Published on 6/08/2020 5:36:31 PM | Source: LKP Securities Ltd

Indian bourses end higher; Nifty tops 11,200 level - LKP Securities

Posted in Market Outlook| #Market Outlook #LKP Securities Ltd

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Indian bourses end higher; Nifty tops 11,200 level

Indian benchmark indices came off highs but still closed out a volatile day with gains of around a percent each on Thursday, on the back of value buying by fund and retail investors in the select blue chip counters amid firm global cues. Frontline gauges surged above their crucial 38,000 (Sensex) and 11,200 (Nifty) levels. Markets made an optimistic start and traded in fine fettle, as traders took encouragement with Director General of Foreign Trade Amit Yadav’s statement that the Directorate General of Foreign Trade will realign itself along the lines of Prime Minister’s Make in India and will push for production of items domestically to cut down imports. Sentiments also remained positive with the Department for Promotion of Industry and Internal Trade’s (DPIIT) statement that it will rope in a consulting agency to scrutinise tenders of government procuring entities for compliance with public procurement regulations that aim at promoting 'Made in India' products.

Key gauges added more strength in afternoon session to trade near day’s high point, after the Reserve Bank of India (RBI), in its second bi-monthly policy for financial year 2020-21 (FY21), has kept the repo rate unchanged in the August policy. With no change this time, the repo rate currently stands at 4 percent. The reverse repo rate has been maintained at 3.35 percent. The central bank has maintained its policy stance at ‘accommodative’ which could continue for as long as necessary to revive growth. The RBI also announced several additional measures to accelerate the economy, enhance liquidity, improve the flow of credit and deepen digital payment facilities, among others. However, in final hour of trade, markets gave up some of their initial gains, as some concern came with RBI Governor Shaktikanta Das’ statement that the country’s headline inflation is expected to remain elevated during the second quarter of the current fiscal year and may subside thereafter. He also said domestic food inflation remains elevated across most economies since the onset of the pandemic.

On the global front, Asian markets ended mostly higher on Thursday, following the positive cues from Wall Street amid optimism that U.S. lawmakers will eventually reach an agreement on a new coronavirus relief bill. Encouraging news regarding coronavirus vaccines also boosted sentiment. European markets were trading lower, after the Bank of England held interest rates steady and maintained its existing level of asset purchases, as widely expected, but forecast a slower post-pandemic economic rebound in the U.K. However, there was some respite on the data front as official data showed that German factory orders grew more than expected in June, driven by both domestic and foreign demand. Orders advanced 27.9 percent on a monthly basis in June, faster than the 10.4 percent increase seen in May. Economists had forecast a 10.1 percent rise for June.

Back home, on the sectoral front, majority of pharma sector ended in green as Secretary of Department of Pharmaceuticals, PD Vaghela said the Centre will soon come up with an exclusive policy for Research and Development in the sector. He said the government is planning to set up three National Centres of Excellence (CoE) for drugs, medical devices in the country while the National Institute of Pharmaceutical Education and Research (NIPER) here will house one CoE for drug discovery.

Finally, the BSE Sensex gained 362.12 points or 0.96% to 38,025.45, while the CNX Nifty was up by 98.50 points or 0.89% to 11,200.15.

The BSE Sensex touched high and low of 38,221.40 and 37,755.10, respectively and there were 23 stocks advancing against 7 stocks declining on the index.
The broader indices ended in green; the BSE Mid cap index was up by 0.77%, while Small cap index was up by 0.99%.

The top gaining sectoral indices on the BSE were IT up by 2.21%, TECK up by 1.76%, FMCG up by 1.37%, Consumer Durables up by 1.22% and Metal up by 1.18%, while Telecom down by 0.31%, Capital Goods down by 0.29%, Power down by 0.09% were the few losing indices on BSE.

The top gainers on the Sensex were Tata Steel up by 3.82%, Infosys up by 2.60%, Bajaj Finance up by 2.54%, HCL Technologies up by 2.49% and TCS up by 2.16%. On the flip side, Mahindra & Mahindra down by 0.75%, Bharti Airtel down by 0.60%, Larsen & Toubro down by 0.44%, Axis Bank down by 0.43% and Bajaj Auto down by 0.35% were the top losers.

Meanwhile, the Department for Promotion of Industry and Internal Trade (DPIIT) has said it will rope in a consulting agency to scrutinise the tenders of government procuring entities for compliance with public procurement rules that seek to promote 'Made in India' products. The DPIIT has floated a notice inviting request for proposal (RFP) from interested agencies.

The DPIIT said it intends to onboard an agency for one year for scrutinising tenders of central government procuring agencies for its compliance with the order. It said interested applicants are requested to submit their responses to the RFP on the central public procurement portal (eprocure. gov. in) before September 8, 2020 at 12:00 PM. it added a consulting agency will be selected on (LCS) Least Cost Selection process.

The government issued Public Procurement (Preference to Make in India) Order, 2017 on June 15, 2017, to promote production of goods and services in India and enhance income and employment in the country. The order aims at incentivizing production linked through local content requirements to encourage domestic manufacturer's participation in public procurement activities over entities merely importing to trade or assemble items.

The CNX Nifty traded in a range of 11,256.80 and 11,127.30 and there were 39 stocks advancing against 11 stocks declining on the index.

The top gainers on Nifty were Tata Steel up by 3.81%, Infosys up by 2.89%, GAIL India up by 2.63%, Bajaj Finance up by 2.54% and UPL up by 2.51%. On the flip side, Eicher Motors down by 1.29%, Shree Cement down by 1.15%, Adani Ports & SEZ down by 0.93%, Mahindra & Mahindra down by 0.57% and Dr. Reddys Laboratories down by 0.54% were the top losers.

European markets were trading lower; UK’s FTSE 100 decreased 100.19 points or 1.64% to 6,004.53, France’s CAC fell 41.23 points or 0.84% to 4,892.11 and Germany’s DAX was down by 56.26 points or 0.44% to 12,603.99.

Asian markets finished mostly higher on Thursday, bolstered by optimism of economic recovery and on encouraging reports about coronavirus vaccines. Firm trend in US stocks following the surprise quarterly profit from Disney, upbeat service sector activity data and signs of progress in US stimulus talks also lifted the investors sentiments. However, Japanese shares finished lower with the Foreign Institutional profit selling after three straight weeks of purchases, marking their biggest net offload since mid-March. Dismal earnings results from several Japanese firms also dented investor sentiment.


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