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Sensex jumps 282 pts led by banks, financials; RIL corrects
20-Nov-20   17:15 Hrs IST

Key equity benchmarks ended a volatile session with modest gains on Friday. A recovery in global stock markets supported buying in domestic shares. The Nifty managed to close above the 12,850 mark as banks and IT shares rallied. Pharma shares were under pressure.

The barometer index, the S&P BSE Sensex, rose 282.29 points or 0.65% at 43,882.25. The Nifty 50 index advanced 87.35 points or 0.68% at 12,859.05.

After opening higher at 12,813.40, the Nifty reversed trend and hit the day's low of 12,730.25 in mid-morning trade. The index hovered in a range near the flat line till afternoon trade and advanced sharply in mid-afternoon trade to hit the day's high of 12,892.45.

In the broader market, the S&P BSE Mid-Cap index rose 1.22%. The S&P BSE Small-Cap index gained 0.77%. Both these indices outperformed the Sensex.

Buyers outpaced sellers. On the BSE, 1544 shares rose and 1242 shares fell. A total of 192 shares were unchanged.

New Listing:

Shares of Gland Pharma ended at Rs 1820.45 on the BSE, a premium of 21.36% over the initial public offer (IPO) price of Rs 1500.

The stock was listed at Rs 1701, a premium of 13.4% to IPO price. The stock hit a high of Rs 1850 and low of 1701. On the BSE, 7.88 lakh shares were traded on the counter. While on NSE, 1.13 crore shares exchanged hands.

IPO of Gland Pharma was subscribed 2.06 times. The issue opened for bidding on 9 November 2020 and it closed on 11 November 2020. The price band for the IPO was set at Rs 1490-1500 per share.

Hyderabad-based Gland Pharma is one of the largest and fastest growing injectable-focused companies, with a global footprint across 60 countries, including the United States, Europe, Canada, Australia, India and other markets.

Economy:

The credit ratings agency, Fitch Ratings, has said that economic reforms in India could support the country's medium-term growth. Fitch expects Indian government to undertake more reform measures over next few years and while it also expects reforms to also take place at state-level.

Meanwhile, Moody's Investors Service has revised its GDP projection for India in 2020-21 to a 10.6% contraction compared to a 11.5% drop it had estimated. The rating agency has also marginally elevated its forecast for 2021-22 GDP growth from 10.6% to 10.8%.

Further, Barclays has modestly revised its expectations of India's gross domestic product (GDP) growth for FY21 to minus 6.4% from minus 6% earlier to reflect marginally weaker incoming data it had earlier anticipated. However, it is upbeat about an economic revival in the economy from the next fiscal year which is FY22 and has also raised its FY22 GDP growth forecast to 8.5% from 7% earlier, to reflect a faster recovery in services amid continued policy support. Barclays also held that a possible vaccine roll-out from Q1 21 should broaden the recovery from farm and manufacturing to services.

Coronavirus Update:

Total COVID-19 confirmed cases worldwide stood at 56,895,516 with 1,360,342 deaths.

India reported 443,794 active cases of COVID-19 infection and 132,162 deaths while 8,428,409 patients have been discharged, according to the data from the Ministry of Health and Family Welfare, Government of India.

Numbers to Track:

In the foreign exchange market, the partially convertible rupee edged higher to 74.16 compared with its previous closing 74.27.

The yield on 10-year benchmark federal paper rose to 5.878% from its closing of 5.876% recorded in the previous session.

MCX Gold futures for 4 December 2020 settlement rose 0.19% to Rs 50,085.

In the commodities market, Brent crude for January 2021 settlement added 26 cents to $44.46 a barrel. The contract lost 0.32% or 14 cents to settle at $44.20 in the previous trading sessions.

Global Markets:

After a mixed start, European stocks rose across the board while most Asian shares ended in the green on Friday. Investors were cautious over the short-term economic impact of the coronavirus as cases around the world continue to rise.

Direct Brexit talks have been suspended after a member of the EU team tested positive for COVID-19 on Thursday, but chief negotiators and their respective teams have continued discussions remotely in the hope of executing a deal within the next 10 days.

Japan's core consumer prices fell in October at their fastest pace annual in nearly a decade as the boost from last year's sales tax hike petered out, heightening fears of a return to deflation for an economy still dealing with COVID-19.

The wide core consumer prices, which excludes volatile fresh food costs, fell 0.7% in October from a year earlier, government data showed on Friday.

The au Jibun Bank Flash Japan Manufacturing Purchasing Managers' Index (PMI) fell to a seasonally adjusted 48.3 from a final 48.7 in October, staying below the 50.0 threshold that separates contraction from expansion for a 19th straight month.

Meanwhile, China kept its lending benchmark loan prime rate steady for the 7th straight month, in line with market expectations. The one-year rate was kept unchanged at 3.85% and the five-year rate remained at 4.65%.

The US stock market finished firmly into positive territory on Thursday, 19 November 2020, as risk sentiments improved after Senate Democratic Minority Leader Chuck Schumer said Republican Majority Leader Mitch McConnell had agreed to revive talks to craft a new fiscal relief package.

