19th October 2020 highlights: Markets end up over 1.05%, HDFC Bank’s Q2 results beat street expectations, Revival plans bring cheer to DHFL & Jet Airways & More.
-19th October 2020-
Sensex 40,431.60 ▲ 1.12%
Nifty 11,873.05 ▲ 1.05%
The markets ended the day up by around 1%.
The day started with the markets up around 1% and they remained there almost throughout the entire day without any significant ups or downs. Banking and financial services, metals, and FMCG stocks led most of the gains today.
The rise in the Nifty50 today was largely driven by banks, but the market sentiment was also positive, with gains seen in 36 of the 50 stocks. ICICI Bank (+5.1%), Nestle (+4.5%) and Gail (+4.1%) were the top gainers. The hopes of a viable Covid-19 vaccine by the end of the year led to optimism not only in the Indian indices but also in the European and key Asian markets.
Top Gainers (Nifty)
ICICI Bank - Rs 417.05 ▲ 5.33%
Axis Bank - Rs 493.15 ▲ 4.43%
Nestle India - Rs 16089.65 ▲ 4.25%
SBI - Rs 204.05 ▲ 4.21%
GAIL - Rs 87.40 ▲ 3.99%
Top Losers (Nifty)
Divi's Lab - Rs 3092.85 ▼ 3.96%
Eicher Motors - Rs 2200.00 ▼ 3.07%
Hero MotoCorp- Rs 3247.80 ▼ 2.95%
Cipla - Rs 763.85 ▼ 2.33%
Bajaj Auto - Rs 2980.20 ▼ 2.12%
Here are the top stories of the day.
HDFC Bank’s Q2 results beat street expectations
HDFC Bank, India’s largest private sector lender, reported net profit ₹7,513 crore in Q2, an 18% increase over the same period last year. The bank’s gross non-performing assets or NPAs (which reflect the quality of the loans given) improved and stood at 1.08% (versus 1.36% on 30 June 2020). Buying interest was also seen in other bank stocks, such as ICICI Bank (+5.1%) and Axis Bank (+4.1%). However, HDFC Bank’s shares witnessed profit booking, and the stock ended with a modest gain (+0.2%) after the initial cheer. PSU banks shares had an additional reason to rise, as there were reports that the government is looking to exit the PSU banks entirely when they are privatised. Smaller PSU banks, such as Central Bank (+9.8%), Bank of Maharashtra (+6.7%) and UCO Bank (+3.5%), saw a surge in stock prices.
Q2 Results: HDFC Life Insurance, Britannia Industries
HDFC Life
The net profit of the company rose 5.6% to Rs 326.09 crores in the July to September quarter. The company’s net profit was around Rs 308.7 crores in the same quarter last year.
HDFC Life’s net premium income was up 34.7% to Rs 10,045.44 crores during the same time frame.
The shares of the company ended 1.67% higher at Rs 570.5 per share. Results were declared after market hours.
What is the net premium income?
Net premium income is the revenue earned by the insurer from periodic premium payments by policyholders.
Britannia Industries
The net profit of the company stood at Rs 495.2 crores in the July to September quarter. It is up 23% from the same quarter last year.
Britannia's total revenue rose 12.1% to Rs 3,419.11 crores.
The shares of the company ended 0.67% higher at Rs 3,772.45 per share. Results were declared after the markets closed today.
Rise in D-Mart’s net profit triggers buying interest
Avenue Supermarts, which owns and operates D-Mart stores, reported a strong sequential rise in its net profit to ₹199 crore in Q2 (versus ₹40 crore in Q1) due to the improvement in month-on-month sales. In Q2, the demand for FMCG and staples was robust. However, the demand for general merchandise and garments is yet to see a major pick-up as consumers have reduced discretionary spends. Also, supply-side challenges in that category are a cause for concern. In the coming quarter, consumer spending during the festive season in the wake of the pandemic will be a key to growth. Meanwhile, D-Mart’s stock rose 5.4% thanks to above-average volumes, indicating strong buying interest. Stock performance of other retailers such as Trent (-2.5%), Aditya Birla Fashion (+5.8%) and V-mart Retail (-0.5%) was mixed.
Revival plans bring cheer to DHFL & Jet Airways.
Jet Airways (+4.9%) and DHFL (+9.9%), both of which are mired in financial troubles, hit the upper circuit today. In fact, Jet Airways has gained nearly 47% this month. The buying interest is due to the positive developments towards reviving these companies. In the case of Jet Airways, the committee of creditors approved the resolution plan of the Kalrock Capital–Murari Lal Jalan consortium, which has proposed to re-launch Jet as a full-service carrier, with an initial investment of ₹1,000 crore. On the other hand, four entities have reportedly submitted bids for a part of DHFL’s portfolio or the company as a whole. The revival of these troubled companies could turn into a win-win proposition for stakeholders.
First Day of Restored NAV Cut-off for Equity Funds
On Friday, Sebi announced restoring the NAV cut-off timings for equity mutual funds and aggressive hybrid funds to 3.00 p.m.
In April, Sebi had revised the NAV cut-off timings for all mutual funds due to the lockdowns.
The NAV cut-off timing for all other subcategories of mutual funds is not changing.
What is meant by NAV cut-off timing?
NAV cut-off timing determines which day’s NAV you’ll get. Investing after the NAV cut-off time results in you getting the next applicable day’s NAV and not the same day’s.
New NFO
Edelweiss is launching a healthcare fund that is passive in nature.
This unique fund aims to invest in MSCI India Domestic and World Healthcare 45 Index - which tracks healthcare stocks in India and the USA.
Closing bell
The market seems to be witnessing sector rotation—movement of funds between sectors with the passage of time and change in business cycles. Metals and FMCG stocks, which were laggards until recently, are seeing investor interest whereas IT, pharma and auto stocks are seeing profit booking. Such moves also seem to be driven by the market perception that valuations in certain sectors are attractive. The market has started the week on a positive note, and one could expect volatility to rise in the second half of the week with the US Presidential debate scheduled on Thursday, 22 October.
🥇 Gold: Rs 50,879 ▲ 0.35% at 6 PM
🥈 Silver: Rs 62980 ▲ 1.85% at 6 PM
🔀 USD-INR Rate: Rs 73.37/USD ▲ 0.04%
Dow Jones: 28,606.31 ▲ 0.39% - Oct 16
Nasdaq: 11,671.56 ▼ 0.36% - Oct 16
HAPPY INVESTING!
SEE YOU TOMORROW
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