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Market Update
Bears pulled the NIFTY & Sensex below crucial levels of 11200 and 38000. Apart from Metal and Pharma, all other sectoral indices were in red. Major reasons behind the sell-off were unsatisfactory Chinese macro data, tensions around AGR verdict and lack of clarity over US stimulus package.
Eicher Motors couldn’t change the wave around its weak Q1 results and took the most beating (-7.15%). Tata Motors, Mahindra & Mahindra, Axis Bank and Bajaj Finance were also among the major losers. JSWSteel, Coal India, Sun Pharma, CIPLA and NTPC were top gainers.
Over the weekend, big announcements are expected from PM’s 15 August speech related to boosting the economy, Aatmanirbhar Bharat and national health card.
FII/DII Data:
DII continued their strategy to sell-off and took back 797.08 crores, while less enthusiasm seen today in FIIs too by their net investment of only Rs. 46.39 crores compared to higher net investments in the rest of the week.
| CATEGORY | DATE | BUY VALUE (₹ Crores) | SELL VALUE (₹ Crores) | NET VALUE (₹ Crores) |
| DII | 14-Aug-20 | 3,255.49 | 4,052.57 | -797.08 |
| FII/FPI | 14-Aug-20 | 5,184.05 | 5,137.66 | 46.39 |
Retail inflation rose to 6.93% while WPI inflation remains negative at (-)0.58% for July month:
As per the data released by National Statistical Office (NSO), all India combined (rural + urban) provisional inflation rate based on Consumer Price Index(CPI) for July month rose by 6.93% as compared to last year’s July, mainly due to high food prices. June’s provisional rate 6.09% has been revised to final 6.23%.
CPI based retail inflation has grown above the RBI’s upper margin of 6%. Though RBI vowed to keep its policies sufficiently loose to combat corona-battered economy, still it will be difficult for the central bank to reduce Repo Rate further as it will increase the inflation rate.
Consumer Food Price Index (CFPI) surged to 9.62% in July month, while June’s CFPI also revised to 8.72% from earlier provisional value 7.87%.
Source- Ministry of Statistics and Programme Implementation Press Releases
On the other hand, Wholesale Price index (WPI) inflation remains negative straight four months. In July, it stood at (-)0.58% as compared to 1.17% positive inflation in same month last year.
We can see here that there is huge difference between CPI and WPI based inflation rates. One is (+)6.93% while WPI is (-)0.58%. This is caused due to difference in composition of indices (CPI gives 48.3% wait to food articles while WPI gives only 24.3%) and also disruptions in supply chains due to local lockdowns.
Source- Ministry of Commerce & Industry website
Tata Steel reports consolidated loss of Rs. 4609.17 Crores:
Though company reported larger loss than estimated, its production capacity has been restored to almost (95%) pre-COVIID levels and its debt is reduced significantly. Company believes worst is behind now and it was able to generate positive free cash flow in the quarter passed by. Stock gained 1.16% and closed at Rs. 417.9 .
BPCL privatisation to take place by March 2021:
State-run BPCL said it expects privatisation to take place by March 2021. Also, it is planning to add 1000 fuel stations in FY21. It posted net profit of 21.6% in June quarter though the revenue was down by 41%. Company expects that refinery throughput and revenue from operations will improve and will be at normal levels post COVID 19 impact and removal of complete lockdown restrictions. Comapany shares were down by 1.98% and closed at Rs. 412.8 on NSE.
Still no verdict on staggered payment on AGR dues, SC adjourns case to Monday (Aug 17):
Airtel and VIL have sought 15 year time frame to pay their required dues. But today SC didn’t give decision on it. SC asked Rcom and Reliance Jio to share their spectrum sharing agreement and adjourned hearing to August 17.
On the news of SC hearing today, Airtel and VIL closed almost 1.1% down, while Tata Comm and RCom closed 5% higher.