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Sensex jumps 169 pts after fag-end rally led by financials
14-Oct-20   17:07 Hrs IST

The benchmark indices ended near the day's high after a volatile session on Wednesday. The S&P BSE Sensex, added 169.23 points or 0.42% at 40,794.74. The Nifty 50 index rose 36.55 points or 0.31% to 11,971.05. Both these indices rose for the tenth straight session.

The barometers corrected early today after International Monetary Fund (IMF) slashed India's economic growth forecast in the wake of the coronavirus pandemic. After trading in a narrow range near the day's low for most part of the session, the key indices regained vigor in the final hour of the trade led by firmness in banks shares.

In the broader market, the BSE Mid-Cap index rose 0.50% and the BSE Small-Cap index lost 0.19%.

The market breadth was negative. On the BSE, 1225 shares rose and 1459 shares fell. A total of 168 shares were unchanged.

The Nifty has risen 6.67% in ten sessions. It has surged 1165.50 points, or 10.79% from its recent closing low of 10,805.55 on 24 September 2020.

COVID-19:

India reported 8,26,876 active cases of COVID-19 infection and 1,10,586 deaths while 63,01,927 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 38,066,297 with 1,085,411 deaths, according to data from Johns Hopkins University.

Economy:

The annual rate of inflation, based on monthly Wholesale Price Index (WPI), stood at 1.32% (provisional) for the month of September 2020 (over September 2019) compared with 0.33% during the corresponding month of the previous year.

Meanwhile, the International Monetary Fund (IMF) on Tuesday said it expects India's gross domestic product (GDP) to decline by 10.3% in FY21. It is expected to rebound by 8.8% in 2021. The IMF has revised India's GDP growth, since its June forecast of a 4.5% drop, while reflecting a severe-than-anticipated contraction in economic activities in Q1 FY21, amid the nationwide lockdown due to the COVID-19 pandemic.

Numbers to Watch:

The yield on 10-year benchmark federal paper fell to 5.903% as compared with 5.904% at close in the previous trading session.

In the foreign exchange market, the rupee edged higher against the dollar. The partially convertible rupee was hovering at 73.31, compared with its close of 73.3550 during the previous trading session.

In the commodities market, Brent crude for December 2020 settlement fell 17 cents at $42.28 a barrel. The contract rose 73 cents, or 1.75% to settle at $42.45 a barrel in the previous trading session.

Foreign Markets:

European markets declined while Asian ended mixed on Wednesday. Investors were discouraged with news that a pair of coronavirus drug trials have been paused in the US over safety concerns.

The US stock market finished session lower on Tuesday, 13 October 2020, as investors elected to book profit following the strong upward move seen over the past several sessions and as stalemate in fiscal stimulus negotiations continued. Negative sentiment was also generated in reaction to news that Johnson & Johnson has paused a late-stage trial of its Covid-19 vaccine candidate due to an unexplained illness in a study participant.

Uncertainty about a new stimulus bill also weighed on Wall Street, as House Speaker Nancy Pelosi continued her attacks on the White House's latest offer in a letter to her Democratic colleagues, claiming the proposal falls significantly short of what this pandemic and deep recession demand. Significant changes must be made to remedy the Trump proposal's deficiencies, Pelosi added while saying she remains hopeful that the White House will finally join us to recognize the needs of the American people.

On the economic front, US consumer price index rose by 0.2% in September after climbing by 0.4% in August, according to a report released by the Labor Department on Tuesday.

As per the latest forecast from IMF, the global economy is now projected to contract by 4.4% in 2020 - an upward revision from an estimate of approximately 4.9% made in June.

Buzzing Indian Segment:

The Nifty Bank index rose 1.63% to 23,874.65. The index bounced back after sliding as much as 1.46% in intraday today. It fell 1.5% in the past two sessions.

ICICI Bank (up 2.69%), IndusInd Bank (up 2.34%), State Bank of India (up 2.25%), Axis Bank (up 2.11%),Bank of Baroda (up 1.94%), RBL Bank (up 1.94%), Punjab National Bank (up 1.26%), HDFC Bank (up 1.06%), Kotak Mahindra Bank (up 0.74%), Federal Bank (up 0.67%) and Bandhan Bank (up 0.14%) advanced.

The Supreme Court on Wednesday adjourned its hearing on a batch of petitions seeking interest waiver during the loan moratorium period to 2 November. The apex court has directed the government to come back with an appropriate action. The apex court asked the central government to implement the interest waiver scheme at the earliest.

