Domestic equity benchmarks ended at record high levels on Tuesday. Sentiment was upbeat after US drug maker Pfizer said large-scale trials of its coronavirus vaccine showed it was more than 90% effective in preventing infection. Banks, financial services, hospitality and aviation stocks saw healthy buying interest. IT and pharma shares succumbed to profit selling.
The barometer index, the S&P BSE Sensex, rallied 680.22 points or 1.60% at 43,277.65. The Nifty 50 index spurted 170.05 points or 1.36% at 12,631.10. Both the indices have attained record closing levels today.
The Sensex hit a record high of 43,316.44 while the Nifty hit a record high of 12,643.90 in late trade today. The Sensex jumped 9.25% and the Nifty climbed 8.49% in seven consecutive sessions.
The broader market declined. The BSE Mid-Cap index fell 0.10% and the BSE Small-Cap index lost 0.48%.
The market breadth was negative. On the BSE, 1227 shares rose and 1484 shares fell. A total of 180 shares were unchanged.
HDFC (up 5.62%), HDFC Bank (up 3.93%), ICICI Bank (up 4.58%) and Reliance Industries (up 1.67%) catapulted the main indices higher.
Infosys (down 3.98%), TCS (down 2.79%), HCL Technologies (down 5.36%) and Tech Mahindra (down 5.73%) dragged.
COVID-19:
Total COVID-19 confirmed cases worldwide stood at 5,09,13,451 with 12,63,089 deaths. India reported 5,01,214 active cases of COVID-19 infection and 1,27,059 deaths while 79,63,457 patients have been discharged, according to the data from the Ministry of Health and Family Welfare, Government of India.
Bihar Elections:
The National Democratic Alliance (NDA) is surging ahead of the Mahagathbandhan (MGB) in Bihar polls on Tuesday as the counting of votes for the 243 assembly seats is underway. After initial trends showed a close neck-and-neck contest between the two rival alliances, the incumbent Nitish Kumar-led Janata Dal United (JDU) and Bharatiya Janata Party (BJP) alliance is seen leading on 130 seats, well above the halfway mark of 122.
Numbers to Watch:
The yield on 10-year benchmark federal paper rose to 5.918% as compared with 5.876% 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 74.18, compared with its close of 74.15 during the previous trading session.
In the commodities market, Brent crude for January 2021 settlement rose 51 cents at $42.91 a barrel. The contract rose $2.95, or 7.48% to settle at $42.40 a barrel in the previous trading session.
Foreign Markets:
The US Dow Jones Futures were up 183 points, indicating a positive start in Wall Street today.
European shares rose across the board while most Asian stocks advanced on Tuesday as investors in the region reacted to positive developments overnight on the coronavirus vaccine front.
China's Shanghai Composite fell 0.4%. Authorities in China's financial hub of Shanghai have quarantined 186 people and conducted coronavirus tests on more than 8,000 after a freight handler at the city's main international airport tested positive for the virus.
Meanwhile, China's consumer price index rose 0.5% in October from a year ago, according to data from the country's National Bureau of Statistics. The producer price index for China declined 2.1% year-on-year in October, unchanged from a 2.1% drop in September.
In US, the Dow Jones Industrial Average and S&P 500 jumped on Monday as investors cheered trial data from drugmakers Pfizer and BioNTech indicating their Covid-19 vaccine is more than 90% effective. However, the Nasdaq Composite closed lower as traders rotated out of high-flying technology names that outperformed during the pandemic into more beaten-down value stocks.
While the vaccine study is still ongoing and requires approval, Pfizer and BioNTech said they had found no serious safety concerns so far and expected to seek U.S. emergency use authorization later this month.
The 90% effective rate from Pfizer and Germany's BioNTech was better than what the market was expecting. Dr. Anthony Fauci, the director of the National Institute of Allergy and Infectious Diseases, has said that a vaccine that was 50% to 60% effective would be acceptable.
Buzzing Segments:
Shares of hospitality companies advanced as progress with Covid-19 vaccine lifted investors' sentiment.
Indian Hotels Company (up 14.65%), Lemon Tree Hotels (up 10%), EIH (up 7.60%), India Tourism Development Corporation (up 5.3%), Chalet Hotels (up 3.24%) and Delta Corp (up 3.72%) advanced.
Investors hoped that a vaccine may revive the travel and tourism business across the world. The Covid-19 pandemic shook the hotel industry particularly hard, and turned many hotel businesses upside down.
The Nifty Pharma index fell 4.33% to 11,168.90.
