Sensex, Nifty rally for sixth trading session

Benchmark indices surged for the sixth trading session on Thursday, led by gains in banks and IT shares. A stellar Q2 result from TCS boosted IT shares. The Nifty 50 index faced stiff resistance at 11,900 mark and ended below 11,850 level.

As per provisional closing data, the barometer index, the S&P BSE Sensex, jumped 321.2 points or 0.81% at 40,200.57. The Nifty 50 index rallied 95.35 points or 0.81% at 11,834.30.

The broader market underperformed and ended on a mixed note. The S&P BSE Mid-Cap index rose 0.29% while the S&P BSE Small-Cap index declined 0.26%.

Sellers outpaced buyers. On the BSE, 1244 shares rose and 1437 shares fell. A total of 166 shares were unchanged.

COVID-19 Update:

India reported 902,425 active cases of COVID-19 infection and 105,526 deaths while 5,827,704 patients have been discharged, according to the data from the Ministry of Health and Family Welfare, Government of India. Total COVID-19 confirmed cases worldwide stood at 36,077,017 with 1,054,674 deaths.

Economy:

The World Bank has cut India's gross domestic product (GDP) forecast for FY21. India's GDP for the fiscal started March is expected to contract by 9.6%, compared to June estimates of 4.5% contraction, it said in its South Asia Economic Focus report.

It added that it expects growth to return to 5.4% in FY22, assuming COVID-19-related restrictions are completely lifted by 2022, but mostly reflecting base effects.

Stocks in Spotlight:

TCS gained 3.85% after the company reported good sequential numbers in the second quarter and announced a share buyback worth Rs 16,000 crore. The consolidated net profit grew 6.6% and revenue increased 4.73% in Q2 September 2020 (Q2FY21) over Q1 June 2020 (Q1FY21).

TCS said that constant currency revenue for Q2FY21 rose 4.8% quarter-on-quarter. The IT major's operating margin stood at 26.2% in Q2FY21 from 23.6% in Q1FY21. The deal wins stood at $8.6 billion in Q2FY21, against $6.9 billion in Q1FY21. BFSI (+6.2%), Retail and CPG (+8.8%) and life sciences and healthcare (+6.9%) led the growth. Technology & services grew 3.1%, manufacturing +1.4% while communications & media de-grew by 2.4%.

The company's consolidated headcount stood at 453,540 as of 30 September 2020. IT services attrition rate (last twelve months) hit an all-time low at 8.9%.

Meanwhile, the IT major's board approved a proposal to buyback up to 5.33 crore equity shares of the company for an aggregate amount not exceeding Rs 16,000 crore, being 1.42% of the total paid-up equity share capital, at Rs 3,000 per equity share. The board also declared an interim dividend of Rs 12 per equity share. The record date is set on 15 October 2020.

Wipro jumped 7.32% after the IT major said its board will consider a share buyback on 13 October 2020. "The outcome of the board meeting will be communicated to the stock exchanges soon after conclusion of the board meeting on October 13, 2020," Wipro said in a statement after market hours yesterday, 7 October 2020. The firm will also announce its Q2 results on 13 October 2020 after stock market trading hours in India.

Infosys gained 3.2% after the IT major announced that it has signed a definitive agreement to acquire Blue Acorn iCi, Adobe Platinum partner in the US for a total consideration of $125 million. Infosys said the acquisition strengthens end-to-end customer experience offerings and demonstrates its continued commitment to help clients navigate their digital transformation journey.

Titan Company fell 0.64% after the company and Montblanc mutually agreed to end their joint venture partnership in India. In accordance with the joint venture agreement, the partnership will end in December 2020. The decision enables Montblanc to become a wholly owned subsidiary in the country.

GM Breweries shed 4.77% after the liquor maker's standalone net profit fell 43.52% to Rs 11.21 crore on 38.23% decrease in revenue from operations to Rs 262.30 crore in Q2 September 2020 over Q2 September 2019. Profit before tax (PBT) tumbled 35.52% to Rs 14.99 crore in Q2 September 2020 as against Rs 23.25 crore in Q2 September 2019. The company's operations were closed from 23 March 2020 to 20 May 2020. The operations restarted partially from 20 May 2020. The counter sales outside Mumbai & MMR region were started from 5 May 2020 & the counter sales in Mumbai Thane & several other region were started from 5 August 2020. The bars and restaurants in Maharashtra were not permitted to operate till 30 September 2020.

Bandhan Bank rose 1.32% after the bank said its collection efficiency in September 2020 was about 92%. While the micro finance collection efficiency was approximately at 89%, the collection efficiency in mortgage and others segments (which includes small and medium enterprises & non-banking financial companies) stood at approximately 98%. The bank's total deposits jumped 34% to Rs 66,153 crore in Q2 FY21 from Rs 49,195 crore in Q2 FY20. Loans & advances rose 20% to Rs 76,724 crore in Q2 September 2020 (Q2 FY21) from Rs 64,186 crore in Q2 September 2019 (Q2 FY20). CASA ratio was at 38.2% as on 30 September 2020 as against 32.9% as on 30 September 2019.

Jet Airways (India) hit an upper circuit of 5% at Rs 30.05 on reports that lenders to Jet Airways have chosen UK-based Kalrock Capital and UAE-based entrepreneur Murari Lal Jalan as the new owners of the bankrupt airline. The media reported that a consortium of the London-based asset management company Kalrock Capital and UAE investor Murari Lal Jalan had been chosen as the successful resolution applicant by the committee of creditors in the corporate insolvency process of the Jet Airways (India).

Jet Airways, however, clarified to the bourses today (8 October) that such news items are false and misleading and must be disregarded. It added that the committee of creditors had not concluded the e-voting under the Insolvency and Bankruptcy Code and the resolution professional shall make appropriate disclosures after the voting process is duly completed.

"The Jalan-Kalrock consortium has also intimated the Resolution Professional that it has not made any statement claiming to have been chosen as the successful resolution applicant," the airline clarified.

Buzzing Segment:

Shares of six Future Group companies tumbled after the media reported that that e-commerce giant Amazon has served a legal notice on the Future Group for striking a deal with Reliance Industries (RIL).

Future Lifestyle Fashions (down 6.59%), Future Supply Chain Solutions (down 6.15%) Future Retail (down 5.49%), Future consumer (down 5%), Future Enterprises (down 5%) and Future Market Networks (down 3.95%) declined.

Global Markets:

Shares in Europe and Asia advanced on Thursday following the overnight rally on Wall Street. In Europe, German exports rose for the fourth consecutive month, growing 2.4% in August after a 4.7% rise in July, according to the Federal Statistics Office.

US stocks rose sharply on Wednesday after President Donald Trump tweeted support for aid to airlines and other stimulus measures, stoking hope that a smaller aid package could be passed by lawmakers.

In a series of tweets Tuesday night, Trump urged Congress to approve airline payroll support, saying that money and aid for small business could be paid for with unused funds from the previous stimulus. Trump also pushed for another round of $1,200 stimulus checks for Americans.

Meanwhile, on the virus treatment front, Eli Lilly said it's seeking clearance from the U.S. Food and Drug Administration for emergency authorization of its Covid-19 antibody treatment.

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