Benchmarks turn range bound; financial stocks rally

The benchmark indices were trading in a narrow range near the day's high in early afternoon trade. Stocks rose across the globe as investors reacted strongly to Democrat Joe Biden's victory in the U.S. presidential race. At 12:20 IST, the barometer index, the S&P BSE Sensex, spurted 403.90 points or 0.96% at 42,296.96. The Nifty 50 index rallied 121.45 points or 0.99% at 12,385.

In the broader market, the S&P BSE Mid-Cap index rose 0.55% while the S&P BSE Small-Cap index gained 0.21%.

The market breadth was positive. On the BSE, 1,361 shares rose and 1,139 shares fell. A total of 160 shares were unchanged.

US Election 2020:

Democrat Joe Biden defeated incumbent Donald Trump in the U.S. presidential race to become president elect. Kamala Harris will become the first female, Black and Indian-origin vice-president of the United States. Biden and Kamala will be sworn in to their new offices on 20 January 2021, taking over from incumbent Republicans Donald Trump and Mike Pence.

Bihar Exit Polls:

Following the end of third and final phase of Bihar election on 7 November 2020, the results will be declared on 10 November 2020. The market will closely watch results as exit polls reportedly indicated that the Tejashwi Yadav-led Mahagathbandhan could get a majority in the Bihar election with maximum 191 seats, while the Chief Minister Nitish Kumar-led National Democratic Alliance (NDA) may get maximum 91 seats. Most of the exit polls predicted RJD to again emerge as the single largest party.

Coronavirus Update:

Total COVID-19 confirmed cases worldwide stood at 5,03,95,314 with 12,56,179 deaths.

India reported 5,09,673 active cases of COVID-19 infection and 1,26,611 deaths while 79,17,373 patients have been discharged, according to the data from the Ministry of Health and Family Welfare, Government of India.

Derivatives:

The NSE's India VIX, a gauge of market's expectation of volatility over the near term, rose 0.59% to 20.62. The Nifty November 2020 futures were trading at 12,404.60, at a premium of 12.55 points compared with the spot at 12,392.05.

The Nifty option chain for 26 November 2020 expiry showed maximum Call OI of 16.58 lakh contracts at the 13,000 strike price. Maximum Put OI of 26.62 lakh contracts was seen at 11,000 strike price.

Buzzing Index:

The Nifty Financial Service index gained 1.18% to 13,045.65. The index added 12.11% in the past six sessions.

HDFC Asset Management Company (up 4.64%), M&M Financial Services (up 3.69%), ICICI Bank (up 2.89%), Axis Bank (up 2.09%) and HDFC Bank (up 1.52%) advanced.

Stocks in Spotlight:

Ipca Laboratories dropped 4.91%. The drug maker reported 38.3% jump in consolidated net profit to Rs 266.70 crore on a 6% rise in net sales to Rs 1,361.10 crore in Q2 FY21 over Q2 FY20. Profit before tax in Q2 September 2020 stood at Rs 319.29 crore, up by 41.6% from Rs 225.43 crore in Q2 September 2020. Current tax expenses during the quarter increased 59.3% year-on-year (Y-o-Y) to Rs 53.33 crore.

On the segmental front, revenue from the formulations business increased by 2% to Rs 899.86 crore while the revenue from the APIs business jumped by 21% to Rs 381.03 crore in Q2 September 2020 over Q2 September 2019. EBITDA rose by 29% to Rs 358.14 crore in Q2 FY21 from Rs 278.37 crore in Q2 FY20. EBITDA margin was at 27.28% as on 30 September 2020 as against 22.69% as on 30 September 2019.

Amber Enterprises India slumped 5.30% after the company's net profit tanked 77% to Rs 3 crore on a 35% fall in revenue from operations to Rs 408 crore in Q2 FY21 over Q2 FY20. The company said that RAC (room air-conditioner) sales contributed 36% of total revenue while components & mobile application contributed 64% of total revenue.

Operating EBITDA declined 49% to Rs 20 crore in Q2 September 2020 from Rs 39 crore in Q2 September 2019. Operating EBITDA margin was at 4.8% as on 30 September 2020 as against 6.2% as on 30 September 2019.

Bharat Heavy Electricals (BHEL) rose 0.72%. The state-run enterprise reported a consolidated net loss of Rs 552.38 crore in Q2 September 2020 as compared to a net profit of Rs 120.95 crore in Q2 September 2019.

On a consolidated basis, net sales slumped 42.9% to Rs 3,444.31 crore in Q2 September 2020 over Q2 September 2019. Pre-tax loss stood at Rs 733.80 crore in Q2 September 2020 as against a pre-tax profit of Rs 166.88 crore in Q2 September 2019. Current tax expense for the quarter stood at Rs 2.33 crore. The company reported negative EBITDA of Rs 528 crore in Q2 FY21 as against a positive EBITDA of Rs 403 crore in Q2 FY20.

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