Key barometers sharply pared gains in early afternoon trade. The Nifty regained 11,100 mark after briefly slipping below that level. Weak domestic economic data spoiled investors sentiment.
At 12:27 IST, the barometer index, the S&P BSE Sensex, was up 58.59 points or 0.16% at 37,746.47. The Nifty 50 index was up 21.05 points or 0.19% at 11,116.40.
The broader market continued trading higher. The S&P BSE Mid-Cap index was up 0.55% while the S&P BSE Small-Cap index added 0.81%.
The market breadth was positive. On the BSE, 1490 shares rose and 917 shares fell. A total of 146 shares were unchanged.
Derivatives:
The NSE's India VIX, a gauge of market's expectation of volatility over the near term, fell 0.5% to 23.6950. The Nifty August 2020 futures were trading at 11,099.90, at a premium of 8.1 points compared with the spot at 11,091.80.
On the weekly index options front, the Nifty option chain for 6 August 2020 expiry showed maximum Call OI of 46.66 lakh contracts at the 11,200 strike price. Maximum Put OI of 38.69 lakh contracts was seen at 11,000 strike price.
On the monthly index options front, the Nifty option chain for 27 August 2020 expiry showed maximum Call OI of 22.22 lakh contracts at the 11,500 strike price. Maximum Put OI of 31.35 lakh contracts was seen at 11,000 strike price.
COVID-19 Update:
Total COVID-19 confirmed cases worldwide stood at 18,480,000 with 700,647 deaths. India reported 5,86,244 active cases of COVID-19 infection and 39,795 deaths while 12,82,215 patients have been discharged, according to the data from the Ministry of Health and Family Welfare, Government of India.
Economy:
The IHS Markit India Services Business Activity Index registered 34.2 in July, and despite rising slightly from 33.7 in June, signalled a further rapid reduction in service sector output. Moreover, the latest reading was among the lowest recorded in nearly 15 years of data collection, surpassed only by the unprecedented falls in the previous three months. With overall demand conditions severely muted, service providers made further job cuts in July
The Composite PMI Output Index, which measures combined services and manufacturing output, signalled a further rapid contraction in private sector business activity in July. Falling from 37.8 in June 2020 to 37.2 in July 2020.
Commenting on the latest survey results, Lewis Cooper, Economist at IHS Markit said, The coronavirus pandemic and subsequent introduction of "lockdown" measures continued to weigh heavily on the Indian service sector in July. Business activity and new orders dropped again, with the rates of decline remaining rapid overall. Panellists frequently reported temporary company closures and weak demand as a result of the pandemic. "With demand severely restricted, July data highlighted another round of job cuts, with the latest reduction the most marked on record, while firms' output expectations in the year ahead remained pessimistic. "July data, as a whole, provide no real signs that the downturn is slowing down. That's not surprising with lockdown measures still in force, but undoubtedly these will have to be loosened and companies reopen before the sector can move towards stabilisation. With such a prolonged and significant downturn, any substantial recovery will take many months, if not years. Latest IHS Markit estimates point to an annual contraction in GDP of over 6% in the year ending March 2021.
Stocks in Spotlight:
Sun Pharma Advanced Research Company jumped 7.33% to Rs 187.45 after the company reported a net profit of Rs 56.69 crore in Q1 FY21 as compared to a net loss of Rs 94.19 crore in Q1 FY20. SPARC has returned to profitability after reporting losses in the past eight quarters. The company had last reported a net profit of Rs 2.48 crore in the quarter ended on 31 March 2018. Net sales in the June quarter surged to Rs 185.45 crore from Rs 17.32 crore reported in the same period last year. Total expenses rose by 12.4% to Rs 129.42 crore in Q1 June 2020 from Rs 115.18 crore in Q1 June 2019.
PI Industries rose 4.20% to Rs 1,908.40 after consolidated net profit jumped 43.2% to Rs 145.50 crore on 40.60% rise in net sales to Rs 1,060.10 crore in Q1 June 2020 over Q1 June 2019. EBITDA surged 55% to Rs 236 crore in Q1 FY21 as against Rs 153 crore in Q1 FY20. EBITDA margin improved to 22% in Q1 FY21 as compared to 20% in Q1 FY20. Exports sales grew 23% to Rs 614 crore in Q1 June 2020 as against Rs 501 crore in Q1 June 2019 driven mainly by proactive raw material inventory management and capacity planning. Demand for key commercialised molecules remained strong. Shipments have also gained momentum.
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