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Nifty hovers nears 11,300; pharma stocks rally

Capital Market 

Key indices held firm near the day's high in mid morning trade. The Nifty hovered around its crucial 11,300 mark. At 11:25 IST, the barometer index, the S&P BSE Sensex, rose 302.71 points or 0.8% at 38,373.56. The Nifty 50 index added 87.45 points or 0.78% at 11,290.15.

Shares across Asia got a boost after the US Federal Reserve kept interest rates near zero to support the country's virus-battered economy, sending the dollar to a two-year trough.

Sentiment also improved after the Indian government issued its latest 'Unlock 3' guidelines aimed at continuing some restrictions on people's movement while easing curbs on others.

In broader market, the S&P BSE Mid-Cap index rose 0.19% while the S&P BSE Small-Cap index was rose 0.59%.

The market breadth, indicating the overall health of the market, is strong. On the BSE, 1247 shares rose and 993 shares fell. A total of 143 shares were unchanged.

Foreign portfolio investors (FPIs) sold shares worth Rs 352.62 crore, while domestic institutional investors (DIIs), were net sellers to the tune of Rs 505.62 crore in the Indian equity market on 29 July, provisional data showed.

COVID-19 Update:

Total COVID-19 confirmed cases worldwide stood at 17,029,155 with 667,011 deaths. India reported 5,28,242 active cases of COVID-19 infection and 34,968 deaths while 10,20,582 patients have been discharged, according to the data from the Ministry of Health and Family Welfare, Government of India.

Unlock 3.0 guidelines:

The Ministry of Home Affairs (MHA) on 29 July issued new guidelines for opening up of more activities in areas outside containment zones, as a part of Unlock 3.0, which will come into effect from 1 August. The Centre directed the states governments to allow/prohibit activities outside containment zones after proper assessment of the situation. As per the guidelines, yoga institutes and gymnasiums will be allowed to open from 5 August 2020. Schools, colleges and coaching institutions will remain closed till 31 August 2020.

Sebi Regulation:

Market regulator Sebi on Wednesday gave relaxation of one month till 15 September to listed companies for submitting their June quarter results amid coronavirus pandemic.

Buzzing Index:

The Nifty Pharma index rose 2.34% to 10,685.60. The index has gained 6.2% in three days.

Dr. Reddy's Laboratories (up 3.99%), Torrent Pharmaceuticals (up 3.27%), Divi's Laboratories (up 3.15%), Lupin (up 2.29%), Cipla (up 1.83%), Sun Pharmaceuticals (up 1.62%), Cadila Healthcare (up 1.59%) and Aurobindo Pharma (up 1.48%) were top gainers in pharmaceutical space.

GlaxoSmithKline Pharmaceuticals fell 2.16% to Rs 1450 after the drug maker's consolidated net profit fell 2.4% to Rs 110.83 crore on 17.7% decline in net sales to Rs 648.59 crore in Q1 FY21 over Q1 FY20. Other income surged 88% YoY to Rs 57.92 crore in the first quarter, which includes interest on income tax refund of Rs 42.68 crore.

Other income for the quarter ended 30th June 2019 includes interest on income tax refund of Rs 8.63 crore, the company said in its notes to accounts. Profit before tax in Q1 June 2020 stood at Rs 149.14 crore, down by 15.3% from Rs 176.11 crore in Q1 June 2019. Current tax expense declined 32.4% year-on-year (YoY) to Rs 38.11 crore during the quarter.

Earnings Impact:

Sagar Cements spurted 12.22% to Rs 521.75 after the company's consolidated net profit jumped 22% to Rs 36 crore on 23.3% decline in net sales to Rs 264.12 crore in Q1 June 2020 over Q1 June 2019. Consolidated profit before tax (PBT) soared 16.3% to Rs 55.04 crore in Q1 June 2020 as against Rs 47.32 crore in Q1 June 2019. Current tax expense for the quarter surged 185.9% at Rs 8.92 crore as against Rs 3.12 crore in Q1 June 2019. The result was declared after market hours yesterday, 29 July 2020. Sales volume skid 32% to 5,55,312 MT in Q1 FY21 as against 8,20,155 MT in Q1 FY20, due to suspension of operations due to nationwide lockdown. Consolidated operating EBITDA jumped 11% to Rs 87.01 crore in Q1 FY21 as against Rs 78.62 crore in Q1 FY20. Operating EBITDA margin improved to 33% in Q1 FY21 compared with 23% in Q1 FY20.

Bombay Burmah Trading Corp gained 4.26% to Rs 1252.85 after the company reported an 89.7% jump in consolidated net profit to Rs 464 crore on a 24% rise in net sales to Rs 3425 crore in Q1 June 2020 over Q1 June 2019.

Global Markets:

Asian stocks were trading higher on Thursday after the US Federal Reserve left interest rates unchanged. On the economic data front, Japanese retail sales for June declined 1.2% as compared to a year ago, according to a preliminary report by the country's Ministry of Economy, Trade and Industry.

In US, stocks finished higher Wednesday after the US Fed policy outcome. Fed Chair Powell reiterated his promise to provide support until the threat of the coronavirus to the US economy has passed.

In a statement at the end of its policy-making meeting Wednesday, the Fed acknowledged that the economy has rebounded from the depths of March and April, when nearly all states closed down nonessential businesses. But it said the ongoing coronavirus pandemic will weigh heavily on economic activity, employment and inflation." The Fed announced no new policies in its statement. The central bank said it will also continue to buy about $120 billion in Treasury and mortgage bonds each month, which are intended to inject cash into financial markets and spur borrowing and spending.

Investors also were tuned into testimony in Washington from the nation's most prominent chief executives in the technology sector, who were fielding tough questions on their business practices and accusations they have used their market power to thwart competition, in a hearing before the House Judiciary Antitrust Subcommittee.

Treasury Secretary Steven Mnuchin said the Trump administration and Democrats remained far apart on the proposed fiscal stimulus bill.

In US economic data, the trade deficit in goods dropped to $70.6 billion in June, a 6.1% decline in June from the previous month. The index of pending home sales soared 16.6% last month, helped by low borrowing rates, as compared with May, the National Association of Realtors reported Wednesday.

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(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Thu, July 30 2020. 11:23 IST
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