Key equity benchmarks ended with tepid gains on Friday. The barometer index, the BSE Sensex rose 35.98 points or 0.09% to 40,165.03. The Nifty 50 index rose 22.05 points or 0.19% to 11,899.50. Strong gains were capped as weak domestic economic data spoiled sentiment.
Domestic shares have seen steady gains in the last few sessions supported by better-than-expected Q2 results. The Sensex has risen 2.93% and the Nifty is up 2.74% in six straight trading sessions from their recent closing low on 24 October 2019.
In the broader market Friday, the S&P BSE Mid-Cap index rose 0.18% while the S&P BSE Small-Cap index rose 0.32%. Both these indices outperformed the Sensex.
The market breadth was positive. On the BSE, 1430 shares rose and 1163 shares fell. A total of 174 shares were unchanged.
The Nifty edged higher in early trade but soon witnessed profit booking at higher level. Selling pressure in morning trade dragged the index lower as it hit the day's low of 11,843.55. The 50-unit recovered from lows in early afternoon trade and remained range bound for most part of the day. The Nifty finally managed to end a tad below 11,900-mark.
Among the sectoral indices, the S&P BSE Metal index (up 2.5%), the S&P BSE Telecom index (up 1.49%) and the S&P BSE Basic Materials index (up 1.02%) outperformed the Sensex.
The S&P BSE Consumer Durables index (down 1.16%), the S&P BSE IT index (down 0.77%) and the S&P BSE Auto index (down 0.75%) underperformed the Sensex.
Domestic economic data:
Goods & Services Tax (GST) collections for October stood at Rs 95,380 crore, an increase from the Rs 91,916 crore collected in September, but a drop from the Rs 1 lakh crore collected in the same period last year. Central GST (CGST) and State GST (SGST) collections stand at Rs 17,582 crore and Rs 23,674 crore, respectively.
Even though GST collection in October have declined 5.29% over the same month last year, the same has grown 6.74% between April and October. The government has settled Rs 20,642 crore to CGST and Rs 13,971 crore to SGST from IGST as regular settlement. The total revenue earned by the Centre and state governments after regular settlement in October is Rs 38,224 crore for CGST and Rs 37,645 crore for SGST.
India's unemployment rate in October rose to 8.5%, the highest since August 2016, and up from 7.2% in September, according to data released by the Centre for Monitoring Indian Economy (CMIE) on Friday, reflecting the impact of a slowdown in the economy.
The headline seasonally adjusted IHS Markit India Manufacturing PMI fell to a two-year low of 50.6 in October 2019 from 51.4 in September. The indices vary between 0 and 100, with a reading above 50 indicating an overall increase compared to the previous month, and below 50 an overall decrease.
India's fiscal deficit reached nearly 93% of the budget estimate at Rs 6.52 lakh crore at the end of September in the current financial year, government data showed on Thursday. In absolute terms, the fiscal deficit or the gap between expenditure and revenue was Rs 6,51,554 crore as on 30 September, according to the data released by the Controller General of Accounts (CGA). The deficit stood at 95.3% of the 2018-19 budget estimate (BE) in the corresponding month a year ago. The government has pegged the fiscal deficit for the current financial year at Rs 7.03 trillion, aiming to restrict the deficit at 3.3% of the gross domestic product (GDP).
The output of the core sector fell a record 5.2% in September, with production by seven of the eight industries declining. In September 2018, it had risen 4.3%, and 0.1% in August 2019. The Eight Core Industries comprise 40.27% of the weight of items included in the Index of Industrial Production (IIP) and includes industries like coal, crude oil, natural gas refinery products, fertilizers, steel, cement and electricity.
Currency & commodity:
In the foreign exchange market, the Indian rupee edged higher against the dollar in mid afternoon trade. In the spot currency market, the Indian unit was last seen trading at 70.86. On Tuesday, it closed at 70.925 against the US dollar.
In the commodities market, Brent crude for January 2020 settlement was up 11 cents at $59.73 a barrel. The contract fell 62 cents or 1.03% to settle at $ 59.62 a barrel during the previous trading session.
European stocks were trading higher as investors await corporate earnings and monitor global trade developments.
Asian stocks ended mostly higher Friday. A private survey of factory activity in China showed manufacturing activity in the country expanded more than expected in October. The Caixin/Markit Purchasing Managers's Index (PMI) for the manufacturing sector rose from 51.4 in September to 51.7 in October.
The US stock market finished session lower on Thursday, 31 October 2019, on skepticism about a U.S.-China trade truce deal and weakening manufacturing data. Concerns around trade and the economy dampened the enthusiasm around strong earnings from Apple and Facebook.
