Domestic equity benchmarks ended near the day's high after a robust rally on Thursday. The barometer index, the S&P BSE Sensex, surged 724.02 points or 1.78% at 41,340.16. The Nifty 50 index jumped 211.80 points or 1.78% at 12,120.30.
Investors monitored the results of the US Presidential election as Joe Biden edged closer to victory. While the outcome of the presidential election was not clear, investors turned bullish on the prospect of a split government. The lack of a so-called "blue wave" will likely leave the Senate in Republicans' control while expanding their minority in the House. A split government stymies hopes for a massive fiscal relief bill, but it also staves off Democrats' efforts to raise corporate taxes and pursue new industry regulations.
The rally was broad based. The BSE Mid-Cap index rose 1.74% and the BSE Small-Cap index gained 1.70%. Both these indices underperformed the Sensex.
Buyers outpaced sellers. On the BSE, 1737 shares rose and 912 shares fell. A total of 179 shares were unchanged.
Index heavyweight Reliance Industries (RIL) rose 2.18% to Rs 1955.10. The Public Investment Fund (PIF) will invest Rs 9,555 crore for an equity stake of 2.04% into Reliance Retail Ventures (RRVL), a subsidiary of RIL. This investment values RRVL at a pre-money equity value of Rs 4.587 lakh crore (approximately $62.4 billion). The investment in RRVL follows PIF's earlier acquisition of a 2.32% stake in Jio Platforms, the digital services subsidiary of RIL.
COVID-19:
Total COVID-19 confirmed cases worldwide stood at 4,80,92,115 with 12,25,221 deaths. India reported 5,27,962 active cases of COVID-19 infection and 1,24,315 deaths while 77,11,809 patients have been discharged, according to the data from the Ministry of Health and Family Welfare, Government of India.
US Election 2020:
According to the latest count, Democratic Party candidate and former vice president Joe Biden has won 264 electoral votes while President Donald Trump has won 214 electoral votes. A candidate needs 270 electoral votes to win the election.
In the Senate, the Republican Party has so far won 48 seats while the Democratic Party has won 46 seats. Either party needs 51 seats for a majority in the Senate.
In the House, the Democratic Party has won 204 seats so far while the Republican Party has won 190 seats. Either party needs 218 seats for a majority in the House.
The US Dow Jones Futures were currently up 400 points and Nasdaq futures were up 330 points.
Meanwhile, the US Federal Reserve's rate-setting committee began meeting on Wednesday, hours after polls closed in the US presidential election which remains undecided. Traders will be watching FOMC's statement and Fed Chair Jerome Powell's press conference on Thursday to analyse central bank leaders' take on further stimulus measures.
Numbers to Watch:
The yield on 10-year benchmark federal paper fell to 5.861% as compared with 5.886% at close in the previous trading session.
In the foreign exchange market, the rupee edged higher against the dollar. The partially convertible rupee was hovering at 74.36, compared with its close of 74.76 during the previous trading session.
In the commodities market, Brent crude for January 2021 settlement fell 7 cents at $41.16 a barrel. The contract rose $1.52, or 3.83% to settle at $41.23 a barrel in the previous trading session.
Foreign Markets:
Shares in Europe and Asia rose across the board on Thursday as Democrat Joe Biden inched closer to winning the White House and Bank of England (BOE) shoveled in additional stimulus.
The UK's central bank on Thursday held interest rates steady as England enters a fresh period of national lockdown measures expected to hit the country's economic recovery. Along with maintaining its main lending rate at 0.1%, BOE's Monetary Policy Committee (MPC) also voted to expand its target stock of asset purchases to 895 billion pounds.
The US stock market finished session higher on Wednesday, 4 November 2020, adding to the strong gains posted in the previous session.
US service sector activity slowed by more than expected in the month of October, according to a report released by the Institute for Supply Management on Wednesday. The ISM said its services PMI dipped to 56.6 in October from 57.8 in September, although a reading above 50 still indicates growth in the service sector.
US trade deficit narrowed to $63.9 billion in September from a revised $67.0 billion in August, a report released by the Commerce Department on Wednesday. The narrower deficit came as the value of exports jumped by 2.6% to $176.4 billion, while the value of imports rose by 0.5% to $240.2 billion.
US private sector employment rose by 365,000 jobs in October after spiking by an upwardly revised 753,000 jobs in September, according to a report released by payroll processor ADP on Wednesday.
Buzzing Indian Segment:
Shares of the multiplex operators advanced after Maharashtra government allowed the cinema halls, theatres, multiplexes to open with 50% of seating capacity from Thursday, 5 November 2020.
