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Indian equity markets ended little changed in today's session after a volatile final hour of trade, attributed by some to the FTSE rebalancing and by some to the tensions on the borders with Pakistan and China.
The final hour saw the S&P BSE Sensex and NSE Nifty 50 give up modest gains, fall to the day's low and witness a pullback from the lows.
The S&P BSE Sensex ended 0.34% lower at 38,845 while the NSE Nifty 50 was unchanged as compared to its close on Thursday, at 11,516.
The volatile moves were led by the Nifty Bank, which saw a sharper correction, falling as much as 550 points at one point. The index then recovered nearly 300 points from the day's low to end 1.1% lower.
There would be no doubt in anybody's mind that the day belonged to Pharma stocks. Dr Reddy's Laboratories and Cipla were the top two gainers on the Nifty 50 index, ending 9.9% and 7.1% higher respectively. The Pharma index too ended with gains of 5% - the biggest single-day gain in over a month. The index ended at the highest level in nearly five years. All constituents of the Pharma index ended with gains.
Nifty Realty was the other sectoral gainer, ending with gains of 1.9%.
Pressure on banking stocks led to a decline in the PSU Bank index as well, which ended 1.6% lower.
Broader markets were largely in-line with the benchmarks. The midcap index ended little changed while the smallcap index ended 0.4% lower.
The India Volatility Index ended 0.8% lower at 19.94.
Market breadth turned adverse in the final minutes of trade. 990 stocks on the NSE ended with losses while 826 stocks posted gains.
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The Yellow Metal is headed for its second straight weekly advance as the U.S. Dollar steadies, with investors weighing climbing cases of Covid-19 and lukewarm commentary from the U.S. Federal Reserve.
Earlier this week, Fed officials indicated that interest rates will stay low for years to come, but fell short of tweaking bond purchases as some expected.
"Gold remains stuck in a range thanks to a lack of movement in real treasury yields and demand from Asian retail investors," according to Adrian Ash, Director of Research at BullionVault.
Analysts believe that Gold will retest $2,000/Oz this year as the Fed will eventually increase asset purchases and focus on longer-dated treasuries.
Let's take a look at how benchmark indices in Europe have opened:
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India will give greater direct access to foreign investors in the defence sector.
Foreign investors can now invest up to 74% in defence manufacturing under the automatic route, up from the earlier 49%, the DPITT said in a statement on Friday.
Interest of foreign investors in India's defence sector was negligible even in the pre-Covid-19 times. The sector attracted just $9.5 million in FDI over the last two decades, for which data is available, whereas overall investment flows in the country stood at over $50 billion in 2019 alone.
"Amendments will enhance self-reliance in defence production, while keeping national interests and security paramount," Commerce Minister Piyush Goyal wrote on twitter.
The drugmaker has informed the exchanges that it has received the final approval from the U.S. FDA to market the Potassium Chloride Extended-release tablets in the strength of 10mEq (750 mg) and 20 mEq (1500 mg).
The medication is a mineral supplement used to treat or prevent low amounts of potassium in the blood, the drugmaker said in an exchange filing.
Shares gained as much as 5.1% to Rs 413.8, post the announcement. The stock is up for the fourth straight day and is trading at the highest level since September 2018.
India Ratings & Research has revised its outlook on the banking sector to negative for H2FY21. It has revised its outlook to negative from stable.
The revision has been done with an expectation of a spike in stressed assets, higher credit costs, weaker earnings on account of interest reversals and lower fee income and muted growth prospects in view of the measures taken to contain the spread of Covid-19.
The agency has revised the rating outlook on Public Sector Banks to negative from stable. The agency expects the capital buffers of PSU banks to deplete further in FY21.
The agency has maintained a stable outlook for private banks. It expects credit costs for banks to range between 2.6%-3.4%.
Both pharma majors are surging in today's session after Perrigo Company on Thursday announced a voluntary U.S. nationwide recall of Albuterol Sulfate inhalation aerosol to the retail level, after previously halting production and distribution.
