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Market corrects on profit selling; Nifty holds 11,300 mark
(17:10, 12 Aug 2020)

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Domestic-equity-benchmarks-corrected-on-Wednesday,-snapping-their-recent-rising-streak.-The-profit-selling-was-triggered-following-weak-macroeconomic-data-and-concerns-over-rising-coronavirus-cases.-

After-opening-with-steep-losses,-the-key-indices-crawled-higher-as-the-session-progressed-and-ended-a-tad-below-the-flat-line.-Strength-in-PSU-banks-and-auto-shares-negated-weakness-in-pharma-and-metal-stocks.-

The-barometer-index,-the-S&P-BSE-Sensex-fell-37.38-points-or-0.10%-at-38,369.63.-The-Nifty-50-index-declined-14.10-points-or-0.12%-at-11,308.40.-The-Nifty-added-3.96%-in-the-previous-six-sessions.

Kotak-Mahindra-Bank-(down-2.10%),-TCS-(down-0.99%)-and-Reliance-Industries-(down-0.30%)-were-major-index-shakers.-

HCL-Technologies-(up-4.86%),-State-Bank-of-India-(up-4.23%),-Maruti-Suzuki-India-(up-1.25%)-and-Infosys-(up-0.75%)-were-major-market-movers.-

In-the-broader-market,-the-BSE-Mid-Cap-index-fell-0.26%-and-the-BSE-Small-Cap-index-slipped-0.02%.-

The-market-breadth-was-tilted-towards-the-buyers.-On-the-BSE,-1472-shares-rose-and-1261-shares-fell.-A-total-of-140-shares-were-unchanged.-

COVID-19-update:

Total-COVID-19-confirmed-cases-worldwide-stood-at-20,292,486-with-741,380-deaths.-India-reported-6,43,948-active-cases-of-COVID-19-infection-and-46,091-deaths-while-16,39,599-patients-have-been-discharged,-according-to-the-data-from-the-Ministry-of-Health-and-Family-Welfare,-Government-of-India.

Economy:

India's-industrial-output-fell-for-the-fourth-straight-month,-led-by-weakness-across-most-segments-except-consumer-non-durable-goods.-The-Index-of-Industrial-Production-contracted-by-16.6%-in-June-over-last-year,-compared-to-a-revised-contraction-of-34%-in-May-and-a-record-57.6%-slide-in-April.-In-the-April-June-2020-quarter,-the-index-contracted-by-35.9%.

India-CPI-numbers-for-July-are-due-to-be-announced-today.-The-domestic-consumer-prices-in-India-increased-6.09%-year-on-year-(YoY)-in-June-of-2020,-compared-with-6.27%-in-May-2020.-The-retail-inflation-in-June-had-surpassed-the-Reserve-Bank-of-India's-(RBI)-upper-limit-of-6%.-The-government-has-mandated-the-Indian-central-bank-to-keep-inflation-within-the-range-of-4%-with-a-margin-of-2%-on-either-side.

Numbers-to-Watch:

The-yield-on-10-year-benchmark-federal-paper-fell-to-5.884%-as-compared-with-5.903%-at-close-in-the-previous-trading-session.

In-the-foreign-exchange-market,-the-rupee-edged-lower-against-the-dollar.-The-partially-convertible-rupee-was-hovering-at-74.83,-compared-with-its-close-of-74.78-during-the-previous-trading-session.

In-the-commodities-market,-Brent-crude-for-October-2020-settlement-rose-65-cents-at-$45.15-a-barrel.-The-contract-fell-49-cents,-or-1.09%-to-settle-at-$44.50-a-barrel-in-the-previous-trading-session.