PVR surged 9.52% at Rs 1220.95 while Inox Leisure jumped 4.31% at Rs 275.75.
The State Government in an order said multiplexes will be opened only in areas outside containment zone. The development comes after the Central Government issued order on 1 October 2020 permitting to open with upto 50% of their seating capacity, for which, standard operating procedure (SOP) will be issued by Ministry of Information & Broadcasting.
The Nifty Metal index surged 4.40% to 2,488.65. The index fell 0.31% on Wednesday.
SAIL (up 10.07%), NALCO (up 7.08%), Hindalco Industries (up 6.15%), NMDC (up 5.98%), Tata Steel (up 5.34%), Hindustan Copper (up 4.24%), JSW Steel (up 3.1%), Vedanta (up 2.56%), JSPL (up 1.98%) and Hindustan Zinc (up 0.72%) advanced.
Earnings Impact:
Lupin shed 0.91%. The drug major reported a consolidated net profit of Rs 211 crore in Q2 FY21 compared with net loss of Rs 127.1 crore in Q2 FY20. Net sales during the quarter declined by 1% year-on-year (YoY) to Rs 3781.80 crore. On the segmental front, revenue from the formulations business was at Rs 3407.9 crore (up 1.1% YoY) and revenue from the API business was at Rs 373.9 crore (up 22.5% YoY) in Q2 FY21.
In the formulations business, the revenue growth was led by North America (up 5.6% YoY) and Europe, Middle East, and Africa (EMEA) region (up 2% YoY). The biggest revenue contraction was witnessed in the ROW (Rest-of-the-World) market (down 27.4% YoY) followed by Growth Markets (down 3.7% YoY) and India (down 0.7% YoY). Investment in R&D was Rs 384.3 crore (10.2% of sales) for Q2 FY2021 compared to Rs 357.5 crore (10.3% of sales) for Q1 FY2021.
Pidilite Industries gained 1.43%. The company posted a 9.7% rise in consolidated net profit to Rs 356.44 crore in Q2 September 2020 from Rs 325 crore in Q2 September 2019. Consolidated net sales for Q2 September 2020 stood at Rs 1,880 crore, rising 4% from Rs 1,806 crore in Q2 September 2019.
Pidilite said the consumer and bazaar segment returned to growth reaching pre-COVID levels in most geographies. Growth was healthy in construction chemicals and DIY products. The Fevicol maker further said that B2B segment continued to face headwinds, however it showed signs of recovery in the latter part of the quarter. International subsidiaries have reported healthy double-digit constant currency growth and domestic subsidiaries continued to witness challenging business conditions. However, performance has continued to improve sequentially during the quarter, the company added.
BASF India soared 9.91%. The company's consolidated net profit surged to Rs 412.83 crore in Q2 September 2020 from Rs 2.32 crore in Q2 September 2019. Consolidated total income rose to Rs 2462.86 crore in Q2 September 2020 from Rs 2080.59 crore in Q2 September 2019.
HPCL jumped 9.91%. The board of the state-run oil marketing company approved a proposal to buyback shares worth upto Rs 2500 crore at a maximum buyback price of Rs 250 per equity share. At maximum buyback price and maximum buyback offer size, the indicative maximum number of equity shares to be bought back would be 10 crore equity shares, which is 6.55% of the total number of equity shares of the company.
HPCL reported its Q2 September 2020 result on Wednesday. The company's net profit surged 135.4% to Rs 2,247.75 crore on 14.16% decline in total income to Rs 52,590.08 crore in Q2 September 2020 over Q2 September 2019. Average gross refining margin during the six months ended 30 September 2020 was $2.58 per BBL (barrel of oil) as against $1.87 per BBL during the corresponding period of previous year.
SRF jumped 9.67%. The chemical maker reported 4.7% rise in consolidated net profit to Rs 315.20 crore in Q2 September 2020 from Rs 301 crore posted in Q2 September 2019. Consolidated net sales in Q2 September 2020 stood at Rs 2,062.98 crore, registering a 21% growth over Rs 1,702 crore in Q2 September 2019.
Bajaj Electricals rose 3.48%. The company posted a consolidated net profit of Rs 53.11 crore in Q2 September 2020 as against a net loss of Rs 36.54 crore in Q2 September 2019. Consolidated revenue from operations for Q2 September 2020 stood at Rs 1,217.71 crore, rising 11% from Rs 1095.65 crore in the year ago period.
The company's order book as on 1 October 2020 stands at Rs 1,474 crore, comprising of Rs 482 crore for Transmission Line Towers, Rs 602 crore for Power Distribution and Rs 390 crore for Illumination Projects.
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