SSPL WEALTH PVT LTD

End - Session

Detailed review of the post market session of the day.

Sensex, Nifty attain record closing levels; TCS, RIL major contributors

14-Jan-21 17:31 Hrs IST

The domestic equity benchmarks reversed early losses and ended with decent gains on Thursday. The indices witnessed volatility due to expiry of weekly index options on the NSE. Auto stocks extended gains for the sixth consecutive session.

The barometer index, the S&P BSE Sensex, added 91.84 points or 0.19% to 49,584.16. The Nifty 50 index gained 30.75 points or 0.21% at 14,595.60. Both the indices attained record closing high levels.

TCS (up 2.89%), Reliance Industries (up 1.11%), L&T (up 1.80%) and ITC (up 1.35%) were major market movers.

Investors looked forward to US President-elect Joe Biden's major COVID-19 relief package to be unveiled on Thursday.

In the broader market, the BSE Mid-Cap index rose 0.29% and the BSE Small-Cap index gained 0.17%.

The market breadth was almost even. On the BSE, 1501 shares rose and 1509 shares fell. A total of 173 shares were unchanged.

COVID-19:

Total COVID-19 confirmed cases worldwide stood at 9,23,51,683 with 19,78,629 deaths. India reported 2,13,603 active cases of COVID-19 infection and 1,51,727 deaths while 1,01,46,763 patients have been discharged, according to the data from the Ministry of Health and Family Welfare, Government of India.

Economy:

India's wholesale prices rose by 1.22% year-on-year in December 2020, slowing from a 1.55% gain in November 2020 and 2.76% in December 2019.

Meanwhile, Fitch Ratings projected India's medium-term growth to slow down to 6.5% from FY23 onward, after the initial rebound to 11% in FY22, as the economy suffers lasting damage from the pandemic. The agency downgraded its projection of supply-side potential growth to 5.1% annually over the five-year period from 2020-25 compared to its pre-pandemic expectation of 7%.

Numbers to Watch:

The yield on 10-year benchmark federal paper fell to 5.924% as compared with 5.947% at close in the previous trading session.

In the foreign exchange market, the rupee edged higher against the dollar. The partially convertible rupee was hovering at 73.0450, compared with its close of 73.15 during the previous trading session.

In the commodities market, Brent crude for March 2021 settlement fell 3 cents at $56.03 a barrel. The contract fell 52 cents, or 0.92% to settle at $56.06 a barrel in the previous trading session.

Foreign Markets:

European stocks advanced while most Asian markets ended higher on Thursday despite ongoing concerns over the COVID-19 pandemic and political turbulence in the U.S. Vaccination rollouts across the continent have raised hopes that an end to the pandemic is on its way.

Trial data published Wednesday in the New England Journal of Medicine reportedly showed Johnson & Johnson's one-shot COVID-19 vaccine is safe and appears to generate an immune response in both young and elderly volunteers. J&J's vaccine candidate, which only requires one dose, could simplify logistics for health-care providers. The two vaccines currently authorized by the Food and Drug Administration from Pfizer-BioNTech and Moderna require two doses about three to four weeks apart.

In US, the S&P 500 and Nasdaq Composite closed slightly higher on Wednesday, led by tech shares, as traders kept an eye on interest rates, the political uncertainty coming out of Washington and a still raging pandemic. President-elect Joe Biden is expected to release details on his economic plan on Thursday.

The S&P 500 index gained 0.2% to end the day at 3,809.84, and the tech-heavy Nasdaq advanced 0.4% to 13,128.95. The Dow Jones Industrial Average closed just 8.22 points lower, or 0.03%, at 31,060.47.

Meanwhile, turmoil in Washington continues with the House on Wednesday impeaching U.S. President Donald Trump for inciting the attack on the U.S. Capitol last week.

The riots led to the death of five people and raised questions in the U.S. and around the world about the integrity of U.S. democracy and a smooth transfer of presidential power. The Wall Street Journal reported that it was the fastest impeachment vote assembled in the nation's history.

Buzzing Indian Segment:

The Nifty Auto index rose 0.29% to 10,238.30, extending gains for sixth day in a row. The index has added 9.16% in six sessions.

