Sensex zooms over 500 pts, Nifty ends up over 1%; RIL, financials lead gains

Indian stock markets rallied for the fifth consecutive day on Friday, with benchmark indices surging over 1%. Gains were led by index heavyweight Reliance Industries Ltd and financial stocks.

At close today, Sensex was 552.90 points or 1.34% higher at 41,893.06 while the Nifty gained 143.25 points or 1.18% to end at 12,263.55. Broader indices, Nifty Smallcap100 and Nifty Midcap100 indices gained 0.5% each.

BSE Midcap and Smallcap indices ended 0.3-0.5% higher.

Among sectors, Nifty Private Bank rallied the most, rising over 2% followed by Nifty Financial Services, Nifty IT and Nifty Realty. Nifty Pharma and Nifty FMCG, however, ended in the red.

State-owned Bank of India (BoI) expects pressure on margins to continue given the lack of credit demand and transmission of interest rate cuts, as per chief executive AK Das.

The bank’s net interest margin (NIM), a key measure of profitability, stood at 2.66% in the September quarter, an improvement of 18 basis points sequentially.

Aditya Birla Group’s EMIL Mines and Minerals Resources Ltd and Aurobindo Reality and Infrastructure Private Ltd placed winning bids for Radhikapur (East) coal mine in Odisha and Urma Paharitola mine in Jharkhand respectively, according to a government official.

These two mines that were bid out on the fifth day of commercial coal mine auctions have geological coal reserves of 755.63 million tonnes. A total of 17 coal mines have been auctioned till date under the commercial coal mine auctions that began on Monday, wherein the fuel is being awarded on a revenue-sharing basis. Earlier, blocks were awarded on a fixed payment per tonne basis.

European stocks struggled for momentum on Friday after a strong rally this week as Italy and France posted a record number of coronavirus cases, while the counting of U.S. election votes continued.

The pan-European STOXX 600 index was down 0.1% by 0818 GMT after a five-day winning run that put the index on course for its best week since early April.

Bank of India on Friday reported an over two-fold jump in its September quarter consolidated net profit at ₹543.47 crore while asset quality improved.

The bank had posted a net profit of ₹257.31 crore for the same quater a year ago.

Total income rose to ₹12,477.79 crore in July-September from ₹12,062.55 crore in the year-ago period, the state-owned lender said in a BSE filing.

On standalone basis, the net profit in the quarter rose to ₹525.78 crore as against ₹266.37 crore a year ago.

Gross non-performing assets (NPAs) fell to 13.79% of gross advances as on 30 September from 16.31% in the year-ago period.

Amazon Web Services (AWS), the cloud computing arm of e-commerce major Amazon.com Inc., on Friday said it would launch a second cloud infrastructure region in India by mid-2022 as part of its expansion plans.

Gold fell on Friday, as the dollar gained, but was set for its best week since late July on hopes for more central bank economic support as investors bet on a divided U.S. Congress under a Joe Biden presidency.

Spot gold fell 0.5% to $1,939.10 per ounce. Prices had soared 2.4% on Thursday on a dollar slide, setting them up for a 3.2% weekly gain.

U.S. gold futures dropped 0.3% to $1,940.20 per ounce.

Fitch Solutions, an affiliate of Fitch Ratings, on Friday revised downward its estimate for India's FY21 fiscal deficit to 7.8% of GDP from 8.2% projected earlier, anticipating higher revenue receipts and lower government spending.

"This was mainly driven by a strong recovery in tax revenues during Q2FY21, which suggests a faster than previously anticipated path of recovery for fiscal receipts over the fiscal year. That said, we maintain our view for FY21 receipts to be lower relative to FY20. Meanwhile, we have also revised our outlook for central government expenditures to come in slightly below budget projections, revenue constraints will likely see some winding down of fiscal spending on a year-on-year basis over the second half of FY21,” it said in a report.

Faced with growing competition in the domestic market Royal Enfield, plans to expand further to global markets.

Siddhartha Lal, Managing director, Eicher Motors, said the company has already taken the first step towards that direction. "We continue to focus a lot on the global markets. Our approach has been to take the first few steps and then build upon them to make deeper inroads” Lal told Mint in an interview.

The way we moved in the last couple of days, we anticipated a possible breakout in the upward direction.

We have finally broken out from some crucial resistance and hence, looking at the price behavior, we expect this northward move to continue towards 12250 – 12400 now. But since, the actual verdict is yet to come; we cannot just overlook this development. Traders should keep a close track of it and how markets react post the outcome. But despite this, we still believe that in case of any weakness 12000 – 11900 should now act as a sheet anchor for the bulls. Yesterday, almost all sectors participated in the rally, which is always considered a healthy sign for the market.

Also, we would like to highlight that the NIFTY MIDCAP 50 index which was consolidating and interestingly placed since the last few days, has finally confirmed a huge breakout on the daily chart. Mostly it is observed that Mid and Small cap indices confirm a bigger breakout only when the market feels that the uncertainty is behind us and is likely to witness some strong rally in the near future. Going by this logic, it adds more conviction and hence, we expect some encouraging moves to come in the broader market.

The fifth day of commercial coal mine auctions is expected to see Adani Enterprises Ltd (AEL), EMIL Mines and Minerals Resources Ltd, Jindal Steel and Power Ltd and National Aluminium Company Ltd vying for Radhikapur (East) mine in Odisha.

Also, Adani Power Resources Ltd, Welspun Steel Ltd, Aurobindo Reality and Infrastructure Private Ltd, JMS Mining Private Ltd, Adicorp Enterprises Private Ltd, India Coke and Power Private Ltd and JMS Mining Private Ltd are in fray today for the Urma Paharitola mine in Jharkhand.

The cap on the number of domestic flights for Indian airlines will be raised to 70-75% of their pre-COVID levels as the passenger traffic surges, the civil aviation ministry said on Thursday.

Last week , it had said that Indian airlines can operate maximum 60% of their pre-COVID domestic passenger flights till February 24 next year due to the pandemic.

Berger Paints India Ltd on Thursday reported a 13.5% year-on-year rise in its September consolidated net profit to ₹221.05 crore. Revenue from operations was at ₹1,742.55 crore during the quarter under review, up from ₹1,598.58 crore in the corresponding period of the previous fiscal.

The trend of the index is positive and we should work towards a target of 12300-12400. Since the markets have run up in the last couple of days, it would be best to accumulate the Nifty on dips for higher targets. The support for the index is at 11500 so the risk reward would be favourable if we enter closer to the support price.

India and China will sit down for their eighth round of military talks on Friday in another attempt to work out steps to preserve an uneasy truce amid unprecedented tensions on the border between the two countries.

Analysts said expectations of a “breakthrough" were low with doubts over what could constitute a breakthrough in the current circumstances, seen as a state of heightened tensions unseen in decades.

Saudi Arabia’s Public Investment Fund (PIF) will invest ₹9,555 crore for a little over 2% stake in Reliance Industries Ltd’s (RIL) retail unit, taking total investments into India’s largest retailer to about ₹47,265 crore.

This will be the second such investment by the Saudi sovereign wealth fund in an RIL unit this year. PIF had earlier acquired a 2.32% stake in Jio Platforms Ltd, the digital services subsidiary of RIL, for about ₹11,367 crore.