▼ Nifty: 11,153 (-0.86%) ▼ Sensex: 37,734 (-0.79%)
After a sharp sell-off seen yesterday, the Nifty50 index continued its downward slide today. The fall seemed to be tracking weak global sentiments owing to concerns about the economic recovery in the US and fears of a fresh lockdown in the UK. Most of the sectoral indices (except the Nifty IT and Nifty Pharma) were down today. The Nifty Media (-2.6%), Nifty Realty (-1.8%) and Nifty Auto (-1.7%) were the top losers.
TCS gains on extension of pact with British supermarket chain
India's IT giant announced that it has expanded its partnership with Morrisons, a leading supermarket chain in the UK, with a five-year contract. TCS shares rose 2.4%, as it led a small pack of bullish stocks in an otherwise weak market. Other IT stocks also witnessed strong buying as HCL Tech (2.8%), Mindtree (3%) and Tech Mahindra (2.1%) posted healthy gains. The IT sector continues to be a silver lining to the dark cloud hanging over the rest of the market.
L&T underperforms amid grim outlook for infra sector
In its FY20 annual report, the L&T management mentioned that the pandemic and its fallout make it difficult to forecast the future with certainty. The report added that even though things could improve in the second half of FY21, it would be premature to predict the company’s business outcomes for FY21. The current constraints on spending in both the public as well as private sectors could impact the outlook for FY21. The L&T share price dropped 2.2% today and has fallen 9.3% since the beginning of the month, versus a 2.1% decline in the Nifty50 index during the same period.
SPARC rises on tie-up with Tripoint Therapeutics
Sun Pharma Advanced Research (SPARC) announced that it has granted an exclusive license to American pharma company Tripoint Therapeutics to commercially produce its epilepsy drug in the US. Over the five-year period of the agreement, SPARC will receive tiered royalties ranging from 15% to 50% on the net sales. Shares of the SPARC were up nearly 2.6% today.
Closing bell
Today, the global markets will closely watch the testimony of the US Federal Reserve Chairman, Jerome Powell, on the economic outlook and recent monetary policy actions. Typically, during the Q&A segment of the testimony, markets see high volatility. The Dow Jones Industrial Average was down 1.8% yesterday and its movement indicates a short-term downtrend. Back home, the Nifty50 lacks support from most sectors, except for IT and pharma. As we pointed in our newsletter yesterday, high volatility can be expected this week as we move toward the monthly derivatives expiry.