Perrigo's exit will provide a temporary window of opportunity to both Cipla and Lupin in the short-term, Praful Bohra of Emkay Global wrote in a note.
Assuming Perrigo remains out of the market for the next six months and a shift of incremental $30 million sales to Lupin and Cipla each, a rough calculation indicates an 8-9% upgrade for Cipla and a 13-14% upgrade for Lupin in FY21, the note added.
Shares of Lupin gained as much as 7.2% to Rs 1,112 to its highest level since July 2017. The stock is up for the eighth straight day - its longest winning streak since October 2017.
Shares of Cipla gained as much as 6.45% to Rs 800 and are trading at a record high.
The company on Thursday set its rights issue price at Rs 65 per share, which is a 24.8% discount to Thursday's closing price.
The board has set the record date for the rights issue as September 23. The rights entitlement ratio has been set at 8 shares for every 85 shares held.
The company has proposed to allot 5.38 crore rights shares at a face value of Rs 2 each. It had given an approval to raise Rs 350 crore through the rights issue on September 7.
Shares gained as much as 3.65% to Rs 89.5 and have alternated between gains and losses this week.
The two-wheeler and three-wheeler maker on Thursday announced their new distribution partnership with Autotecnica Colombiana SAS - a leading motorcycle assembler in Columbia.
Autotecnica Colombiana SAS will operate 50 dealerships exclusive to TVS Motor and create dedicated space for the brand in over 600 retail outlets, the company said in an exchange filing.
It will also support TVS Motor with dedicated sales service, spares and customer relationship management.
The deal marks the expansion of the company's presence in the Columbian market, the statement said.
Shares gained as much as 2.4% to Rs 468 and trade at the highest level in three weeks. Brokerage firm CLSA maintained its sell rating on the stock but raised its price target to Rs 435 from the earlier Rs 418.
The currency opened with gains in today's session, continuing its trend of alternating between gains and losses during this week.
The rupee opened at 73.46 against the U.S. Dollar as compared to Thursday's close of 73.65. It was the third worst performing currency in Asia on Thursday.
Yield on the 10-year government bond opened at 6.01% as compared to Thursday's close of 5.993%.
The Reserve Bank of India on Thursday said that it will resume outright open-market operations, announcing one on September 24.
Bond market traders will also look forward to the sale of bonds worth Rs 30,000 crore today.
Shares of the company are declining at the start of trade after 7.35 crore shares or 23.3% of the total equity exchanged hands in five large trades, according to Bloomberg data.
Bloomberg had reported on Thursday that the company's promoter Blackstone Group's entity Epsilon Bidco is looking to sell up to 7.26 crore shares or 23% of the total outstanding capital of the company.
The floor price of Rs 255 per share was a 6.5% discount to Thursday's closing price.
On sale of the complete stake, Epsilon Bidco's stake in the company would fall to 51.99% from the earlier 74.99%.
Buyers and sellers in those five large trades remain unknown as of now.
Shares fell as much as 6.1% to Rs 256, post the deals. The stock is down for the fourth straight day and is trading at the lowest level in nearly two months.
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Indian equity markets have begun the final trading day of the week on a positive note, led by strong traction in Pharma stocks like Dr Reddy's Laboratories & Cipla.
The S&P BSE Sensex opened 0.57% higher at 39,200 while the NSE Nifty 50 index opened 0.6% higher at 11,584. Both benchmarks were up 0.4% for the week, as of closing on Thursday.
All sectoral indices have opened with gains, led by the Nifty Pharma index, which has begun trade with gains of 2%.
The Nifty Media is the other sectoral gainer, starting 1% higher while other indices like Nifty Bank, Nifty Auto, Nifty Metal and Nifty Realty have opened with gains of 0.5% each.
Broader markets have opened higher after being subdued over the last two sessions. The midcap index is up 0.5% while the smallcap index has gained 0.6% at the start of trade.
Market breadth was in favour of the gainers. 1,063 stocks on the NSE traded with gains while 356 opened with losses.
Source: ICICI Securities
To know more about the stocks in focus, key brokerage updates and F&O cues, click here.
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