Cadila Healthcare (down 6.09%), Lupin (down 6.05%), Cipla (down 5.37%), Divis Laboratories (down 4.49%), Torrent Pharmaceuticals (down 4.45%), Dr. Reddy's Laboratories (down 3.37%), Sun Pharmaceutical Industries (down 3.36%), Aurobindo Pharma (down 3.11%), Biocon (down 2.28%) and Alkem Laboratories (down 2.16%) slumped.
Pfizer rose 2.66% after the company's US-based parent said that its vaccine candidate against COVID-19 achieved success in first interim analysis from Phase 3 study.
The scrip jumped 19.46% to hit the day's high at Rs 5875 in early trade. Pfizer Inc. and BioNTech SE announced their mRNA-based vaccine candidate against SARS-CoV-2 has demonstrated evidence of efficacy against COVID-19 in participants without prior evidence of SARS-CoV-2 infection, based on the first interim efficacy analysis conducted on 8 November 2020 by an external, independent Data Monitoring Committee (DMC) from the Phase 3 clinical study.
Earnings Impact:
GAIL (India) jumped 4.28%. The state-owned natural gas processing and distribution company's consolidated net profit slipped 8.51% to Rs 1,068.16 crore on 24.32% drop in revenue from operations to Rs 13,809.86 crore in Q2 September 2020 over Q2 September 2019. Profit before tax (PBT) skid 16.08% to Rs 1,432 crore in Q2 September 2020 as against Rs 1,706.47 crore in Q2 September 2019. Total tax expense for the quarter declined 32.48% to Rs 363.84 crore as against Rs 538.89 crore in Q2 September 2019.
Hindalco Industries fell 1.26% after the company's consolidated net profit tumbled 60.3% to Rs 387 crore on 5.3% rise in revenue from operations to Rs 31,237 crore in Q2 FY21 over Q2 FY20. The company said that there was a one-time impact of Rs 1,398 crore on account of the divestiture of the Lewisport unit of Aleris. EBITDA jumped 31.9% to Rs 5,171 crore in Q2 September 2020 from Rs 3,918 crore in Q2 September 2019.
Hindalco Industries' U.S. subsidiary Novelis Inc. reported a net loss attributed to its common shareholder of $37 million, down 130% versus the prior year due to a $181 million net loss associated with discontinued operations. Net sales increased 4% from the prior year period to $3 billion for the second quarter of fiscal 2021, primarily driven by an eleven percent increase in shipments, partially offset by lower average aluminum prices.
Motherson Sumi Systems jumped 3.58%. The auto component maker's consolidated net profit fell 12.2% to Rs 337.58 crore on 1.98% decline in total revenues from operations to Rs 14,957.21 crore in Q2 FY21 over Q2 FY20. Profit before tax in Q2 September 2020 stood at Rs 553.58 crore, up by 0.8% from Rs 549.31 crore in Q2 September 2019. Total tax expense during the quarter declined by 3.5% year-on-year (YoY) to Rs 165.65 crore. With improved operating performance and debt repayments, net debt reduced from Rs 9,083 crore to Rs 7,512 crore between 30 June 2020 to 30 September 2020. Further liquidity also enhanced from Rs 10,037 crore to Rs 11,629 crore between 30 June 2020 to 30 September 2020. The company said that new orders worth Rs 14,694 crore (euro 1.7 billion) were received while orders worth Rs 19,016 crore (euro 2.2 billion) were executed during H1 FY20-21. Total order book, at SMRP BV level, was Rs 113,234 crore (euro 13.1 billion) for H1 FY20-21.
Mahindra & Mahindra (M&M) rose 0.54% after the company reported 88% decline in net profit to Rs 162 crore in Q2 FY21 from Rs 1355 crore in Q2 FY20. M&M's profit before tax in Q2 September 2020 stood at Rs 587 crore, down by 67% from Rs 1758 crore in Q2 September 2019. Revenues rose by 6% year-on-year (YoY) to Rs 11,590 crore during the quarter. The company incurred an exceptional expenditure of Rs 1,149.46 crore in Q2 September 2020 towards impairment provision for certain long-term investments. The results include the combined earnings of M&M and Mahindra Vehicle Manufacturers (MVML), which is a manufacturing unit of M&M. While total vehicle sales declined by 21% to 87,332 units, tractor sales jumped by 31% to 89,597 units in Q2 FY21 over Q2 FY20. Total exports (vehicles and tractors) during the September quarter tumbled 33% YoY to 7,103 units.
JK Cement fell 2.42%. The cement maker's consolidated net profit jumped 170% to Rs 221.56 crore in Q2 September 2020 from Rs 81.9 crore in Q2 September 2019. Consolidated revenue from operations stood at Rs 1634.4 crore in Q2 September 2020, rising 24% year on year from Rs 1317.63 crore in Q2 September 2019.
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