Market rises for 5th day led by banks, IT shares

The market extended its winning run for the fifth consecutive session on Tuesday. The barometer S&P BSE Sensex gained 187.24 points or 0.51% at 36,674.52. The Nifty 50 index added 36 points or 0.33% at 10,799.65.

Easing of lockdown curbs, impressive recovery rate from coronavirus and decent Q1 operating performance by banks boosted sentiment. Progress of monsoon across the country also cheered investors. Surplus rainfall is good for kharif season, sowing for which is currently underway in the country.

In the five consecutive sessions, the Nifty has risen 4.83% and the Sensex has risen 5.04%.

On Tuesday, the Nifty opened higher at 10,802.85. It soon reversed trend and hit an intraday low of 10,689.70 in mid-morning trade. The index firmed up once again and briefly crossed 10,800 in mid-afternoon session.

In the broader market, the BSE Mid-Cap index rose 0.58% and the BSE Small-Cap index gained 0.57%. Both these indices outperformed the Sensex.

The market breadth was negative. On the BSE, 1339 shares rose and 1379 shares fell. A total of 163 shares were unchanged on the BSE.

COVID-19 update:

India reported 2,59,557 active cases of COVID-19 infection and 20,160 deaths while 4,39,947 patients have been cured, according to the data from the Ministry of Health and Family Welfare, Government of India. Total coronavirus cases worldwide stood at 11,622,741 with 538,079 deaths so far, according to data from Johns Hopkins University.


The World Bank and the Government of India signed the $750 million agreement for the MSME Emergency Response Programme to support increased flow of finance into the hands of micro, small, and medium enterprises (MSMEs), severely impacted by the COVID-19 crisis. The World Bank's MSME Emergency Response Programme will address the immediate liquidity and credit needs of some 1.5 million viable MSMEs to help them withstand the impact of the current shock and protect millions of jobs. This is the first step among a broader set of reforms that are needed to propel the MSME sector over time.

Numbers to Watch:

The yield on 10-year benchmark federal paper fell to 5.793% as compared with 5.836% 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 74.9350, compared with its close of 74.6850 during the previous trading session.

In the commodities market, Brent crude for September 2020 settlement fell 54 cents at $42.56 a barrel. The contract fell 4 cents, or 0.09% to settle at $43.10 a barrel in the previous trading session.

Foreign Markets:

Shares in Europe and Asia declined on Tuesday amid profit booking after a recent sharp upmove. German industrial production rose to 7.8% in May, following a 17.5% contraction in April.

In US, stocks finished sharply higher Monday, with the Nasdaq scoring a record close, as a rebound in U.S. services industry activity in June and expectations of a revival in China's economy boosted optimism, helping investors look past a surge in new coronavirus cases in the United States. The gains came despite a record surge in new COVID-19 cases in 16 states in the United States this month that could further hamper reopening plans and create a risk to the economic recovery. rose 5.8% to close at $3,057 a share, topping the $3,000 level for the first time in its history and clinching a $1.5 trillion valuation.

The Institute for Supply Management's (ISM) non-manufacturing activity index almost returned to its pre-COVID-19 pandemic levels last month, jumping to a reading of 57.1, the highest since February, from 45.4 in May, a report showed.

Buzzing Indian Segments:

Shares of hotel companies rose after the Maharashtra government allowed hotels to reopen with 33% capacity from 8 July. Kamat Hotels (up 19.86%), Chalet Hotels (up 10%), Lemon Tree Hotel (up 4.85%), Indian Hotels Company (up 4.48%), TajGVK Hotels (up 3.73%), HLV (up 3.19%), EIH (up 2.88%) and ITDC (up 1.63%) advanced.

The Nifty IT index rose 2.07% to 15,784.95. The index is up 7.15% in four sessions.

Persistent Systems (up 4.28%), Infosys (up 4.01%), HCL Technologies (up 2.55%), Mindtree (up 2.31%), Mphasis (up 1.53%), Wipro (up 0.9%), Tech Mahindra (up 0.88%) and TCS (up 0.3%) rallied.

The Nifty Bank index rose 1.93% to 22,628. The index has risen 3.55% in two sessions.

IndusInd Bank (up 6.10%), RBL Bank (up 5.06%), Federal Bank (up 4.19%), IDFC First Bank (up 3.86%), ICICI Bank (up 3.84%), Axis Bank (up 3.09%), State Bank of India (up 0.27%), HDFC Bank (up 0.19%) and Kotak Mahindra Bank (up 0.03%) jumped.

