Sensex, Nifty pare gains; Nifty holds 11,300 mark

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Key benchmark indices sharply pared gains in afternoon trade as profit booking emerged at higher levels. Rising coronavirus cases spooked investors. The Nifty held above 11,300 mark.

The barometer index, the S&P BSE Sensex rose 51.10 points or 0.13% at 38,361.59. The Nifty 50 index was up 22.70 points or 0.20% at 11,323.15.

The broader market outperformed the benchmark indices. The S&P BSE Mid-Cap index rose 0.30%. The S&P BSE Small-Cap index gained 0.65%.

The market breadth was positive. On the BSE, 1,430 shares rose and 1,131 shares fell. A total of 145 shares were unchanged. In Nifty 50 index, 29 stocks advanced while 21 stocks declined.

Foreign portfolio investors (FPIs) bought shares worth Rs 416.28 crore, while domestic institutional investors (DIIs), were net sellers to the tune of Rs 763.54 crore in the Indian equity market on 13 August 2020, provisional data showed.

COVID-19 Update:

Total COVID-19 confirmed cases worldwide stood at 2,09,19,243 with 7,59,582 deaths. India reported 6,61,595 active cases of COVID-19 infection and 48,040 deaths while 17,51,555 patients have been discharged, according to the data from the Ministry of Health and Family Welfare, Government of India.

Economy:

India's inflation, based on the Wholesale Price Index (WPI), declined 0.58% in July, against 1.81% drop in June, according to the government data.

India's retail inflation stood at 6.93% for the month of July as against 6.23% in the month-ago period, data released yesterday showed. The consumer price index (CPI)-based inflation rate for June has been revised from 6.09% to 6.23%.

Gainers & Losers:

Coal India (up 3.41%), JSW Steel (up 2.94%), Zee Entertainment Enterprise (up 2.77%), Hindalco Industries (up 2.34%) and Sun Pharmaceutical Industries (up 2.24%) were major gainers in Nifty 50 index.

Tata Motors (down 1.94%), Maruti Suzuki India (down 1.59%), Axis Bank (down 1.35%), HCL Technologies (down 1.05%) and PowerGrid Corporation of India (down 0.98%) were major losers in Nifty 50 index.

Results Today:

Hindalco Industries (up 2.94%) and NTPC (up 0.92%) will announce their quarterly earnings today.

Berger Paints India (up 0.76%), Dilip Buildcon (up 0.94%), Glenmark Pharmaceuticals (up 3.62%), IIFL Wealth Management (down 1.79%), Indian Bank (up 2.21%), MRF (up 0.57%), Nesco (up 8.30%), United Breweries (down 0.47%) and VRL Logistics (down 0.91%) are some of the non-Nifty companies that will announce their quarterly results today.

Earnings Impact:

Hero MotoCorp rose 0.44%. The two-wheeler major's standalone net profit slumped 92% to Rs 61.31 crore on a 63% decline in net sales to Rs 2,971.54 crore in Q1 FY21 over Q1 FY20. The company sold 5.65 lakh units in Q1 June 2020, which were lower by 69.3% as compared to 18.42 lakh units sold in Q1 June 2019. EBITDA margin was at 3.6% as on 30 June 2020 as compared to 14.4% as on 30 June 2019.

Niranjan Gupta, chief financial officer (CFO) of Hero MotoCorp, said: "We are already seeing green shoots, and expect them to sustain and get stronger as we move towards the festive season. Our July month sales were more than 95% of pre-COVID sales and we do see positive trend moving forward."

Eicher Motors declined 4.24% after the automobile major posted a consolidated net loss of Rs 55.18 crore in Q1 June 2020 as compared to a consolidated net profit of Rs 451.77 crore in Q1 June 2019. Net sales for Q1 FY21 stood at Rs 809.16 crore, falling 65.7% from Rs 2,361.24 crore reported in the same period last year. Eicher's Royal Enfield sold 58,383 motorcycles in Q1 June 2020, a decline of 68% from 1,81,966 motorcycles sold over the same period last year. The company sold 2,129 units of commercial vehicles in Q1 June 2020 as compared to 13,331 units sold in the corresponding quarter last year.

Vinod K. Dasari, the chief executive officer (CEO) of Royal Enfield, commented, "From a business point of view the initial consumer sentiment over the last two months has been very encouraging. Demand from semi-urban and rural towns have picked up well, and our network of studio stores across the country have been able to cater to this demand. There is pent up demand and we are optimistic about stronger recovery once supply chain stabilizes."

