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Sensex, Nifty end with tepid gains

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Key equity benchmarks wiped off majority of the gains in last hour of session and ended marginally higher. Gains in pharma stocks were negated by weakness in auto stocks. The Nifty struggled to hold the 11,100-mark and ended below that level.

The S&P BSE Sensex rose 52.16 points or 0.14% to 37,402.49 and the Nifty 50 index rose 6.10 points or 0.06% to 11,053.90.

On the BSE, 1268 shares rose and 1212 shares fell. A total of 164 shares were unchanged. The S&P BSE Mid-Cap index rose 0.20%. The S&P BSE Small-Cap index rose 0.51%.

The undertone of the market was positive amid supportive global cues. Shares in Europe and Asia advanced on Monday as hopes emerge for stimulus from central banks and fiscal measures from major economies such as China and Germany.

German finance minister Olaf Scholz said on Sunday that Germany has the fiscal strength to mitigate any future economic crisis with "full force" and suggested that Berlin could free up around 50 billion euros ($55 billion) of extra spending.

Meanwhile, China's central bank unveiled a key interest rate reform on Saturday intended to lower borrowing costs for companies and reinvigorate an economy being negatively impacted by its trade war with the US.

Back home, investors sentiment also got a boost after Fitch Solutions said on Friday, that the Reserve Bank of India (RBI) is expected to cut interest rates by 40 basis points before the end of the current financial year as monetary easing till now appears to be insufficient in boosting economic growth. RBI on 7 Aug, had cut benchmark repurchase and reverse repurchase rates by 35 bps. In all, the central bank has cut interest rates by 110 bps this year.

The Monetary Policy Committee noted that growth is of highest priority at this point, RBI Governor Shaktikanta Das said today, 19 August at the FICCI-IBA banking seminar. He added that financial stability is important to sustain growth in the long run. Weaker-than-expected growth with signs of slowdown is the key risk to global financial stability, though banks are more resilient to shocks, he said.

Further, finance minister Nirmala Sitharaman Friday said that discussions on a possible stimulus package for industry are going on at the highest level and an announcement will come at a right time. Sitharaman held several meetings this month with industry executives, who have called for stimulus measures, including tax rebates, to support consumer demand and private investment.

On the equity front, Axis Bank (up 1.40%), Larsen & Toubro (up 1.30%), Reliance Industries (up 1.15%) and ICICI Bank (up 1.01%) were the major gainers.

Yes Bank (down 3.46%), Power Grid Corporation of India (down 1.96%), ONGC (down 1.48%) and State Bank of India (down 1.46%) were the major losers.

Tech Mahindra rose 1.84%. The IT firm said it divested 73.38% equity investment held in US-based FixStream Networks Inc. for $2 million. The announcement was made on Sunday, 18 August 2019.

Pharma shares witnessed demand. The S&P BSE Healthcare index rose 0.56%.

Drug major Sun Pharmaceutical Industries rose 2.66% after the company announced that one of its wholly owned subsidiaries has been granted an exclusive license to a subsidiary of China Medical System Holdings (CMS) to develop and commercialize seven generic products in Mainland China. The collaboration with CMS now covers eight generic products. The total addressable market size for all these eight products is about $1 billion (as per recent IQVIA data) in Mainland China. The initial term of the agreement shall be 20 years from the first commercial sale of the respective products in Mainland China and may be extended for additional three years' as per mutual agreement of the two parties.

Glenmark Pharmaceuticals rose 1.95% to Rs 368.15 on bargain hunting after a recent steep fall. The scrip plunged 15.29% in the past three trading sessions to settle at Rs 361.10 on Friday, 16 August 2019, from its close of Rs 426.30 on Friday, 9 August 2019.

The drug maker announced during today, 19 August 2019, that it has received regulatory approval to market a combination of its patent protected sodium glucose co‐transporter‐2 (SGLT2) inhibitor, Remogliflozin etabonate (Remogliflozin) and Metformin Hydrochloride (Metformin) film coated tablets in India. The drug is used to cure type‐2 diabetes mellitus in adults. The firm plans to commercialize the product under the brand names 'Remo‐M' and 'Remozen‐M'.

