Indices hit day's high; breadth strong

Benchmark indices firmed up once again and hit the day's high during the afternoon trade. Buying was seen in auto and media stocks. Reliance Industries (up 0.76%), HDFC (up 0.81%) and Maruti Suzuki India (up 2.92%) boosted the indices. The Nifty index hovered above 11,950 level.

The barometer index, the S&P BSE Sensex, rose 197.43 points or 0.49% at 40,755.92. The Nifty 50 index gained 63.15 points or 0.53% at 11,959.60.

The broader market outperformed the benchmark indices. The S&P BSE Mid-Cap index rose 0.83%. The S&P BSE Small-Cap index gained 0.75%.

Buyers outnumbered sellers. On the BSE, 1,636 shares rose and 891 shares fell. A total of 135 shares were unchanged. In Nifty 50 index, 34 stocks advanced while 16 stocks declined.

Foreign portfolio investors (FPIs) bought shares worth Rs 1,118.46 crore, while domestic institutional investors (DIIs), were net sellers to the tune of Rs 2,019.87 crore in the Indian equity market on 22 October 2020, provisional data showed.

COVID-19 Update:

Total COVID-19 confirmed cases worldwide stood at 4,17,05,699 with 11,37,333 deaths. India reported 6,95,509 active cases of COVID-19 infection and 1,17,306 deaths while 69,48,497 patients have been discharged, according to the data from the Ministry of Health and Family Welfare, Government of India.

Gainers & Losers:

Tata Steel (up 2.93%), Tata Motors (up 2.51%), PowerGrid Corporation of India (up 2.39%) and HDFC Life Insurance Company (up 2.06%) were major gainers in Nifty 50 index.

Shree Cement (down 2.04%), GAIL (India) (down 1.52%), SBI Life Insurance Company (down 1.50%), Ultratech Cement Company (down 1.29%) and Hindustan Unilever (down 1.29%) were major losers in Nifty 50 index.

Results Today:

Nestle India (down 0.24%), Tech Mahindra (up 1.04%), JSW Steel (down 0.38%), Yes Bank (up 1.26%), ICICI Lombard General Insurance Company (down 0.63%), IDBI Bank (down 0.13%), Atul (up 0.96%), Heidelberg Cement (down 0.53%), Sudarshan Chemicals (up 0.97%), Persistent Systems (down 0.42%) and Aarti Drugs (up 0.25%) will announce its quarterly earnings today.

Earnings Impact:

HDFC Asset Management Company declined 2% after the company's net profit fell 8% to Rs 337.90 crore on 8% decline in revenue from operations to Rs 456.20 crore in Q2 FY21 over Q2 FY20.

The fund house's market share stood at 13.6% as on 30 September 2020 as against 14.5% as on 30 June 2020 and 14.7% as on 30 September 2019. The company's quarterly average Assets Under Management (QAAUM) was Rs 3,75,500 crore as of 30 September 2020 compared to Rs 3,76,600 crore as on 30 September 2019.

Biocon skid 2.29% after the company's consolidated net profit fell 23% to Rs 195.40 crore on 11.33% rise in net sales to Rs 1,744.80 crore in Q2 September 2020 over Q2 September 2019. Net profit for Q2FY21 was impacted due to higher R&D expenses at Rs 148 crore (versus Rs 104 crore in Q2FY20) up by 42%, forex losses and higher staff & other expenses. EBITDA margin fell to 23% in Q2 September 2020 compared with 27% in Q2 September 2019.

Income from generics business increased 8% YoY to Rs 599 crore while the income from biosimilars business jumped 11% YoY to Rs 676 crore in Q2 September 2020. Revenue from research services gained 12% YoY to Rs 520 crore in Q2 September 2020 driven by good performances in the Discovery Services and Dedicated R&D Centre businesses.

Coforge dropped 3.61%. The IT firm reported a 47.40% growth in consolidated net profit to Rs 122.20 crore on a 9.14% increase in net sales to Rs 1,153.70 crore in Q2 September 2020 (Q2FY21) over Q1 June 2020 (Q1FY21).

Consolidated profit before tax (PBT) stood at Rs 152.50 crore in Q2FY21, rising 40.03% from Rs 108.90 crore in Q1FY21. Total tax expense advanced 7.31% to Rs 41.10 crore in Q2FY21 over Rs 38.30 crore in Q1FY21. On a sequential basis, consolidated revenue grew 9.1% over the preceding quarter in rupee terms, 8.1% in constant currency terms and 10.7% in dollar terms.

Stock in Spotlight:

Tech Mahindra rose 1.04% after its wholly owned subsidiary, Tech Mahindra (Americas), Inc. has agreed to acquire 6.03% equity shares in VitalTech Holdings, Inc. for a total cash consideration of $3 million. The company also has an option of investing an additional amount of upto $5 million (or an additional 8% stake) till January 2021. The acquisition is expected to be completed by 26 October 2020.

Music Broadcast hit an upper circuit of 20% at Rs 21.35 after the private FM radio broadcaster announced bonus issue of non-convertible non-cumulative redeemable preference shares (NCRPS) for every ten shares held by non-promoter shareholders.

The issue price will be Rs 100 per share, including a premium of Rs 90 and face value of Rs 10. The total issue size will be worth Rs 90 crore, and the coupon rate for the same will be 0.1%. The NCRPS will be redeemed on the expiry of 36 months from the date of allotment, the company said. The record date is to be determined in due course with the redemption price been fixed at Rs 120.

Global Markets:

Shares in Europe and Asia advanced on Friday as investors monitor coronavirus developments. COVID-19 infections in Germany have risen to a record while Spain's health minister said that the spread is 'out of control' in certain parts of the country. Hospitalisations related to the virus have reached a two-month high in the U.S.

In Europe, the U.K. and European Union (EU) ramped up daily talks on Thursday regarding a post-Brexit trading arrangement between both the parties.

The US stock market finished higher after fluctuating in and out of the unchanged line throughout the session on Thursday, 22 October 2020. The gain was largely supported by better than expected economic data and the prospect of more fiscal stimulus to support a pandemic-damaged U.S. economy.

US House speaker Nancy Pelosi said a deal on new coronavirus aid was "just about there", despite continued opposition from the Republican-controlled Senate. U.S. House of Representatives Speaker Nancy Pelosi reported progress in talks with the Trump administration for another round of financial aid and said legislation could be hammered out "pretty soon". However, White House economic adviser Larry Kudlow cautioned "significant policy differences" remained, which were unlikely to be resolved before the November 3 election.

The US leading economic index climbed by 0.7% in September after surging up by a revised 1.4% in August, the Conference Board reported on Thursday, suggesting the U.S. economy could be losing momentum heading into the final quarter of 2020. However, the continued increase by the leading economic index was driven primarily by declining unemployment claims and rising housing permits.

The existing home sales in the US soared by 9.4% to an annual rate of 6.54 million in September after jumping by 2% to a revised rate of 5.98 million in August, reflecting record-low interest rates and an abundance of buyers, the National Association of Realtors reported on Thursday.

US initial jobless claims fell to 787,000 in the week ended October 17th, a decrease of 55,000 from the previous week's revised level of 842,000, a report released by the Labor Department on Thursday showed.

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