MCX-Gold-futures-for-5-October-2020-settlement-was-up-0.01%-to-₹-51,932.-

Earnings-Impact:

Cholamandalam-Financial-Holdings-hit-an-upper-circuit-of-10%-to-₹-371.35-after-the-company's-consolidated-net-profit-surged-78.61%-to-₹-589.46-crore-on-3.56%-rise-in-total-income-to-₹-3,233.85-crore-in-Q1-June-2020-over-Q1-June-2019.-Profit-before-tax-(PBT)-soared-55.80%-to-₹-794.25-crore-in-Q1-June-2020-as-against-₹-509.78-crore-in-Q1-June-2019.-Current-tax-expense-for-the-quarter-jumped-20.88%-to-₹-239.80-crore-as-against-₹-198.37-crore-in-Q1-June-2019.-

Bharat-Forge-jumped-5.28%.-The-company-reported-a-consolidated-net-loss-of-₹-127.32-crore-in-Q1-June-2020-as-against-net-profit-of-₹-171.92-crore-posted-in-Q1-June-2019.-EBITDA-margin-declined-to-1%-in-Q1-June-2020-from-17.8%-in-Q1-June-2019.

Revenue-from-operations-for-Q1-June-2020-stood-at-₹-1154.21-crore,-tumbling-50%-from-₹-2327.85-crore-in-the-same-period-last-year.-The-company-clarified-that-a-drop-in-revenue-was-due-to-the-shutdown-of-manufacturing-operations-in-the-month-of-April-and-May-on-account-of-the-lockdown-imposed-by-the-government-to-control-the-spread-of-the-pandemic.

Adani-Ports-and-Special-Economic-Zone-(APSEZ)-rose-1.91%-after-the-company-said-that-there-had-been-been-a-steady-increase-in-cargo-throughput-across-ports-from-July-2020.

During-the-month-of-July-2020,-APSEZ-handled-cargo-volume-of-18.30-MMT,-a-growth-of-6%-on-year-on-year-basis-and-31%-over-June-2020.-This-trend-gives-us-confidence-that-worst-is-behind-us-and-going-forward-cargo-volume-in-FY21-is-expected-to-stabilize,-APSEZ-further-said.

However,-the-company-delivered-a-weak-set-of-numbers-for-the-April-June-quarter-as-lockdown-measures-announced-by-the-government-during-the-quarter-to-tame-the-spread-of-COVID-19-resulted-in-lower-import-and-export,-impacting-cargo-throughput-in-first-quarter-of-FY21.

APSEZ-reported-26%-decline-in-consolidated-net-profit-to-₹-758-crore-on-a-18%-fall-in-revenue-to-₹-2,293-crore-in-Q1-FY21-over-Q1-FY20.-Cargo-volumes-fell-27%-to-41.41-MMT-(million-metric-tonne)-in-Q1-June-2020-compared-to-56.75-MMT-in-Q1-June-2019.-

Sundram-Fasteners-added-4.14%.-The-TVS-Group-company-reported-a-consolidated-net-loss-of-₹-26.70-crore-in-Q1-June-2020-as-against-a-net-profit-of-₹-95.52-crore-in-Q1-June-2019.-Net-sales-tumbled-68.1%-year-on-year-(YoY)-to-₹-362.76-crore-in-the-first-quarter.-Earnings-before-depreciation-and-taxes-(EBDT)-for-the-quarter-ended-30-June-2020-slumped-93.2%-to-₹-12.35-crore-from-₹-182.87-crore-during-the-same-period-in-the-previous-year.

Metropolis-Healthcare-rose-0.84%.-The-medical-diagnostics-company's-consolidated-net-profit-slumped-89.3%-to-₹-2.88-crore-on-29.6%-drop-in-net-sales-to-₹-143.13-crore-in-Q1-June-2020-over-Q1-June-2019.

Metropolis-said-it-conducted-2.65-million-tests-from-1.37-million-patient-visits.-Cost-rationalization-program-initiated-in-April-2020-to-reduce-fixed-costs-by-9%,-semi-variable-cost-by-12%-and-variable-cost-by-21%.-Goal-for-second-quarter-is-to-scale-up-Non-COVID-19-tests-and-subsequent-revenues.

