Here are the key highlights from today's trading session:
1. Market erases early gains, Nifty gives up 50 points from top to end at 11,300
2. Midcap Index outperforms peers, back at 5-month high reclaiming 16,500 mark
3. Nifty Bank ends in the red for 2nd day; HDFC Bank & Axis Bank top contributors
4. Hindalco ends 3% higher ahead of Q1 earnings tomorrow; Novelis reported 27% drop in EBITDA/tonne
5. L&T and Titan lead gains for Nifty while ITC drags; stock snaps 6-day gaining streak
6. Nifty Pharma lower for the 3rd day followed by Nifty PSU Bank among sectoral indices
7. Bharti Airtel ends off lows after report says MSCI weightage cut of company could be reversed
8. MSCI cut Bharti Airtel's weightage to 1.8% from 3.5% today
9. Market Breadth remains in favour of advances as midcaps surge; ratio at 3:2
Closing Bell: Sensex closes 59 points lower, Nifty at 11,300; auto stocks gain, Tata Motors top gainer
Indian indices ended lower on Thursday after paring all morning gains led by banking and pharma names. However, auto stocks continued to gain, with Tata Motors leading the pack (4.55%).
At close, the Sensex ended 59 points lower to 38,310 while the Nifty50 index closed at 11,300, down 8 points. Broader markets continued to outperform the benchmarks, with Nifty Midcap100 and Nifty Smallcap100 indexes ending 1.66 percent and 0.77 percent higher.
Auto, Metal and Media indices ended over a percent higher, while PSU Bank index closed a percent lower followed by pharma (-0.97 percent) and bank (-0.30 percent).
Tata Motors, L&T, Hindalco, Titan and Bharti Infratel were the Nifty50 top gainers of the day while Sun Pharma, EIcher Motors, Bharti Airtel, HDFC Life Insurance and ITC remained the index top losers.
Face of trade relationships, global supply chains will shift rapidly, says Moody's report
The major tremor from COVID-19 would be felt in the global supply chains and country trade relationships, said Moody's Investors Service. In its report, it highlighted that some Asian economies will benefit from the diversification away from China.
According to the credit rating agency, supply chains will become shorter and less just-in-time, leading to a more fragmented global trade system with a greater range of suppliers for similar products and increased regionalization of production.
It feels the key beneficiaries of this fundamental shift would be Asian economies with sound economic fundamentals, reliable infrastructure, sufficient human capital stock, and low geopolitical and supply security risk.
The report also highlighted a key point that localization of production or reshoring will not help the Asian producers. Asian markets ex-China can mitigate differences by offering producers preferential access to the advanced markets, the report added later.
This stock is sitting on a breakout point after 15 weeks of consolidation, says ICICI Direct
After a brief consolidation phase, what most traders wait for is the perfect breakout point. According to ICICI Direct, Berger Paints is sitting on one right now, above the falling supply line after 15 weeks of consolidation range signaling a primary uptrend.
"The share price in the last 15 weeks has been consolidating in the broad range of Rs 552-432. In the current week trade it has resolved above the
same highlighting strength and continuation of the up move," said the brokerage report.
Interestingly, this has been a pattern for the stock in the last 4 years. In multiple occasions, the stock's buying demand emerged in the vicinity of 52 weeks EMA (exponential moving average) coincided with demand line joining lows since July 2019 (Rs 302). Click here to read more
Atmanirbhar Bharat: DPIIT prepares blueprint for aluminium, leather and furniture sector
The Department of Promotion of Industry and Internal Trade (DPIIT) has proposed short- and-long-term measures to turn India into a manufacturing hub for 20 champion sectors. CNBC-TV18 learns that short and long term measures have been identified for the aluminium, leather, and furniture sector by DPIIT as part of the overall push to manufacturing which is part of the Modi government's aim to become Atmanirbhar Bharat.
The DPIIT has suggested having a separate policy on power for the energy-intensive aluminium sector, reduction of coal cess from Rs 500 per tonne to Rs 50 per tonne, and reduction in rail freight. In the long term, the suggestion is to have an import monitoring mechanism, quality control order, and utilise aluminium for rail coaches. Read more here.
Buzzing | Lemon Tree Hotels shares hit 10% upper circuit; rise for fourth straight session
Shares of Lemon Tree Hotels were locked at 10 percent upper circuit on Thursday, gaining for the fourth day in a row. The stock surged 10 percent to Rs 32.25 per share on the BSE.
The stock has been gaining on the back of multiple developments including better-than-expected operating profit in June quarter, the company's debut in Dwarka and bullish brokerage views. It has gained more than 35 percent in the last four sessions.
