Key domestic benchmarks ended with strong gains on Friday, supported by rally in IT shares. The barometer S&P BSE Sensex rallied 329.17 points or 0.94% at 35,171.27. The Nifty 50 index added 94.10 points or 0.91% at 10,383. Positive global cues boosted sentiment.
The Nifty opened higher at 10,378.90 but succumbed to selling pressure in morning trade. The barometer displayed volatile moves for most part of the day. After hitting an intraday low of 10,311.25 in mid-afternoon trade, the index firmed up once again and touched 10,400 in late trade.
Besides IT pivotals, HDFC Bank (up 2.59%), Larsen & Toubro (up 2.05%) and Reliance Industries (up 1.43%) were other major index movers.
The broader market underperformed the benchmarks. The S&P BSE Mid-Cap index gained 0.27% while the S&P BSE Small-Cap index rose 0.19%.
The market breadth was positive. On the BSE, shares 1,651 rose and 1,069 shares fell. A total of 145 shares were unchanged.
RBI Board Meeting:
The central board of the Reserve Bank of India (RBI) met today through video conference. The governor and deputy governors briefed the board about the overall macroeconomic conditions - both domestic and global; financial sector situation; and the impact of various monetary, regulatory and other measures taken by the RBI in the context of the COVID-19 pandemic. The board deliberated on the current economic situation and the evolving challenges posed by the pandemic. The board also discussed RBI's activities during the period (July 2019-June 2020), the budget for the next accounting year July 2020 to March 2021 (aligned with the Government's financial year), other policy and operational matters.
Sebi Regulation:
The board of the Securities and Exchange Board of India (Sebi) on Thursday eased pricing framework for preferential allotment of shares, making it easier for listed companies to raise money. It has decided to allow companies to consider two-week average price for pricing preferential share issue. In addition, the regulator has also streamlined settlement regulations to make procedures faster and more effective. Besides, it has decided to amend insider trading norms. It also tweaked its takeover regulations to ensure that shareholders receive interest if open offers are delayed.
COVID-19 Update:
Total COVID-19 confirmed cases worldwide stood at 96,11,062 far with 4,89,343 deaths. India reported 1,89,463 active cases of COVID-19 infection and 15,301 deaths, according to the data from the Ministry of Health and Family Welfare, Government of India.
Numbers to Track:
The yield on 10-year benchmark federal paper rose to 5.917% compared with previous closing of 5.891% in the previous trading session.
In the foreign exchange market, the partially convertible rupee edged higher to 75.65 compared with its previous closing 75.655.
In the commodities market, Brent crude for August 2020 settlement rose 30 cents to $41.35 a barrel. The contract gained 1.8% or 74 cents to settle at $41.05 a barrel in the previous trading session.
MCX Gold futures for 5 August 2020 settlement rose 0.18% to Rs 48,029.
Global Markets:
Shares in Europe and Asia advanced on Friday despite rising new coronavirus infections. US equity indices closed higher in choppy trading on Thursday, with bank stocks soaring ahead of annual stress test results and helping to offset investor jitters over alarming increases in new coronavirus cases.
Apple Inc said it would close 14 stores in Florida again due to rising COVID-19 cases after other re-closures in Houston, Arizona, South Carolina, and North Carolina. Texas Governor Greg Abbott said he was halting his state's phased economic reopening in response to a jump in COVID-19 infections and hospitalizations.
The US Fed on Thursday said it will cap big bank dividend payments and halt share repurchases until at least the fourth quarter. It found lenders faced significant capital losses when tested against an economic downturn caused by the coronavirus pandemic.
The US economy shrank at a 5% rate in the first quarter with a much worse decline expected in the current three-month economic period because of the coronavirus pandemic. The Commerce Department reported on Thursday that the decline in the gross domestic product, the total output of goods and services, in the January-March quarter was unchanged from the estimate made a month ago.
Buzzing Indian Index:
The Nifty IT index jumped 4.05% to 14,994.65, snapping its two-day losing streak.
IT majors viz. Infosys (up 6.94%) and TCS (up 5.21%) boosted indices higher.
Among other IT shares, Mindtree, Wipro, Oracle Financial Services Software and Persistent Systems rose by between 3.54% to 2.64%.
IT shares were in demand after the global IT giant Accenture reported steady performance for the third quarter ended May 2020.