In-June-2020,-the-company-achieved-100%-revenues-(including-COVID-19-testing)-compared-to-June-2019.-With-improving-Non-COVID-19-revenues-and-cost-rationalization-measures-we-have-achieved-near-normal-EBITDA-margin-of-25.2%-for-June-2020.

Foreign-Markets:

Most-markets-in-Europe-and-Asia-advanced-on-Wednesday.-The-Dow-Jones-Futures-30-were-trading-229-points-higher,-indicating-a-positive-opening-in-US-markets-today.

The-UK-economy-contracted-by-20.4%-in-the-second-quarter-of-2020,-compared-to-the-previous-three-months,-as-coronavirus-induced-lockdowns-hammered-activity.

US-stocks-stumbled-in-late-trade-Tuesday,-giving-up-early-gains-to-end-lower-as-a-selloff-in-tech-shares-continued.-Investors-continued-to-assess-the-outlook-for-the-US-economy-amid-a-decline-in-the-number-of-new-coronavirus-cases-recorded-and-a-lack-of-progress-toward-additional-coronavirus-aid-from-Washington.

Enthusiasm-around-Russia's-COVID-19-vaccine-efforts-faded-throughout-the-day-amid-international-skepticism-about-whether-the-vaccine-was-effective-and-safe,-with-doubts-cast-on-the-approach-on-testing.

The-most-important-factor-that-surprised-investors-and-caught-some-off-guard-was-a-sharp-rise-in-Treasury-yields.-The-yield-on-the-10-year-Treasury-note-reportedly-rose-7-basis-points-to-0.64%-as-investors-shunned-safe-haven-assets.

That-triggered-a-wave-of-gold-selling-and-consequently,-gold-retreated-on-Tuesday-from-record-territory-and-posted-its-steepest-daily-dollar-slide-in-more-than-seven-years,-with-December-futures-tumbling-4.6%-to-settle-at-$1,946.30-an-ounce.

The-jump-in-yields-was-driven-by-plans-of-the-US-Treasury-to-sell-a-record-amount-of-sovereign-debt-this-week.-

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Domestic-equity-benchmarks-corrected-on-Wednesday,-snapping-their-recent-rising-streak.-The-profit-selling-was-triggered-following-weak-macroeconomic-data-and-concerns-over-rising-coronavirus-cases.-

After-opening-with-steep-losses,-the-key-indices-crawled-higher-as-the-session-progressed-and-ended-a-tad-below-the-flat-line.-Strength-in-PSU-banks-and-auto-shares-negated-weakness-in-pharma-and-metal-stocks.-

The-barometer-index,-the-S&P-BSE-Sensex-fell-37.38-points-or-0.10%-at-38,369.63.-The-Nifty-50-index-declined-14.10-points-or-0.12%-at-11,308.40.-The-Nifty-added-3.96%-in-the-previous-six-sessions.

Kotak-Mahindra-Bank-(down-2.10%),-TCS-(down-0.99%)-and-Reliance-Industries-(down-0.30%)-were-major-index-shakers.-

HCL-Technologies-(up-4.86%),-State-Bank-of-India-(up-4.23%),-Maruti-Suzuki-India-(up-1.25%)-and-Infosys-(up-0.75%)-were-major-market-movers.-

In-the-broader-market,-the-BSE-Mid-Cap-index-fell-0.26%-and-the-BSE-Small-Cap-index-slipped-0.02%.-

The-market-breadth-was-tilted-towards-the-buyers.-On-the-BSE,-1472-shares-rose-and-1261-shares-fell.-A-total-of-140-shares-were-unchanged.-

COVID-19-update:

Total-COVID-19-confirmed-cases-worldwide-stood-at-20,292,486-with-741,380-deaths.-India-reported-6,43,948-active-cases-of-COVID-19-infection-and-46,091-deaths-while-16,39,599-patients-have-been-discharged,-according-to-the-data-from-the-Ministry-of-Health-and-Family-Welfare,-Government-of-India.

