▼Nifty: 11,527 (-0.07%) ▼Sensex: 38,990 (-0.24%)
The markets saw a range-bound session today, with the Nifty50 closing flat. This is in contrast to the sharp rise in the US markets (1.6% rise in the Dow Jones Industrial Average) seen yesterday. Key European and Asian indices also traded in the green. In India, banking stocks witnessed selling pressure, with the Nifty Bank index ending 1.4% lower. Meanwhile, the Nifty IT (+1.5%), Nifty Pharma (+0.9%), and Nifty FMCG (+0.7%) indices closed on a positive note.
Here are the top stories for the day.
Aviation stocks fly, as govt allows airlines to operate at 60% capacity
Given the recovery in demand for domestic air travel, the government has allowed domestic airlines to operate at 60% capacity (up from 45%). Aviation stocks soared, as Indigo (+2.4%) and Spicejet (+3.4%) saw healthy gains. The industry is still not out of the woods, though. As per Centre for Asia Pacific Aviation (CAPA), the Indian airline industry needs an infusion of roughly $3 billion (over ₹22,000 crore) to cope with the pandemic-induced crisis.
Jubilant FoodWorks stock hits lifetime high despite Q1 losses
Jubilant Foodworks, which holds master franchise rights of Domino's Pizza restaurants, reported a 59% year-on-year drop in consolidated Q1 revenues to ₹388.4 crore. Its net loss stood at ₹74.5 crore. While Q1 results may not be encouraging, the company has been quick to get back on its feet. As of August 2020, the company’s sales are back to nearly 90% of those seen last year. It has also taken measures to reduce cost such as negotiating rent waivers for stores, planning closure of 105 unprofitable stores, and introducing delivery charges. It has also forayed into FMCG segments with the launch of ready-to-cook sauces/pastes (market size ₹500 crore). The stock hit a lifetime high today and has risen by about 22% in August 2020.
Happiest Minds IPO opens on 7 Sept; issue size ~₹700 crore
Bengaluru-based IT services company, Happiest Minds Technologies will launch its initial public offer (IPO) on 7 September (offer closes on 9 September). The price band is fixed at ₹165–166 per share, resulting in an issue size of around ₹700 crore. The company's offerings include digital transformation, product engineering, infrastructure management and security services.
So far in 2020, only two major IPOs (SBI Cards and Rossari Biotech) have been launched as compared to 16 IPOs in 2019. They have delivered 8% and 92% returns, respectively, from their issue price (as on 2 September 2020). UTI AMC and CAMS are also expected to announce their IPO plans.
Closing bell
The Indian markets are looking inward and taking cues from domestic data releases and events. The outcome of the Finance Minister’s meeting with banks and NBFCs—relating to the one-time debt recast for resolution of Covid-related stress in bank loans—is expected to give direction to banking stocks. Development of events at the Indo-China border could sway investor sentiments.