Domestic benchmark indices ended with modest gains on Monday, tracking positive global cues on hopes for imminent coronavirus vaccines. The Nifty managed to close above the 12,900 mark as pharma and IT shares rallied.

The barometer index, the S&P BSE Sensex, rose 194.90 points or 0.44% at 44,077.15. The Nifty 50 index advanced 67.40 points or 0.52% at 12,926.45.

The Sensex hit a fresh record high of 44,271.15 in initial deals while the Nifty hit a record high of 12,968.85 in mid-afternoon session.

ONGC (up 6.84%), Reliance Industries (up 2.72%), Infosys (up 3.37%) and TCS (up 2.42%) were major market movers. HDFC (down 3.55%), ICICI Bank (down 2.48%) and HDFC Bank (down 0.64%) dragged.

In the broader market, the BSE Mid-Cap index gained 1.25% and the BSE Small-Cap index rose 1.37%. Both the indices outperformed the benchmark indices.

Buyers outnumbered sellers. On the BSE, 1,688 shares rose and 1,144 shares fell. A total of 181 shares were unchanged.

COVID-19:

Total COVID-19 confirmed cases worldwide stood at 5,86,49,890 with 13,88,075 deaths. India reported 4,43,486 active cases of COVID-19 infection and 1,33,738 deaths while 85,62,641 patients have been discharged, according to the data from the Ministry of Health and Family Welfare, Government of India.

Economy:

FICCI's latest quarterly survey on Manufacturing pointed towards recovery of manufacturing sector for Q2 (July-September 2020-21) as compared to previous quarter. The percentage of respondents reporting higher production in second quarter of 2020-21 has increased vis-a-vis the Q1 of 2020-21. The proportion of respondents reporting higher output during July-September 2020 rose to 24%, as compared to 10% in Q1 of 2020-21. The percentage of respondents expecting low or same production is 74% in Q2 2020-21 which was 90% in Q1 of 2020-21. The overall capacity utilization in manufacturing has witnessed a rise to 65% as compared to 61.5% in Q4 2019-20.

Meanwhile, the latest reports from Agricultural Ministry suggest that rabi acreage stood at 265 lakh hectares (lh) as on 20th November 2020, up 10% compared to the corresponding week last year. The area under primary rabi crop wheat was marginally higher at 97 lh. The acreage in total pulses surged by around 28% to nearly 82.59 lh. Of this, area under Chana or gram rose by 30% to 57.44 lh.

Oilseeds planting rose by nearly 6.6% to 55.5 lh. Area under Mustard stood at 52.25 lh, up 8.83% on year. Acreage of coarse cereals surged to 22.78 lh, soaring nearly 7%. However, rabi Maize area slipped by around 3% to 3.39 lh.

Numbers to Watch:

The yield on 10-year benchmark federal paper rose to 5.902% as compared with 5.877% at close in the previous trading session.

In the foreign exchange market, the rupee edged higher against the dollar. The partially convertible rupee was hovering at 74.11, compared with its close of 74.16 during the previous trading session.

The US dollar index (DXY), which tracks the greenback's value against majors, fell 0.32% to 92.10.

In the commodities market, Brent crude for January 2021 settlement rose 74 cents at $45.70 a barrel. The contract rose 76 cents, or 1.72% to settle at $44.96 a barrel in the previous trading session.

Foreign Markets:

The US Dow Jones Futures were trading 212 points higher, indicating a strong start on Wall Street today.

European markets were trading higher while Asian markets advanced on Monday as hopes rise that effective coronavirus vaccines will start to be rolled out soon. Markets in Japan were closed for a holiday.

On the economic data front, Singapore's economy contracted 5.8% in the third quarter, according to the country's Ministry of Trade and Industry. Developments surrounding the coronavirus will likely continue to weigh on investor sentiment. South Korea is set to impose stricter distancing regulations for the greater Seoul area and southwestern region in an attempt to stem a resurgence of the coronavirus, as per reports.

US stocks fell on Friday as rising new coronavirus cases, coupled with questions around central-bank funding for key emergency programs, cast doubt on a swift economic recovery. Also, weighing on sentiment Friday was a disagreement between the Treasury Department and the Federal Reserve over the continuation of funding for some of the emergency programs implemented during the recession.

