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Sensex Ends 429 Points Higher; Auto and IT Stocks Rally
Thu, 2 Jul Closing | Monish Vora, TM Team

Indian share markets extended gains for the second consecutive day and ended on a strong note, tracking gains in Asian peers and Wall Street.

Banking and finance stocks rallied as the special liquidity scheme (SLS) trust to rescue NBFCs, announced under the Atmanirbhar Bharat Abhiyan relief package came into effect on 1 July.

Sentiment also got a boost after it was reported that India's unemployment rate fell to 11% in June from 23.5% in May, as economic activities resumed after government eased lockdown curbs.

At the closing bell, the BSE Sensex stood higher by 429 points (up 1.2%).

Meanwhile, the NSE Nifty closed higher by 121 points (up 1.2%).

The SGX Nifty was trading at 10,540, up by 141 points, at the time of writing.

The BSE Mid Cap index ended up by 1%, while the BSE Small Cap index ended the day up by 0.9%.

On the sectoral front, gains were largely seen in the auto sector and IT sector.

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Asian share markets ended on a positive note today. As of the most recent closing prices, the Shanghai Composite stood higher by 2.13%, while the Nikkei ended up 0.11%.

The rupee is trading at 74.81 against the US$.

The rupee today advanced 59 paise, its biggest single-day gain since April 23, to close at 75.01 against the US dollar, boosted by gains in the domestic equity market amid weakness in the greenback.

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Eveready Industries was among the buzzing stocks today.

The stock of Eveready Industries witnessed huge buying interest today and hit fresh 52-week high after the firm reported a three-fold rise in net profit for FY20.

The company reported over three-fold jump in its net profit at Rs 1,795.7 million for the financial year 2019-20, compared to Rs 472.6 million in the last fiscal.

In Q4FY20, the net profit rose multi fold to Rs 637.3 million against Rs 40.4 million in Q4FY19.

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The profitability was aided by rise in gross margin in the core segments of batteries and flashlights and improvement in operating margin due to additional cost savings measures.

The company further said that the discontinuance of the packaged tea business further helped the company in improving margins and releasing working capital.

It added that the turnover for the quarter and the year was lower than that in the previous year as the segments of lighting and appliances were adversely impacted. Furthermore, discontinuance of the packet tea segment decreased turnover by Rs 404 million during the year (Rs 187 million during the quarter).

Moving on, as per an article in the Economic Times, China is at the centre of the discovery of what may be one of the biggest gold counterfeiting scandal in recent history.

According to a report in Zero Hedge, not only does it involve China, but it emerges from a city that has become synonymous for all that is scandalous about China: Wuhan.

It is that the 83 tons of purportedly pure gold stored in creditors' coffers by Kingold as of June, backing the 16 billion yuan of loans, would be equivalent to 22% of China's annual gold production and 4.2% of the state gold reserve as of 2019.

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In short, more than 4% of China's official gold reserves may be fake. And this assume that no other Chinese gold producers and jewelry makers are engaging in similar fraud.

Here's an excerpt from the article in The Economic Times...

  • As for the gold, several billion in gold bars never existed and yet resulted in a cascade of subsequent cash flow events allowing tens of billions in funds to be released, "benefiting" not only founder Jia, but China's broader economy.

    Which is terrifying because whereas just after the financial crisis China was engaged in building ghost cities, everyone knew these were a symbol of demand that would never materialize, even if the cities themselves did exist. However, it now appears that a major part of China's subsequent economic boom has been predicated on tens of billions in hard assets -- such as gold -- which simply do not exist, the report said.

It will be interesting to track how this discovery pans out in the coming days. We will keep you updated on all the news from this space. Stay tuned.

In other news from the commodities space, gold retreated from its all-time high witnessed yesterday and saw some profit booking in the morning session today.

Losses were seen on the back of optimism over a potential vaccine and better than expected economic readings which lifted investors' appetite for riskier assets.

Note that domestic gold prices hit an all-time high yesterday tracking a global rally, as surging coronavirus cases in many countries raised the metal's safe-haven appeal.