Economy:

India's-industrial-output-fell-for-the-fourth-straight-month,-led-by-weakness-across-most-segments-except-consumer-non-durable-goods.-The-Index-of-Industrial-Production-contracted-by-16.6%-in-June-over-last-year,-compared-to-a-revised-contraction-of-34%-in-May-and-a-record-57.6%-slide-in-April.-In-the-April-June-2020-quarter,-the-index-contracted-by-35.9%.

India-CPI-numbers-for-July-are-due-to-be-announced-today.-The-domestic-consumer-prices-in-India-increased-6.09%-year-on-year-(YoY)-in-June-of-2020,-compared-with-6.27%-in-May-2020.-The-retail-inflation-in-June-had-surpassed-the-Reserve-Bank-of-India's-(RBI)-upper-limit-of-6%.-The-government-has-mandated-the-Indian-central-bank-to-keep-inflation-within-the-range-of-4%-with-a-margin-of-2%-on-either-side.

Numbers-to-Watch:

The-yield-on-10-year-benchmark-federal-paper-fell-to-5.884%-as-compared-with-5.903%-at-close-in-the-previous-trading-session.

In-the-foreign-exchange-market,-the-rupee-edged-lower-against-the-dollar.-The-partially-convertible-rupee-was-hovering-at-74.83,-compared-with-its-close-of-74.78-during-the-previous-trading-session.

In-the-commodities-market,-Brent-crude-for-October-2020-settlement-rose-65-cents-at-$45.15-a-barrel.-The-contract-fell-49-cents,-or-1.09%-to-settle-at-$44.50-a-barrel-in-the-previous-trading-session.

MCX-Gold-futures-for-5-October-2020-settlement-was-up-0.01%-to-₹-51,932.-

Earnings-Impact:

Cholamandalam-Financial-Holdings-hit-an-upper-circuit-of-10%-to-₹-371.35-after-the-company's-consolidated-net-profit-surged-78.61%-to-₹-589.46-crore-on-3.56%-rise-in-total-income-to-₹-3,233.85-crore-in-Q1-June-2020-over-Q1-June-2019.-Profit-before-tax-(PBT)-soared-55.80%-to-₹-794.25-crore-in-Q1-June-2020-as-against-₹-509.78-crore-in-Q1-June-2019.-Current-tax-expense-for-the-quarter-jumped-20.88%-to-₹-239.80-crore-as-against-₹-198.37-crore-in-Q1-June-2019.-

Bharat-Forge-jumped-5.28%.-The-company-reported-a-consolidated-net-loss-of-₹-127.32-crore-in-Q1-June-2020-as-against-net-profit-of-₹-171.92-crore-posted-in-Q1-June-2019.-EBITDA-margin-declined-to-1%-in-Q1-June-2020-from-17.8%-in-Q1-June-2019.

Revenue-from-operations-for-Q1-June-2020-stood-at-₹-1154.21-crore,-tumbling-50%-from-₹-2327.85-crore-in-the-same-period-last-year.-The-company-clarified-that-a-drop-in-revenue-was-due-to-the-shutdown-of-manufacturing-operations-in-the-month-of-April-and-May-on-account-of-the-lockdown-imposed-by-the-government-to-control-the-spread-of-the-pandemic.

Adani-Ports-and-Special-Economic-Zone-(APSEZ)-rose-1.91%-after-the-company-said-that-there-had-been-been-a-steady-increase-in-cargo-throughput-across-ports-from-July-2020.

During-the-month-of-July-2020,-APSEZ-handled-cargo-volume-of-18.30-MMT,-a-growth-of-6%-on-year-on-year-basis-and-31%-over-June-2020.-This-trend-gives-us-confidence-that-worst-is-behind-us-and-going-forward-cargo-volume-in-FY21-is-expected-to-stabilize,-APSEZ-further-said.