Tata Motors (up 1.09%), Eicher Motors (up 0.91%), Hero Motocorp (up 0.25%), Maruti Suzuki India (up 0.25%), TVS Motor (up 0.23%) and Mahindra & Mahindra (up 0.14%) advanced.

Earnings Impact:

Infosys fell 1.23%. On a consolidated basis, the IT major's net profit jumped 16.6% to Rs 5,197 crore on a 12.3% rise in revenues to Rs 25,927 crore in Q3 December 2020 (Q3 FY21) over Q3 December 2019 (Q3 FY20).

Sequentially, Infosys net profit rose 7.3% and revenue increased 5.5% in Q3 FY21 over Q2 September 2020 (Q2 FY21). Profit before tax (PBT) stood at Rs 7,151 crore in Q3 FY21, gaining 5.9% over Rs 6,750 crore in Q2 FY21. Income tax expense rose 2.3% to Rs 1,936 crore in Q3 FY21 over Q2 FY21.

Operating profit rose 5.8% to 6,589 crore in Q3 FY21 over Q2 FY21. Operating margin stood at 25.4% in Q3 FY21, higher than 25.3% in Q2 FY21 and 21.9% in Q3 FY20. The company has revised FY21 growth guidance upward to 4.5% to 5% in constant currency term. Operating margin for FY21 is revised upward in the range of 24% to 24.5%.

Wipro lost 0.94%. The IT major, after market hours yesterday, 13 January 2021, posted a 20.37% rise in consolidated net profit to Rs 2,968 crore on a 3.68% increase in revenue to Rs 15,670 crore in Q3 December 2020 (Q3 FY21) over Q2 September 2020 (Q2 FY21).

The company's consolidated net profit grew by 20.85% and revenue has risen by 1.29% in Q3 FY21 over Q3 FY20. Profit before tax (PBT) in Q3 FY21 stood at Rs 3850.4 crore, up by 20% from Rs 3,207.30 crore in Q2 FY21. Total tax expense during the third quarter increased 18% to Rs 852.6 crore in Q3 December 2020.

Wipro's IT services segment revenue came at $2,071 million in Q3 FY21, a sequential growth of 3.9%. The company's non-GAAP constant currency IT services segment revenue increased by 3.4% quarter on quarter. The company said its IT services operating margin grew by 243 basis points quarter on quarter to 21.7% in Q3 FY21.

Stocks in Spotlight:

Hindustan Aeronautics (HAL) jumped 9.57%. The Union Cabinet on January 13 has approved procurement of 83 Light Combat Aircrafts (LCA) 'Tejas' from the company for the Indian Air Force (IAF).

IndusInd Bank added 2.84%. Sebi has granted additional two weeks to promoters of the bank for infusion of residual capital in lieu of conversion of shares warrants issued to them worth over Rs 2,695.26 crore.

Indian Bank jumped 6.17%. The bank has raised Tier 2 Capital Fund through private placement of Basel III compliant Tier 2 bonds aggregating to Rs 2,000 crore at a coupon of 6.18% p.a. payable annually.

Steel Authority of India (SAIL) slumped 9.97% to Rs 67.25 after the offer for sale (OFS) opened for non-retail investors today, 14 January 2021. The floor price for the OFS has been set at Rs 64 per share, at a 14.2% discount to SAIL's closing price of Rs 74.70 on Wednesday, 13 January 2021.

Through the OFS, the Indian government proposes to sell 20,65,26,264 shares (representing 5% stake), with an option to sell an additional 5% stake or 20,65,26,264 equity shares in case of oversubscription. With this, the total OFS size stands at 41,30,52,528 shares, which is calculated at Rs 2,664 crore.

As on 15:30 IST, the OFS received subscription for 74,74,60,041 shares or 413.62% against the base non-retail offer size of 18,07,10,481 shares.

Garden Reach Shipbuilders & Engineers rose 1.78%. The company secured a contract from the Transport and Harbours Department, Ministry of Public Works, Government of Guyana, for designing, construction and supply of an ocean-going passenger and cargo vessel at the cost of $12.7 million.