5TH November 2020 Highlights: Markets up nearly 2%, Reliance gets more investment, US election results still awaited, & more.
-5TH November 2020-
Sensex 41,340.16 ▲ 1.78%
Nifty 12,120.30 ▲ 1.78%
The markets ended up by nearly 2% today. It seems that the news of US presidential candidate Joe Biden’s high chances of victory is making investors optimistic. Taking cues from the buoyant global markets, the Indian markets delivered impressive gains today. All major sector indices were in the green with strong gains seen in the Nifty Metal (+4.4%) and Nifty Media (+4.0%) indices. The rally in the markets saw strong participation from individual stocks, as 48 of the Nifty50 stocks ended the day in the green. Indusind Bank (+6.1%), Hindalco (+6.0%) and SBI (+5.5%) were the top Nifty gainers today, while only Hero Moto (-0.6%) and HDFC Life (-0.2%) closed in the negative.
In fact, today, only 2 companies in Nifty ended in the red. And in Sensex, all companies were in the green. The Sensex and Nifty have already reached levels similar to pre-lockdown levels.
Top Gainers (Nifty)
Top Losers (Nifty)
Here are the top stories of the day.
Saudi Fund Invests in Reliance Retail
The Public Investment Fund will invest Rs 9,555 crores in Reliance Retail Ventures Ltd. (RRVL), a Reliance Industries subsidiary.
The investment translates to a stake of 2.04%. PIF is the 10th investor in RRVL since September 9, 2020.
PIF is a sovereign wealth fund based out of Saudi Arabia.
The shares of the company ended 2.18% higher at Rs 1,955 per share. The announcement was made after market hours.
HPCL surges on strong results and buyback
State-owned Hindustan Petroleum's shares rose 9.8% today after it announced a 135% year-on-year rise in net profit and a lucrative buyback proposal. The strong jump in net profit to ₹2,477 crore in Q2 was supported by lower inventory cost and gains in foreign currency transactions. The sale of the company's petroleum products has nearly back to last year’s levels with easing lockdown restrictions; sales had halved in April 2020. The company will buy back its shares to the tune of ₹2,500 crore at a maximum price of ₹250, at a premium of over 20% on today’s closing price.
U.S. Election Results
According to the Associated Press, Democratic candidate Joe Biden has 264 seats while Republican candidate Donald Trump has 214 seats so far.
Counting is still on. Candidates need 270 seats to win.
Counting is slow and delayed due to the higher use of mail-in votes in this election.
Many US media houses are concluding victory for Joe Biden.
Donald Trump has however disputed this calling the counting of votes a “fraud”. He has already filed cases in multiple US states against practices he calls unfair.
There have been reports of protests in the US from both sides.
It appears full clarity on this matter will emerge by Friday.
SRF hits new high on healthy Q2 performance
SRF, manufacturer of speciality chemicals, packaging films and technical textiles, reported a 57% year-on-year rise in consolidated net profit for Q2. The speciality chemicals business, where operating profit grew 33%, saw higher capacity utilisation, thus leading to operating leverage benefits. Further, better capacity utilisation and focus on higher value-added products resulted in 89% higher operating profit in the packaging films business. Finally, the technical textiles division, which makes raw material for tyres, witnessed a notable 140% rise in operating profit, buoyed by the faster-than-expected recovery in the domestic tyre industry. All in all, the company’s performance reflected in its stock price, which rose 9.5% and hit an all-time high. It is interesting to note that SRF's stock price has risen 37 times in the last seven years.
Cinemas reopen in Maharashtra from today
The Maharashtra government has allowed cinema halls in the state to resume operations from today, at 50% capacity. While people are unlikely to rush to theatres immediately, this development marks a change in the status quo and a positive one at that. Stock markets generally respond well to positive changes, and this was visible in the shares of major multiplex operators, such as PVR (+10.0%) and Inox (+4.5%). Reopening of cinemas in Maharashtra was critical to the movie industry because the state contributes 30–35% of the total box office collections. This reopening comes ahead of Diwali, adding to the festive cheer.
India Developed Vaccine Might be Available by February
India developed vaccine, Covaxin, developed by Bharat Biotech and ICMR is slated to be ready in the first quarter of 2021.
It might be available in limited quantities starting from February itself. Currently, the vaccine is in the final phase of trials.
The head of ICMR’s research management, policy, planning, and coordination cell, Rajni Kant has said that the health ministry can decide to administer the vaccine to certain high-risk individuals earlier than the launch of the vaccine also.
Closing bell
The benchmark indices are just 3% away from the year’s high (which is also their lifetime high). From the lows of March 2020 (when the country went into lockdown), the Nifty50 has risen 61%. These are splendid returns, considering that the rebound took just 7 months and that too at a time when India saw the worst contraction ever in its GDP (-23.9%). Markets reward turnarounds handsomely and the Q2 results of most companies have shown impressive recovery from a weak Q1. However, amid this global bull run, it is important to take cognisance of two realities. First, the US presidential election frenzy is almost over and, second, the rise in coronavirus cases in the US and Europe continues unabated as winter progresses.
Daily Change: 1-Day Change
Long Term: 20-Year Returns
Returns are in INR for Sensex & Nifty and in USD for Dow Jones & Nasdaq.
HAPPY INVESTING!
SEE YOU TOMORROW
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