Indices turn range bound; IT stocks extend gains

Barometers traded sideways with small gains in mid-morning trade, supported by firmness in IT shares. At 11:23 IST, the barometer index, the S&P BSE Sensex, was up 39.32 points or 0.1% at 39,019.58. The Nifty 50 index rose 35.25 points or 0.31% at 11,551.35.

The broader market outperformed the benchmarks. The S&P BSE Mid-Cap index was up 0.71% while the S&P BSE Small-Cap index added 0.47%.

The market breadth was positive. On the BSE, 1308 shares rose and 1054 shares fell. A total of 162 shares were unchanged.

Foreign portfolio investors (FPIs) sold shares worth Rs 249.82 crore, while domestic institutional investors (DIIs), were net sellers to the tune of Rs 1,067.83 crore in the Indian equity market on 17 September, provisional data showed.

COVID-19 Update:

Total COVID-19 confirmed cases worldwide stood at 30,071,314 with 9,44,887 deaths. India reported 10,17,754 active cases of COVID-19 infection and 84,372 deaths while 41,12,551 patients have been discharged, according to the data from the Ministry of Health and Family Welfare, Government of India.

Economy:

The Reserve Bank has decided to conduct purchase of Government securities under Open Market Operations (OMOs) for an aggregate amount of Rs 10,000 crores on 24 September 2020. Accordingly, RBI will purchase Government securities through a multi-security auction using the multiple price method. These include 6.97% GS 2026, 6.45% GS 2029 and 6.68% GS 2031 for Rs 10000 crores. The Reserve Bank reserves the right to decide on the quantum of purchase of individual securities.

Buzzing Index:

The Nifty IT index gained 0.52% to 19,920.80. The index has soared 9% in seven trading days.

Wipro (up 1.62%), Tech Mahindra (up 1.6%), HCL Tech (up 1.01%), Mphasis (up 0.65%), TCS (up 0.6%) and Larsen & Toubro Infotech (up 0.44%) advanced.

Stocks in Spotlight:

Thirteen stocks are banned from trading in NSE's F&O segment. Adani Enterprises (up 0.85%), Aurobindo Pharma (up 2.31%), Bank of Baroda (down 0.88%), BHEL (up 0.43%), Canara Bank (up 0.35%), Escorts (up 2.51%), Indiabulls Housing Finance (up 0.52%), Vodafone Idea (up 1.69%), Jindal Steel (down 1.41%), L&T Finance (up 0.7%), SAIL (down 0.39%), Tata Chemicals (down 0.82%) and Vedanta (up 0.45%) are all banned from trading in NSE's F&O segment after the securities crossed 95% of market wide position limit.

Elantas Beck India rose 1.11% to Rs 2619 after the company signed a pact for acquiring a land near Pune for setting up a new manufacturing facility. The company signed a Memorandum of Understanding with Talegaon Industrial Parks for acquisition of land at Navlakhumbre in Pune, Maharashtra. The deal is for setting up a new greenfield manufacturing facility, which will provide additional capacity to cater to the market demand.

Global Markets:

Asian markets were trading higher on Friday following pledges by central bankers globally to do whatever it takes to support the economic recovery.

US stocks fell on Thursday as technology-related shares slid for a second day. Facebook and Amazon were down 3.3% and 2.3%, respectively. Netflix closed 2.8% lower. Alphabet dropped 1.7% while Apple and Microsoft were both down at least 1%. Snowflake, an IPO which captivated Wall Street on Wednesday as it doubled in its debut, was off by 10.4%.

US President Donald Trump said late Wednesday that the U.S. could distribute a vaccine as early as October, contradicting the director of the Centers for Disease Control and Prevention, who told lawmakers earlier in the day that vaccinations would be in limited quantities this year and not widely distributed for six to nine months.

In Europe, the Bank of England kept its main interest rate unchanged at the record low of 0.1% on Thursday as it gauges the strength of the economy's recovery from recession and what the U.K.'s future trade relationship with the European Union will be. The rate-setting Monetary Policy Committee, which sets policy for the U.K. as a whole, said the outlook for the economy remains unusually uncertain in light of the recent spike in coronavirus infections and questions over the trading relationship with the EU from the start of next year.

The World Health Organization's (WHO) regional director for Europe on Thursday warned of a very serious situation unfolding in Europe. Weekly cases have now exceeded those reported when the pandemic first peaked in Europe in March, said WHO's Hans Klug.

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