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Sensex closes at record high; Nifty ends below 12,000
06-Nov-19   17:19 Hrs IST

Key equity benchmarks reversed early losses and ended in the green on Wednesday. Positive global cues supported sentiment. Gains in private banks and index major Infosys pushed the indices higher. Realty stocks surged on buzz of likely reforms for the sector.

The barometer index, the BSE Sensex rose 221.55 points or 0.55% to close at a 40,469.78. The Sensex ended at record closing high level after hitting an all time high of 40,606.91 in intraday today.

The Nifty 50 index rose 48.85 points or 0.41% to 11,966.05. The index hit an intraday high of 12,002.90. The Nifty is still 142.05 points, or 1.19% away from its all time high of 12,103.05 hit on 3 June 2019.

In the broader market, the BSE Mid-Cap index rose 0.15% and the BSE Small-Cap index was fell 0.36%.

The market breadth was negative. On the BSE, 1224 shares rose and 1280 shares fell. A total of 199 shares were unchanged.

Economy:

Fitch Solutions has raised India's fiscal deficit forecast to 3.6% of the GDP for this fiscal year, from 3.4% previously, due to weak revenue collections resulting from sluggish economic growth and government's sweeping corporate tax rate cut.

Fitch said it was revising the fiscal deficit forecast as revenue collection is likely to fall far short of the projections in the FY2019/20 Union Budget due to weak goods and services tax (GST) and corporate income tax collections.

Foreign markets:

Most European shares were trading higher while most Asian stocks ended higher on Wednesday as investors awaited new developments toward scaling back a bruising trade war between the United States and China.

China is reportedly pressing U.S. President Donald Trump to roll back tariffs the U.S. imposed in September before a phase one trade deal is signed between the world's two biggest economies.

UN economists warned in a report on Tuesday that the Sino-U.S. trade war was a lose-lose situation, costing China $35 billion in the first half of this year while U.S. consumers and companies bore the brunt of the most expensive tariffs.

Meanwhile, media report on Tuesday suggested that finalizing a location for a meeting between Trump and Chinese leader Xi Jinping has become another hurdle for the deal. However, traders are largely optimistic that the preliminary agreement could be signed as early as this month.

US stocks were mixed on Tuesday as investors paused in the wake of a rally buoyed by hopes of a trade deal between the United States and China that sent the three main U.S. stock indexes to record highs in the previous session.

Buzzing sectors:

The Nifty Realty index jumped 2.30% to 273.85, reversing losses incurred in past two sessions.

Indiabulls Real Estate (up 4.95%), Sobha (up 4.44%), DLF (up 4.07%), Godrej Properties (up 3.46%), Prestige Estates (up 3.05%), Sunteck Realty (up 1.58%), Oberoi Realty (up 1.02%), Mahindra Lifespace Developers (up 0.31%) and Omaxe (up 0.24%) advanced.

Realty stocks buzzed on hopes that the government's next round of reforms are likely to be focused on real estate sector. Finance minister Nirmala Sitharaman was quoted by the media as saying on Tuesday, that the real estate sector requires a lot more attention because the sluggishness which prevails there has got to be addressed. The government is very keen and is working very clearly together with Reserve Bank of India (RBI) to see how best we can make necessary tweaks to the existing blocks to help the people who are affected in this one sector which I have not really completely addressed till now, she added.

The Nifty Bank index rose 1.23% to 30,591, reversing yesterday's losses.

Private sector banks were in demand. RBL Bank (up 1.89%), IndusInd Bank (up 1.74%), HDFC Bank (up 1.42%), Axis Bank (up 1.29%), Kotak Mahindra Bank (up 1.13%), Yes Bank (up 0.59%) and Federal Bank (up 0.3%) edged higher.

ICICI Bank rose 2.64%. MSCI is due to announce the results of its semi-annual index review on November 8, including a list of stock additions and removals, along with changes in weightages. The changes will be effective November 27.

Thanks to foreign portfolio investors reducing their stake in ICICI Bank during the preceding quarter, its weightage in the MSCI index is likely to double. According to a domestic broking firm, MSCI rejig will result in a flow of approximately $1.2 billion into the ICICI Bank stock.

Most public sector banks declined. Bank of Baroda (down 2.41%), IDBI Bank (down 1.18%), Punjab National Bank (down 0.85%), Bank of India (down 0.64%) and State Bank of India (down 0.52%) declined.

Canara Bank rose 1.98%. The bank's net profit rose 21.83% to Rs 364.92 crore on a 14.06% rise in total income to Rs 14,461.73 crore in Q2 September 2019 over Q2 September 2018. The bank reported an improvement in asset quality. The ratio of gross NPAs to gross advances stood at 8.68% as on 30 September 2019 as against 8.77% as on 30 June 2019 and 10.56% as on 30 September 2018.

