Equity indices were trading near the flat line in afternoon trade. The Nifty reclaimed the 11,900 mark after briefly slipping below that level. Selling was seen in financials and pharma stocks while IT shares bucked weak sentiment.
At 13:22 IST, the barometer index, the S&P BSE Sensex, was up 14.37 points or 0.04% at 40,608.17. The Nifty 50 index added 3.4 points or 0.03% at 11,934.45.
Gains were capped as India's retail inflation in September rose above the RBI's comfort level, while industrial output continued to contract in August, official data showed on Monday. The RBI MPC has given the mandate to maintain annual inflation at 4% until 31 March 2021, with an upper tolerance of 6% and a lower tolerance of 2%.
Negative opening in European markets also put pressure domestic indices.
In the broader market, the S&P BSE Mid-Cap index fell 0.06% while the S&P BSE Small-Cap index declined 0.15%.
The market breadth turned negative. On the BSE, 1092 shares rose and 1388 shares fell. A total of 159 shares were unchanged.
India reported 838,729 active cases of COVID-19 infection and 109,856 deaths while 6,227,295 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 37,808,273 with 1,080,790 deaths, according to data from Johns Hopkins University.
India's industrial output contracted for the sixth straight month in August, due to lower output of manufacturing, mining and power generation sectors. Data released on Index of Industrial Production (IIP) by the Ministry of Statistics & Programme Implementation on Monday showed the index had contracted 8% in August compared with a fall 10.77% in July. The data further showed that, manufacturing sector production had registered a decline of 8.6%, while the output of mining and power segments fell 9.8% and 1.8%, respectively.
India's retail inflation jumped to its highest in eight months in September on the back of rising food prices. The Consumer Price Index-based inflation stood at 7.34% last month compared with 6.69% in August. Inflation in the food and beverages category stood at 9.73% in September against 8.29% in August, led by higher prices of vegetables, pulses, meat and fish.
Meanwhile, the GST Council on Monday failed to reach any consensus for the second time in a week over compensating states for shortfall in GST collections. The meeting, chaired by finance minister Nirmala Sitharaman, was a continuation of the 42nd GST Council meet held last week.
Addressing the media after the meeting, Nirmala Sitharaman said that the Centre cannot borrow and pay states for the shortfall, it is the States that need to borrow since it would lead to rise in bond yields, resulting in rise in borrowing costs for the government and the private sector.
Gainers & Losers:
UltraTech Cement (up 3.62%), HCL Tech (up 2.8%), Shree Cements (up 2.47%), Eicher Motors (up 2%) and Grasim (up 1.85%) were top gainers in Nifty 50 index.
ICICI Bank (down 2%), Bajaj Finance (down 1.48%), HDFC (down 0.99%) and Titan Company (down 0.97%) were top losers in Nifty 50 index.
Stocks in Spotlight:
Shalby jumped 2% after the company's consolidated net profit rose 89.40% to Rs 24.47 crore on 8.04% decline in net sales to Rs 115.62 crore in Q2 September 2020 over Q2 September 2019.
Alembic Pharmaceuticals gained 2.36% after its Associate Company Rhizen Pharmaceuticals SA (Rhizen) entered into an exclusive license agreement with Curon Biopharmaceutical for development and commercialization of Tenalisib, a Dual PI3K Delta and Gamma Inhibitor for Oncology in Greater China. Under the terms of the agreement, Rhizen will receive an undisclosed upfront cash payment and is eligible to receive additional development and commercial milestone payments with an overall deal value of $149.5 million plus double-digit royalties on annual net sales of Tenalisib.
SRF slipped 0.37% to Rs 4352.60.
The specialty chemicals maker launched a qualified institutional placement (QIP) of shares on Monday (12 October 2020). The floor price has been set at Rs 4168.73 per equity share for the QIP, which is at a 4.58% discount to Monday's closing price of Rs 4368.85 per share. In its draft placement document filed with the bourses, SRF said: "Our company proposes to utilize the net proceeds for funding suitable organic and inorganic growth opportunities, ongoing capital expenditure, other long term and short terms requirements, pre-payment and/or repayment of outstanding borrowings, general corporate purpose, or any other purposes, as may be permissible under applicable law and approved by our board or its duly constituted committee."
Cipla fell 0.95%. The drug major said that its step-down US-based subsidiary received complete response letter (CRL) from the US drug regulator for IV Trambol. The CRL stated that the application for IV tramadol cannot be approved in its present form. The drug, intended to treat patients in acute pain who require an opioid, is not safe for the intended patient population. The USFDA requires an adequate terminal sterilization validation prior to NDA approval, which is planned for later this quarter.
The US Dow Jones index was down 114 points, indicating a negative opening in the US market today.
European indices opened lower while Asian stocks were mixed on Tuesday. Hong Kong Exchanges and Clearing announced Tuesday that trading in the securities and derivatives markets, including after-hours futures trading, have been cancelled for the full day due to the typhoon.
Investors were awaiting earnings season to kick off in the US, while watching the latest China data and coronavirus developments.
China reported strong trade data in September as most business activity resumed in the world's second-largest economy, following the worst of the coronavirus pandemic.
For September, China's imports surged 13.2% in US dollar terms, according to official customs data on Tuesday. Exports rose 9.9% from a year ago. The country imported and exported a record amount of goods in yuan-denominated terms in September. In the third quarter, China's exports rose 10.2% from a year ago to 5 trillion yuan ($742.9 billion). Imports rose 4.3% to 3.88 trillion yuan during that time.
The US stock market finished higher for fourth straight session on Monday, as investors bought technology giants and shifted their focus to corporate earnings starting this week. The moves come against the backdrop of the looming U. S. presidential election and stalled talks for another round of coronavirus stimulus.
With less than three weeks to the presidential election, investors are now focusing on the outlook for the Democratic Party controlling both the White House and Congress.
Prospects for another fiscal stimulus package appeared to have simmed, as Democrats over the weekend rejected a $1.9 trillion proposal from Treasury Secretary Steven Mnuchin, representing the Trump administration's most generous aid proposal thus far.
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