Shares end with minor gains

July 15,2020

The equity market barometers ended near the flat line with some positive bias on Wednesday. After a strong rally in most part of the session, the markets witnessed profit booking in the last hour of trade.

As per provisional closing, the barometer S&P BSE Sensex rose 18.75 points or 0.05% at 36,051.81. The Nifty 50 index gained 10.85 points or 0.10% at 10,618.20.

In the broader market, the S&P BSE Mid-Cap index fell 0.35% while the S&P BSE Small-Cap index lost 0.05%.

The market breadth was strong. On the BSE, 1105 shares rose and 1519 shares fell. A total of 155 shares were unchanged. In Nifty 50 index, 26 stocks advanced while 24 stocks declined.


Index major Reliance Industries (RIL) fell 3.98% to Rs 1840.30. The company held its 43rd annual general meeting (AGM) virtually. The company's chairman and managing director Mukesh Ambani hosted the meeting.

India's top telecom operator Reliance Jio on Wednesday announced that the company has made a complete 5G solution from scratch” which would enable the company to launch world-class 5G services in India. Ambani announced that the Made in India tech can be deployed and launched within a year's time once the 5G spectrum is available.

Due to unforeseen circumstances and COVID-19, the deal with Saudi Aramco has not progressed as per the earlier timeline. We are committed to a long-term partnership with Saudi Aramco, Ambani said.

Our O2C business has competitive feedstock streams that are the building blocks for specialty and new value chains of Acetyls, Acrylates, Phenols and Polyurethanes. Reliance has been approached by global companies for strategic partnerships in its petrochemical business, including in utilizing these feedstocks. These potential partnerships will help us build competitive manufacturing capacity at our existing sites to serve the deficit Indian market that still depends on large-scale imports of chemicals, stated Ambani.

For Reliance Retail, Ambani said: Four things that give me huge satisfaction are: First, more than two-thirds of our nearly 12,000 stores are operated in Tier II, Tier III and Tier IV towns. Second, the deep-rooted bond with tens of thousands of farmers that has helped us source over 80% of our fresh fruits and vegetable directly from farmers. We sell more fruits and vegetables than any other organised retailer in the country. Third, we continue to provide large employment and development opportunities for lakhs of people across India. Fourth, our growth model is based on partnership with small merchants and shopkeepers.

We have successfully piloted JioMart grocery model with kirana partners. The beta version of JioMart grocery platform is being piloted in 200 cities. Daily orders have crossed 2.5 lakh, and the number is growing each day, Ambani said.

Buzzing Index:

The Nifty IT index surged 5.33% to 16,474.70. The index had lost 1.13% yesterday.

Among the index constituents, NIIT Technologies (up 9.83%), Mphasis (up 6.52%), Info Edge India (up 4.48%), HCL Tech (up 3.94%), TCS (up 3.04%) and Tech Mahindra (up 2.81%) while MindTree declined 0.53%.

Infosys rose 6.42% while Larsen & Toubro Infotech fell 2.83% ahead of the release of their first quarter earnings today.

Seperately, US-based Vanguard and Infosys announce strategic partnership for digital transformation of Vanguard's defined contribution record keeping business.

Wipro rallied 17.35 % to Rs 264.10 after the IT major reported a 2.76% rise in consolidated net profit to Rs 2390.40 crore on a 5% decline in revenue from operations to Rs 14913.10 crore in Q1 June 2020 (Q1FY21) over Q4 March 2020 (Q4FY20).

In dollar terms, IT services revenue stood at $1921.60 million in Q1, a decrease of 7.3% QoQ. Sequential revenue growth in constant currency terms declined 7.5% in Q1FY21. IT services operating margin improved to 19% in Q1FY21 from 17.6% in Q4FY20.

Wipro said that the conditions caused by the Covid-19 pandemic could decrease technology spending. This may adversely affect demand for the company's products and also affect the rate of customer spending which could adversely affect the customers' ability or willingness to purchase its offerings.

Meanwhile, Wipro on Tuesday said it has signed an agreement to acquire Brazil-based IVIA Serviços de Informática for about $22.4 million. IVIA's local talent and long-standing relationships, combined with Wipro's global expertise, will help expand the information technology firm's geographical footprint in Brazil, Wipro said in a statement. The acquisition will also help Wipro set up delivery centres in the northeast of Brazil leveraging IVIA's workforce, it added.

Stocks in Spotlight:

National Peroxide tumbled 6.74% to Rs 1960 after the company's consolidated net profit slumped 82.6% to Rs 3.04 crore on a 31.1% decline in net sales to Rs 47.50 crore in Q4 FY20 over Q4 FY19.

Delta Corp rose 4.81%. The company reported consolidated net loss of Rs 28.24 crore in Q1 June 2020 as against net profit of Rs 42.48 crore in Q1 June 2019. Consolidated net sales slumped 74.08% to Rs 48.34 crore in Q1 June 2020 over Rs 186.51 crore in Q1 June 2019.

The company reported a negative EBIDTA of Rs (20.05) crore, which includes a provision of Rs 23.68 crore on account of license fees payable. The casino operator has made a representation to the government of Goa along with the rest of the industry, to consider a waiver of payment of licence fees during the lockdown period. The company said it is hopeful of a positive response on the same from the government. The scrip has hit a 5% upper circuit at Rs 93.80 on the BSE.

HEG fell 1.51% to Rs 734.70. India Ratings and Research (Ind-Ra) has downgraded HEG's long-term issuer rating to 'INDAA-' from 'INDAA' while maintaining 'stable' outlook.

Cadila Healthcare gained 0.24% to Rs 354.50 after the company said that it has started human studies for its potential coronavirus vaccine. ZyCoV-D, the company's plasmid DNA vaccine, was found to be safe, immunogenic and well-tolerated in the pre-clinical toxicity studies, Zydus said in an exchange filing. In the human trials, Zydus will enroll over 1,000 subjects across multiple clinical study sites in the country.

In a separate announcement today, the company said that Zydus Cadila received final approval from the USFDA to market Betamethasone Dipropionate Ointment USP, 0.05%. The ointment is used to treat a variety of skin conditions (e.g., eczema, dermatitis, allergies, rash).

Global Markets:

European markets advanced while Asian markets ended mostly higher after Biotech firm Moderna's potential vaccine to prevent Covid-19 produced a robust immune response, or neutralizing antibodies, in all 45 patients in its early stage human trial, according to newly released data in the peer-reviewed New England Journal of Medicine.

Meanwhile, the Bank of Japan said in its outlook report on Wednesday that the country's economy is likely to improve gradually from the second of this year, though the pace is expected to be only moderate as the impact of the coronavirus pandemic remains globally.

For the time being, the Bank will closely monitor the impact of COVID-19 and will not hesitate to take additional easing measures if necessary, and also it expects short- and long-term policy interest rates to remain at their present or lower levels, the BoJ reported added.

US stock indexes closed near session highs Tuesday, after Federal Reserve Gov. Lael Brainard called for sustained large-scale asset purchases by the US central bank to help the economy rebound amid a thick fog of uncertainty brought on by COVID-19.

Investors continued to monitor the corporate earnings, efforts by some US states to close down businesses again coupled with rising coronavirus cases and deteriorating US-China relations.

Simmering tensions between the United States and China loom large, as US President Donald Trump on Tuesday said he signed legislation to impose sanctions on China in response to its interference with Hong Kong's autonomy. Trump also said he signed an executive order ending Hong Kong's special status with the U.S.

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