Gains were capped as rising COVID-19 cases spooked investors. Introduction of new margin requirement in the cash segment from 1st September and geo-political tensions between India-China also impacted sentiment.
In the broader market, the S&P BSE Mid-Cap index rose 0.4% while the S&P BSE Small-Cap index climbed 0.74%. Both these indices outperformed the Sensex.
The market breadth was positive. On the BSE, 1482 shares rose and 1203 shares fell. A total of 185 shares were unchanged.
The Sebi's new margin rules came into effect from 1 September 2020. As per the new rule, it is mandatory for brokers to collect margins from investors upfront for any purchase or sale of shares. Failing to do so will attract a penalty. Sebi has introduced these measures to safeguard the interest of all investors.
Foreign portfolio investors (FPIs) bought shares worth Rs 990.57 crore, while domestic institutional investors (DIIs), were net sellers to the tune of Rs 657.48 crore in the Indian equity market on 2 September, provisional data showed.
Economy:
The IHS Markit India Services PMI rose sharply to 41.8 in August 2020 from 34.2 in July 2020. The index reached highest level since March, before the escalation of the global COVID-19 pandemic. Nevertheless, the reading is below the 50 which is a neutral value, indicating a continued decline in business activity.
Commenting on the latest survey results, Shreeya Patel, Economist at IHS Markit, said: "August highlights another month of challenging operating conditions in the Indian services sector. Sustained periods of closure and ongoing lockdown restrictions in both domestic and foreign markets have weighed heavily on the health of the industry. Output and new work continue to fall at solid rates, while restrictions meant that firms were often unable to complete projects. Backlogs of work accumulated to the greatest extent in almost 15 years of data collection. That said, the survey showed signs of a potential recovery. Business sentiment was neutral after being negative in the previous three months and employment fell at the softest pace since March. Additionally, there were efforts to protect profit margins, firms raised their selling prices to pass on higher expenses to customers and recover lost revenues after a period of closure."
COVID-19 Update:
Total COVID-19 confirmed cases worldwide stood at 25,938,122 with 861,679 deaths. India reported 8,15,538 active cases of COVID-19 infection and 67,376 deaths while 29,70,492 patients have been discharged, according to the data from the Ministry of Health and Family Welfare, Government of India.
Meanwhile, India continued to report one of the lowest COVID Case Fatality Rates (CFR) when compared to several other countries. While the global CFR stands at 3.3% as on date, the comparative figure for India is 1.76%, an official update noted today. The deaths per million population in India is one of the lowest in the world. While the global average is 110 deaths /million population, India is reporting 48 deaths /million population. The comparative figure for Brazil and the UK is 12 and 13 times higher, respectively.
Buzzing Segment:
Liquor stocks were in spotlight as unlock 4.0 guidelines to relax more coronavirus-induced curbs kicks in across the country. The Karnataka government has allowed pubs, bars and clubs to restart their activities in the state from 1 September.
United Breweries (up 5.26%), Globus Spirits (up 5%), United Spirits (up 1.86%), Associated Alcohols (up 1.58%) and Radico Khaitan (up 0.86%) advanced.
Stocks in Spotlight:
Lupin down 0.21%. The pharma company on Wednesday (2 September) announced the launch of Leflunomide tablets having received an approval from the United States Food & Drug Administration (US FDA) earlier. The drug maker said that the product would be manufactured at its Pithampur (Unit I) facility in Madhya Pradesh, India. Leflunomide is the generic equivalent of Arava tablets of Sanofi-Aventis U.S., and is indicated for the treatment of adults with active rheumatoid arthritis (RA).
Dr Reddy's Laboratories rose 2.07% after the company announced the launch of Methylphenidate Hydrochloride extended-release tablets USP, in the US market. The drug is a therapeutic equivalent generic version of Concerta brand approved by the US Food and Drug Administration (USFDA). The drug is used to treat attention deficit disorder (ADHD or ADD) in children and adults.
