Indian visas restored, vaccine preparation, & more

22nd October 2020 Highlights: Markets end red, Indian visas restored, vaccine preparation, & more.

-22nd October 2020-

Sensex 40,558.49 ▼ 0.37%

Nifty 11,896.45 ▼ 0.35% 

The markets opened below yesterday’s closing mark and remained in the red throughout the day today.

Weak global markets, and poor performance of financial and IT stocks were believed to be the main reason behind the markets’ ending lower today.

The markets started the day on a weak note and remained negative throughout the day. The Nifty50 opened and closed at almost the same level, suggesting indecision in the markets. NTPC (+4.1%), Tata Motors (+3%) and Bharti Airtel (+2.8%) were the top Nifty gainers, whereas Hero MotoCorp (-3%), IndusInd Bank (-2.9%) and ICICI Bank (-1.6%) were the top losers.

Top Gainers (Nifty)

NTPC Rs 84.85 ▲ 3.10%

Bharti Airtel Rs 430.65  ▲ 2.77%

Indian Oil Rs 77.95 ▲ 2.50%

Bajaj Finance Rs 3313.15 ▲ 2.47%

Tata Motors Rs 133.45 ▲ 2.46%

Top Losers (Nifty)

IndusInd Bank Rs 608.80  ▼ 3.10%

Hero Moto Rs 3081.50  ▼ 3.05%

ICICI Bank Rs 412.95 ▼ 1.76%

Infosys  Rs 1130.15 ▼ 1.58%

Cipla Rs 757.50  ▼ 1.25%

Here are the top stories of the day.

Q2 Results: Asian Paints, Bajaj Auto

Asian Paints

Consolidated net profits of the company was reported at Rs 851.9 crores in the July to September quarter. This is a 1.2% rise from the previous year's quarter.

The revenue from operations was up 5.9% to Rs 5,350.2 crores during the same period.

Segmental Revenue: Revenue from paints business rose 6.15% to Rs 5,232.88 crores and home improvement business fell 3% to Rs 117.35 crores.

The shares of the company settled 0.68% lower at Rs 2,099.9 per share today. Results were declared half an hour before the markets closed at 3:30 pm.

Bajaj Auto

Standalone net profits of Bajaj Auto fell 18.84% to Rs 1,138.2 crores per share during the same time frame.

Total revenue from operations fell 7.16% to Rs 7,155.86 crore.

Bajaj Auto sold 10.53 lakh units in the previous quarter, down 10% from the same quarter previous year.

Both exports and the domestic sales segment suffered a decline. While domestic sales fell 9% to 5.73 lakh units, exports fell 12% to 4.79 lakh units. Results were declared 45 minutes before the markets closed.

The shares of the company ended 0.39% lower at Rs 3,006.2 per share.

Bajaj Auto posts weak Q2, pins hopes on festive sales 

Bajaj Auto is the first among auto majors to declare Q2 results, and the numbers are disappointing. Its net profit for Q2 dropped 19% as compared to the same quarter last year due to a 10% decline in volumes, restrictions on export benefits and lower other income. Further, in Q2FY20, the company reported a one-time tax-related gain of ₹182 crore, which was not available in this year. Nonetheless, the company has improved its operating margin to 18.2% (versus 16.9% in Q2FY20) by optimising its fixed costs. The company’s market share in the two-wheeler segment was intact at 18.2% in H1FY21 compared to the same period last year. In the ongoing festive season, the company sees strong indications of a recovery in volumes. While shares of Bajaj Auto ended flat (-0.7%), Hero Moto (-3.0%) and TVS Motors (-0.5%) saw selling pressure today. 

Aurobindo Pharma slips after USFDA warning letter

Shares of Aurobindo Pharma were down nearly 6% intraday after the company received a warning letter from the USFDA for its oral solid manufacturing facility at Dayton, Ohio. While the company believes that business from this facility will not be impacted, it has not provided any details of the content of the warning letter. The company’s shares ended 3.3% lower. A USFDA warning letter is considered informal and advisory in nature. Recently, the USFDA had also issued warning letters to Shilpa Medicare and Panacea Biotec, after which their shares fell 8.6% and 5.0%, respectively.

JK Tyre rides on strong operational performance in Q2

JK Tyre rose 10.7% today, buoyed by revenue growth of 6% and a sharp jump in its operating profit by 21% on a year-on-year basis. The improvement in operating profits was on due to aggressive cost-cutting measures. Improvement in sales was supported by a recovery in the automotive sector. The company also saw strong demand from the replacement market, which is performing better than the overall industry. Investor interest has increased in the tyre sector, as major tyre stocks such as MRF (4.5%), Apollo Tyres (7.9%), Ceat (7.8%) and TVS Srichakra (8.6%) have outperformed the Nifty Auto index (-0.5%) in October 2020.

Indian Visas Restored

The government today restored all visas to India except electronic, tourist, and medical visas.

These visas had been suspended about 8 months ago when the lockdowns started and all flights were cancelled.

This also means that holders of Overseas Citizen of India card and Person of Indian Origin card will also be able to visit India without hindrance now.

Foreign nationals will be able to visit India for matters related to business, education, research, etc. Only tourist visas are not being issued at the moment.

Vaccine Budget Rumoured

Various reports in the media are suggesting that the government is preparing a budget to make the vaccine available to Indians.

Though there are no confirmed reports on the matter, articles from some media houses suggest the government is putting aside a total of Rs 50,000 crores ($7 billion) to acquire vaccines.

At the same time, the news suggests that a vaccine volunteer for the Oxford University vaccine has died in Brazil. 

The university has made clear that the test for the vaccine will continue and that they were safe - indicating that the person didn’t die of vaccine-related reasons.

Closing bell

With the rise of daily Covid cases in India, most economists believe that it would take at least a year for the Indian GDP to reach pre-Covid levels. Further, rising inflation poses risks to economic recovery and the stock markets, if the interest rates are hiked. Currently, we are seeing stock-specific action during Q2 results, which are hinting at signs of recovery. Once most of the index heavyweights have announced their results, markets might focus on the macro picture. At the same time, there may also be more clarity on which side the US elections results (slated for November 3, 2020) are tilted. 

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Daily Change: 1-Day Change

🥇 Gold:  Rs 50,864 ▼ 0.78% at 6 PM

🥈 Silver:  Rs 62,478 ▼ 1.92% at 6 PM

🔀  USD-INR:  Rs 73.53/USD ▼ 0.07%

Dow Jones:  28,210.82 ▼ 0.34% - Oct 21

Nasdaq:  11,484.69 ▼ 0.28% - Oct 21

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Long Term: 20-Year Returns

Sensex:  12.84%

Nifty:  12.42%

Dow Jones:  5.18%

Nasdaq: 6.13%

HAPPY INVESTING! 

SEE YOU TOMORROW