Nifty ends above 11,400 mark

Key domestic indices ended with stellar gains on Thursday. Positive global cues, better-than-expected domestic macro numbers and decent auto sales in September 2020 supported buying.

As per provisional closing data, the barometer index, the S&P BSE Sensex, added 629.12 points or 1.65% at 38,697.93. The Nifty 50 index rallied 169.41 points or 1.51% at 11,416.25.

The risk appetite also improved as the central government yesterday issued new guidelines for opening up of more activities in areas outside the containment zones. Cinema and hotels stocks surged following the notification.

In the broader market, the S&P BSE Mid-Cap index gained 0.73% while the S&P BSE Small-Cap index rose 0.69%.

The market breadth was positive. On the BSE, 1545 shares rose and 1125 shares fell. A total of 147 shares were unchanged.

The domestic stock market will remain shut on Friday (2 October) on account of Mahatma Gandhi Jayanti.

COVID-19 Update:

Total COVID-19 confirmed cases worldwide stood at 3,39,76,447 with 10,14,266 deaths. India reported 9,40,705 active cases of COVID-19 infection and 98,678 deaths while 52,73,201 patients have been discharged, according to the data from the Ministry of Health and Family Welfare, Government of India.

Unlock 5.0:

The Ministry of Home Affairs (MHA), on 30 September 2020, announced the Unlock 5.0 guidelines, further relaxing curbs on activities outside of containment zones. Cinemas, theaters and multiplexes will be permitted to open with upto 50% of their seating capacity from 15 October 2020, in areas outside the containment zones. For re-opening of schools and coaching institutions, State and Union territories Governments have been given the flexibility to take a decision after 15 October 2020, in a graded manner.

Social, academic, sports, entertainment, cultural, religious, political functions and other congregations have already been permitted with a ceiling of 100 persons, outside containment zones only. In closed spaces, a maximum of 50% of the hall capacity will be allowed, with a ceiling of 200 persons. Wearing of face masks, maintaining social distancing, provision for thermal scanning and use of hand wash or sanitizer will be mandatory.

Economy:

The headline seasonally adjusted IHS Markit India Manufacturing Purchasing Managers' Index (PMI) increased from 52 in August 2020 to 56.8 in September 2020, signalling back-to-back improvements in the health of the sector. Moreover, the latest reading was the highest in over eight-and-a-half years.

The output for India's eight core industries contracted for the sixth straight month, dropping 8.5% in August 2020. The production of eight core sectors had contracted 0.2% in August 2019, showed data released by the Commerce and Industry Ministry on Wednesday. Barring coal and fertiliser, all sectors crude oil, natural gas, refinery products, steel, cement and electricity recorded negative growth in August 2020.

New Listing:

Shares of Computer Age Management Services (CAMS) were trading at Rs 1403.60 at 15:22 IST on the BSE, a premium of 14.11% over the initial public offer (IPO) price of Rs 1230. The stock was listed at Rs 1518, a premium of 23.41% to the initial public offer (IPO) price. The stock hit a high of Rs 1550 and low of 1306.20. On the BSE, 129.57 lakh shares were traded on the counter so far. The issue opened for bidding on 21 September 2020 and closed on 23 September 2020. The price band for the IPO was set at Rs 1229-1230 per share.

Shares of Chemcon Speciality Chemicals were trading at Rs 584.8 at 15:23 IST on the BSE, a premium of 72% over the IPO price of Rs 340. The stock was listed at Rs 730.95, a premium of 584.80. On the BSE, 19.4 lakh shares were traded on the counter so far. The issue opened for bidding on 21 September 2020 and closed on 23 September 2020. The price band for the IPO was set at Rs 338-340 per share.

September Auto Sales:

Maruti Suzuki India rose 0.7% after the auto maker's total sales jumped 30.8% to 1,60,442 units in September 2020 from 1,22,640 units sold in September 2019. The company's total sales surged 28.74% in September 2020 from 1,24,624 units sold in August 2020. While the total domestic sales have increased by 32.2% to 1,52,608 units, total exports have risen by 9% to 7,834 in September 2020 over September 2019.

Escorts fell 2.55%. The company's Agri Machinery Segment (EAM) in September 2020 sold 11,851 tractors, highest ever September sales and registering a growth of 9.2% against 10,855 tractors sold in September 2019. While the domestic tractor sales jumped 8.9% to 11,453 units, tractor exports surged 19.2% to 398 units in September 2020 over September 2019. Escorts said that the rural demand continues to remain positive led by lower base of last year, pent-up demand from COVID-19 related lockdowns, and fundamentally positive macroeconomic factors. Timely and widespread monsoon, record rabi crop production, early kharif sowing, and good availability of retail finance have helped drive positive farmer sentiment.

Mahindra & Mahindra (M&M) rose 0.27%. The company's Farm Equipment Sector (FES) sold 43,386 tractors in September 2020, an increase of 17% as against 37,011 tractors sold in September 2019. The tractor sales jumped 77% in September 2020 from 24,458 units sold in August 2020. Domestic tractor sales in September 2020 were at 42,361 units, up 18% from 36,046 units during September 2019. Exports for the month rose 6% YoY to 1,025 units.

