace the market. The US business reported $135 million led by Albuterol ramp-up; 14% QoQ growth.
Divi's Laboratories surged 11.95% after the company's consolidated net profit jumped 81% to Rs 492 crore on a 47% increase in total income to Rs 1748 crore in Q1 FY21 over Q1 FY20. The company has been able to have near normal operations during the quarter and there was minimal impact due to COVID-19 pandemic.
The company further said that while a significant part of the ongoing capex programs has been completed during the last financial year, due to the COVID-19 pandemic, there has been delay in implementing the balance part of the capex programs taken up by the company due to non-availability of workmen of some contractors implementing the projects. It expects to complete the capex programs by second half of the financial year.
IPCA Laboratories surged 7.36%. The company's net profit surged to Rs 445.68 crore in Q1 June 2020 from Rs 129.43 crore in Q1 June 2019. Net total income increased by 41% YoY to Rs 1,546.49 crore during the quarter.
Abbott India jumped 5.01% after standalone net profit surged 54.2% to Rs 180.35 crore on 6.5% jump in net sales to Rs 1,064.27 crore in Q1 June 2020 over Q1 June 2019. Profit before tax (PBT) soared 29.7% to Rs 242.50 crore in Q1 June 2020 as against Rs 186.95 crore in Q1 June 2019. Current tax expense for the quarter dropped 10.2% to Rs 63.60 crore as against Rs 70.80 crore in Q1 June 2019.
REC gained 2.03% after the consolidated net profit rose 22.29% to Rs 1,845.30 crore on 20.44% rise in total income to Rs 8,450.36 crore in Q1 June 2020 over Q1 June 2019.
Meanwhile, the board of directors of REC approved the proposal of raising of funds through issue of unsecured/secured non-convertible bonds/debentures through Private Placement, upto an amount of Rs 85,000 crore, in one or more tranches, subject to approval of shareholders in this regard in the ensuing Annual General Meeting.
Birla Corporation tumbled 7.37% after consolidated net profit tanked 53.2% to Rs 65.77 crore on 35.1% decline in net sales to Rs 1,221.97 crore in Q1 June 2020 over Q1 June 2019.
Revenue for the quarter declined as sales by volume dropped 33.9% to 2.4 million tons (mt). EBITDA slumped 37% to Rs 252 crore in June 2020 as against Rs 402 crore in June 2019 amid severe disruptions in key markets and manufacturing centres due to the Covid-19 pandemic.
Affle (India) hit an upper circuit of 10% at Rs 2025.95 after the company's consolidated net profit jumped 42.3% to Rs 18.77 crore on 20% increase in net sales to Rs 89.77 crore in Q1 June 2020 over Q1 June 2019. EBITDA margin remained unchanged at 25% in Q1 June 2020.
The firm said that the growth has been broad-based coming from both cost per converted user (CPCU) business and non-CPCU business. The CPCU business continued its positive momentum delivering a total of 1.7 crore of converted users in Q1 FY21.
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