Bharat Petroleum Corporation (BPCL) slipped 0.55%. The PSU OMC reported a 93% jump in standalone net profit to Rs 2,076.17 crore on 41% decline in revenue from operations to Rs 50,616.92 crore in Q1 June 2020 over Q1 June 2019. BPCL's profit before tax came 2,926.17 crore in Q1 June 2020, a rise of 116% over Rs 1,351.78 crore in Q1 June 2019. Total tax expense for quarter ending June 2020 stood at Rs 850 crore, a 207% rise against Rs 276.66 crore in quarter ending June 2019. The average Gross Refining Margin (GRM) of BPCL during the quarter ended June 2020 fell 86% to $0.39 per barrel from $2.81 per barrel posted in April - June 2019.

Tata Steel advanced 3.36%. The steel major reported consolidated net loss of Rs 4,648.13 crore in Q1 June 2020 as against net profit of Rs 714.03 crore in Q1 June 2019. Net sales slumped 32.7% to Rs 23,812.50 crore in Q1 FY21 over Rs 35,382.16 crore in Q1 FY20. Tata Steel's operating level has recovered to 90% by end June 2020 and has since then increased further to 95%, catering to both domestic and export customers. With the improvement in the domestic market, Tata Steel has been reducing its exports ratio. The price outlook in both export and domestic market continues to improve on month on month basis and the current quarter demand has been much better than a typically slow monsoon quarter in the past.

3M India skid 3.90% after the company reported consolidated net loss of Rs 42.52 crore in Q1 June 2020 as compared to net profit of Rs 90.13 crore in Q1 June 2019. Total income fell 56.51% to Rs 352.59 crore in Q1 June 2020 over Q1 June 2019.

Shriram Transport Finance's rallied 2.73% after standalone net profit tanked 49.5% to Rs 320.06 crore on 2.8% increase in total income to Rs 4,144.70 crore in Q1 June 2020 over Q1 June 2019. Profit before tax (PBT) slumped 56.1% to Rs 430.58 crore in Q1 June 2020 as against Rs 981.58 crore in Q1 June 2019. Tax expense for the quarter tanked 68.18% to Rs 110.52 crore as against Rs 347.33 crore in Q1 June 2019. Net interest income (NII) for the first quarter ended 30 June 2020 declined 6.51% to Rs 1,820.35 crore as against Rs 1,947.02 crore in the same period of the previous year. Total Asset under Management as on 30 June 2020 stands at Rs 1,11,756.37 crore as compared to Rs 1,06,343.48 crore as on 30 June 2019 and Rs 1,09,749.24 crore for the year ended 31 March 2020.

Global Markets:

European shares opened lower ahead of second quarter Euro Zone GDP figures. Meanwhile, Asian market traded higher on Friday as investors shrugged off concerns over the US coronavirus stimulus bill.

The United Kingdom has imposed a new 14-day quarantine period on all arrivals from France from Saturday due to the rising rate of coronavirus cases in the country. The Netherlands, Malta and Monaco were also added to the quarantine list, which already featured Spain and Belgium. British Prime Minister Boris Johnson and new Irish Taoiseach Micheál Martin struck an deal over the possibility of a post-Brexit free trade agreement following a first meeting on Thursday.

The US stock market finished session lower on Thursday, 13 August 2020, as investors elected to book profit after hitting 6-month highs yesterday. Meanwhile, selloff fueled further on concern over a stalled US economic relief deal and as weekly jobless claims dipped below 1 million for the first time in four months, though they remain at historically high levels.

Initial claims for state unemployment benefits decreased to 963,000 for the week ended Aug. 8, the lowest level since mid-March but the expiration of a $600 weekly jobless supplement at the end of July likely contributed to the decline. Data last week showed the economy has regained only 9.3 million jobs of the 22 million jobs lost between February and April, indicating that it faces a long road to reach pre-pandemic levels.

Meanwhile, lawmakers in the United States appear to be at an impasse over the next round of coronavirus aid and an agreement on legislation and passage of a bill looks to be weeks away.

US House Speaker Nancy Pelosi has said she will not restart talks with Republicans on the matter until they increase their aid offer by $1 trillion. White House economic advisor Larry Kudlow reportedly said that the administration and Democrats were at a “stalemate.”



Source: Capitalmarket.com