9th November 2020 Highlights: Markets scale new high, ITC Q2, Pfizer optimistic about vaccine & more.
-9th November 2020-
Sensex 42,597.43 ▲ 1.68%
Nifty 12,461.05 ▲ 1.61%
The markets today reached the highest in history.
Sensex ended at 42,597.43.
Nifty ended at 12,461.05.
Before this, the highest the markets had ever touched was 41,952.63 (Sensex), and 12,362.30 (Nifty) - in Jan 2020, right before the pandemic struck. Bank and IT companies were the main drivers of today’s rally.
Joe Biden was declared the winner of the US elections over the weekend. Today’s rally could also have been influenced by this news.
The optimism following the US elections was visible across the markets today, as global equity markets, key commodities (bullion and oil) and the US dollar saw gains. Further, the Nifty50 crossed its lifetime high that it scaled in January 2020. Of the key sectoral indices, the Nifty IT and Nifty Pharma managed to rise above previous highs. Among individual stocks, Divi’s Labs (+5.4%), Bharti Airtel (+5.1%) and IndusInd Bank (+4.9%) were the top Nifty gainers, while Cipla (-3.0%), Adani Ports (-1.2%) and Maruti (-0.6%) were the top losers.
Top Gainers (Nifty)
Top Losers (Nifty)
Here are the top stories of the day.
Q2 Results: ITC
The net profit of the company stood at Rs 3,232.4 crores in the July to September quarter. This is a 19.65% decline from the previous quarter.
Revenue from operations rose 0.1% to Rs 11,976.75 crores
Segmental Revenue
Cigarettes: Fell 3.8% to Rs 5,121.3 crores
FMCG (apart from cigarettes): Up 15.4% to Rs 3,794.95 crores
Hotels: Fell 80.7% to Rs 81.96 crores
The shares of the company closed 0.66% lower at Rs 172.8 per share. Results were declared on Friday after the markets closed.
Amfi Monthly Report: October 2020
Open-ended debt schemes showed remarkable improvement in terms of inflows. There was an inflow of Rs 1.1 lakh crores in October as against an outflow of Rs 51,962 crores in September 2020.
Here are other highlights from the report:
Total AUM: The total mutual fund AUM stood at Rs 28.22 lakh crores as compared to Rs 26.85 crores at the end of September 30, 2020.
Outflows: The net outflows from open-ended equity schemes rose to Rs 2,724.95 crores from an outflow of Rs 734 crores in September.
SIP: SIP contributions rose on a monthly basis for the first time since March 2020.
Glenmark tumbles despite rise in operating profits
Today, investors chose to book profits in Glenmark Pharmaceuticals following its Q2 results. The stock, which rose 7.8% last week, dropped 5.9% today. In Q2, its consolidated revenues grew by nearly 5% on a year-on-year basis to ₹2,952 crore. The company’s sales growth was driven by a 17% jump in revenues from the India market, which contributes 35% of total revenues. The company’s net profit was down by 8.5% due to forex losses. However, its operating profit grew by 26.5%, supported by a reduction in costs.
Auto dealers see flat-to-declining sales in November
As per a survey by the Federation of Automobile Dealers Association (FADA), nearly 67% of the automobile dealers in India expect November sales growth to decline or at best to remain flat as compared with November last year. In October 2020, vehicle registrations across the country declined by 24% YoY. This is in stark contrast with manufacturer-level sales, which grew rapidly. However, the year-on-year comparison is likely skewed due to the fact that last year both Diwali and Navratri fell in October, boosting sales above normal levels. Thus, the actual scenario will be clear only after Diwali. FADA has sounded caution to manufacturers and dealers to keep a check on inventory levels (which are highest in this fiscal), as demand may drop after the festive season. Today, the shares of auto companies followed the overall upward market trend, as Eicher Motors (+2.5%), Tata Motors (+1.4%) and Escorts (+5.6%) witnessed gains.
Elgi Equipments sees volume spike after robust Q2
Elgi Equipments, which manufactures air compressors, posted an improved Q2 performance after lockdown restrictions were eased and industrial activity picked up pace. Consolidated revenues in Q2 grew 8% YoY, mainly driven by a 12% growth in air-compressor sales. The company’s net profit nearly tripled to ₹33.2 crore because of lower other expenses during the quarter. The Coimbatore-based company expects the business momentum to continue in Q3, especially in the India market. The stock rose 11.5% today coupled with a spike in volumes (18x on BSE), indicating a strong buying interest.
Gland Pharma IPO Opens for Subscription Today
Gland Pharma Ltd. is launching its initial public offer (IPO) which is open for subscription between November 9-11 2020. The IPO will get listed on November 20.
The price band for the issue is Rs 1,490 - 1,500 per share and the minimum lot size is 10 shares.
The issue size is 4.3 crore shares of which, 83.33 lakh shares is a fresh issue and 3.48 crore shares is an offer for sale.
What is the difference between an offer for sale and a fresh issue?
A fresh issue is when a company issues new, fresh shares. Offer for sale is a method by which existing shares are put on offer for investors. It is used by the company's promoters to dilute their shareholding.
Sovereign Gold Bonds (SGB) Opened for Tranche VIII Today
This is the eighth tranche of gold bonds. It is open for subscription between November 9 and November 13.
The issue price of the bond has been fixed at Rs 5,177 per gram.
The issue price for the previous tranche which was open between October 12 and October 16 was Rs 5,051 per gram.
As usual, there will be a discount of Rs 50 per gram for those who invest online.
What are SGBs?
SGBs are issued by the Government of India but are managed and supervised by the Reserve bank of India (RBI). These bonds have a term of eight years with a lock-in period of five years. The interest is fixed at 2.5% per annum and you do not get physical gold delivery.
-Word of the Day-
Net Asset Value
It is also known as the NAV of a mutual fund.
It is the price of one unit of any mutual fund.
A lower NAV does not necessarily mean that it will give better returns nor does a higher NAV mean it’ll give lower returns.
NAV is just the value of the unit of the mutual fund.
Vaccine 90% Effective: Pfizer
According to Pfizer, their vaccine is 90% effective.
This still does not mean their vaccine will be successfully approved. The final results of the vaccine are due later this month.
According to FDA (US), for this vaccine to be approved, it needs to be 50% or more effective.
Pfizer is one of the leading companies developing vaccines for this pandemic-causing virus.
The other two companies leading this race are Moderna and AstraZeneca (working with Oxford University).
Closing bell
The anxiety over the outcome of US elections is finally over. Some changes will be announced by the Biden administration at the outset (e.g. increase in H-1B visas), which will get quickly factored in the relevant stocks and sectors. The Nifty50 has witnessed gap-up openings continuously over the last three trading sessions and has sustained at higher levels. It would be important to watch the inflation numbers, which will be declared this Thursday. They have been rising in recent months, and any further increase could be a cause of concern ahead of RBI’s policy meeting, expected in the first week of December 2020.
Daily Change: 1-Day Change
Long Term: 20-Year Returns
Returns are per annum. Returns in INR for Sensex & Nifty and in USD for Dow Jones & Nasdaq.
HAPPY INVESTING!
SEE YOU TOMORROW
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