Meanwhile, M&M's total auto sales declined 17% to 35,920 units in September 2020 from 43,343 units sold in September 2019. Sequentially, however, the company's auto sales increased 18% in September 2020 from 30,426 units sold in August 2020.

SML Isuzu fell 0.77% after the company's sales tumbled 41% to 360 units in September 2020 over September 2019. Sequentially, however, total sales increased 12.50% in September 2020 from 320 units sold in August 2020. The company's sales declined 54% to 987 units in Q2 September 2020 over Q2 September 2019.

Ashok Leyland rose 2.42% to Rs 76.20 after the company's total auto sales jumped 31.92% to 8344 units in September 2020 from 6325 units sold in August 2020. The company's total auto sales, however, have declined by 5% as compared to 8780 units sold in September 2019.

Bajaj Auto surged 4.11% after the company's total sales rose 10% to 441,306 units in September 2020 from 402,035 units in September 2019. The two wheeler makers total domestic sales grew by 6% to 228,731 units while total exports expanded 14% to 212,575 units in September 2020 over September 2019.

Stocks in Spotlight:

Reliance Industries fell 0.7%. The conglomerate announced that Silver Lake would invest an additional Rs 1,875 crore its subsidiary Reliance Retail Ventures (RRVL). This brings the aggregate investment by Silver Lake and its co-investors in RRVL to Rs 9,375 crore, which will translate into a 2.13% equity stake in RRVL on a fully diluted basis. This latest investment values Reliance Retail at a pre-money equity value of Rs 4.285 lakh crore. The transaction is subject to regulatory and other customary approvals.

Coal India (CIL) gained 0.86% after the state-owned coal producer announced coal production and offtake figures for September 2020. The company's coal production rose 31.6% to 40.51 million tonnes (MT) in September 2020 from 30.78 million tonnes in September 2019. CIL's coal offtake in September 2020 stood at 46.46 million tonnes, up by 31.7% from 35.28 million tonnes in September 2019.

Sobha advanced 2% after the Bengaluru-based real estate company said it sold its entire contribution of 43.13% in CVS Techzone LLP for Rs 35,87,972 on 30 September 2020. The realty firm, had contributed Rs 35,87,972 to take 43.13% in the newly incorporated limited liability partnership (LLP) company - CVS Techzone LLP. It was incorporated on 8 September 2020 for development of a tech park on a joint venture basis.

Lupin surged 2.29% after the pharma major announced yesterday the launch of Lapatinib Tablets, 250 mg, after Lupin's alliance partner Natco Pharma received final approval for its ANDA from the United States Food and Drug Administration (U.S. FDA). Lapatinib Tablets, 250 mg, are the generic equivalent of Tykerb Tablets, 250 mg, of Novartis Pharmaceutical Corporation, and are indicated in combination with Capecitabine for the treatment of patients with advanced or metastatic breast cancer. Lapatinib Tablets had annual sales of approximately $61 million in the U.S. (IQVIA MAT June 2020).

KEC International rallied 1.7% after the EPC company said it has secured new orders worth Rs 1,033 crore across its various businesses. Vimal Kejriwal, MD & CEO, KEC International commented, Our International order book has strengthened significantly in the last few months especially in the Middle East and Africa regions. In line with our strategy to diversify into new segments, we are pleased with the order win for metro electrification works, which marks our entry into the technologically enabled areas of urban infra.

Global Markets:

European markets were trading higher while Asian stocks closed on a positive note tracking overnight gains in US stocks. Markets in China, Hong Kong, South Korea and Taiwan are closed on Thursday for holidays. Japan's Tokyo Stock Exchange suspended trading on Thursday due to a technical issue.

On the economic data front, the headline large manufacturers index in the Bank of Japan's quarterly tankan business sentiment survey came in at minus 27. Still, that was better than the minus 34 reading in June.

In US, stocks climbed in volatile trading on Wednesday amid rising hopes for further coronavirus stimulus.

Stocks cut gains in the final hour of trading after House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin failed to strike a coronavirus aid deal. The pair will continue talks as they try to craft a fifth package that could pass both chambers of Congress. The market soared earlier in the session after Mnuchin said lawmakers were giving the bill "a serious try."

Meanwhile, Moderna's experimental COVID-19 vaccine appears safe and shows signs of working in older adults, according to study results published in the New England Journal of Medicine. However, as per reports Moderna's vaccine won't be ready before the November election.

Sentiment was helped by better-than-expected economic data. ADP's monthly private-sector jobs count showed growth of 749,000 in September. Meanwhile, pending home sales soared 8.8% in August, marking its highest pace on record, according to the National Association of Realtors survey.

The US economy plunged at a record rate in the spring. The Commerce Department reported Wednesday that the gross domestic product, the economy's total output of goods and services, fell at a rate of 31.4% in the April-June quarter, only slightly changed from the 31.7% drop estimated one month ago.

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