On the coronavirus vaccine front, Pfizer and BioNTech said they applied for an emergency use authorization for their vaccine from the Food and Drug Administration. The companies said they can be ready to ship the vaccine within hours after the FDA approves the authorization.

Buzzing Indian Segments:

Shares of select non-banking finance companies (NBFCs) rallied after the Reserve Bank of India's (RBI's) internal working group proposed changes in the corporate structure of Indian private sector banks.

Equitas Holdings, IDFC, Ujjivan Financial Services, Bajaj Holdings & Investment surged by between 8.15% to 20%.

The media reported that RBI's internal working group's proposals may cut holding company discounts for these companies.

On Friday, RBI's working group constituted to review ownership in Indian private banks recommended allowing promoters to hold 26% in banks over a period of 15 years. The working group in its proposal has also favourably looked at allowing industrial houses as bank promoters only after making legislative changes to the banking regulation act.

Non-operative Financial Holding Company (NOFHC) should continue to be the preferred structure for all new licenses to be issued for universal banks. However, it should be mandatory only in cases where the individual promoters / promoting entities/ converting entities have other group entities,” IWG said.

Banks currently under NOFHC structure may be allowed to exit from such a structure if they do not have other group entities in their fold, the working group added.

The Nifty Pharma index rose 1.83% to 11,737.20. The index fell 2.08% in the past four sessions.

Wockhardt, Dr. Reddy's Laboratories, Alkem Laboratories, Divis Laboratories, Ipca Laboratories, Sun Pharmaceutical Industries, Aurobindo Pharma, Cadila Healthcare, Cipla and Lupin rose by 0.83% to 10.4%

Stocks in Spotlight:

Reliance Industries (RIL) gained 2.72% after the Competition Commission of India (CCI) on Friday approved the acquisition of retail, wholesale, logistics & warehousing businesses of Future Group by Reliance Retail Ventures. Reliance Industries (RIL) on 29 August 2020 announced the acquisition of retail & wholesale business and logistics & warehousing business from the Future Group as going concerns on a slump sale basis for Rs 24,713 crore through its subsidiary Reliance Retail Ventures (RRVL). RIL said the acquisition complements and makes a strong strategic fit into Reliance's retail business.

Mindtree advanced 2.95% after the company announced a five-year deal with a leading wind turbine manufacturer, The Nordex Group. The Nordex Group chose Mindtree as its business transformation partner to simplify, modernize, and transform its entire IT landscape globally, while providing scalability to support the company's growth plans,” the IT firm said.

Praj Industries advanced 7.20% after the company signed a non-binding memorandum of understanding (MoU) with Ministry of Petroleum & Natural Gas for providing technology support to Compressed Bio Gas (CBG) projects under SATAT scheme. The objective of the MoU is to facilitate technological support to the entities for setting-up and commissioning of multiple number of eligible and qualified CBG plants and their continuous operation for production of CBG and organic compost manure under sustainable alternative towards affordable transportation (SATAT), the company said.

Jindal Steel & Power (JSPL) rose 2.18% after the company recorded a 13% year-on-year (YoY) growth in standalone steel production at 585,000 metric tons in October 2020 as against 518,000 metric tons in the same month last year. JSPL's standalone sales rose by 10% year on year in October 2020 to 600,000 metric tons (MT) as against 547,000 metric tons recorded in the previous year during the same period.

SREI Infrastructure Finance slumped 12.22% after the Reserve Bank of India (RBI) initiated a special audit of the company and its subsidiary. Selling pressure was also seen as SREI holds a 3.34% stake in the Lakshmi Vilas Bank, which has been put under a 30-day moratorium by RBI. Furthermore, Brickwork Ratings (BWR) had downgraded the long-term ratings of SREI Infrastructure Finance (SIFL) on the innovative perpetual debt instrument to BWR BB' from BWR BBB-'/Negative while placing the ratings under credit watch with negative implications. The credit ratings agency said that the rating downgrade was mainly driven by continued stress on asset quality, significant decline in profitability and stretched liquidity position of the company on account of low collections.

BEML gained 2.29% after the PSU Enterprise received variation order to contract 'MRS1' from DMRC, for additional 12 trainsets of 6 cars each (total 72 cars) to operate on line 2B and 7 of Mumbai metro project. The order is valued at Rs 501 crore (approx) on equivalent INR basis.

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