Gold is also in focus lately after US Federal Reserve Chairman Powell said last week that output and employment remain far below their pre-pandemic levels and cautioned that the outlook for the economy is "extraordinarily uncertain."

Speaking of gold, how lucrative has gold been as a long-term investment in India?

The chart below shows the annual returns on gold over the last 15 years...

Gold Has Been a Shining Long-Term Investment

As you can see, barring just two years - 2013 and 2015, gold has delivered positive returns in 13 of the last 15 years.

As per Vijay Bhambwani, editor of Weekly Cash Alerts at Equitymaster, the recent developments in bullion market may put some short-term pressure on gold prices.

In his latest video, he shares his thoughts on gold, especially in view of three events which have recently transpired in the gold market.

You can check the same here: These 3 Recent Events Will Impact the Price of Gold.

To know what's moving the Indian stock markets today, check out the most recent share market updates here.

For information on how to pick stocks that have the potential to deliver big returns, download our special report now!

Read the latest Market Commentary


What else is happening in the markets today? Dig in...

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Stock Market Updates

KPR MILL Share Price Up by 12%; BSE 500 Index Down 0.1% (Today's Market)

Aug 12, 2020 03:29 PM

KPR MILL share price is trading up by 12% and its current market price is Rs 504. The BSE 500 is down by 0.1%. The top gainers in the BSE 500 Index are KPR MILL (up 12.1%) and INTERGLOBE AVIATION (INDIGO) (up 10.1%). The top losers are DLF and BALRAMPUR CHINI .

STRIDES PHARMA SCIENCE Share Price Down by 5%; BSE HEALTHCARE Index Down 1.4% (Today's Market)

Aug 12, 2020 03:29 PM

STRIDES PHARMA SCIENCE share price is trading down by 5% and its current market price is Rs 607. The BSE HEALTHCARE is down by 1.4%. The top gainers in the BSE HEALTHCARE Index are PROCTER & GAMBLE HEALTH (up 4.5%) and ERIS LIFESCIENCES LIMITED (up 2.3%). The top losers are STRIDES PHARMA SCIENCE (down 5.2%) and CAPLIN POINT (down 5.0%).

SONATA SOFTWARE Share Price Up by 5%; BSE IT Index Up 0.5% (Today's Market)

Aug 12, 2020 03:27 PM

SONATA SOFTWARE share price is trading up by 5% and its current market price is Rs 299. The BSE IT is up by 0.5%. The top gainers in the BSE IT Index is SONATA SOFTWARE (up 5.5%). The top losers are PERSISTENT SYSTEMS (down 0.7%) and TCS (down 1.0%).

CROMPTON GREAVES CONSUMER ELEC. Share Price Down by 5%; BSE CONSUMER DURABLES Index Down 0.9% (Today's Market)

Aug 12, 2020 02:41 PM

CROMPTON GREAVES CONSUMER ELEC. share price is trading down by 5% and its current market price is Rs 263. The BSE CONSUMER DURABLES is down by 0.9%. The top gainers in the BSE CONSUMER DURABLES Index are VIP INDUSTRIES (up 3.6%) and BLUE STAR (up 2.2%). The top losers is CROMPTON GREAVES CONSUMER ELEC. (down 5.0%)..

HCL TECHNOLOGIES at 52 Week High; BSE 500 Index Down 0.1 % (Today's Market)

Aug 12, 2020 02:41 PM

HCL TECHNOLOGIES share price has hit a 52-week high. It is presently trading at Rs 719. BSE 500 Index is down by 0.1% at 14,753. Within the BSE 500, HCL TECHNOLOGIES (up 5.0%) and IDFC (up 17.6%) are among the top gainers, while top losers are RESPONSIVE INDUSTRIES and HINDUSTAN ZINC.

Indian Indices Recover from Day's Low; SBI Jumps 4% (Today's Market)

Aug 12, 2020 12:30 pm

The BSE Sensex is trading down by 63 points, while the NSE Nifty is trading down by 23 points.

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Aug 12, 2020 03:37 PM

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