Benchmarks indices reversed gains and hit the day's low in afternoon trade, dragged by IT and auto shares. At 13:22 IST, the barometer index, the S&P BSE Sensex, was down 117.8 points or 0.31% at 37,812.53. The Nifty 50 index declined 36.45 points or 0.33% at 11,125.80.

The broader market was mixed with the S&P BSE Mid-Cap index rising 0.3% while the S&P BSE Small-Cap index falling 0.04%.

The market breadth was weak. On the BSE, 1161 shares rose and 1297 shares fell. A total of 151 shares were unchanged. In Nifty 50 index, 19 stocks advanced while 31 stocks declined.

Foreign portfolio investors (FPIs) bought shares worth Rs 2,265.88 crore, while domestic institutional investors (DIIs), were net sellers to the tune of Rs 727.39 crore in the Indian equity market on 21 July, provisional data showed.

COVID-19 Update:

India reported 4,11,133 active cases of COVID-19 infection and 28,732 deaths while 7,53,049 patients have been cured, according to the data from the Ministry of Health and Family Welfare, Government of India. Total coronavirus cases worldwide stood at 14,952,328 with 616,577 deaths so far, according to data from Johns Hopkins University.

Earnings to watch:

Larsen & Toubro (down 1.16%), Alembic Pharmaceuticals (up 3.11%) and Jindal Steel & Power (up 0.78%) will announce their quarterly earnings today.

Buzzing Segment:

Shares of 11 sugar makers were in demand after the government on Tuesday (21 July) fixed an export quota of 10,000 tonne of sugar at concessional rate for the European Union under a specific provision.

Balrampur Chini Mills (up 4.25%), Sakthi Sugar (up 4.06%), Dhampur Sugar (up 3.93%), Rana Sugars (up 3.81%), Dwarikesh Sugar (up 3.13%), Uttam Sugar Mills (up 2.86%), Shree Renuka Sugar (up 2.41%), Bajaj Hindustan (up 1.98%), Avadh Sugar & Energy (up 1.97%), EID Parry (up 1.62%) and Triveni Engineering (up 1.28%) all advanced.

Director General of Foreign Trade (DGFT) said that the quantity of 10,000 tonne of sugar (raw and/or white sugar) to be exported to EU under CXL quota from 1 October 2020 to 30 September 2021 has been notified.

Earnings Impact:

Hindustan Unilever (HUL) fell 3.08%. The FMCG company reported standalone net profit of Rs 1,881 crore in Q1 June 2020 as against net profit of Rs 1,755 crore in Q1 June 2019. The FMCG major's revenue from operations stood at Rs 10,560 crore in Q1 June 2020 as against Rs 10,114 crore in Q1 June 2019. The result was announced after market hours on 21 July 2020. Underlying domestic consumer business sales (excluding the impact of business combinations i.e. merger of GlaxoSmithKline Consumer Healthcare with HUL) impacted by COVID disruptions declined by 7% in the quarter. Standalone EBITDA for the quarter was flat at Rs 2,644 crore compared with Rs 2,647 crore in Q1 June 2019. EBITDA margin declined by 110 bps over the corresponding period of the previous year.

Bajaj Finserv rose 0.96% after the company's consolidated net profit jumped 44% to Rs 1,215 crore on 16% rise in total income to Rs 14,192 crore in Q1 June 2020 over Q1 June 2019. Bajaj Finance made a pre-tax provision of Rs 1,450 crore in the form of contingency provision during Q1 FY21, on account of the impact of COVID-19. The same is over and above the provision considered of Rs 900 crore in FY20 and other usual and necessary provisions for NPAs.

Polycab India lost 2.89% after the company posted a 12.57% fall in consolidated net profit to Rs 117.60 crore on a 49.95% drop in net sales to Rs 976.60 crore in Q1 June 2020 over Q1 June 2019.

The Fast Moving Electrical Goods (FMEG) company's consolidated profit before tax before exceptional items declined by 86% to Rs 29.4 crore in Q1FY20 from Rs 206.6 crore in Q1FY19 on account of adverse operating leverage. PAT margin at 12% in Q1FY20, was up 510 basis points YoY from Q1FY19 reflecting few one off gains.

IndiaMART InterMESH rose 3.97% after the company's consolidated net profit jumped 128.7% to Rs 74.1 crore in Q1 June 2020 from Rs 32.4 crore posted in Q1 June 2019. Net sales rose 3.94% year on year (y-o-y) to Rs 153.10 crore in Q1 June 2020. Revenue was primarily driven by marginal improvement in realization of existing customers. Number of paying subscription suppliers were same as last year due to the challenging economic and market conditions amidst the Covid-19 pandemic. Consolidated deferred revenue grew by 3% to Rs 628 crore in Q1FY21 from Rs 610 crore in Q1FY20. EBITDA margins increased to 48% in Q1FY21 from 25% in Q1FY20 primarily driven by various cost optimization measures leading to sustained and temporary rationalization of expenses.

Syngene International fell 0.96% after consolidated net profit dropped 19.4% to Rs 58 crore on 0.2% increase in net sales to Rs 421.60 crore in Q1 June 2020 over Q1 June 2019. EBITDA margin remained flat at 32% in Q1 FY21 as well as in Q1 FY20. Syngene's first quarter performance was driven by robust performances in discovery services and the dedicated centres. The national lockdown resulted in a temporary suspension of operations in all divisions. Since restarting, the expansion of shift working and other protection measures for employees allowed the divisions to return to near normal levels of operation and get client projects largely back on schedule.

Mahindra CIE Automotive slipped 3.55% after the company reported consolidated net loss of Rs 128.74 crore in Q2 June 2020 compared with net profit of Rs 126.22 crore in Q2 June 2019. Net sales slumped 65.7% to Rs 735.47 crore in Q2 FY21 over Q2 FY20. Pre-tax loss stood at Rs 147.06 crore in Q2 June 2020 compared with pre-tax profit of Rs 173.44 crore in Q2 June 2019. Consolidated net financial debt stood at Rs 1,454.10 crore as on 30 June 2020 as compared to Rs 1,148.80 crore as on 31 December 2019.

Global Markets:

European market opened lower while Asian stocks were negative on Wednesday as rising global coronavirus cases weighed on investor sentiment.

A report by the US Centers for Disease Control suggested that the number of coronavirus cases in some states is much higher than has been reported due to issues with testing and data collection.

The US stock market finished session marginal higher on Tuesday, 21 July 2020, thanks to a relatively better than expected second-quarter earnings reports and guidance from companies including IBM and Coca-Cola. Market cut gains in the final hour of trading after hopes faded for a fresh round of fiscal stimulus in the coming week to prop up an economy reeling from the COVID-19 pandemic.

Market hopes for a fresh round of fiscal stimulus in the coming week faded after Senator Majority Leader Mitch McConnell told reporters that Congress would most likely not pass a new fiscal stimulus bill this week, before the $600 jobless benefit boost runs out for millions of Americans.

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