Sensex, Nifty Gain For Fourth Session As Metals, Private Lenders Lead; Pharma Drags
Indian equity benchmarks extended their gains to a fourth straight session as investors weighed the prospect of business recovery against the pace of new coronavirus infections.
The S&P BSE Sensex climbed 0.6% to 38,407 while the NSE Nifty 50 Index closed 0.4% higher at 11,318. Ten of the 19 sectoral indices on the BSE advanced led by the 1.5% rise in S&P BSE Metal Index. The S&P BSE Healthcare & S&P BSE Telecom were the worst performing indies, down nearly 1.5%.
The broader market underperformed with the S&P BSE SmallCap and S&P BSE MidCap indices losing 0.2% each.
Foreign investors have bought net $1.3 billion of local shares this month through August 7 as inflows continue into a fourth month. Still, a steady increase in new coronavirus infections continues to curb business activity, with the economy on course for its first contraction in 40 years.
As earnings continue, 24 of the 37 Nifty 50-member companies that have announced results so far have beaten or matched estimates.
Rupee Settles 12 Paise Higher At 74.78/$
The rupee appreciated 12 paise to close at 74.78 (provisional) against the U.S. dollar tracking weakness in the greenback and gains in the domestic equity market.
At the interbank forex market, the local unit opened at 74.83 against the US dollar, then gained further ground and finally settled at 74.78, up 12 paise over its previous close of 74.90 against the American currency.
During the session, the domestic unit witnessed an intra-day high of 74.77 and a low of 74.86 against the greenback.
Forex traders said gains in the domestic currency were supported by foreign fund inflows into domestic equity and debt markets. Market participants will track Index of Industrial Production (IIP) numbers scheduled to be released later in the day for further cues, they said.
India July Passenger Vehicle Sales Fall 3.9% YoY: SIAM
Passenger vehicles sales in domestic market in July plunged by 3.86% year-on-year to 1,82,779 units, according to data released by SIAM.
The three-wheeler sales was at 12,728 units in July, compared to 55,719 units year-on-year.
The two-wheeler sales was 12,81,354 units in July vs 1,511,717 units in the same period year ago.
“After a few consecutive of months of plummeted sales in a post-covid scenario, there are signs of green shoots in passenger vehicles and two-wheelers where the year-on-year de-growth is much lesser than in the previous months,” SIAM President Rajan Wadhera said in a statement on Tuesday. “The sales in August will indicate if this is a sustainable demand and not just pent-up.”
Yes Bank Extends Its Winning Streak
Yes Bank jumps nearly 5% to Rs 15.50 apiece.
The Mumbai-based private lender’s stock is higher for the seventh straight day, on track for the longest winning streak since the period ended Nov. 9, 2018.
The stock has gained a total of 30% during the streak while the Sensex Index increased 2.3%.
Stocks Moving On Heavy Volume
- IRCTC gains nearly 3% to Rs 1,361 apiece.
- Chambal Fertilisers rises 6.4%, the most in three months, to Rs 161.
- IDFC up 7.5%, most in five weeks, to Rs 22.30 apiece.
- Alkem Labs down 6.6%, most in almost five months, to Rs 2782 apiece.
Bloomberg Intelligence Report On IndiGo
IndiGo's Rs 4,000 crore equity raise could extend its cash buffer to 15 months from 10 as its liquidity rises to Rs 13,500 crore. Yet this could dilute earnings per share by 13% if the issue price is discounted 30% vs. Monday's close, similar to discounts seen at other airlines' equity raisings. This could also boost book value per share by 45%.
Low-cost carrier InterGlobe Aviation (IndiGo) may record a 64% capacity cut this fiscal year ending March due to the pandemic, missing its original 20% growth target amid aircraft underutilization as it continues to take deliveries through to at least September. High maintenance costs that plagued the airline last year may normalize, as its last 40 troubled engines are replaced. Rival Jet Airways’ exit boosted IndiGo’s domestic market share to 48% but also put smaller competitors on a stronger footing, intensifying competition. In the longer term, IndiGo’s cost structure could improve as older A320ceos are replaced by more efficient A320/321neos, which may also position it for international expansion.Bloomberg Intelligence Report