Barometers trade flat, broader market rallies

Benchmarks traded flat in a lackluster trade in mid-afternoon session. The Nifty hovered around 11,200 mark. Gains in auto and FMCG stocks were negated by losses in IT and pharmaceutical stocks. The barometer index, the S&P BSE Sensex fell 11.59 points or 0.03% at 38,013.86. The Nifty 50 index declined 2.15 points or 0.02% at 11,198.50.

In the broader market, the S&P BSE Mid-Cap index added 1.4% while the S&P BSE Small-Cap index gained 0.82%. Both these indices outperformed the Sensex.

Honeywell Automation (up 11.60%), Bayer CropScience (up 8.76%) and RBL Bank (up 7.95%) were top mid-cap gainers.

Electrotherm (India) (up 20%), Anant Raj (up 20%), RattanIndia Power (up 19.83%) and GMM Pfaudler (up 15%) were major small-cap gainers.

Buyers outnumbered sellers. On the BSE, 1,620 shares rose and 983 shares fell. A total of 154 shares were unchanged.

COVID-19 Update:

Total COVID-19 confirmed cases worldwide stood at 1,91,01,222 with 7,15,013 deaths. India reported 6,07,384 active cases of COVID-19 infection and 41,585 deaths while 13,78,105 patients have been discharged, according to the data from the Ministry of Health and Family Welfare, Government of India.

RBI Announcement:

RBI announced yesterday that it had decided to permit one-time restructuring of corporate loans. The details of this exercise will be spelt out by a committee headed by veteran banker KV Kamath. The Reserve Bank has announced a 'Resolution Framework for Covid19-related Stress', as a special window under the Prudential Framework on Resolution of Stressed Assets.

Accordingly, the Reserve Bank has constituted the expert committee under the chairmanship of K.V. Kamath. The other members of the committee are Diwakar Gupta (effective 1 September 2020, after the completion of his term as Vice President, ADB), T.N. Manoharan (effective 14 August 2020, after the completion of his term as Chairman, Canara Bank), Ashvin Parekh as Strategy Advisor and CEO, Indian Banks' Association, as the Member Secretary.

RBI said the committee shall submit its recommendations on the financial parameters to the Reserve Bank which, in turn, shall notify the same along with modifications, if any, in 30 days. The Indian Banks' Association shall function as the Secretariat to the Committee.

Numbers to Track:

The yield on 10-year benchmark federal paper rose to 5.89% compared with previous closing of 5.862% in the previous trading session.

In the foreign exchange market, the partially convertible rupee edged higher to 74.93 compared with its previous closing 74.94.

In the commodities market, Brent crude for October 2020 settlement fell 19 cents to $44.90 a barrel. The contract fell 0.18% to end at $45.09 in the previous trading session.

MCX Gold futures for 5 August 2020 settlement rose 0.02% to Rs 55,857.

Stocks in Spotlight:

KEI Industries jumped 6.75%. The company posted a 20.8% drop in consolidated net profit to Rs 36.23 crore in Q1 June 2020 from Rs 45.72 crore reported in Q1 June 2019. Consolidated net sales for Q1 June 2020 stood at Rs 745.35 crore, declining 31% from Rs 1081.36 crore in Q1 June 2019. KEI said sales declined approximately 31% due to lockdown and restrictions on business activities caused due to COVID-19 pandemic during the current quarter. Consolidated EBIDTA during Q1 June 2020 stood at Rs 80.87 crore, falling 32% from Rs 119.04 crore posted in the same period last year. KEI's pending order at the end of 31 July 2020 stood at Rs 2951 crore.

Indian Hotels Company up 0.1%. The company reported consolidated net loss of Rs 280 crore in Q1 June 2020 compared with net profit of Rs 6 crore in Q1 June 2019. Consolidated net sales tanked 85.9% to Rs 143.61 crore in Q1 June 2020 over Q1 June 2019. Pre-tax loss stood at Rs 336.22 crore in Q1 June 2020 compared with pre-tax profit of Rs 27.74 crore in Q1 June 2019. IHCL reported consolidated net debt of Rs 2,328 crore as on 30 June 2020, higher than Rs 1,915 crore as on 31 March 2020.

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