Domestic equity benchmarks ended a volatile session with minor gains on Monday. The Nifty ended above 11,900 mark after briefly crossing 12,000 mark in morning trade. Trading was volatile as investors assessed the latest government measures announced by the finance minister Nirmala Sitharaman to stimulate consumer demand in the covid-hit economy.
The S&P BSE Sensex, gained 84.31 points or 0.21% at 40,593.80. The Nifty 50 index added 16.75 points or 0.14% at 11,930.95.
ITC (up 2.59%), Infosys (up 2.23%) and TCS (up 0.58%) boosted indices while Bharti Airtel (down 2.33%) and HDFC Bank (down 1.65%) dragged.
The Nifty has risen 6.31% in eight sessions. It has surged 1125.40 points, or 10.42% from its recent closing low of 10,805.55 on 24 September 2020.
The broader market declined. The BSE Mid-Cap index fell 0.48% and the BSE Small-Cap index lost 0.40%.
The market breadth was weak. On the BSE, 943 shares rose and 1746 shares fell. A total of 187 shares were unchanged.
Mumbai Power Outage:
Mumbai faced a power outage on Monday morning. The Brihanmumbai Electric Supply and Transport (BEST) Electricity, twitted that the electric supply in Mumbai was interrupted due to TATA's incoming electric supply failure. Power has now been restored in most areas of the city.
FM's Media Address:
Finance Minister Nirmala Sitharaman addressed a press conference on economic issues today. FM announced LTC (Leave Travel Concession) cash voucher scheme and special festival advance scheme for government employees with an aim to increase consumer spending.
Under LTC cash voucher scheme, government employees can opt to receive cash amounting to leave encashment + 3 times ticket fare, to buy something of their choice. The items bought should be those attracting GST of 12% or more. Only digital transactions are allowed, GST invoice is to be produced.
The special festival advance scheme, which was meant for non-gazetted government employees, is being revived as a one-time measure, for gazetted employees too. All central government employees can now get interest-free advance of Rs 10,000, in the form of a prepaid RuPay Card, to be spent by 31 March 2021. Employees can spend this on any festival.
Further, a special interest-free 50-year loan to states is being issued for Rs 12,000 crore capital expenditure. As per the scheme, Rs 200 crore each will be given to for 8 North East states; Rs 450 crore each to Uttarakhand and Himachal; and Rs 7,500 crore for remaining states, as per share of Finance Commission's devolution. All the above interest-free loans given to states are to be spent by 31 March 2021; 50% will be given initially, remaining upon utilization of first 50%.
Additional budget of Rs 25,000 crore (in addition to Rs 4.13 lakh crore given in Budget 2020-21) is being provided for capital expenditure on roads, defence, water supply, urban development and domestically produced capital equipment.
"We estimate that the measures announced today, for boosting consumer spending and capital expenditure, will boost demand by Rs 73,000 crores, to be spent by March 31, 2021," FM said.
Numbers to Watch:
The yield on 10-year benchmark federal paper fell to 5.9% as compared with 5.939% at close in the previous trading session.
In the foreign exchange market, the rupee edged lower against the dollar. The partially convertible rupee was hovering at 73.28, compared with its close of 73.16 during the previous trading session.
In the commodities market, Brent crude for December 2020 settlement fell 59 cents at $42.26 a barrel. The contract fell 49 cents, or 1.13% to settle at $42.85 a barrel in the previous trading session.
Foreign Markets:
Most European shares rose while Asian stocks ended higher on China optimism. However, rising coronavirus cases in Europe continued to cap gains.
China's Shanghai Composite spurted 2.64%. China on Sunday unveiled a new comprehensive reform plan for Shenzhen to push high-quality development of the special economic zone and create a model city for a great modern socialist country. The plan for 2020-2025 gives local authorities in Shenzhen a more direct and greater say in businesses, such as carrying out market-based economic reform, improving market and legal environments for global businesses, building a high-level open economy, providing service for people's livelihood, bettering the ecological environment, and urban space.
Meanwhile, China's policy makers acted to restrain a rally in the yuan by removing rules that made betting against the currency expensive. Financial institutions will no longer need to set aside cash when purchasing foreign exchange for clients through currency forwards, effective from Monday, according to a statement from the People's Bank of China on Saturday.
