5th October 2020 Highlights: Markets end up over +0.76%, TCS peaks on buyback & Hatsun Agro rises on bonus issue & more.
-5th October 2020-
Sensex 38,973.70 ▲ +0.71%
Nifty 11,503.35 ▲ +0.76%
The markets opened up 1.3% today, however, towards the end of the day, they settled at 0.7% up. IT stocks not only drove the markets up today but also helped in maintaining the upward momentum of the indices. Meanwhile, banking stocks witnessed some intraday selling after a strong opening. The market was broadly positive with 29 of the Nifty50 stocks ending the day with gains.
Top Gainers (Nifty)
TCS - Rs 2706.85 ▲ 7.30%
Wipro - Rs 334.05 ▲ 6.73%
Tata Steel - Rs 382.15 ▲ 4.71%
Sun Pharma - Rs 523.10 ▲ 3.20%
Infosys - Rs 1048.70 ▲ 3.05%
Top Losers (Nifty)
Bajaj Finserv - Rs 5881.15 ▼ 2.85%
Zee Entertainment - Rs 208.25 ▼ 2.71%
Shree Cement - Rs 20131.80 ▼ 2.32%
Bajaj Finance - Rs 3379.85 ▼ 1.86%
Bharti Airtel - Rs 424.35 ▼ 1.85%
Here are the top stories of the day.
TCS peaks on buyback & hopes of strong Q2
TCS, India’s largest IT company, was on a roll today. In its upcoming board meeting (on 7 October), the management will consider a buyback program and a second interim dividend. The market expects IT companies to deliver strong quarterly results, especially after HCL Tech revised its Q2 revenue guidance upward. TCS gained 7.5% today and surpassed the ₹10 lakh crore market-cap milestone for the first time. Additionally, investors were upbeat on most IT sector stocks after a US district court blocked President Trump’s ban on H1B and other work visas. The Nifty IT index was up 3.4%. IT majors Wipro (+7%), Infosys (+2.9%) and Tech Mahindra (+2.7%) were among top gainers in the Nifty50.
Hatsun Agro rises on bonus issue & capital raising
Hatsun Agro, India’s largest private sector dairy company, announced plans to issue bonus shares and raise capital through private placement of equity shares. The company’s shares soared 7.4%, today, and witnessed higher than usual trading volumes, indicating strong buying interest. Since the March 2020 lows, the company’s shares have gained nearly 120%. Further, there has been a long-standing demand by the dairy industry for reducing GST on ghee and milk fat from 12% to 5%. Any development on this front could trigger further investor interest in the sector.
ITI & Solar Industries surgeon orders from MoD
ITI Limited, the state-run telecom and defence equipment manufacturer, announced that it has signed a contract worth ₹7,796 crore to deploy and maintain a secured communication network across India, for the Indian Army. The company’s shares rose as high as 7.5% intraday. Similarly, Solar Industries, one of the largest explosives manufacturers in the country, gained nearly 7.7% intraday after receiving an order to supply 10 lakh pieces of hand grenade to the Ministry of Defence. The contract, which is valued at ₹409 crore, is expected to be completed in two years. Defence-sector stocks are catching investors’ attention of late. The 'Vocal for Local’ initiative with an import ban on defence items and the bumper subscription (157 times) for the IPO of defence PSU Mazagon Docks point in that direction.
Interest on Interest Waived Off During Moratorium Period
The central government and the Reserve Bank of India were asked by the Supreme Court of India to place on record the KV Kamath Committee recommendations on debt restructuring due to pandemic related stress.
This comes after the finance ministry waived off the interest in interest charged loans of up to Rs 2 crore for a six-month moratorium period announced due to the current situation.
A bench of SC judges listened to a bunch of pleas that alleged banks are charging interest on EMIs that were not paid by borrowers during the moratorium period between March 1 and August 31.
The KV Kamath Committee had named 26 sectors in the economy that will need restructuring in the aftermath of the ongoing crisis.
IPO Listing: Angel Broking
Angel Broking’s Rs 600 crore IPO listed on the exchanges today. Angel Broking ended 9.87% lower at Rs 275.8 on day 1 of listing.
The IPO was open for subscription between September 22 and 24. The IPO had been subscribed 3.95 times on the last day of bidding.
RIL Gets Fresh Investments From TPG and GIC
TPG will invest Rs 1837.5 crore in Reliance Retail Ventures Ltd (RRVL) which will give it a stake of 0.41% in the company.
Singapore’s sovereign wealth fund GIC will invest Rs 5512.5 cores in RRVL which will give it a stake of 1.22% in the company.
These two are the latest in a string of investors who have invested in RRVL in the past few weeks.
The company’s share price closed at Rs 2212.20 per share today.
MARKET SCENARIO
When Presidents get sick!!
“President Eisenhower suffered a heart attack on September 25, 1955. Immediately after news was released that he was hospitalized, the market fell by 6%. Eisenhower recovered, and the market continued to rally upwards.”
Trump vs. Biden trades
“I think it’s more important for investors to focus on when to put the trade on. Getting that trade on early, but not too early, is so important. Because if you get caught on that trade too early and you’re on the wrong side of it, you will see a big snapback that goes against you.”
Bears drink coffee too
“According to last week's Commitment of Traders report, which breaks down the total open interest, showed that Commercial Hedgers more commonly known as Smart Money Hedgers are holding near extreme bearish exposure on Coffee.”
The Dollar is stuck
“The U.S. dollar had its worst month in nine years in July. It continued lower in August. The greenback is also squeezing between some potentially important levels: to the upside, DXY is hitting resistance at the March low of 94.65. To the downside, DXY is testing the 94 area.”
Calling the Salesforce top
“SalesForce looks like an ideal short right now because of the ridiculous rally it made at the end of August. The stock rallied $80/share, which translates to a market cap increase larger than the entire NFL. Crazy, right? When you read the reason for the earning surprise below, it's even crazier.”
Risk management vs. time management
“The pioneers of the theory of behaviour finance Hersh Shifrin and Meyer Statman showed in 1985 that investors intuitively misjudge the likelihood of repeating random results - they hold unprofitable positions too long and close profitable positions too quickly.”
Closing bell
Asian and European markets were up today on news of President Trump’s improving health. Meanwhile, in India, the Supreme Court has deferred hearing on waiver of interest to 13 October (the decision was expected today). The India VIX jumped over 7% today, indicating expectations of increased volatility in the coming days.
🥇 Gold: Rs 50,417 ▼ 0.005% at 6 PM
🥈 Silver: Rs 61,153 ▲ 1.02% at 6 PM
🔀 USD-INR Rate: Rs 73.29/USD ▲ 0.20%
Dow Jones: 27,682.81 ▼ 0.48% - Oct 2
Nasdaq: 11,075.02 ▼ 2.22% - Oct 2
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