Nifty tops 11,800 as IT stocks shine

Benchmark indices advanced for the sixth trading session on Thursday amid positive global cues. Firmness in IT and banks shares supported the uptrend. The Nifty faced stiff resistance at 11,900 mark, but managed to settle above 11,800. The trading was volatile due to expiry of weekly index options.

The barometer index, the S&P BSE Sensex, jumped 303.72 points or 0.76% at 40,182.67. The Nifty 50 index rallied 95.75 points or 0.82% at 11,834.60.

HDFC Bank (up 2.57%) and ICICI Bank (up 1.20%) boosted the indices while Reliance Industries (down 0.81%) and ITC (down 1.36%) capped gains.

The Nifty has risen 5.46% in six sessions. It has surged 1029.05 points, or 9.52% from its recent closing low of 10,805.55 on 24 September 2020.

In the broader market, the BSE Mid-Cap index rose 0.29% and the BSE Small-Cap index fell 0.26%. Both these indices underperformed the main stock indices.

The market breadth was negative. On the BSE, 1239 shares rose and 1441 shares fell. A total of 167 shares were unchanged.

COVID-19 Update:

India reported 902,425 active cases of COVID-19 infection and 105,526 deaths while 5,827,704 patients have been discharged, according to the data from the Ministry of Health and Family Welfare, Government of India. Total COVID-19 confirmed cases worldwide stood at 36,077,017 with 1,054,674 deaths.

Economy:

The World Bank has cut India's gross domestic product (GDP) forecast for FY21. India's GDP for the fiscal started March is expected to contract by 9.6%, compared to June estimates of 4.5% contraction, it said in its South Asia Economic Focus report.

It added that it expects growth to return to 5.4% in FY22, assuming COVID-19-related restrictions are completely lifted by 2022, but mostly reflecting base effects.

Numbers to Watch:

The yield on 10-year benchmark federal paper rose to 6.016% as compared with 6.014% 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 73.24, compared with its close of 73.3350 during the previous trading session.

In the commodities market, Brent crude for December 2020 settlement rose 65 cents at $42.64 a barrel. The contract fell 66 cents, or 1.55% to settle at $41.99 a barrel in the previous trading session.

Foreign Markets:

The US Dow Jones index futures were up 168 points, indicating a strong opening in the US stocks today.

Shares in Europe and Asia advanced on Thursday following the overnight rally on Wall Street. In Europe, German exports rose for the fourth consecutive month, growing 2.4% in August after a 4.7% rise in July, according to the Federal Statistics Office.

US stocks rose sharply on Wednesday after President Donald Trump tweeted support for aid to airlines and other stimulus measures, stoking hope that a smaller aid package could be passed by lawmakers.

In a series of tweets Tuesday night, Trump urged Congress to approve airline payroll support, saying that money and aid for small business could be paid for with unused funds from the previous stimulus. Trump also pushed for another round of $1,200 stimulus checks for Americans.

Meanwhile, on the virus treatment front, Eli Lilly said it's seeking clearance from the U.S. Food and Drug Administration for emergency authorization of its Covid-19 antibody treatment.

Buzzing Indian Segments:

The Nifty IT index rose 3.23% to 21,697.25. The index has surged 14.36% in nine sessions.

TCS gained 3.19% after the company reported good sequential numbers in the second quarter and announced a share buyback worth Rs 16,000 crore. The consolidated net profit grew 6.6% and revenue increased 4.73% in Q2 September 2020 (Q2FY21) over Q1 June 2020 (Q1FY21).

TCS said that constant currency revenue for Q2FY21 rose 4.8% quarter-on-quarter. The IT major's operating margin stood at 26.2% in Q2FY21 from 23.6% in Q1FY21. The deal wins stood at $8.6 billion in Q2FY21, against $6.9 billion in Q1FY21. BFSI (+6.2%), Retail and CPG (+8.8%) and life sciences and healthcare (+6.9%) led the growth.

Meanwhile, the IT major's board approved a proposal to buyback up to 5.33 crore equity shares of the company for an aggregate amount not exceeding Rs 16,000 crore, being 1.42% of the total paid-up equity share capital, at Rs 3,000 per equity share. The board also declared an interim dividend of Rs 12 per equity share. The record date is set on 15 October 2020.

Wipro jumped 7.22% after the IT major said its board will consider a share buyback on 13 October 2020. "The outcome of the board meeting will be communicated to the stock exchanges soon after conclusion of the board meeting on October 13, 2020," Wipro said in a statement after market hours yesterday, 7 October 2020. The firm will also announce its Q2 results on 13 October 2020 after stock market trading hours in India.

Infosys gained 2.57% after the IT major announced that it has signed a definitive agreement to acquire Blue Acorn iCi, Adobe Platinum partner in the US for a total consideration of $125 million. Infosys said the acquisition strengthens end-to-end customer experience offerings and demonstrates its continued commitment to help clients navigate their digital transformation journey.