Stocks in spotlight:

IT major Infosys rose 2.37% to Rs 712.30 after chairman Nandan Nilkeni said that co-founders had no role in the whistleblower complaints. The company said it strongly condemns the mischievous insinuations made by anonymous sources against the co-founders and former colleagues, suggesting their involvement in the recent whistleblower allegations.

According to Nandan Nilekani, chairman, Infosys, These speculations are appalling and seem to be aimed at tarnishing the image of some of the most accomplished and respected individuals. I have deep regard for the life-long contribution of all our cofounders. They have built this institution and have served this company selflessly and even today, remain committed to the long-term success of Infosys.

As previously stated, the audit committee has appointed an external law firm to conduct an independent investigation into the allegations made in the complaints. The firm will share the outcome of the investigation at the relevant time with all stakeholders, the company added in its statement issued during trading hours today, 6 November 2019.

PC Jeweller jumped 8.04% to Rs 34.95 after the company settled a case with Sebi regarding alleged non-disclosure of certain information about a share buyback offer that was withdrawn later. The company paid Rs 19,12,500 towards full and final settlement of the alleged default, according to an order.

Aurobindo Pharma fell 4.80% to Rs 450.75. The company said that the U.S. Food and Drug Administration (FDA) issued Form 483 to the company with four observations after inspecting its Hyderabad facilities in October 2019.

Hero MotoCorp rose 0.50% to Rs 2677.10. The board of directors of Hero MotoCorp has considered and approved an investment of upto Rs 450 crore in its associate company, Hero FinCorp (HFCL) by subscribing to the issue of shares by way of private placement in one or more tranches.

Maruti Suzuki India fell 1% to Rs 7311.55. Maruti Suzuki and Toyota Tsusho Group announced setting up one-of-its-kind vehicle dismantling and recycling joint venture, Maruti Suzuki Toyotsu India (MSTI). The joint venture is between Maruti Suzuki India (MSIL) and Toyota Tsusho Group (Toyota Tsusho Corporation (TTC) and Toyota Tsusho India (TTIPL)) with each owning a 50% equity.

Earnings watch:

Drug major Lupin rose 2.29% to end at Rs 772.15. On consolidated basis, the company reported a net loss of Rs 127 crore in Q2 September 2019 as against a net profit of Rs 265.98 crore in Q2 September 2018. The company's revenue from operations rose 10.34% to Rs 4359.65 crore on YoY basis.

Lupin reported a one-time loss of Rs 546 crore due to adjustments made during the quarter, including provisions worth Rs 379.18 crore toward a Texas lawsuit and a loss of Rs 167.30 crore toward selling stake in a Japanese joint venture, Kyowa CritiCare Co.

Drug major Cipla advanced 2.76% to Rs 480.50. Net profit rose by 25% to Rs 471 crore on a 10% in total revenue from operations to Rs 4,395.78 crore in Q2 September 2019 over Q2 September 2018. EBITDA jumped by 21% to Rs 909 crore in Q2 September 2019 as compared to Rs 753 crore in corresponding quarter in the last fiscal. Revenue and EBITDA growth were aided by growth across key businesses.

Titan Company slumped 9.96% to Rs 1156. The company lowered guidance of its jewellery business for the rest of the year due to weak consumer sentiment and high gold prices.

Titan's standalone net profit rose 1.83% to Rs 320.16 crore on 0.4% rise in net sales to Rs 4,370.82 crore in Q2 September 2019 over Q2 September 2018. Revenue growth during the quarter was impacted substantially by the decline in the revenues of the jewellery division due to the sudden spike in gold prices in June 2019. Jewellery segment revenue declined by 1.5% in Q2. After a sudden surge in gold prices in mid-June, there was a considerable decline in sales in July. Higher level of promotion and schemes, led to strong growth in the months of August and September.

The company lowered its jewellery sales growth guidance to 11-13% for the second half of 2019-20 from 20% earlier, the company said in its conference call Tuesday.

IT firm Tech Mahindra slipped 0.17% to Rs 771.85. The company reported 17.2% rise in consolidated profit after tax to Rs 1124 crore on a 4.8% rise in revenue to Rs 9070 crore in Q2 September 2019 over Q1 June 2019. EBITDA rose 14.2% to Rs 1501 crore while the EBITDA margins rose by 130 bps to 16.5% in Q2 September 2019 over Q1 June 2019.

Gillette India fell 3.45% to Rs 7625.55. The company reported 5.49% fall in net profit to Rs 61.76 crore on 1.25% rise in net sales to Rs 462.20 crore in Q1 September 2019 over Q1 September 2018.

The company stated that the fall in net profits was largely due to increased spending on advertising and innovation. The result was announced after market hours yesterday, 5 November 2019.

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