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Sensex, Nifty pare gain; Europe opens higher

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Key equity indices pared in afternoon trade as profit selling emerged at higher levels. At 13:24 IST, the barometer index, the S&P BSE Sensex, was up 219.44 points or 0.56% at 39,073.99. The Nifty 50 index added 53.50 points or 0.47% at 11,517.95.

Tech Mahindra (up 3.65%), UPL (up 3.25%), TCS (up 3.11%), GAIL (up 2.59%) and Adani Ports (up 2.57%) were the top Nifty gainers.

Bajaj Finance (down 1.51%), BPCL (down 1.47%), Hindustan Unilever (down 1.38%), Britannia (down 1.19%) and Nestle Industries (down 1.17%) were the top Nifty losers.

The broader market surged after the Securities and Exchange Board of India (SEBI) on 11 September issued a circular mandating multi cap funds to allocate least 25% of their portfolios in large-, mid- and small-caps each by February 2021.

The S&P BSE Mid-Cap index was up 2.10% while the S&P BSE Small-Cap index jumped 4.12%.

Gainers outnumbered losers. On the BSE, 1886 shares rose and 717 shares fell. A total of 151 shares were unchanged.

Foreign portfolio investors (FPIs) bought shares worth Rs 1,175.81 crore, while domestic institutional investors (DIIs), were net sellers to the tune of Rs 724.31 crore in the Indian equity market on 11 September, provisional data showed.

Economy:

The Ministry of Commerce & Industry announced Wholesale Price Index (WPI) for August 2020. The annual rate of inflation, based on monthly wholesale price-based inflation (WPI), increased 0.16% from a year earlier in August 2020, after a 0.58% decline in July 2020. The index rose 1.17% during the corresponding month of the previous year. The government will announce Consumer Price Index (CPI) inflation later today.

S&P Global Ratings has forecast India's economy to shrink by 9% in FY21. It said that rising COVID-19 cases in India will keep private spending and investment lower for longer.

SEBI Ruling:

To achieve the desired objective of true to label and appropriate benchmarking, SEBI issued a circular dated 11 September 2020 on multi cap schemes of mutual funds, requiring them to invest a minimum of 25% each in large, mid and small cap stocks, with the balance 25% giving flexibility to the fund manager.

SEBI on 13 September 2020 clarified that mutual funds have many options to meet with the requirements, based on the preference of their unit holders. Apart from rebalancing their portfolio in the multi cap schemes, they could facilitate switch to other schemes by unit holders, merge their multi cap scheme with their large cap scheme or convert their multi cap scheme to another scheme category, for instance Large cum mid cap scheme.

SEBI is conscious of market stability and therefore has given time to the mutual funds till 31 January 2021 to achieve compliance, through its preferred route of which rebalancing of the portfolio is only one such route.

COVID-19 Update:

Total COVID-19 confirmed cases worldwide stood at 28,902,170 with 9,22,735 deaths. India reported 9,86,598 active cases of COVID-19 infection and 79,722 deaths while 37,80,107 patients have been discharged, according to the data from the Ministry of Health and Family Welfare, Government of India. India's recovery rate has improved to 77.88%. The COVID-19 case fatality rate has further dropped to 1.65%.

Buzzing Index:

The Nifty IT index jumped 4.57% to 19,485.45. It hit a record high of 19,545.75 today. The index has climbed 6.7% in the three sessions.

Mphasis (up 10.82%), Larsen & Toubro Infotech (up 5.59%), Infosys (up 4.76%), MindTree (up 4.49%) and Wipro (up 3.92%) were the top index gainers.

HCL Technologies surged 10.26% to Rs 795 after the company said it expects the revenue and the operating margin for the September 2020 quarter to be meaningfully better than the top end of the guidance provided in July 2020. It added that the revenue growth for the current quarter is expected to exceed 3.5% quarter on quarter in constant currency, enabled by broad based momentum across all service lines, verticals and geographies. The company expects EBIT margin for the current quarter to be between 20.5% and 21%.

