Shares trade higher on firm global cues

The equity barometers continued to trade near day's high in afternoon trade. The Nifty 50 index faced resistance near 11,900 mark. Positive global cues boosted gains.

At 13:24 IST, the barometer index, the S&P BSE Sensex, surged 540 points or 1.35% at 40,418.95. The Nifty 50 index rallied 149.35 points or 1.27% at 11,888.20.

HCL Tech (up 5.45%), Tech Mahindra (up 4.33%), HDFC Bank (up 2.99%), UltraTech Cement (up 2.53%) and SBI (up 1.76%) were the top Nifty gainers.

ONGC (down 2.62%), GAIL (down 2.60%), Eicher Motors (down 2.29%), ITC (down 1.24%) and Asian Paints (down 1.04%) were the top Nifty losers.

In the broader market, the S&P BSE Mid-Cap index gained 0.44% while the S&P BSE Small-Cap index rose 0.24%. Both these indices underperformed the Sensex.

The market breadth was almost even. On the BSE, 1246 shares rose and 1279 shares fell. A total of 152 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.

Buzzing Index:

The Nifty Pharma index rose 1.41% to 12,083.45. The index had slipped 0.9% in the past two sessions.

Cipla (up 2.98%), Sun Pharma (up 2.02%), Torrent Pharma (up 1.61%), Aurobindo Pharma (up 1.23%), Biocon (up 0.85%) and Lupin (up 0.80%) advanced.

Cadila Healthcare jumped 5.09% to Rs 433.85 after the company announced the launch of India's first pressurized metered dose inhaler for patients suffering from chronic obstructive pulmonary disease.

Stocks in Spotlight:

TCS rose 4.96% to Rs 2873.15 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.

Infosys added 4.69% to Rs 1116.55 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. Together with Infosys' earlier acquisition of WONGDOODY that offers creative and marketing services, BlueAcorn iCi brings complimentary capabilities to help global chief marketing officer (CMOs) and businesses thrive in a digital commerce world.

Wipro jumped 8.13% to Rs 362.50 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 the same day.

Bandhan Bank rose 1.86% to Rs 320.35 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.

Global Markets:

European shares advanced while most Asian markets edged higher on Thursday following the overnight rally on Wall Street.

Investors continued to monitor the developments with respect to the US stimulus support, after President Donald Trump tweeted support for aid to airlines and other stimulus measures.

On the data front, 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. 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.

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.

The Federal Reserve could ramp up its bond purchasing program to push down further on borrowing costs, but for now the U.S. economy's most pressing need is for a new round of government spending, U.S. central bankers said on Wednesday.

Many members of the Federal Open Market Committee said their economic outlook assumed additional fiscal support, according to U.S. Federal Reserve minutes released on Wednesday. Central bank officials believe if aid packages are too small or too late, the economy is in for a weak recovery.

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