Nifty nears 11,550; broader market rallies

Key benchmarks were trading with modest gains in morning trade, tracking positive global sentiment. At 10:26 IST, the barometer index, the S&P BSE Sensex, added 316.12 points or 0.81% at 39,170.67. The Nifty 50 index rallied 77.6 points or 0.68% at 11,542.05.

The broader market surged after the Securities and Exchange Board of India (SEBI) on 11 September issued a circular mandating multi cap funds to allocate least 25% of their portfolios in large-, mid- and small-caps each by February 2021. The S&P BSE Mid-Cap index was up 1.81% while the S&P BSE Small-Cap index jumped 3.73%.

The market breadth, indicating the overall health of the market, was strong. On the BSE, 1702 shares rose and 492 shares fell. A total of 140 shares were unchanged.

SEBI Ruling:

To achieve the desired objective of true to label and appropriate benchmarking, SEBI issued a circular dated 11 September 2020 on multi cap schemes of mutual funds, requiring them to invest a minimum of 25% each in large, mid and small cap stocks, with the balance 25% giving flexibility to the fund manager.

SEBI on 13 September 2020 clarified that mutual funds have many options to meet with the requirements, based on the preference of their unit holders. Apart from rebalancing their portfolio in the multi cap schemes, they could facilitate switch to other schemes by unit holders, merge their multi cap scheme with their large cap scheme or convert their multi cap scheme to another scheme category, for instance Large cum mid cap scheme.

SEBI is conscious of market stability and therefore has given time to the mutual funds till 31 January 2021 to achieve compliance, through its preferred route of which rebalancing of the portfolio is only one such route.

Monsoon Session of Parliament:

The Monsoon session of the Parliament starts today (14 September). In view of the COVID-19 pandemic, the session will be held in two shifts - 9 AM to 1 PM and 3 PM to 7 PM. Except for the first day, the Rajya Sabha will sit in the morning shift and the Lok Sabha will sit in the evening. The Session will take up 47 items during its 18 sittings till 1st October. It will take up eleven Bills to replace the ordinances. These includes the Farmers' Produce Trade and Commerce (Promotion and Facilitation) Bill, 2020, the Indian Medicine Central Council (Amendment) Bill, 2020, the Essential Commodities (Amendment) Bill, 2020, the Banking Regulation (Amendment) Bill, 2020, the Epidemic Diseases (Amendment) Bill, 2020 and the Salary and Allowances of Ministers (Amendment) Bill, 2020.

COVID-19 Update:

Total COVID-19 confirmed cases worldwide stood at 28,902,170 with 9,22,735 deaths. India reported 9,86,598 active cases of COVID-19 infection and 79,722 deaths while 37,80,107 patients have been discharged, according to the data from the Ministry of Health and Family Welfare, Government of India.

India's recovery rate has improved to 77.88%. The COVID-19 case fatality rate has further dropped to 1.65%.

Earnings Today:

PVR (up 2.79%), Apollo Hospital Enterprise (up 0.63%), Axiscades Engineering (up 2.67%), Bajaj Healthcare (up 3.23%), Future Retail (down 2.49%), Raymond (up 2.62%), Balaji Telefilms (up 2%), Bharat Road Network (up 0.74%), Gati (up 1.1%), JB Chemicals & Pharma (up 5.94%), MMTC (up 1.66%), NBCC (up 3.45%) and SAIL (up 1.41%) are some of the companies that will announce their quarterly results today.

Buzzing Index:

The Nifty IT index surged 2.4% to 19,080.20, rising for third consecutive trading session. The IT index added 4.4% in three trading days.

Mphasis (up 6.38%), Mindtree (up 3.42%), Tech Mahindra (up 2.59%), Infosys (up 2.36%), TCS (up 2.23%) and Wipro (up 1.69%) advanced.

HCL Technologies jumped 6.25% after the company said it expects the revenue and the operating margin for the September 2020 quarter to be meaningfully better than the top end of the guidance provided in July 2020. It added that the revenue growth for the current quarter is expected to exceed 3.5% quarter on quarter in constant currency, enabled by broad based momentum across all service lines, verticals and geographies. The company expects EBIT margin for the current quarter to be between 20.5% and 21%.

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