Stocks in Spotlight:

Bharti Airtel fell 1.75% to Rs 483.05. The credit ratings agency Moody's Investors Service affirmed the company's 'Ba1' corporate family rating and changed the rating outlook to 'stable' from 'negative'. Annalisa DiChiara, a Moody's Senior Vice President, said, "The ratings affirmation and change in outlook to stable reflect improving profitability at Bharti's core Indian mobile business, because of a moderation in industry competition, an increase in its 4G customer base, and a tariff hike from December 2019."

ICICI Lombard General Insurance Company rose 1.69% to Rs 1,320.95 after the company said it has entered into a Bancassurance tie-up with Yes Bank. The partnership will provide the bank's diverse customer base access to the insurer's portfolio and make insurance more accessible to its customers across India.

Through this tie-up, ICICI Lombard aims to offer innovative insurance solutions to Yes Bank's customers across 28 states and 8 Union Territories. The announcement was made during market hours today, 14 September 2020.

Tata Motors added 3.88% to Rs 149.90. The company's' wholly owned subsidiary, Jaguar Land Rover (UK) said retail sales totaled 36,421 in July and 28,887 vehicles in the seasonally lower month of August. Notably UK retail sales in July and August were up significantly year-on-year, 29.1% and 14.3% respectively.

Mahindra and Mahindra (M&M) rose 1.21% to Rs 621.20. M&M said that Share Purchase Agreement entered into for sale of 93,15,000 equity shares of Neo Solren (NSPL) held by Mahindra Renewables (MRPL), a step-down wholly owned subsidiary of M&M, to CLP India stands terminated on 10th September 2020.

Adani Enterprises gained 0.90% to Rs 298.50. Adani Land Defence Systems and Technologies, a step down subsidiary of Adani Enterprises, has acquired 51% equity of PLR Systems from Fouraces Systems India on 10 September 2020. PLR Systems was incorporated in 2013 and is engaged in the manufacture and supply of indigenously manufactured defence equipment to the Armed Forces countries. PLR Systems has an authorised share capital of Rs 13 crore and paid up share capital of Rs 12.04 crore.

Global Markets:

US Dow Jones futures were up 326 points, indicating a strong opening in US stock market today.

European shares rose across the board on Monday, boosted by the resumption of coronavirus vaccine trials.

The media reported that Phase III trials of AstraZeneca's coronavirus vaccine have resumed in the U. K. after trials were halted last week over safety concerns. AstraZeneca received confirmation from the United Kingdom's Medicines Health Regulatory Authority that it was safe to resume clinical trials.

Asian shares advanced today, with investors watching shares of Japanese conglomerate Softbank Group following an announcement of its sale of U. K. chip designer Arm to U. S. chip firm Nvidia.

Chipmaker Nvidia has agreed to buy Arm Holdings, a designer of chips for mobile phones, from Softbank in a deal worth $40 billion, the companies announced Sunday. The deal will be for a mix of $21.5 billion in Nvidia stock and $12 billion in cash, including $2 billion payable at signing.

Developments in Japanese politics were also watched as the search for the successor for Prime Minister Shinzo Abe continues. The ruling Liberal Democratic Party is set to hold an election to choose its new leader on Monday.

In US, the Nasdaq Composite Index fell 66.05 points, or 0.6%, finishing at 10,853.55 in another volatile session on Friday on continuing sell-off in tech stocks. The Dow Jones Industrial Average rose 131.06 points, or 0.5%, ending at 27,665.64; while the S&P 500 rose 1.78 points, or 0.1%, to close at 3,340.97. Apple dropped 1.3% and Amazon fell by 1.9%. Facebook, Alphabet and Microsoft were all down. ByteDance rejected Microsoft's bid to buy TikTok's U. S. operations.

The Labor Department said Friday its U. S. consumer price index rose by 0.4% in August. The Treasury Department said the federal budget deficit officially surpassed $3 trillion in August, and is on pace to hit $3.3 trillion when the fiscal year ends this month.

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

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First Published: Mon, September 14 2020. 13:26 IST
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