In Europe, the pandemic continues to cause widespread havoc with governments reportedly resorting to localized lockdowns to stem the spread of the virus. Spain imposed a state of emergency on Madrid and the U.K. government is set to announce further restrictions for England on Monday, the reports added.
The US stock market finished higher for third straight session on Friday, 9 October 2020, as investors cling to hope that a new round of coronavirus relief aid can be agreed upon between the White House and Congress for struggling US businesses and households. Meanwhile, growing expectations of a Democratic victory in next month's presidential election also supported risk sentiments.
Meanwhile, the second presidential debate between President Donald Trump and Democrat Joe Biden is officially off. The decision was made a day after the commission announced the debate would take place "virtually" because Trump had contracted the coronavirus. The third debate, scheduled for October 22 in Nashville, Tennessee, is still on.
Buzzing Indian Segment:
The Nifty IT index rose 1.67% to 22,202.10. The index has gained 17.02% in eleven sessions.
Mindtree (up 3.98%), HCL Technologies (up 1.21%), Mphasis (up 0.63%), Tech Mahindra (up 0.36%) and Persistent System (up 0.13%) advanced.
Meanwhile, IT major Wipro gained 0.92% ahead of its Q2 earnings today.
Stocks in Spotlight:
Vedanta slumped 20.60% to Rs 96.95 after the mining major on 10 October 2020 said that its delisting offer is deemed to have failed as per terms of delisting regulations. A total of 125.47 crore shares were validly tendered by public shareholders, which is less than the minimum number of offer shares required to be accepted by the promoters in order for the delisting offer to be successful.
The promoters sought to buy out 169.73 crore shares or 47.67% stake held by the public to delist the firm. Accordingly, the promoter group will not acquire any equity shares tendered by the public shareholders in the delisting offer and the equity shares of the company will continue to remain listed on the stock exchanges.
Shilpa Medicare slumped 8.64% to Rs 497.75 after the company announced that its Jadcherla facility in Telangana received a warning letter on 9 October 2020 from the US drug regulator. The company said that it will be engaging with the agency and is fully committed in resolving this issue at the earliest. It believes that the warning letter will have minimum impact of disruption of supplies and the existing revenues from operations of this facility.
GTPL Hathway surged 18.05% after the company posted a 58.94% rise in consolidated net profit to Rs 45.30 crore in Q2 September 2020 from Rs 28.50 crore registered in Q2 September 2019. Total income stood at Rs 584.70 crore in Q2 September 2020, registering a 6.75% decline from Rs 627.05 crore recorded in Q2 September 2019. The company's CATV subscription revenue rose 3% year on year (YoY) to Rs 267.7 crore. Broadband revenue stood at Rs 67 crore, rising 68% YoY.
HFCL fell 2.69%. The company reported 21.5% fall in consolidated net profit to Rs 51 crore on a 7.6% rise in net sales to Rs 1054.32 crore in Q2 September 2020 over Q2 September 2019. On the segmental front, revenue from turnkey contracts and services was at Rs 775.46 crore (down 2.6% YoY) while the revenue from telecom products was at Rs 278.86 crore (up 52.2% YoY).
New Listings:
Shares of UTI Asset Management Company (UTI AMC) settled at Rs 476.60 on the BSE, a discount of 13.97% over the initial public offer (IPO) price of Rs 554. The stock was listed at Rs 490.25, a discount of 11.51% to IPO price. The stock hit a high of Rs 530 and low of 471.10. On the BSE, 13.69 lakh shares were traded on the counter. The IPO of UTI AMC was subscribed 2.31 times. The issue was open between 29 September and 1 October 2020. The price band for the IPO was set at Rs 552-554 per share.
Shares of Mazagon Dock Shipbuilders settled at Rs 173 on the BSE, a premium of 19.31% over the IPO price of Rs 145. The stock was listed at Rs 216.25, a premium of 49.14% to IPO price. The stock hit a high of Rs 216.65 and low of 173. On the BSE, 35.97 lakh shares were traded on the counter. The IPO of Mazagon Dock Shipbuilders was subscribed 157.41 times. The issue was open between 29 September and 1 October 2020. The price band for the IPO was set at Rs 135-145 per share.
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