Nifty below 11,800; Europe opens in red

·6-min read

Key indices further extended losses in afternoon trade. At 13:28 IST, the barometer index, the S&P BSE Sensex, tumbled 517.80 points or 1.27% to 40,167.70. The Nifty 50 index slipped 153.85 points or 1.29% at 11,776.50. Selling pressure was broad based with metal and auto stocks losing the most.

Hero MotoCorp (down 6.26%), Bajaj Auto (down 5.78%), Hindalco (down 5.21%), JSW Steel (down 4.62%) and Tata Steel (down 3.79%) were the top nifty losers.

HDFC Life (up 2.18%), Adani Ports (up 1.37%), Hindustan Unilever (up 1.05%), Power Grid Corporation of India (up 0.94%) and Larsen & Toubro (up 0.93%) bucked the trend.

In the broader market, the S&P BSE Mid-Cap index fell 1.77% while the S&P BSE Small-Cap index lost 0.87%.

Sellers outpaced buyers. On the BSE, 909 shares rose and 1584 shares fell. A total of 183 shares were unchanged.

COVID-19 Update:

India reported 653,717 active cases of COVID-19 infection and 119,014 deaths while 7,137,228 patients have been discharged, according to the data from the Ministry of Health and Family Welfare, Government of India. Total COVID-19 confirmed cases worldwide stood at 42,926,013 with 1,152,990 deaths, according to data from Johns Hopkins University.

RBI Governor Shaktikanta Das on Sunday tweeted that he has been tested positive for COVID-19 but he is asymptomatic. He assured that work in RBI will go on normally.

Stocks in Spotlight:

Kotak Mahindra Bank (down 0.97%) and SBI Life Insurance (up 0.25%) are two Nifty companies that will announce their quarterly result today.

Nestle India rose 2.22%. The FMCG major reported 1.34% decline in net profit to Rs 587.09 crore on 10.2% increase in net sales to Rs 3,525.41 crore in Q3 September 2020 over Q3 September 2019. Profit before tax (PBT) rose 12.41% to Rs 786.50 crore in Q3 September 2020 over Q3 September 2019. The company's total sales and domestic sales both increased by 10.2% driven by volume and mix. Export sales increased by 9.4%. Demand in out of home channel improved through the quarter but continues to be impacted by COVID. The FMCG major said factories have returned to normal output. The firm has reported double digit growth in key brands, boosted by in-home consumption. Demand in 'Out of Home' channels also improved during the quarter. E-commerce grew by 97%, contributing about 4% of domestic sales. The company has planned Rs 2600 crore investment over the next three to four years.

ICICI Lombard General Insurance Company gained 1.36% after the company reported 35.02% rise in net profit to Rs 415.74 crore in Q2 FY21 as against Rs 307.91 crore in Q2 FY20. Total income increased by 5.28% to Rs 2883.40 crore in Q2 September 2020 compared with Rs 2738.92 crore in Q2 September 2019. Capital gains were at Rs 124 crore in Q2 FY2021 compared with Rs 69 crore in Q2 FY2020, registering a growth of 79.71%. Gross Direct Premium Income (GDPI) of the company was at Rs 3,189 crore in Q2 FY2021 compared to Rs 2,953 crore in Q2 FY2020, a growth of 8%. Excluding crop segment, GDPI of the company increased to Rs 3,186 crore in Q2 FY2021 compared to Rs 2,898 crore in Q2 FY2020, registering a growth of 9.9%. This was higher than the industry growth (excluding crop segment) for Q2 FY2021 of 9.2%.

Reliance Industries (RIL) fell 1.97% to Rs 2070.95. The stock witnessed some selling pressure after won an interim award against the Future Group, placing the Future-Reliance Retail deal on hold. In August 2020, RIL's subsidiary Reliance Retail Ventures (RRVL) had announced acquisition of the retail & wholesale business and the logistics & warehousing business of the Future Group as going concerns on a slump sale basis for Rs 24,713 crore. RRVL said that it had entered into the transaction for acquisition of assets and business of Future Retail under proper legal advice and the rights and obligations are fully enforceable under Indian Law. “RRVL intends to enforce its rights and complete the transaction in terms of the scheme and agreement with Future group without any delay,” it added.

IndusInd Bank rose 2.63% to Rs 623.45. The media reported that Kotak is looking at an all-stock acquisition of IndusInd Bank. It also said that the UK-based Hinduja family began the discussion for selling control of the Mumbai-based lender following a dispute between the four brothers over the family's fortune.

Indusind Bank on 25 October 2020, however, said that the reports of a takeover are "malicious, untrue and baseless".

"The Promoter of Indusind Bank, IndusInd International Holdings (IIHL), completely denies the said rumour and considers it malicious, untrue and baseless. IIHL is promoted by the Hindujas and a broad base of other successful NRIs from the overseas Indian diaspora. They reiterate their full support to the IndusInd Bank, now and always," IIHL said in a statement.

Global Markets:

European markets tumbled while Asian shares were mixed on Monday as new coronavirus cases surge in the US as well in countries across Europe. The Hong Kong market is closed on Monday for a holiday.

The central committee of China's ruling Communist Party, led by Xi, is set to meet in Beijing from October 26 to 29 to discuss a proposal for national development for the next five years - from 2021 to 2025. The government sets these economic and social priorities every five years.

The resurgence of the coronavirus in Europe has continued apace in recent days, with France reporting a record daily rise in new infections on Sunday, Italy ordering bars to close early and shutting public gyms and Spain issuing a nationwide curfew to stem a worsening outbreak. The U.S. also reported a record number of daily Covid-19 infections on Friday with more than 83,000, surpassing its mid-July peaks despite President Donald Trump's insistence that the country is “rounding the turn” on the virus.

In US, the S&P 500 and Nasdaq closed modestly higher on Friday in choppy trading while the Dow ended lower on the day as investors weighed the potential for additional fiscal stimulus.

Intel shares fell 10.6% following the release of mixed quarterly numbers for the chipmaker. Gilead Sciences Inc rose as its antiviral drug remdesivir became the first and only drug approved for treating patients hospitalized with COVID-19 in the United States.

U.S. House Speaker Nancy Pelosi said it still was possible to get another round of COVID-19 aid before the November 3 election, but that it was up to President Donald Trump to act. Trump and Treasury Secretary Steven Mnuchin countered that Pelosi must compromise to get an aid package.