Majesco ended almost flat at Rs 847.05. The IT company recorded a consolidated net profit of Rs 2376.54 crore in Q2 September 2020, steeply higher than net profit of Rs 16.79 crore in Q2 September 2019. Consolidated total income rose 6.02% to Rs 5.81 crore in Q2 September 2020 from Rs 5.48 crore in Q2 September 2019.

The company earned an exceptional income of Rs 3,065.47 crore during the quarter. The income was received from the sale of Majesco's entire stake/ investment in the US Subsidiary pursuant to the merger between the Majesco (US subsidiary) and Magic Merger Sub, Inc., a Delaware corporation.

Meanwhile, Majesco's board approved a proposal of buyback of shares worth upto Rs 631 crore. Majesco proposes to buyback upto 74,70,540 fully paid equity shares of Rs 5 each of the company, representing 25% of the total paid-up equity capital of the company as on 30 September 2020) at a price of Rs 845. Majesco expects share buyback to be completed by December, subject to necessary approvals.

Shares of six Future Group companies tumbled after the media reported that that e-commerce giant Amazon has served a legal notice on the Future Group for striking a deal with Reliance Industries (RIL).

Future Supply Chain Solutions (down 6.25%), Future Lifestyle Fashions (down 6.2%), Future Retail (down 5.4%), Future Enterprises (down 5%), Future Consumer (down 4.8%) and Future Market Networks (down 4.86%) declined.

On 29 August 2020, RIL's subsidiary Reliance Retail Ventures (RRVL) announced a deal to acquire the retail & wholesale business and the logistics & warehousing business from the Future Group as going concerns on a slump sale basis for Rs 24,713 crore. As per the legal notice, the Future-RIL transaction cannot go ahead without Amazon's approval in view of the non-compete clause entered earlier with the retail group.

Stocks in Spotlight:

Jet Airways (India) hit an upper circuit of 5% at Rs 30.05 on reports that lenders to Jet Airways have chosen UK-based Kalrock Capital and UAE-based entrepreneur Murari Lal Jalan as the new owners of the bankrupt airline. The media reported that a consortium of the London-based asset management company Kalrock Capital and UAE investor Murari Lal Jalan had been chosen as the successful resolution applicant by the committee of creditors in the corporate insolvency process of the Jet Airways (India).

Jet Airways, however, clarified to the bourses today (8 October) that such news items are false and misleading and must be disregarded. It added that the committee of creditors had not concluded the e-voting under the Insolvency and Bankruptcy Code and the resolution professional shall make appropriate disclosures after the voting process is duly completed.

"The Jalan-Kalrock consortium has also intimated the Resolution Professional that it has not made any statement claiming to have been chosen as the successful resolution applicant," the airline clarified.

Titan Company rose 0.08%. The company and Montblanc mutually agreed to end their joint venture partnership in India. In accordance with the joint venture agreement, the partnership will end in December 2020. The decision enables Montblanc to become a wholly owned subsidiary in the country.

GM Breweries shed 5.28% after the liquor maker's standalone net profit fell 43.52% to Rs 11.21 crore on 38.23% decrease in revenue from operations to Rs 262.30 crore in Q2 September 2020 over Q2 September 2019. Profit before tax (PBT) tumbled 35.52% to Rs 14.99 crore in Q2 September 2020 as against Rs 23.25 crore in Q2 September 2019. The company's operations were closed from 23 March 2020 to 20 May 2020. The operations restarted partially from 20 May 2020. The counter sales outside Mumbai & MMR region were started from 5 May 2020 & the counter sales in Mumbai Thane & several other region were started from 5 August 2020. The bars and restaurants in Maharashtra were not permitted to operate till 30 September 2020.

Bandhan Bank rose 1.30% after the bank said its collection efficiency in September 2020 was about 92%. While the micro finance collection efficiency was approximately at 89%, the collection efficiency in mortgage and others segments (which includes small and medium enterprises & non-banking financial companies) stood at approximately 98%. The bank's total deposits jumped 34% to Rs 66,153 crore in Q2 FY21 from Rs 49,195 crore in Q2 FY20. Loans & advances rose 20% to Rs 76,724 crore in Q2 September 2020 (Q2 FY21) from Rs 64,186 crore in Q2 September 2019 (Q2 FY20). CASA ratio was at 38.2% as on 30 September 2020 as against 32.9% as on 30 September 2019.

Nitco jumped 8.43% after the company said that its sales volume improved significantly during Q2 September 2020. The company's sales volume for the month of September 2020 is almost at 80% of the sales volume achieved in September 2019.

Nitco's sales volume dipped considerably during Q1 June 2020 due to the nationwide lockdown. The company managed to turn the tide from July 2020 onwards and managed three-fold improvement in sales volume during the second quarter. The firm said it is witnessing tangible improvement in business volumes and a gradual pick-up in refurbishment demand. With Nitco's brand being well-entrenched as a preferred choice of architects and designers, the company hopes to clock in larger volumes in the coming months.

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(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)