IndusInd Bank fell 1.54%. The bank has approved the allotment of 4.76 crore shares at Rs 524 per share on a preferential basis, for an aggregate consideration of Rs 2495.79 crore. Route One Offshore Master Fund was allotted 1.06 crore shares, Route One Fund I, L.P. was allotted 71.59 lakh shares, ICICI Prudential Life Insurance Company was allotted 1.62 crore shares, Tata Investment Corporation was allotted 57.25 lakh shares and AIA Company was allotted 78.30 lakh shares. Consequently, the issued, subscribed and paid-up equity share capital of the bank stands increased from the present level of Rs 693.56 crore to Rs 741.19 crore.
Coal India (CIL) fell 0.55%. The coal major's consolidated net profit tumbled 55.1% to Rs 2,079.60 crore on 26.8% decline in net sales to Rs 17,007.10 crore in Q1 FY21 over Q1 FY20. CIL's raw coal production declined 11.6% to 121.04 million tonne in Q1 June 2020 over Q1 June 2019. Coal offtake tumbled 21.55% to 120.42 million tonne during the period under review. The average realization declined 6.6% to Rs 1,415.49 per ton in Q1 June 2020 from Rs 1,515.50 per ton in Q1 June 2019.
TCS rose 1.55% after the IT major said it bagged a deal from ABB Information Systems for transforming its tech hosting infrastructure and cloud service management. The Swiss technology company identified TCS as its service partner as part of the organisation's efforts to rationalise its IT operations.
Vedanta declined 1.87%. The company's parent Vedanta Resources on Wednesday (2 September) said the book value of the equity share of its Indian subsidiary as per the delisting regulations is Rs 89.38 per share. The book value has been extracted from from the audited consolidated financial statements of the Vedanta.
Tata Motors rose 2.13% to Rs 153.60 after the company's total sales increased 13.4% to 36,472 vehicles in August 2020 from 32,166 units sold during August 2019. Total domestic sales jumped 21.6% to 35,420 units in August 2020 from 29,140 units in August 2019. While the total commercial vehicles sales declined by 28% to 17,889 units, the total passenger vehicles sales surged 154% to 18,583 in August 2020 over August 2019.
Page Industries fell 2.22% after the company reported net loss of Rs 39.55 crore in Q1 June 2020 compared with net profit of Rs 110.66 crore in Q1 June 2019. Lower Q1 PAT was primarily on account of lower revenues resulting in lower absorption of wages and fixed cost. Revenue from operations slumped 65.89% to Rs 284.80 crore in Q1 June 2020 over Q1 June 2019. This quarter witnessed the full impact of COVID-19 lockdowns. As of now, more than 80% of the firm's multi-brand outlets, 96% of exclusive brand outlets (EBOs) and 90% of large format stores are fully functional.
Global Markets:
The Dow Jones 30 Futures were trading 38 points lower, indicating a flat-to-negative start in US markets on Thursday.
European shares rose across the board on Thursday, ahead of the release of Euro Area Markit Purchasing Managers' Index (PMI) today.
Asian stocks ended mixed as investors reacted to regional economic data releases. China's Caixin/Markit services Purchasing Managing Index (PMI) came in at 54.0, compared with 54.1 in July.
Meanwhile, the final Jibun Bank Japan Services Purchasing Managers' Index (PMI) inched down to a seasonally adjusted 45.0 in August from 45.4 in the previous month, pressured by weakening new business and business expectations.
US stock market rose sharply on Wednesday, continuing a strong start to September for the market as traders took profits out of high-flying names like Apple and Tesla and snapped up shares in more beaten-down parts of the market. Both the S&P 500 and Nasdaq hit record highs, with the Nasdaq topping 12,000 for the first time.
The Dow Jones Industrial Average advanced 454.84 points, or 1.6%, to close at 29,100.50. It was the Dow's first close above 29,000 since February. The S&P 500 gained 1.5% to end the day at 3,580.84 while the Nasdaq Composite was higher by 1% at 12,056.44.
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