Among NBFCs, Bajaj Finserv (up 3.87%), Bajaj Finance (up 3%) and HDFC (up 1.85%) advanced.

Stocks in Spotlight:

Infosys fell 1.89% to Rs 1136.10. The IT major's consolidated net profit jumped 20.5% to Rs 4,845 crore on a 8.6% rise in revenues to Rs 24,570 crore in Q2 September 2020 over Q2 September 2019.

Sequentially, consolidated net profit rose 14.4% and revenue increased 3.8% in Q2 September 2020 (Q2FY21) over Q1 June 2020 (Q1FY21). Consolidated profit before tax (PBT) stood at Rs 6,750 crore in Q2 FY21, gaining 16.5% from Rs 5,792 crore in Q1FY21. Total tax expense rose 24.5% to Rs 1,892 crore in Q2 FY21 over Q1 FY21. The result was announced after market hours today, 14 October 2020.

Operating profit jumped 16.1% to 6,228 crore in Q2 FY21 over Q1 FY21. Operating margin stood at 25.3% in Q2 FY21, higher than 22.7% in Q1 FY21.

The company has revised FY21 growth guidance upward to 2% to 3% in constant currency term. Operating margin for FY21 is also revised upward in the range of 21% to 23%.

The company announced large deal wins worth $3.15 billion during the quarter. Infosys' Q2 revenue grew year-on-year by 3.2% in dollar terms and grew by 2.2% in constant currency. Digital revenues were at $1,568 million (47.3% of total revenues), year-on-year growth of 25.4% in constant currency.

Wipro dropped 6.81% to Rs 350.15 after the IT major's consolidated net profit declined 3.4% to Rs 2,465.70 crore on 0.1% fall in net sales to Rs 15,114.50 crore in Q2 September 2020 over Q2 September 2019. Sequentially, consolidated net profit rose 3.02% and revenue increased 1.35% in Q2 September 2020 (Q2FY21) over Q1 June 2020 (Q1FY21).

Wipro's IT services segment revenue for the September quarter came in at $1,992.4 million, an increase of 3.7% quarter-on-quarter (QoQ). IT services operating margin for the quarter was at 19.2%, an expansion of 0.2% QoQ and 1.1% year-on-year (YoY).

Wipro expects revenue from its IT services business to be in the range of $2,022 million to $2,062 million in Q3 December 2020, a sequential growth of 1.5% to 3.5%.

Meanwhile, the board of IT services company approved a plan to buyback 23.75 crore shares at Rs 400 per equity share for an aggregate amount not exceeding Rs 9,500 crore. This represents 4.16% of total paid-up equity share capital of the company as on 30 September.

Further, Wipro announced that it has signed a definitive agreement to acquire Eximius Design, a leading engineering services company with strong expertise in semiconductor, software and systems design.

Tata Steel Long Products hit an upper circuit of 20% at Rs 403.20 after the company reported a consolidated net profit of Rs 59.06 crore in Q2 FY21 as against a net loss of Rs 188.48 crore in Q2 FY20. Net sales during the quarter jumped 52.5% year-on-year (YoY) to Rs 1185.86 crore in Q2 FY21.

Karnataka Bank rose 4.17% after the bank reported 12.8% rise in net profit to Rs 119.44 crore on 1.6% increase in total income to Rs 1933.52 crore in Q2 September 2020 over Q2 September 2019.

The bank's net interest income (NII) rose by 15.27% to Rs 574.87 crore in Q2 September 2020 over Q2 September 2019. Net Interest Margin (NIM) improved to 3.08% in Q2 September 2020 from 2.82% in Q2 September 2019. The bank's provisions and contingencies increased by 22.76% to Rs 322.13 in Q2 September 2020 over Q2 September 2019.

The ratio of gross NPAs to gross advances stood at 3.97% on 30 September 2020 as against 4.64% as on 30 June 2020 and 4.78% as on 30 September 2019. The ratio of net NPAs to net advances stood at 2.21% as on 30 September 2020 as against 3.01% as on 30 June 2020 and 3.48% as on 30 September 2019.

Tata Power fell 2.13%. The company said that it will develop 100 megawatts solar project at Dholera Solar Park in Gujarat. The integrated power firm has received letter of award (LoA) from Gujarat Urja Vikas Nigam (GUVNL) for the proposed solar project. The energy will be supplied to GUVNL under a power purchase agreement (PPA), valid for a period of 25 years from scheduled commercial operation date. The project has to be commissioned within 15 months from the date of execution of the PPA.

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