US Election 2020- Impact on Indian Stock Markets
Weekly updates: US election 2020, PMI data, Quarterly results impact on Indian markets
The US election 2020, macro data, quarterly earnings, and FIIs inflow played a key role to end the Indian markets higher on 6 November ended week. The Indian benchmark indices Nifty and Sensex closed above the psychological levels and are just a few points away from their all-time high.
Weekly basis, the Nifty gained 728.1 points or 6.33% ended at 12263.55 levels while Sensex was up by 2651.19 points or 6.76% and closed at 41954.93 levels. The Bank Nifty on the spot levels also closed higher by 2898.05 points or 12.13% and ended at 26798.95 levels.
The Nifty midcap and smallcap 100 indices also gained during the week. The midcap index gained 736.25 points or 4.31% and closed at 17802.75 levels. The smallcap index was up by only 40.05 points or 0.69% and closed at 5859.10 levels.
Nifty weekly gainers and losers
Weekly Nifty Top Gainers | |||
Company Name | LTP | Previous Close | Change (%) |
Bajaj Finserve | 6286.45 | 6055.15 | 3.82 |
Reliance | 2029.15 | 1955.00 | 3.79 |
IndusInd Bank | 738.65 | 714.40 | 3.39 |
HDFC Bank | 1307.65 | 1269.20 | 3.03 |
Kotak Mahindra Bank | 1718.05 | 1675.45 | 2.54 |
Weekly Nifty Top Losers | |||
Company Name | LTP | Previous Close | Change (%) |
Maruti Suzuki | 6907.60 | 7092.80 | 2.61 |
Gail | 85.80 | 87.45 | 1.89 |
Bharti Airtel | 449.90 | 457.30 | 1.64 |
Ultratech Cement | 4556.00 | 4617.90 | 1.34 |
Asian Paints | 2209.05 | 2238.30 | 1.31 |
Nifty Midcap & Smallcap- Gainers & Losers
Weekly Nifty Midcap 100 Gainers | |||
Company Name | LTP | Previous Close | Change (%) |
Dhani Service | 207.25 | 190.25 | 8.94 |
Indiabulls Housing | 152.35 | 144.65 | 5.32 |
Weekly Nifty Midcap 100 Losers | |||
Company Name | LTP | Previous Close | Change (%) |
Edelweiss Fin | 54.40 | 55.65 | 2.25 |
Mphasis | 1335.20 | 1363.20 | 2.05 |
Weekly NSE Nifty Smallcap 100 Gainers | |||
Company Name | LTP | Previous Close | Change (%) |
CSB Bank | 255.70 | 236.85 | 7.96 |
Linde India | 885.60 | 828.50 | 6.89 |
Weekly NSE Nifty Smallcap 100 Losers | |||
Company Name | LTP | Previous Close | Change (%) |
Welspun India | 65.00 | 68.35 | 4.90 |
Inox Leisure | 266.40 | 275.70 | 3.37 |
Indian Markets on a weekly basis
Indian markets started the week with positive notes with the news of higher GST collections. The first time the GST collection crossed more than 1 Lakh crore since February 2020. The IHS Markit India Manufacturing PMI rose to 58.9 in October compared to 56.8 in September.
Indian stock markets were trading volatile in the mid of the week due to the US election 2020. The US markets rallied during the week with the expectation that the new president would announce additional stimulus for the speedy growth of the economy. Indian and other global markets traded positively on almost all trading days during the week while tracking the US markets.
There was some cautiousness in the market due to negative news in the week. Investors have ignored the negative news like India’s export’s dropped and ICRA’s statement that the commercial vehicle sector would remain negative in FY21 due to pandemic.
US election 2020 and Global Market updates
The US markets posted their largest weekly rally since April despite the uncertainty of the US election 2020 result. After getting clarity that former Vice President Joe Biden will be the next president, investors began to anticipate additional stimulus and relaxation in tax increases.
The Federal Reserve after two days meeting on Thursday announced no changes in monetary policy. Fed Chair Jerome Powell has also said that the central bank still has monetary policy tools and it can deploy at the appropriate time to boost the economy if required.
The European stock markets also rallied while tracking the US markets. The markets also got boosted from the strong quarterly earnings and additional stimulus measures announced in the UK. Investors ignored the surges in the coronavirus cases in the European countries during the week.
Other Asian markets, Japanese markets gained during the truncated week as last Tuesday Japan’s stock market was closed on account of Cultural Day. Chinese stock market also gained during the week as the prospect of a Biden presidency raised the outlook for improved US-China bitter relations.
