The domestic equity benchmarks surged to hit the day's high in morning trade. At 10:23 IST, the barometer index, the S&P BSE Sensex, was up 361.20 points or 0.93% at 39,334.90. The Nifty 50 index added 84.20 points or 0.73% at 11,587.55.
In the broader market, the S&P BSE Mid-Cap index gained 0.58% while the S&P BSE Small-Cap index rose 0.59%.
The market breadth is strong. On the BSE, 1341 shares rose and 732 shares fell. A total of 133 shares were unchanged.
Global cues were positive amid reports that US President Donald Trump left Walter Reed National Military Medical Center on Monday to return to the White House, where he will continue to be treated for the coronavirus even as he looks to restart his reelection campaign.
Economy:
The government has named Shashanka Bhide, Ashima Goyal and Jayanth Varma as its nominees on the central bank's monetary policy committee (MPC) on Monday. The new members have been appointed for a four-year term.
The Reserve Bank of India was forced to delay the bi-monthly committee meeting set to take place from 29 September to 1 October, as it required at least four MPC members to proceed and the Indian government had failed to name replacements for three previous appointees whose tenure ended in September.
The committee, of three government nominees and three RBI members, had been scheduled to announce India's key interest rates and monetary policy for the next two months on 1 October.
Services PMI:
The seasonally adjusted India Services Business Activity Index rose for the fifth straight month in September to 49.8 from 41.8 in August. The latest reading was indicative of broadly stable output across the sector. Monitored companies that observed growth commented on the reopening of business units amid the loosening of lockdown rules. Firms that reported a contraction mentioned the damaging impact of the pandemic on demand.
A reading above 50 indicating an overall increase compared to the previous month, and below 50 an overall decrease.
Commenting on the latest survey results, Pollyanna De Lima, Economics Associate Director at IHS Markit, said: "The relaxation of lockdown rules in India helped the service sector move towards a recovery in September. Participants of the PMI survey signalled broadly stable business activity and a much softer decline in new work intakes. Payroll numbers decreased further, but several firms reported that attempts to take on extra workers were hampered by a lack of available labour. Backlogs data suggest that hiring efforts will continue in the near-term, however, so we could see a better employment trend in coming months provided that people are willing to leave their hometown in search for vacancies."Taking into account the performance of the manufacturing industry, a better picture of the Indian economy is painted. Private sector output expanded for the first time in six months during September, and at an above-trend rate, while the increase in sales was the first since February. The news will be welcomed by policymakers, particularly following the pandemic-related 23.9% contraction in GDP in the opening quarter of fiscal year 2020/21."
Buzzing Index:
The Nifty Auto index rose 1.34% to 8,064.20. The index had shed 0.10% yesterday.
Mahindra & Mahindra (up 3.34%), Ashok Leyland (up 2.59%) and Maruti Suzuki (up 1.16%) were the top index gainers while Hero MotoCorp (down 0.21%) and Eicher Motors (down 0.05%) were the top index laggards.
Tata Motors spurt 6.27% to Rs 142.30. The company's wholly owned subsidiary Jaguar Land Rover said retail sales for the three-month period to 30 September 2020 significantly improved from sales in the preceding quarter but continue to be impacted by Covid-19. Retail sales for the quarter ending 30 September 2020 were 113,569 vehicles, up over 50% from sales of 74,067 in the prior quarter, while down 11.9% from pre-COVID levels a year ago.
Stocks in spotlight:
HDFC Bank rose 1.74% to Rs 1133.50 after the bank's advances rose 16% to Rs 10.37 lakh crore in the quarter ended 30 September 2020, from Rs 8.97 lakh crore in the quarter ended 30 September 2019. Sequentially, the private lender's advances have increased by 3% as compared to Rs 10.03 lakh crore in the quarter ended 30 June 2020.
The bank's deposits were at Rs 12.29 lakh crore as of 30 September 2020, up by 20% from Rs 10.21 lakh crore in the same period last year. The deposits have registered a growth of around 3% as compared to Rs 11.89 lakh crore in Q1 June 2020.
The bank's CASA ratio stood at around 42% as of 30 September 2020, as compared to 39.3% as of 30 September 2019 and 40.1% as of 30 June 2020.
HDFC jumped 5.65% to Rs 1886.30 after the corporation said that its individual loan disbursements in Q2 September 2020 reached 95% of the level in the year-ago period. The corporation's individual loan business continued to witness sequential month-on-month improvement in the period July to September 2020.
The number of loan applications received during the period grew by 12% over the corresponding quarter of the previous year. During the quarter ended 30 September 2020, individual loan approvals grew by 9% compared to the corresponding quarter of the previous year.
During the September 2020 quarter, the corporation assigned loans amounting to Rs 3,026 crore compared to Rs 7,160 crore in the corresponding quarter of the previous year. All the loans assigned during the quarter ended 30 September 2020 were to HDFC Bank pursuant to the buyback option embedded in the home loan arrangement between the corporation and HDFC Bank. Gross income from dividend for the quarter ended 30 September 2020 was Rs 323 crore as against Rs 1,074 crore received in the same period last year. During Q2 FY21, the profit on sale of investments was zero as against Rs. 1,627 crore recorded in the corresponding period last fiscal.
Sobha surged 8.07% to Rs 258.45. The Bengaluru-based realty developer said it achieved a total sales volume of 891,700 square feet valued at Rs 690 crore, with a total average realization of Rs 7,737 per square feet during Q2 September 2020. The company said its dependency on Bengaluru sales volume has reduced from 74% during Q1 June 2020 to 60% during Q2 September 2020.
Sales volume, total sales value and Sobha share of sales value during Q2 September 2020 were up by 37%, 41%, 35% respectively compared with Q1 June 2020. The company said its price realization of Rs 7,737 per square feet achieved during Q2 September 2020 is the highest price realization achieved by the company as compared to past five quarters. The total average price realization was Rs 7,498 per square feet in Q1 June 2020 and Rs 6,584 per square feet in Q2 September 2019.
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