However,-the-company-delivered-a-weak-set-of-numbers-for-the-April-June-quarter-as-lockdown-measures-announced-by-the-government-during-the-quarter-to-tame-the-spread-of-COVID-19-resulted-in-lower-import-and-export,-impacting-cargo-throughput-in-first-quarter-of-FY21.

APSEZ-reported-26%-decline-in-consolidated-net-profit-to-₹-758-crore-on-a-18%-fall-in-revenue-to-₹-2,293-crore-in-Q1-FY21-over-Q1-FY20.-Cargo-volumes-fell-27%-to-41.41-MMT-(million-metric-tonne)-in-Q1-June-2020-compared-to-56.75-MMT-in-Q1-June-2019.-

Sundram-Fasteners-added-4.14%.-The-TVS-Group-company-reported-a-consolidated-net-loss-of-₹-26.70-crore-in-Q1-June-2020-as-against-a-net-profit-of-₹-95.52-crore-in-Q1-June-2019.-Net-sales-tumbled-68.1%-year-on-year-(YoY)-to-₹-362.76-crore-in-the-first-quarter.-Earnings-before-depreciation-and-taxes-(EBDT)-for-the-quarter-ended-30-June-2020-slumped-93.2%-to-₹-12.35-crore-from-₹-182.87-crore-during-the-same-period-in-the-previous-year.

Metropolis-Healthcare-rose-0.84%.-The-medical-diagnostics-company's-consolidated-net-profit-slumped-89.3%-to-₹-2.88-crore-on-29.6%-drop-in-net-sales-to-₹-143.13-crore-in-Q1-June-2020-over-Q1-June-2019.

Metropolis-said-it-conducted-2.65-million-tests-from-1.37-million-patient-visits.-Cost-rationalization-program-initiated-in-April-2020-to-reduce-fixed-costs-by-9%,-semi-variable-cost-by-12%-and-variable-cost-by-21%.-Goal-for-second-quarter-is-to-scale-up-Non-COVID-19-tests-and-subsequent-revenues.

In-June-2020,-the-company-achieved-100%-revenues-(including-COVID-19-testing)-compared-to-June-2019.-With-improving-Non-COVID-19-revenues-and-cost-rationalization-measures-we-have-achieved-near-normal-EBITDA-margin-of-25.2%-for-June-2020.

Foreign-Markets:

Most-markets-in-Europe-and-Asia-advanced-on-Wednesday.-The-Dow-Jones-Futures-30-were-trading-229-points-higher,-indicating-a-positive-opening-in-US-markets-today.

The-UK-economy-contracted-by-20.4%-in-the-second-quarter-of-2020,-compared-to-the-previous-three-months,-as-coronavirus-induced-lockdowns-hammered-activity.

US-stocks-stumbled-in-late-trade-Tuesday,-giving-up-early-gains-to-end-lower-as-a-selloff-in-tech-shares-continued.-Investors-continued-to-assess-the-outlook-for-the-US-economy-amid-a-decline-in-the-number-of-new-coronavirus-cases-recorded-and-a-lack-of-progress-toward-additional-coronavirus-aid-from-Washington.

Enthusiasm-around-Russia's-COVID-19-vaccine-efforts-faded-throughout-the-day-amid-international-skepticism-about-whether-the-vaccine-was-effective-and-safe,-with-doubts-cast-on-the-approach-on-testing.

The-most-important-factor-that-surprised-investors-and-caught-some-off-guard-was-a-sharp-rise-in-Treasury-yields.-The-yield-on-the-10-year-Treasury-note-reportedly-rose-7-basis-points-to-0.64%-as-investors-shunned-safe-haven-assets.

That-triggered-a-wave-of-gold-selling-and-consequently,-gold-retreated-on-Tuesday-from-record-territory-and-posted-its-steepest-daily-dollar-slide-in-more-than-seven-years,-with-December-futures-tumbling-4.6%-to-settle-at-$1,946.30-an-ounce.

The-jump-in-yields-was-driven-by-plans-of-the-US-Treasury-to-sell-a-record-amount-of-sovereign-debt-this-week.-

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