Concerns over trade tensions resurfaced after reports that Chinese officials are doubtful that they will be able to reach a comprehensive, long-term trade deal with the U.S. The preliminary deal was meant to be signed at the APEC meeting in Chile, but the South American country announced this week that it will no longer be hosting. President Donald Trump tweeted Thursday "China and the USA are working on selecting a new site for signing of Phase One of Trade Agreement, about 60% of total deal."
The tariff war between the world's two biggest economies has disrupted supply chains and roiled financial markets for more than a year.
Domestic Q2 results:
Indian Oil Corporation declined 2.83% after announcing a dismal Q2 result during market hours yesterday. On a standalone basis, the net profit tumbled 82.64% to Rs 563.42 crore on 12.66% drop in net sales to Rs 132,375.69 crore in Q2 September 2019 over Q2 September 2018.
The average gross refining margin for the period April-September 2019 was at $2.96 per barrel as against $8.45 per barrel during April-September 2018.
The company has accounted for a budgetary support of Rs 944.41 crore in April-September 2019 compared with Rs 2,270.03 crore during April-September 2018 as revenue grants on sale of SKO (PDS) included in revenue from operations and no under-realization is suffered by the firm on this account. Expenses include foreign exchange loss of Rs 1,135.13 crore in July-September 2019 period over Rs 2,619.72 crore in July-September 2018.
Dr. Reddy's Laboratories fell 1.02%. The drug maker reported 117% jump in net profit to Rs 1,093 crore on a 26% increase in revenue to Rs 4,801 crore in Q2 September 2019 over Q2 September 2018.
The drugmaker's revenue was aided by a tax write-back of Rs 330 crore and a licence fee worth Rs 720 crore for selling territory rights for two neurology brands to U.S.-based Upsher-Smith Laboratories, the filing said.
Kansai Nerolac Paints fell 3.06%. The paint maker reported 59.98% increase in net profit to Rs 190.77 crore on a 2.79% decline in net sales to Rs 1319.57 crore in Q2 September 2019 over Q2 September 2018. The company has chosen to exercise the option of lower tax rate of 25.17%. The full impact of this change has been recognized in tax expense for the quarter ended 30 September 2019.
Bank of India fell 0.42%. The state-run bank reported a net profit of Rs 266.37 crore in Q2 September 2019 as against a net loss of Rs 1,156.25 crore in Q2 September 2018. Total income rose 10.97% to Rs 11,985.50 crore on a 31.88% increase in net interest income to Rs 3860 crore in Q2 September 2019 over Q2 September 2018.
October auto sales:
TVS Motor Company fell 3.11%. The company registered sales of 3.23 lakh units in October 2019 as against sales of 3.98 lakh units in the month of October 2018, registering a decline of 18.83%. The auto maker, however, witnessed 2.36% increase in October compared with 3.15 lakh units in September 2019.
Bajaj Auto fell 0.47%. The company reported a 9% decline in total auto sales, selling 4.63 lakh units in October 2019 as against 5.06 lakh units October 2018. However, the total auto sales rose 15% on a month-on-month basis from 4.02 lakh units in September 2019.
Escorts fell 0.59%. Total tractor sales rose 1.6% to 13,353 units in October 2019 compared with 13,140 in October 2018. Sequentially, total tractor sales rose 23.01% in October 2019 compared with 10,855 units in September 2019.
Ashok Leyland fell 1.04%. The company reported a 35% fall in total vehicle sales to 9857 units in October 2019 as against 15149 units in October 2018. Sequentially, auto sales jumped 12.27% in October from 8,780 units in September 2019.
Maruti Suzuki India rose 0.78%. The car major reported 25.11% increase in total auto sales in October 2019 compared with 1.22 lakh units in September 2019. Total auto sales rose 4.5% to 1.53 lakh units in October 2019 over October 2019.
Mahindra & Mahindra (M&M) fell 2.81%. The company's total auto sales fell 11% to 51,896 units in October 2019 as against 58,416 units in October 2018. Sequentially, total auto sales jumped 19.73% in October 2019 as against 43,343 units in September 2019.
Total tractor sales fell 4% to 45,433 units in October 2019 over 47,376 units in October 2018. Sequentially, tractor sales surged 22.75% to 45,433 units in October 2019 as against 37,011 units in September 2019.
SML Isuzu declined 1.96%. The company said its total sales tumbled 37.9% to 515 units in October 2019 over 829 units in October 2018. Sequentially, total sales fell 16.12% in October 2019 over 614 units in September 2018.
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