Nifty ends above 10,800 as banks lead

July 09,2020

Domestic shares resumed uptrend on Thursday after a day's pause. Banks and metal shares rallied while FMCG shares declined. Indices witnessed a bout of volatility due to expiry of weekly index options on NSE.

As per provisional closing, the barometer S&P BSE Sensex surged 408.68 points or 1.12% at 36,737.69. The Nifty 50 index added 126.75 points or 1.18% at 10,832.50.

After opening higher at 10,755.55, the Nifty pared gains and hit a low of 10,733. The index reclaimed 10,800 mark in afternoon session. After some range bound trading, fresh buying in the final hour pushed the Nifty near the day's high of 10,836.85.

In the broader market, the S&P BSE Mid-Cap index rose 0.11% while the S&P BSE Small-Cap index gained 0.61%. Both these indices underperformed the Sensex.

The market breadth was positive. On the BSE, 1343 shares rose and 1250 shares fell. A total of 157 shares were unchanged. In Nifty 50 index, 35 stocks advanced and 15 stocks declined.

COVID-19 Update:

India reported 2,69,789 active cases of COVID-19 infection and 21,129 deaths while 4,76,377 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 12,043,080 with 549,508 deaths so far, according to data from Johns Hopkins University.

SEBI, CBDT data-sharing pact:

A formal Memorandum of Understanding (MoU) was signed between the Central Board of Direct Taxes (CBDT) and the Securities and Exchange Board of India (SEBI) for data exchange between the two organizations. The MoU will facilitate the sharing of data and information between SEBI and CBDT on an automatic and regular basis. In addition to regular exchange of data, SEBI and CBDT will also exchange with each other, on request and suo moto basis, any information available in their respective databases, for the purpose of carrying out their functions under various laws.

Stocks in Spotlight:

IT major TCS (down 0.42%) will announce Q1 results later today. Infosys (up 0.96%) will announce its Q1 results on 15 July 2020.

ICICI Bank up 0.7%. The bank's board has approved raising of funds for an amount aggregating up to Rs 15000 crore, in one or more tranches by way of issuance of Securities, through one or more permissible mode(s) including but not limited to a private placement, preferential issue, qualified institutions placement, follow-on public offering or a combination thereof.

State Bank of India (SBI) gained 3.93%. SBI said the executive committee of central board (ECCB) approved the formation of joint venture entity, SBICAP, its wholly owned subsidiary to invest in Investec Capital Services India to form a joint venture entity, along with transfer of SBICAP Securities institutional equities broking and research business to the JV entity proposed to be created.

Meanwhile, SBI said that its executive committee of central board (ECCB) has approved a maximum investment of up to Rs 1,760 crore in Yes Bank's upcoming follow-on public offer (FPO). Yes Bank (up 2.11%) today informed about the filing of the red herring prospectus in connection with the FPO. The bank will raise upto Rs 15000 crore, by way of a fresh issue of equity shares, including an employee reservation portion of up to Rs 200 crore. The FPO will open on 15 July and close on 17 July 2020. Anchor investor bidding date is fixed on 14 July 2020

Tata Steel rose 3.23%. The steel major's production volume in India declined 33.5% to 2.99 million tons (MT) (provisional) in Q1 June 2020 from 4.50 MT in Q1 June 2019. The company's sales volume in India stood at 2.92 MT (provisional) in Q1FY21, declining 26.2% from 3.96 MT in Q1FY20.

Tata Steel Europe achieved production of 2.14 MT (provisional) in Q1FY21, declining 19% from 2.65 MT in Q1FY20. Sales volume stood at 1.94 MT (provisional) in Q1FY21, falling 14% from 2.26 MT in Q1FY20.

South Indian Bank hit an upper circuit of 5% at Rs 8.37 after the bank's standalone net profit jumped 11.05% to Rs 81.65 crore on a 4.6% increase in total income to Rs 2,171.86 crore in Q1 June 2020 over Q1 June 2019. Net Interest Income (NII) rose 10% to Rs 587 crore in Q1 June 2020 as compared to Rs 536 crore in Q1 June 2019. The bank's provisions and contingencies surged 42.95% to Rs 293.08 crore in Q1 June 2020 over Q1 June 2019. The provision coverage ratio of the bank was at 58.8% as on Q1 June 2020, higher than 45.1% in Q1 June 2019.

Can Fin Homes advanced 0.98%. Can Fin Homes said that the meeting of the board of directors of the company is scheduled on 17 July 2020 to consider and approve the proposal of raising funds by way of issue of equity shares through qualified institutions placement and/or preferential issue to promoters or rights issue and/ or any other permissible securities.

GAIL (India) surged 2.68%. LIC's stake in GAIL (India) has increased to 7.019% from 5.004% earlier, after it bought 20.37 crore shares of the state-run company between 13 February 2019 and 7 July 2020.

Strides Pharma Science spurted 2.26% after its Singapore-based subsidiary, Strides Pharma Global, received US FDA approval for butalbital, acetaminophen, caffeine, and codeine phosphate capsules. According to IQVIA MAT May 2020 data, the drug has a US market of approximately US$ 10 million.

BASF India fell 2% after the company said it has received a tax demand notice of Rs 46.01 crore for the period 2015-2016 from Commercial Tax Department, Karnataka. The company has received a demand notice from Commercial Tax Department, Karnataka for the period 2015-2016, aggregating to Rs 46.01 crore (including interest and penalty), by treating the stock transfers of the company's Mangalore plant as interstate sales to dealers.

Bharat Heavy Electricals (BHEL) gained 2.18% after the company said it commissioned a 1.7 megawatts solar photovoltaic plant in Madhya Pradesh for the Indian Railways. The plant will directly feed power to traction systems of Indian Railways, the company said in a BSE filing made during market hours today. “The project is a landmark achievement in the history of solar power, as this is the first time that solar power is being directly used for traction applications. Notably, with this, BHEL has achieved direct injection of single-phase 25 kV power to traction substation of Indian Railways, the company said in a statement.

Global Markets:

Most shares in Europe and Asia advanced on Thursday as investors monitored upcoming company earnings, with hopes that global stimulus efforts will result in upbeat business outlooks.

In the Malaysian market, shares of AirAsia Group, the budget airline operator, gained over 6% on Thursday after the company reportedly said that it was in talks to raise more than 1 billion ringgit ($234.52 million) in funds, be it debt or equity, as it looked to at least halve cash expenses this year. This comes a day after the airline's auditor cast doubt on its ability to continue as a going concern after the group had liabilities that exceeded its current assets by more than $400 million at the end of 2019, media reports said. Consequently, AirAsia's shares fell as much as 17.54% in the previous session.

Meanwhile, the US stock market settled session higher after fluctuating in and out of the boundary line over the course of the trading day on Wednesday, 08 July 2020, as investors assessed economic-reopening efforts in the face of climbing coronavirus cases, causing many regions to pause or reverse their reopening plans.

Stock investors took sidelines due to nagging unease over the outlook for the global economy in the midst of rising U.S. coronavirus infections. Investor concerns that a resurgence of coronavirus cases, specifically across the Southeast and Southwest of the U.S.—known as the Sun Belt—will make a quick global recovery more difficult. Several states have had to pull back or postpone reopening efforts to control surging COVID-19 cases, threatening the speed of the economic recovery in the US. A lockdown in Australia's city of Melbourne has also raised concerns.

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