Sebi restores NAV cut-off timings, import ban on ACs, and more.

16th October 2020 highlights: Markets back in green again, Sebi restores NAV cut-off timings, import ban on ACs, and more.

-16th October 2020-

Sensex 39,982.98 ▲ 0.64%

Nifty 11,762.45 ▲ 0.70%

The markets ended up by around 0.67% today after witnessing a down of 2.5% yesterday. 

After a sharp decline yesterday, the markets were range-bound today. Most sectoral indices ended the day on a positive note. The Nifty Metal index (+3.9%) and Nifty Bank index (+2%) saw healthy gains. JSW Steel (+6.6%), Tata Steel (+5.3%) and BPCL (+4.3%) were among the top Nifty50 gainers, whereas UPL (-7.7%), HCL Tech (-3.4%) and M&M (-1.8%) were among the top losers.

Sectors like IT, banking, and metals saw heavy buying and pushed the indices up.

Top Gainers (Nifty)

JSW Steel - Rs 311.05 ▲ 6.69% 

Tata Steel - Rs 393.85 ▲ 5.34%

Bharat Petroleum - Rs 339.95 ▲ 4.07%

Divi's Labs - Rs 3220.30 ▲ 3.63%

Hindalco Industries - Rs 179.80 ▲ 3.54%

Top Losers (Nifty)

UPL - Rs 467.10 ▼ 7.77%

HCL Tech - Rs 827.10 ▼ 3.76%

M&M - Rs 606.45 ▼ 1.72%

Asian Paints - Rs 2061.20 ▼ 1.40%

Reliance - Rs 2175.50 ▼ 1.36%

Here are the top stories of the day.

Sebi Revises NAV Cut-Off Timing For Equity Funds

Sebi has restored the NAV cut-off timings for equity mutual funds to 3.00 p.m.

This is applicable only to equity mutual funds and not debt mutual funds and conservative hybrid mutual funds.

In April, Sebi had revised the NAV cut-off timings for all mutual funds due to the lockdowns.

The NAV cut-off timings for liquid and overnight funds was revised to 12.30 pm. And the NAV cut-off timings for debt funds was revised to 1.00 pm. This will remain unchanged for now.

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.

Q2 Results: HCL Tech Net Profit Up 6% QoQ

The company's net profit stood at Rs 3,143 crores in the July to September quarter. It was up 15.9% compared to the same quarter of the previous year.

The revenue rose 6.08% to Rs 18,594 crores in the same time frame.

Net profits rose around 7% and revenues were up 4.2%, as compared to the April to June quarter.

The company’s board declared an interim dividend of Rs. 4 per share. The record date is October 24, 2020, and the payment date is November 9, 2020.

The company also said it will roll out salary hikes effective January 1, 2021.

The shares of the company ended 3.82% lower at Rs 827.15 per share. The results were declared before 9.30 am today.

IT major HCL reported Q2 net profit of ₹3,142 crore, up 7.4% over the last quarter. Similarly, Mindtree too reported strong Q2 results with ₹253 crore in net profit, up 19.1% as compared to the previous quarter. Both the companies saw strong deal wins during the Q2. However, robust quarterly performance failed to restrict profit booking in these stocks. HCL was down -3.4% while Mindtree fell -6.8%. Interestingly, both of these stocks had risen over 50% since July. Shares of other IT majors also slumped post their Q2 results, due to profit booking.

What is the record date?

The record date in the context of dividends is the cut-off date to determine which shareholders will get the dividend. A dividend is given to investors who hold the shares as on the record date.

Government Bans Import of Air Conditioners

Yesterday, the government announced a ban on imports of air conditioners with refrigerants. This move is expected to help domestic manufacturing of ACs and also reduce the import bill to an extent. Imports account for over 30% (close to ₹9,000 crore) of the domestic demand for ACs in India. This ban opens up a huge opportunity for domestic AC manufacturers. Strong buying interest was seen in shares of domestic players such as Bluestar (+4.1%), IFB (+7.9%), Johnson Controls-Hitachi (+3.7%) and Voltas (+4.2%). Notably, Amber Enterprises, which makes ACs for most of the major brands in India, gained 8.5% today.

The government banned the import of ACs in a notification issued by the Directorate General of Foreign Trade (DGFT) yesterday.

It moved split and other ACs with refrigerants into the prohibited category. A few listed companies that manufacture ACs in India are Voltas, Blue Star, and Havells.

Metals shine on hopes of demand recovery

Metal stocks witnessed strong buying interest today and for most of this week after major steel makers released operational data for Q2. The data indicated an improvement in domestic sales volumes and an increase in production capacity utilisation. Tata Steel reported its highest-ever quarterly deliveries in India at 5.05 million tonnes due to strong demand from the passenger vehicle and two-wheeler segments, along with housing and industrial projects. Meanwhile, average production capacity utilisation at JSW has reportedly hit 86%, which is at par with pre-Covid levels. Optimism was seen in shares of Tata Steel (+5.3%), JSW Steel (6.6%) and Sail (3.6%), while the Nifty Metal Index rose by 4% today.

Closing bell

Although the markets were positive today, the movement of the index was within yesterday’s range and thus does not give any directional cues. A look at the Nifty50’s weekly picture indicates signs of fatigue, especially after gains of 7.8% made over the previous two weeks. Meanwhile, the global scenario is not exactly encouraging. Most countries in Europe are experiencing a second wave of Covid-19 cases. As we mentioned in yesterday’s newsletter, investors are likely to tread with 'caution’ in the week ahead.

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🥇 Gold: Rs 50,700 ▲ 0.68% at 6 PM

🥈 Silver: Rs 61,839 ▲ 2.80% at 6 PM

🔀  USD-INR Rate: Rs 73.34/USD ▼ 0.05%

Dow Jones: 28,494.20 ▼ 0.07% - Oct 15

Nasdaq: 11,713.87 ▼ 0.47% - Oct 15

HAPPY INVESTING!

SEE YOU TOMORROW.