Quarterly results
HDFC –
On 2nd November Housing Development Finance Corporation (HDFC) posted a 28% fall on a YoY basis of Rs 2870.12 crores against Rs 3961.53 crore for the same period last year. The profit for Q2FY21 is not directly comparable, as the previous year the profit increased due to one time gain.
The company’s Net interest income (NII) increased by 21% YoY to Rs 3647 crore. On the other hand, net interest margin (NIM) for the quarter stood at Rs 3.3% and for the half-year at 3.2%. The share price of HDFC gained more than 6% after the announcement of Q2FY21 results.
NTPC-
NTPC on 2nd November reported 7.43% YoY growth in net profit at Rs 3504 crore for the Q2FY21 on account of exceptional gains of Rs 560.43 crore. The company had posted a profit of Rs 3262.44 crore for the same period last year.
NTPC said the board has approved buyback of up to 19.78 crore equity shares at a price of Rs 115. The company has fixed the record date as 13 November for the buyback. The NTPC share price reacted negatively after the announcement of quarterly earnings.
Adani Ports-
On Tuesday 3 November Adani ports reported 31.57% YoY growth in its consolidated net profit at Rs 1393.69 crore for the Q2FY21. The company had posted a profit of Rs 1059.20 crore for the same period last year. Revenue from the operations grew around 3% YoY to Rs 2902.52 crore.
The EBITDA of the company increased by 136% YoY to Rs 2229 crore. The share price of Adani Ports reacted positively after the announcement of September end quarters.
Sun Pharma-
Sun Pharma on 3rd November reported a 70% rise in net profit on a YoY basis to Rs 1813 crore in the Q2FY21. The company’s profit rose on the back of lower operating expenses and higher other income. The Company had reported a net loss of Rs 1656 crore in the previous quarter. The other expenses declined by 3% to Rs 2392 crore and other income rose by 28% to Rs 256 crore.
The company’s revenue rose 5% over a year earlier to Rs 8553 crore, a 13% rise over the previous quarter. Sun Pharma’s operating profit rose by 30% to Rs 2310 crores. The share price of Sun Pharma reacted strongly after the announcement of Q2FY21 results.
SBI-
The top PSU lender State Bank of India (SBI) posted a 51.9% YoY rise in its net profit for the Q2FY21 at Rs 4574.16 crore. The bank had reported a net profit of Rs 3011.73 crore in the previous year for the same quarter.
Bank’s total income stood at Rs 75341.80 crore, up by 3.42% from Rs 72850 crore reported in the previous year. The Net Interest Income (NII) of the bank for Q2Fy21 rose 14.56% to Rs 28181 crore. The net margin rose from 3.22% reported in the previous year to 3.34% in the quarter ended September.
The Bank’s gross NPA came in at 5.28% against 5.44% in the preceding quarter and the 7.19 in the same quarter last year. The share price of SBI reacted positively after the announcement of the Q2FY21 results.
Cipla-
On 6 November Friday, Cipla posted a 41.18% increase in its consolidated net profit for the Q2FY21 to Rs 665.43 crore. The company had posted a net profit of Rs 471.35 crore in the same period the previous year. The company’s revenue from operations rose to Rs 5038.29 crore, up by 14.62% from 4395.78 crores reported in the previous year.
Cipla’s Q2FY21 earnings beat the street estimates. The announcement of second-quarter earnings came after the market on Friday. The share price of Cipla may react positively on Monday
ITC-
On Friday 6 November, ITC reported a 19.65% YoY drop in standalone net profit to Rs 3232.40 crore. The company had reported a net profit of Rs 4023.10 crores in the same quarter previous year. The company’s revenue from operations rose just 0.1% to Rs 11976.75 crore from Rs 11871.47 crore reported last year.
ITC’s revenue from cigarettes and hotel business dropped sharply while revenue from the agro-business rose during the quarter. The result came post market hours, the share price closed 0.49% ahead of the quarterly result announcement on Friday. On Monday we may see a profit booking on this counter.
Conclusion:
Indian markets closed higher on weekly basis due to positive global market cues and strong inflow from the FIIs. The better than expected second quarterly earnings has also supported the Indian markets to trade higher during the week.
The market will have a clear picture of the US election 2020 next week. You can visit our website tomorrow for the “Key factors that will impact the market next week” report.
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Happy weekend !!
Editor’s Desk