Among pharma stocks, Ipca Laboratories (up 1.15%), Piramal Enterprises (up 0.83%), Cadila Healthcare (up 0.78%), Dr. Reddy's Laboratories (up 0.67%), Divi's Laboratories (up 0.47%) and Lupin (up 0.35%) advanced.

Auto stocks witnessed selling after the Federation of Automobile Dealers Associations (FADA) today released the monthly vehicle registration data for July 2019. The S&P BSE Auto index fell 0.57%.

Eicher Motors (down 1.33%), Hero MotoCorp (down 1.32%), Bajaj Auto (down 0.61%), Escorts (down 0.59%) and Tata Motors (down 0.37%) declined.

For the month of July, overall sales continued to be negative at 6%, a drop of 5% in 2-wheeler sales, personal vehicles (PV) sales tanked by 11% and commercial vehicles (CV) sales dropped 14%.

On a positive note, overall sales up grew 5% in July 2019 as compared to June 2019. June 2019 had the 2nd lowest volume base this year after February. Postponement of demand seen in June due to deficient rainfall concluded in July, after onset and even spread of monsoon and slight liquidity improvement seen towards July end in banking system contributed also, towards this MoM uptick in sales. FADA categorised the near-term outlook as "cautiously optimistic''.

Auto major Mahindra & Mahindra (M&M) fell 1.36%. M&M announced that it has inaugurated its 1st automotive assembly plant in Sri Lanka. The assembly plant commenced its production with its first product, KUV 100. The company has extended its global footprint by establishing a plant in Welipenna, near Colombo, Sri Lanka. The plant established is in association with Ideal Motors of Sri Lanka.

TVS Motor Company fell 1.72%. TVS Motor (Singapore), a wholly-owned subsidiary of TVS Motor Company, signed definitive agreements to invest $3.2 million in US-based Predictronics Corporation, specialising in end-to-end predictive maintenance analytics solutions. The announcement was made on Saturday, 17 August 2019.

Shares of Spandana Sphoorty Financial made a tepid debut on exchanges. On BSE, Spandana Sphoorty Financial closed at Rs 848.40, a discount of 0.89% over the initial public offer (IPO) price of Rs 856. The stock debuted at Rs 824, discount of 3.73% to IPO price. The stock hit an intraday high of Rs 865 and an intraday low of Rs 690.

Dewan Housing Finance (DHFL) jumped 6.86% on reports that the company and its lenders have agreed on a 3-level resolution plan that includes conversion of debt to equity and issuance of nonconvertible debentures. These steps will reportedly give creditors majority stake in the embattled financier and help resume stalled credit lines. Meanwhile, announced that it will announce its Q1 earnings by 14 September 2019.

Jammu & Kashmir Bank fell 2.65% on reports that the Anti-Corruption Bureau (ACB) investigation reported irregularities in board approvals. As per reports, the case has been registered in a bank-loan fraud worth Rs 350 crore, and searches have been conducted at the Bengaluru office of the bank. The ACB has reportedly said that the management at the corporate headquarters/zonal office, Bengaluru, and officers/officials of J&K Bank, Infantry Road Branch, Bengaluru, had given loans worth crores of rupees to Rawther Spices by passing all norms and procedures.

Coffee Day Enterprises was locked in a 5% upper circuit at Rs 66.05 after the company announced debt reduction plans. The company's total debt as on 31 July 2019, excluding Sical and Magnasoft, stood at Rs 3,472 crore while the total debt of Coffee Day Group was Rs 4,970 crore. The company has announced the divestment of Global Village Tech Park (Global Village) held by its subsidiary Tanglin Developments for an aggregate consideration in the range of Rs 2,600-3,000 crore. On receipt of the consideration for the sale of Global Village after payment of required statutory payments, the debt position of Coffee Day Group will reduce around by Rs 2,400 crore. The debt position of Coffee Day Group (excluding Sical and Magnasoft) post repayment of debt out of proceeds from sale of Global Village is expected to be around Rs 1,000 crore in the next 45 days. The company further assured that it is expected to have a comfortable position to service the reduced debt obligations.

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First Published: Mon, August 19 2019. 16:40 IST