Accenture's revenues for the third quarter of fiscal 2020 were $11.0 billion, compared with $11.1 billion for the third quarter of fiscal 2019. The revenue came in at the top end of the company's guided range for quarterly revenues, which was approximately $10.65 billion to $11.05 billion. Outsourcing revenues grew by 5% YoY $5.0 billion during the quarter and outsourcing new bookings represented 44% of Accenture's total new bookings. It is outsourcing business where Indian IT sector reportedly has a greater presence. "For fiscal 2020, the company now expects revenue growth to be in the range of 3.5% to 4.5% in local currency, compared with 3% to 6% previously, the global IT services firm said. A domestic brokerage reportedly stated that Accenture did not face significant cancellations or pricing pressure. It added that work from Home (WFH) transition was smooth and had a very little revenue impact.
Earnings Impact:
Ashok Leyland fell 2.24% after the commercial vehicle manufacturer reported 97.46% decline in consolidated net profit to Rs 18.07 crore on a 48.23% slide in total income to Rs 5,128.20 crore in Q4 March 2020 over Q4 March 2019.
UCO Bank spurted 15.53% after the bank reported net profit of Rs 16.78 crore in Q4 March 2020 as against net loss of Rs 1552.03 crore in Q4 March 2019. Total income rose 8.74% to Rs 4511.21 crore in Q4 FY20 from Rs 4148.52 crore in Q4 FY19. The result was announced during market hours today, 26 June 2020. Provisions and contingencies fell 46.5% to Rs 1199.82 crore in Q4 March 2020 from Rs 2242.58 crore in Q4 March 2019. Provisions for non-performing assets fell 58.13% to Rs 1089.26 crore during the period under review. The non-performing loan provisioning coverage ratio is 85.46% as on 31 March 2020 as against 74.93% as on 31 March 2019. On the asset quality front, gross non-performing assets stood at Rs 19281.95 crore as on 31 March 2020 as against Rs 22139.65 crore as on 31 December 2019 and Rs 29888.33 crore as on 31 March 2019.
IDFC fell 3.16% after the company reported a consolidated net loss of Rs 240.48 crore in Q4 FY20 as against net loss of Rs 312.28 crore in Q4 FY19. Total income during the quarter declined 59.7% year-on-year (YoY) to Rs 53.54 crore.
Apollo Hospitals Enterprise declined 3.49%. The healthcare company's consolidated net profit surged 169% to Rs 219.36 crore on 17% increase in net sales to Rs 2,922.43 crore in Q4 March 2020 over Q4 March 2019. The company recorded sale of Apollo Munich Health Insurance Company to HDFC as an exceptional gain of Rs 198.30 crore in Q4 FY20 which aided net profit. Consolidated EBITDA (post Ind AS116) grew 36% to Rs 380.10 crore in Q4 FY20 from Rs 279.60 crore in Q4 FY19.
Container Corporation of India (CONCOR) gained 1.75%. The company's consolidated net profit slipped 9.4% to Rs 313.47 crore on 14.3% decline in net sales to Rs 1,584.31 crore in Q4 March 2020 over Q4 March 2019. Consolidated profit before tax (PBT) dropped 14% to Rs 410.88 crore in Q4 March 2020 as against Rs 477.94 crore in Q4 March 2019. Current tax expense skid 25.31% to Rs 67.60 crore in Q4 March 2020 as against Rs 90.51 crore in Q4 March 2019. The board has proposed final dividend of Rs 2.85 per equity share.
Engineers India jumped 7.32% after the company's consolidated net profit jumped 34.6% to Rs 119.69 crore on 39.8% increase in net sales to Rs 864.38 crore in Q4 FY20 over Q4 FY19. Profit before tax (PBT) in Q4 March 2020 stood at Rs 172.24 crore, up by 19.8% from Rs 143.75 crore in Q4 March 2019. Current tax expense jumped 35.2% to Rs 56.71 crore in the fourth quarter from Rs 41.95 crore incurred in the corresponding period last year.
Stocks in Spotlight:
Vedanta rose 1.21% to Rs 109.95 after the firm said it has received shareholders' nod for delisting the company. While 93.34% of the votes were in favour of the proposal, 6.65% were against it, the filing said. The proposal required approval of at least 66.7% of minority shareholders.
Last month, the company had sought shareholders' nod to delist after Anil Agarwal-controlled Vedanta Resources (VRL) offered to buyout about 49.9% of public shareholding at Rs 87.5 per share. Currently, promoters hold 50.14% in Vedanta.
Sterling and Wilson Solar (SWSL) hit an upper circuit limit of 5% after the company said its US subsidiary has bagged a contract worth $99 million to construct a solar project in the United States of America. Construction for the project will commence in September 2020 and the project will be commissioned by November, next year, the company added.
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