Key benchmark indices ended near the day's high after stellar rally on Monday, supported by positive global shares. Easing crude oil prices and strengthening rupee also boosted sentiment. IT major Infosys was the biggest contributor to index gains. The stock got a boost after encouraging Q3 numbers.
The barometer BSE S&P Sensex rose 259.97 points or 0.62% to 41,859.69, as per the provisional closing data. The Nifty 50 index gained 72.80 points or 0.59% to 12,329.60, as per the provisional closing data.
In the broader market, the S&P BSE Mid-Cap index rose 0.87% while the S&P BSE Small-Cap index gained 0.95%. Both these indices outperformed the Sensex.
The market breadth favored the buyers. On the BSE, 1545 shares rose and 984 shares fell. A total of 182 shares were unchanged. In Nifty 50 index, 36 stocks advanced while 14 stocks declined.
Macroeconomic data:
India's industrial output (IIP) grew 1.8% in November against a contraction of 3.8% in October, according to the data released by the government. Manufacturing output, which accounts for more than three-fourths of the entire index, grew 2.7% in November, against a contraction of 2.1% in October. Mining production grew 1.7% against a fall of 8% a month ago.
The growth of primary products fell 0.3% against a fall of 6% last month. Production of capital goods in November saw contraction of 8.6% against a fall of 21.9% in October. Consumer durables fell 1.5% in November against a fall of 18% last month. Electricity production fell 5% against a contraction of 12.2% in October.
Buzzing Index:
The Nifty IT index rose 1.66% to 16,225.10, extending gains for second straight session. The index has risen 1.88% in two sessions.
Oracle Financial Services Software (up 3.6%), Wipro (up 1.33%), MindTree (up 1.23%), Tech Mahindra (up 1.2%), HCL Technologies (up 1.12%) and MphasiS (up 0.3%) advanced.
TCS (down 1.1%), Hexaware Technologies (down 0.79%) and Persistent Systems (down 0.4%) declined.
Infosys surged 4.92% to Rs 774.60. On a consolidated basis, net profit rose 10.9% to Rs 4,457 crore on 2% increase in revenues to Rs 23,092 crore in Q3 December 2019 over Q2 September 2019.
The company increased FY20 revenue guidance. The revised guidance is 10.0%-10.5% in constant currency higher than 9-10% estimated earlier. It maintained FY20 operating margin guidance range of 21%-23%.
Infosys said that its audit committee has found no evidence of financial impropriety or executive misconduct, giving a clean chit to CEO Salil Parekh and CFO Nilanjan Roy who were accused by anonymous whistleblowers of rigging the company's balance sheet.
Stocks in Spotlight:
Avenue Supermarts rose 2.09% to Rs 1916. On a consolidated basis, the company's net profit jumped 55.3% to Rs 384.04 crore in Q3 December 2019 compared with net profit of Rs 247.25 crore in Q3 December 2018. Profit after tax (PAT) margin improved to 5.6% in Q3 December 2019 from 4.5% in Q3 December 2018. Net sales rose 24.4% to Rs 6808.93 crore in Q3 December 2019 from Rs 5474.27 crore in Q3 December 2018.
Tata Steel advanced 1.74% to Rs 495. The company's wholly-owned Netherlands- based subsidiary, Tata Steel Netherlands Holdings BV (TSNBHV), said that it has executed agreementsfor the refinancing of its bank debt. TSNBHV has raised term loan facilities of euro 1.75 billion from 19 banks. The fresh arrangement will enable the standalone European business to have a more robust balance sheet.
Yes Bank slumped 5.92% to Rs 42.15. The private sector bank said that its board have approved raising of funds upto Rs 10,000 crore through a mix of equity and debt and decided not to proceed with the offer from Erwin Singh Braich-SPGP Holdings. The bank will hold extra-ordinary general meeting to obtain shareholders' approval for fund raising.
Adani Enterprises rose 2.61% to Rs 214.15 after Siemens AG said it will remain involved in a controversial Adani coal mining project in Australia. Germany's Siemens AG on 10 December 2019 signed the contract to supply signaling systems for a rail link between the Adani Carmichael coal mine and a port. The contract is worth about $20 million to Siemens.
Climate activists wanted Siemens to quit the mine project because emissions from coal-fired power plants contribute to global warming. Opposition has worsened in the wake of Australia's recent devastating bushfires.
Tata Elxsi jumped 4.96% to Rs 889.35 after the company reported a 51.43% jump in net profit to Rs 75.42 crore in Q3 December 2019 as against Rs 49.80 crore reported in Q2 September 2019. Revenue from operations rose 9.75% to Rs 423.43 crore on QoQ basis.
Tata Chemicals rose 2.22% to Rs 704.90 while Tata Global Beverages added 3.38% to trade at Rs 352.85. Both the stocks have hit their respective 52-week highs in intraday trade today.
The National company Law Tribunal (NCLT), Mumbai Bench, vide its order dated 10 January 2020 had sanctioned the Scheme of Arrangement between Tata Chemicals and Tata Global Beverages and their respective shareholders and creditors for the demerger of the consumer products business consisting of the business of sourcing, packaging, marketing, distribution and sales of vacuum evaporated edible common salt for human consumption, spices, protein foods and certain other food and other products from Tata Chemical to Tata Global Beverages.
In May last year, Tata Group had decided to demerge consumer business of Tata Chemicals and merge it with Tata Global Beverages. Tata Global Beverages will be renamed as Tata Consumer Products. The management said the combination of the two consumer-focused businesses will benefit both sets of shareholders who will be able to participate in a larger business poised to grow their share of the foods & beverages market with a broader exposure to the attractive and fast growing FMCG sector.
Edelweiss Financial Services gained 3.02% to Rs 109.20 after chairman Rashesh Shah clarified that the company has no links or transactions with Capstone Forex and all allegations regarding the violation of FEMA guidelines are false. As per the company's filing, Rashesh Shah said that he was unable to meet the Directorate of Enforcement (ED) in person. The company, however, sent a senior authorised representative to attend the ED with the requisite information.
Media reports suggested that Sanjay Nathalal Shah, a chartered accountant and an independent director of Edelweiss Group had been accussed of having connections with Capstone Forex. Shah further clarified that he has no association with the Edelweiss Group.
Foreign Markets:
Most shares in Europe and Asia advanced ahead of US-China trade deal that will be signed this week on 15 January 2020.
This week Wednesday, U.S. President Donald Trump and Chinese officials are due to sign the long-awaited phase one trade deal between both countries. The deal will involve some tariff relief, increased Chinese purchases of U.S. agricultural goods and changes to intellectual property and technology rules. Meanwhile, Washington and Beijing have agreed to hold semi-annual talks in targeting to resolve disputes and push for reforms.
In US, stocks ended lower on Friday, after the Dow briefly topped the 29,000 milestone, with investor euphoria over recent record highs deflated by data showing slower-than-expected US jobs and wage growth in December.
The US Labor Department said the US economy added 145,000 new jobs in December less than the 266,000 gain in the prior month. The unemployment rate, meanwhile, held near a 50-year low at 3.5%.
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