On Wednesday, Lemon Tree Hotels, through its management subsidiary Carnation Hotels Pvt. Ltd., announced its debut in Dwarka, Gujarat, with the launch of the 109-key hotel - Lemon Tree Premier, Dwarka. Read more here.
Deepak Jasani, Head Retail Research, HDFC Securities on the launch “Transparent Taxation Honoring the Honest”: The launch of the platform by Prime Minister on August 13 will incentivise tax payers to be more honest and transparent in their filings and lead to gradual rise in direct tax collections. They will enjoy the benefits of relatively less documentation and greater ease of compliance, increased liquidity and flexibility of investment choices. Faceless assessments and appeals will give confidence to the taxpayer of fairness and fearlessness.
EXCLUSIVE: DoT may allow 5G trials for telcos by Sep; Chinese gear makers debarred
The Department of Telecommunications is expected to provide the spectrum needed by telecom service providers for testing their 5G networks, by September, CNBC-TV18 learns from sources.
5G is the fifth generation technology standard for cellular networks, superior to the 4G networks which currently provide connectivity to most cellphones.
The testing was originally scheduled for March, but got delayed because of the COVID-19 pandemic.
"Telecom operators will need 6 months of testing 5G devices and spectrum before we begin auctions," said a DoT official who did not want to be named.
"We are looking at providing the companies with spectrum for the testing by September so that they can begin the process," the official said. Click here to read more
Jay Thakkar of Marwadi Shares & Financials: The first buy recommendation is Cholamandalam Finance. "It seems to be consolidating sideways or in a triangular pattern. The stock seems to have reversed very well from the lower end of the channel and is now expected to inch towards the upper end of the channel. The target on the stock could be around Rs 225-230 with a stop loss at Rs 207.”
The second recommendation is on Petronet LNG given its performance in the past 2-3 trading sessions. "Petronet LNG seems to have confirmed the higher tops and bottom formation on the daily chart. One can buy it for a target of around Rs 274 and Rs 280 with a stop loss of Rs 252.”
Gold rate today: At 11:50 am, gold futures for October delivery fell 0.31 percent to Rs 52,094 per 10 grams as against the previous close of Rs 52,254 and opening price of Rs 52,365 on the MCX. Silver futures traded 0.54 percent higher at Rs 67,113 per kg. The prices opened at Rs 67,280 as compared to the previous close of Rs 66,753 per kg.
In the international market, gold rose on Thursday on a softer dollar, consolidating further above the key $1,900 level, with an ultra-low interest rate environment and worries over global economic fallout from mounting COVID-19 cases underpinning its safe-haven appeal.
Spot gold was up 0.6 percent at $1,928.94 per ounce, a day after slipping below the $1,900 level in choppy trade. US gold futures eased 0.5 percent to $1,939.79.
Saurabh Mukherjea reveals his three investment parameters and the four stocks he likes
Investing in the companies that compound earnings at a very healthy rate is what makes money for investors in the Indian stock market, said Saurabh Mukherjea, one of India's leading equity strategists.
"It is not because of GDP growth that the earnings compound, earnings compound when a company reinvests a large amount of capital, ploughs back into the business large amount of capital," said Mukherjea, Founder and Chief Investment Officer of Marcellus Investment Managers.
According to him, while investing, the focus shouldn’t be on PE multiples but it should be on a higher return on capital and then reinvestment of the surplus capital back in the business to generate good returns.
Mukherjea likes Kotak Mahindra Bank, Pidilite, GMM Pfaudler, and Alkyl Amines Chemicals from the giant, mid, small, and micro categories. Continue reading
IT index rises over 1% post US relaxation on H-1B visa rules; Tech Mahindra leads
The Nifty IT index surged over a percent on Thursday, reacting positively to the Trump administration allowing H-1B visa holders to enter the United States with conditions. The index surged about 1.31 percent with all stocks trading in the green. Tech Mahindra gained 1.78 percent, followed by NIIT Technologies which rose 1.78 percent. Mphasis surged 1.75 percent and TCS traded 1.49 percent higher. Meanwhile, IT giants like HCL Technologies, Infosys and Wipro also traded over a percent higher.
The Trump administration allowed the existing H-1B visa holders returning to the same jobs they had prior to the proclamation of the visa ban. The dependent spouses and children will also be allowed to travel along with primary visa holders.
The Trump administration has also allowed travel for technical specialists, senior-level managers, and other workers who hold H-1B visas and their travel is necessary to facilitate the immediate and continued economic recovery of the United States.
On June 22, Trump had signed a proclamation suspending the entry of certain nonimmigrant visa categories like the H1B and L1 visas till the end of the year.