Firm cues, strong Q1 numbers push Sensex 269 pts higher; RIL hits record high

MUMBAI: Benchmark equity indices resumed their uptrend on Thursday after a one-day pause as investors focussed on firm cues from global markets and better-than-expected June quarter earnings, shrugging off concerns over renewed US-China tensions.

Reliance Industries (RIL) and financials spearheaded the rally and drove Sensex 269 points higher to 38,140. Its peer Nifty climbed 83 points to settle at 11,215.

"Global markets set aside the rising US-China tensions and focused on potential vaccine developments and better than expected earnings numbers. Domestically, except for IT, most major indices logged gains. Liquidity seems to be driving the markets," said Vinod Nair, head of research at Geojit Financial Services.

"Any dip looks like it will be bought into and is likely to be short-lived, especially in the current mood of the markets when the negatives are being overlooked," he added.

Another record surge in new coronavirus infections was also overlooked. The total Covid-19 cases in the country have breached the 12-lakh mark.

In the 30-pack Sensex, as many as 22 stocks settled in the green.


Oil-to-telecom behemoth RIL contributed the most to the benchmark’s gains. The stock in intraday trade hit a new high of Rs 2,078.90 after ET Now reported Amazon is looking to pick a 9.9 per cent stake in Reliance Retail. It pared some gains and shut shop 2.82 per cent higher at Rs 2,060.65 with market cap soaring past Rs 13 lakh crore.

Private lender ICICI Bank rose 2.94 per cent while smaller rival Kotak Mahindra Bank climbed 2.14 per cent.

Cigarettes-to-hotels business ITC and paints maker Asian Paints rose 2.09 per cent and 1.94 per cent, respectively ahead of their June quarter earnings on Friday.

Engineering and construction major Larsen & Toubro shed 0.50 per cent as sharp decline in orders dented its Q1 net profit.

Market breadth tilted in favour of the gainers with advance-decline ratio at 1.2:1 on the BSE.

The broader market was upbeat as well, with BSE Midcap and Smallcap indices rising 0.98 per cent and 0.61 per cent, respectively.

BSE Energy was the biggest sectoral gainer as it rose 2.36 per cent. It was followed by BSE Healthcare that advanced 1.65 per cent. BSE IT shed the most, down 0.61 per cent.

Rossari Biotech’s stellar debut stole the show as the specialty chemical maker’s shares rallied nearly 75 per cent over their issue price on listing day.

Private lender YES Bank nosedived 19.2 per cent, taking its losing streak to the fourth straight session. The stock has been on a falling spree ever since the bank concluded its Rs 15,000 crore follow-on public offer (FPO), even as Moody's feel the capital raising by the bank is credit positive.

Glenmark Pharmaceuticals rose 1.87 per cent as the drug maker on Wednesday said Phase 3 clinical trial of antiviral drug Favipiravir in mild to moderate Covid-19 patients demonstrated significant faster time to clinical improvement.

ICICI Securities rose 2.37 per cent after it reported a 70 per cent jump in profit after tax (PAT) to Rs 193 crore in the April-June quarter on robust growth in revenues and improvement in margins.

Trident jumped 10 per cent after promoter Trident Group bought 4,80,00,000 shares in the company on Wednesday.

Foreign institutional investors (FIIs) have flip-flopped between being net buyers and net sellers of Indian shares in July. They are net buyers to the tune of $61.81 million or Rs 425.47 crore so far this month. Domestic institutional investors (DIIs) on the other hand, have sold a net of Rs 5,627.58 crore of the asset class this month.

Markets at a glance:

• Sensex up 0.71% or 269 points to close at 38,140
• Nifty climbs 0.74% or 83 points to close at 11,215
• 22 of 30 Sensex stocks close higher
• RIL records new high; m-cap rises past Rs 13 lakh crore
• Top Sensex gainers: SBI up 3.28 %, ICICI 2.94%, RIL 2.82%
• Top Sensex losers: Axis down 3.80%, HUL 1.57%, Infy 1.15%
• Market breadth positive; advance-decline ratio 1.2:1
• Broader markets rise; BSE Midcap up 0.98%, Smallcap 0.61%
• BSE Energy top gainer, up 2.36%; Hindustan Oil up 4.97%, GMDC 3.74%
• BSE Healthcare up 1.65%; Sequent up 9.50%, Medicamen 8.68%
• BSE IT top loser, sheds 0.61%; Newgen down 5.68%, 3i Infotech 4.96%
• ITC, Asian Paints up ahead of Q1 earnings Friday
• L&T drops 0.50% as decline in orders hurts Q1 net
• Glenmark up 1.85% on optimistic Favipiravir trial results
• ICICI Sec up 2.37% on robust Q1 net
• Trident up 10% as promoter ups stake

Who moved my market

• Firm world stocks

European stocks rose on Thursday as better-than-expected corporate earnings offset worries about rising cases of COVID-19 and a sharp escalation in tensions between the United States and China, Reuters reported. The pan-region Euro Stoxx 50 climbed 0.42 per cent while the German DAX gained 0.43 per cent and the FTSE 100 by a similar margin. S&P mini-futures added 0.29 per cent, pointing to a stronger open on Wall Street. The MSCI world equity index, which tracks shares in 49 countries, rose 0.2 per cent, close to Tuesday’s level, which was its highest since late February.

• Earnings optimism

Better-than-earnings from India Inc boosted the sentiment on Dalal Street. Market participants were keenly eyeing the June quarter numbers and management commentary as the companies faced the brunt of nationwide lockdown the most during this period. "Markets are currently riding high on better than expected earnings and upbeat global markets. Considering the momentum, the Nifty index might test 11,350 soon. Traders should align their trades accordingly but we suggest preferring hedged trades instead of outrights," said Ajit Mishra, VP - Research, Religare Broking.

• Coronavirus cases rise above 12-lakh mark

New coronavirus cases in India rose be a record 45,720 on Thursday, pushing the total Covid-19 tally in India over 12 lakh mark , while the total number of recoveries crossed 7.82 lakh, according to the Union Health Ministry data. The death toll due to the disease rose to 29,861 with 1,129 fatalities reported in one day.

What to watch out for

• The coronavirus cases in India are yet to peak and are witnessing a record rise each day and are a major cause of worry.

• The direction of global markets will be closely watched as the domestic market tends to follow the cues.

• Progress on domestic as well as overseas vaccine for Covid-19 treatment will be closely watched.

• The ongoing June quarter corporate earnings season is providing a better picture of the damage caused by the pandemic-induced lockdown. More than the numbers for the quarter, the commentary and the outlook are the key moniterables.