Market trims early gains

July 16,2020

A bout of volatility was seen in early trade as the key indices were off day's high, with the Sensex trading with small gains and Nifty trading with small losses. At 9:25 IST, the barometer index, the S&P BSE Sensex, was up 23.85 points or 0.07% at 36,075.66. The Nifty 50 index was down 19 points or 0.18% at 10,599.20.

The S&P BSE Mid-Cap index was off 0.7%. The S&P BSE Small-Cap index was down 0.8%.

The market breadth, indicating the overall health of the market, is weak. On the BSE, 471 shares rose and 1082 shares fell. A total of 73 shares were unchanged.

On the macro front, India's exports declined by 12.41% to $21.91 billion in June mainly due to drop in shipments of petroleum, textiles, engineering goods, and gems and jewellery items. Imports too plunged 47.59% to $21.11 billion in June, leaving a trade surplus of $0.79 billion, compared to a deficit of $15.28 billion in the same month of the last year, according to the data released by the Commerce and Industry Ministry on Wednesday.

Stocks in news:

Infosys jumped 10%. Infosys reported a 2% fall in consolidated net profit to Rs 4,233 crore on a 1.7% rise in revenues to Rs 23,665 crore in Q1 June 2020 over Q4 March 2020. Consolidated profit before tax (PBT) rose 5.4% to Rs 5792 crore. Infosys forecast FY21 revenue growth in the range of 0%-2% in constant currency terms. Operating margin for FY21 is expected to be in the range of 21%-23%.

GAIL (India) dropped 2.06%. The company received letter from Department of Telecommunication towards withdrawal of all provisional demand notices issued to it. Consequent upon the withdrawal of claims, nothing remains due to DoT by GAIL in the matter of AGR.

Cochin Shipyard rose 0.98% after the company signed contracts for construction and supply of two units Autonomous Electric Ferry for ASKO Maritime AS, Norway with an option to build two more identical vessels.

Minda Corporation lost 6.98% after the company reported consolidated net loss of Rs 299.77 crore in Q4 March 2020, as compared to net profit of Rs 41.92 crore in Q4 March 2019. Total income dropped 9.22% to Rs 712.19 crore.

Gateway Distriparks slipped 0.63%. Gateway Distriparks said that the meeting of the board of directors of the company is scheduled on 20/07/2020 to consider and approve proposed issue of equity shares of the company on a rights basis.

Global Markets:

Overseas, Asian stocks are trading higher as optimism over a coronavirus vaccine carry weight over the ongoing spread of the disease and simmering U.S.-China tensions.

China's economy rebounded from a painful contraction to grow by 3.2% over a year earlier in the latest quarter as anti-virus lockdowns were lifted and factories and stores reopened. The expansion reported on July 16 was a dramatic improvement over the previous quarter's 6.8% contraction.

In US, stocks ended sharply higher on Wednesday, following promising early data for a potential COVID-19 vaccine and a strong quarterly report from Goldman Sachs.

Moderna Inc rallied after a small-scale study showed its experimental COVID-19 vaccine produced high levels of virus-killing antibodies. Goldman Sachs rose after it said its trading revenue doubled in the second quarter, driven by big swings in stock and bond markets since March.

The Federal Reserve's Beige Book survey showed U.S. businesses saw an uptick in activity into the beginning of July as states eased restrictions to contain the novel coronavirus pandemic.

However, the United States has failed to control the coronavirus and there is a high level of uncertainty over how much the pandemic will affect the economy, Philadelphia Federal Reserve Bank President Patrick Harker said.

Meanwhile, OPEC and allies such as Russia agreed to ease record supply curbs from August, though the drop was cushioned by hopes for a swift U.S. demand pick-up after a bigger-than-expected drawdown from the country's crude stocks.

Back home, key equity barometers ended near the flat line with some positive bias on Wednesday. The barometer S&P BSE Sensex rose 18.75 points or 0.05% at 36,051.81. The Nifty 50 index rose 10.85 points or 0.10% at 10,618.20.

Foreign portfolio investors (FPIs) sold shares worth Rs 221.70 crore, while domestic institutional investors (DIIs), were net sellers to the tune of Rs 899.37 crore in the Indian equity market on 15 July, provisional data showed.

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