However, market gains capped after Treasury Secretary Mnuchin later asked the Federal Reserve to return money earmarked under the March pandemic relief act for emergency lending to businesses, nonprofits and local governments. Further, weighing on the market sentiment was reports of soaring coronavirus cases and an unexpected rise in weekly jobless claims which raised fears of stalling growth in the world's largest economy.

The Dow Jones Industrial Average index advanced 0.15%, the S&P 500 index grew 0.39% and the tech-heavy Nasdaq Composite Index added 0.87%.

The rising number of coronavirus cases weighed on utilities but supported 'stay-at-home' stocks in the technology sector. Shares in Alphabet (Google) rose 1% with Amazon up 0.4%. US leading economic index climbed by 0.7% in October, according to a report released by the Conference Board on Thursday.

US jobless claims climbed to 742,000 in the week ended November 14th, an increase of 31,000 from the previous week's revised level of 711,000, the Labor Department reported on Thursday.

US existing home sales jumped by 4.3% to an annual rate of 6.85 million in October after soaring by 9.9% to a revised rate of 6.57 million in September, a report released by the National Association of Realtors on Thursday showed.

Buzzing Indian Segments:

The Nifty IT index rose 1.40% to 21,409.25. The index had lost 1.74% in the past two sessions.

Info Edge (India) (up 4.3%), Larsen & Toubro Infotech (up 4.06%), MindTree (up 3.01%), HCL Technologies (up 1.92%), Tech Mahindra (up 1.83%), Wipro (up 1.28%), Coforge (up 0.97%), TCS (up 0.79%) and Infosys (up 0.7%) advanced.

MphasiS gained 1.10% after the IT company announced the acquisition of Datalytx, a leading next-gen data engineering and consultancy company, for consideration up to GBP 13.3 million. The company said that the acquisition is expected to provide access to strengthen company's Next-Gen Data GTM Strategy and provide higher value partnership status with Snowflake and Talend for cloud-based data services. The acquisition also provides access to highly skilled data professionals and sales professionals thereby creating an offshore pool of Snowflake and Talend expertise.

Banks and financial stocks rallied after the Reserve Bank of India (RBI)'s Internal Working Group (IWG) on Friday (20 November) recommended allowing promoters to hold higher stake in private banks. It also suggested permitting large NBFCs to be converted into bank.

The Nifty Bank index rose 1.15% to 29,236. It bounced 2.29% from the day's low of 28,580.90 in mid-morning trade. The index has added 22.32% so far in November.

Kotak Mahindra Bank (up 3.05%), HDFC Bank (up 2.23%) and State Bank of India (up 0.94%) advanced.

As of 30 September 2020, Uday Kotak, promoter of Kotak Mahindra Bank, held 26.04% stake in the private bank.

Among non-banking financial companies, Bajaj Finserv (up 9.27%), Bajaj Holdings (up 4.73%), Bajaj Finance (up 3.98%), Shriram Transport Finance (up 2.33%) and Cholamandalam Investment and Finance (up 1.23%) rallied.

Stocks in Spotlight:

Reliance Industries (RIL) declined 3.72% to Rs 1899.20. RIL and Reliance Retail Ventures (RRVL) in a joint statement on 19 November 2020 said that they have completed the current phase of partner induction and fund raise exercise for RRVL. RRVL has received cumulative subscription amounting to Rs 47,265 crore (or 10.09% stake in RRVL) from the nine financial partners and allotted 69.27 crore equity shares to them.

The nine financial partners and their respective stakes are as follows: Silver Lake Partners (1.60% stake), Silver Lake Partners - Co-Investors (0.40% stake), KKR (1.19% stake), Mubadala (1.33% stake), ADIA (1.18% stake), GIC (1.18% stake), TPG (0.39% stake), General Atlantic (0.78% stake) and PIF (2.04% stake).

Syngene International advanced 0.90%. The company and Deerfield have signed an agreement to collaborate to advance therapeutic discovery projects, from target validation through to pharmacological proof of concept and preclinical evaluation. This five-year collaboration unites the core skills of the investment management company Deerfield, through its drug discovery and development arm Deerfield Discovery and Development Corporation (3DC), and Syngene's integrated drug discovery (IDD) services.

Emami added 4.10% after the company announced the launch of a complete range of home hygiene products under the brand name of 'EMASOL'. With this launch, Emami has forayed into the homecare segment. In this segment, the company will manufacture and sell disinfectant floor cleaner, toilet cleaner, bathroom cleaner, antibacterial dish wash gel and all-purpose sanitizer.

Pricol rose 2.27% to Rs 60.90 after the company said its board approved the rights issue price at Rs 30 per share. The company's board at its meeting held on 19 November approved issuing 2,70,84,777 rights equity shares, for an amount aggregating up to Rs 81.25 crore.

The rights entitlement ratio is set at 2 rights shares for every 7 equity shares held by eligible shareholders as on the record date fixed on 25 November 2020. The rights issue will open on 3 December 2020 and it will close on 17 December 2020. The rights issue price of Rs 30 per share is at a 50.45% discount to the ruling market price.

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