Key equity indices declined on Tuesday, as investors locked profits after seven-day rising streak. The barometer index, the BSE Sensex fell 53.73 points or 0.13% to close at a 40,248.23. The Nifty 50 index fell 24.10 points or 0.20% to close at a 11,917.20.
In the broader market, the S&P BSE Mid-Cap index fell 1.13% while the S&P BSE Small-Cap index fell 0.80%. Both these indices underperformed the Sensex.
The market breadth was weak. On the BSE, 989 shares rose and 1505 shares fell. A total of 162 shares were unchanged.
The Sensex rose 3.28% and the Nifty rose 3.13% in seven straight trading sessions till Monday, 4 November 2019, from their recent closing low on 24 October 2019. Gains were supported by better-than-expected Q2 results, rate cut by US Federal Reserve and easing Sino-US trade war tensions.
The IHS Markit India Services Business Activity Index rose to 49.2 in October 2019 from 48.7 in September 2019.
The Composite PMI Output Index fell from 49.8 in September 2019 to 49.6 in October 2019.
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.
Currency and crude:
In the foreign exchange market, the rupee edged higher against the dollar. The partially convertible rupee was hovering at 70.69, compared with its close of 70.77 during the previous trading session.
In the commodities market, Brent crude for January 2019 settlement was up 64 cents at $62.77 a barrel. The contract rose 50 cents or 0.81% to settle at $62.14 a barrel during the previous trading session.
India on Monday declined to join a 16-nation grouping led by China known as the Regional Comprehensive Economic Partnership (RCEP).
RCEP is a proposed agreement between the member states of the Association of Southeast Asian Nations (Asean) and its free trade agreement (FTA) partners. The pact aims to create an integrated market with 16 countries, making it easier for products and services of each of these countries to be available across this region. The RCEP countries include the 10 members of the Association of Southeast Asian Nations, plus China, Japan, South Korea, Australia and New Zealand.
A summit of the leaders of RCEP left open the door for India to still join if it can resolve issues before the deal is set to be signed in 2020.
Most European shares traded higher as investors awaited updates on a potential U.S.-China trade deal and monitored global economic developments.
New data published by the British Retail Consortium (BRC) on Tuesday showed that consumer spending in the U.K. saw its strongest year-over-year increase in October for six months. However, the organization warned that sales growth over a 12-month period fell to a new low of 0.1%.
PMI data from IHS Markit showed that the euro zone's manufacturing sector continued to contract during October.
Asian stocks ended higher following record closes overnight on Wall Street. A private survey of China's services sector showed activity slowing to a eight month low in October. The Caixin/Markit services Purchasing Managers' Index (PMI) for October came in at 51.1 - its lowest reading since February. The 50-point level separates expansion from contraction in PMI readings.
The US stock market finished session at fresh record high on Monday, 4 November 2019, as investors risk sentiments boosted up on hopes of a U.S.-China trade deal, third-quarter earnings season, and an improving U.S. economy.
Media reports suggested that US President Donald Trump has invited his Chinese counterpart Xi Jinping to sign the phase one of a bilateral trade deal when it is agreed upon.
Domestic Q2 results:
Titan Company fell 1.2% to end at Rs 1283.85. The company's net profit rose 1.83% to Rs 320.16 crore on 0.4% rise in net sales to Rs 4,370.82 crore in Q2 September 2019 over Q2 September 2018. Revenue growth during the quarter was impacted substantially by the decline in the revenues of the jewellery division due to the sudden spike in gold prices in June 2019. The result was announced after market hours today, 5 November 2019.
Tech Mahindra rose 0.49% to end at Rs 773.15. The company reported 17.2% increase in consolidated profit after tax to Rs 1124 crore on a 4.8% rise in revenue to Rs 9070 crore in Q2 September 2019 over Q1 September 2018. EBITDA improved by 14.2% to Rs 1501 crore while the EBITDA margins rose by 130bps to 16.5% in Q2 September 2019 over Q1 September 2018. The result was announced after market hours today, 5 November 2019.
Dabur India rose 4.73%. The firm's consolidated net profit rose 6.91% to Rs 403.64 crore on 4.09% rise in net sales to Rs 2,211.97 crore in Q2 September 2019 over Q2 September 2018. The result was announced during market hours today, 5 November 2019.
The net profit was impacted by one-time impairment in value of investments to the tune of Rs 40 crore. Excluding this impairment, the net profit for Q2 of 2019-20 marked a 15.1% growth year-on-year. The domestic FMCG business reported an underlying volume growth of 4.8% during the quarter. The domestic FMCG volume growth for the quarter, excluding the foods business, stood at 7.4%.
Dabur India mitigated the impact of macro-economic headwinds and a prolonged slowdown to deliver a 4.09% growth in consolidated revenue and an improvement of 90 bps in operating margin during the second quarter of 2019-20 financial year.
Punjab National Bank (PNB) fell 5.06%. PNB reported a net profit of Rs 507.05 crore in Q2 September 2019 compared with a net loss of Rs 4,532.35 crore in Q2 September 2018. Total income rose 10.83% to Rs 15,556.61 crore while net interest income rose 7.29% to Rs 4,263.84 crore in Q2 September 2019 over Q2 September 2018.
The bank's provisions and contingencies fell 69.98% to Rs 2,928.90 crore in Q2 September 2019 over Q2 September 2018. It, however, jumped 44.76% compared with Rs 2023.31 in Q1 June 2019.
Indian Overseas Bank tanked 11.27%. The bank reported a net loss of Rs 2,253.64 crore in Q2 September 2019 compared with a net loss of Rs 487.26 crore in Q2 September 2018. The total income fell 6.1% to Rs 5,024 crore in Q2 September 2019 as against Q2 September 2018. The result was announced after market hours yesterday, 4 November 2019.
The bank's provisions and contingencies jumped 48.56% to Rs 2,996.04 crore in Q1 September 2019 over Q1 September 2018. Provision coverage ratio of the bank was at 75.85% as on 30 September 2019.
Stocks in focus:
Yes Bank rose 3.40% to Rs 68.35. According to the bulk deal data, Rakesh Jhunjhunwala, purchased 1,29,50,000 shares, or 0.51% stake, in Yes Bank at an average price of Rs 67.10 on the BSE yesterday, 4 November 2019.
InterGlobe Aviation rose 1.77% to Rs 1461.45. Reports suggested that the company and Qatar Airways will make a strategic business announcement on 7 November 2019. IndiGo is planning an aggressive push to more international destinations and the airline's CEO Ronojoy Dutta and Qatar Airways CEO Akbar Al Baker will talk about the vision and future for both the airlines, reports suggested.
Qatar Airways CEO later confirmed to the media that he has no plans for making any investment in IndiGo.
Bajaj Finance rose 2.77% to Rs 4229.80. The company on Monday launched its qualified institutional placement (QIP) offer. The company's special committee has recommended a floor price of Rs 4,019.78 per equity share. The company may offer such discount on the floor price as may be approved by the special committee.
In a separate announcement, Bajaj Finance said that a meeting of the special committee is scheduled to be held on 7 November 2019 to consider and approve the issue price, including a discount for the equity shares to be allotted to qualified institutional buyers, pursuant to the issue.
Varun Beverages surged 11.44% to Rs 701.80. A global brokerage has maintained buy rating with a price target of Rs 860 per share. The company has posted strong growth in the international segment and it remains as our preferred pick in the consumer space, the brokerage said.
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