Punjab National Bank (PNB) fell 0.81%. The bank said that its board will meet on Thursday (9 July 2020) to consider a proposal to raise capital through a mix of both equity and debt. The board will consider proposal for raising capital through issue of Basel-III-compliant tier-1 bonds, tier-2 bonds and equity shares by way of private placement, qualified institutions placement, follow-on public offering, rights issue or any other mode or through a combination, it said. Following the board approval, the resolution will be put for the shareholders' nod, the bank added.

Bandhan Bank jumped 10.65% on reporting strong growth in advances and deposits in Q1 June 2020. The private lender's loans & advances (on book+off book+TLTRO investments) jumped 18% year-on-year to Rs 74,325 crore (merged) in Q1 June 2020 as against Rs 63,164 crore in Q1 June 2019. Total deposits rose 35% to Rs 60,602 in Q1 June 2020 from Rs 44,796 crore in Q1 June 2018. Retail to total deposits were flat at 78% in Q1 June 2020 over Q1 June 2019. CASA deposits were reported at Rs 22,473 crore during the quarter, rising 47% from Rs 15,257 crore in the corresponding quarter last year. CASA ratio improved to 37.1% in Q1 June 2020 from 34.1% in the same quarter last year.

Stocks in Spotlight:

Bajaj Finance gained 7.84% after the company's asset under management (AUM) under moratorium reduced to about 15.5% as of 30 June from 27% as of end April. The company's customer franchise stood at 43 million as of 30 June 2020, up by 16.5% or 0.5 million from 36.9 million as on 30 June 2019. New loans booked during Q1 FY21 were down by 76.7% to 1.7 million as compared to 7.3 million in Q1 FY20. Assets under management (AUM) increased by 7.8% to approximately Rs 1.38 lakh crore as of 30 June 2020 as compared to approximately Rs 1.28 lakh crore as of 30 June 2019. The company continues to remain well capitalized with capital adequacy ratio (CRAR) of approximately 26.4% as of 30 June 2020, the NBFC said. With consolidated liquidity surplus of approximately Rs 17,600 crore as of 30 June 2020, the company's liquidity position remains very strong, it added. Bajaj Finance's deposit book grew 32.6% to Rs 20,000 crore in Q1 FY21 from Rs 15,084 crore in Q1 FY20.

Gujarat Pipavav Port surged 7.14%. On Monday (6 July), JP Morgan Funds purchased 30.34 lakh equity shares, or 0.63% stake, of Gujarat Pipavav Port at an average price of Rs 77.85 per share via block deal on the BSE. JP Morgan Funds acquired the shares from Flagship Indian Investment Company (Mauritius).

Godrej Consumer Products fell 0.54%. The company on Monday (6 July) said that it expected to post mid single-digit sales growth in Q1 June 2020 in India, driven by higher volumes.

SH Kelkar and Company jumped 5.71% after the company said it further reduced its net debt to between Rs 254 to 258 crore as on 30 June 2020 from Rs 299 crore as on 31 March 2020. The company in its business update on Monday (6 July) said the nationwide lockdown significantly affected production and sales in the domestic market during April and May. The firm witnessed encouraging demand pick-up from the last week of May 2020 continuing into June 2020. The revenues in Q1 FY21 stood between Rs 190 to 192 crore (provisional and unaudited figure). The management continues to very closely monitor the operating environment and actively engage with its customers to build demand. From June 2020 onwards, the company said it has been witnessing initial signs of recovery in the FMCG industry and a gradual normalization of the supply chain system. Accordingly, the firm is taking all necessary steps to ensure optimal production levels are maintained throughout the year.

Suzlon Energy hit a lower circuit of 5% at Rs 5.33 after the company reported consolidated net loss of Rs 823.53 crore in Q4 March 2020, higher than net loss of Rs 292.60 crore in Q4 March 2019. Net sales declined 54.7% year-on-year (YoY) to Rs 643.39 crore in the March quarter. Pre-tax loss in Q4 March 2020 stood at Rs 828.78 crore as against a pre-tax loss of Rs 288.88 crore in Q4 March 2019. Current tax expense jumped 18.1% YoY to Rs 5.36 crore in the fourth quarter.

NBCC jumped 8.53%. The company's consolidated net profit fell 42.3% to Rs 78.98 crore on 16.8% decline in net sales to Rs 2568.73 crore in Q4 March 2020 over Q4 March 2019. Profit before tax in Q4 FY20 stood at Rs 99.57 crore, down by 53.2% from Rs 212.93 crore in Q4 FY19. Current tax expense declined 83.5% on a year-on-year (YoY) basis to Rs 16.76 crore in the fourth quarter.


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