The benchmark indices bounced back in mid-afternoon trade. At 14:29 IST, the S&P BSE Sensex, was up 45.04 points or 0.11% at 40,958.86. The Nifty 50 index was up 3.75 points or 0.03% at 12,039.55.
Sentiment was boosted after Economic Survey projected GDP growth at 6-6.5% for 2020-21. In the broader market, the S&P BSE Mid-Cap index was down 0.18% while the S&P BSE Small-Cap index was up 0.10%.
The market breadth was negative. On the BSE, 1016 shares rose and 1286 shares fell. A total of 135 shares were unchanged. In Nifty 50 index, 22 stocks advanced while 28 stocks declined.
Economy
Finance Minister Nirmala Sitharaman today tabled the Economic Survey 2019-20 in the Parliament. The survey estimates Financial Year 2020-21 GDP growth at 6-6.5% while FY20 GDP growth is seen at 5%. Survey asked the government to deliver expeditiously on reforms.
Prepared by Chief Economic Advisor (CEA) Krishnamurthy Subramanian, the Economic Survey gives a review of the developments in the economy over the previous 12 months. It also gives an outlook for the next financial year.
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CEA Subramanian said, "We have a slowdown in the Indian economy, part of it is because of the global economy slowing down in 2019." The economic slowdown since 2017 has been due to the lagged effect of reduced investment from 2013 which occurred due to credit boom-bust, he added.
To spur economic growth and achieve $5 trillion economy, India needs to spend about $1.4 trillion on the infrastructure sector during FY2020-2025, the survey said. Investment in infrastructure is necessary for the economy, as power shortages, inadequate transport and poor connectivity affects overall growth performance, as per the Economic Survey.
The survey said affordability of vegetarian 'thalis' improved by 29% while that of non-vegetarian by 18% during the 2006-07 and 2019-20 period. The survey analysed data from the Consumer Price Index for industrial workers for around 80 centres in 25 states/Union Territories from April 2006 to October 2019 to arrive at the cost of a 'thali'.
Industrial growth in 2019-20 is estimated at 2.5%. The survey said that Apr-Nov indirect tax collections have been muted. FY21 is expected to pose challenges on fiscal front. The Government may need to relax fiscal gap aim in FY20 to revive growth. Outlook on global growth continues to be weak, it added. The survey said that India need counter-cyclical fiscal steps to up demand.
The survey highlighted that there is room to further rationalize subsidies, particularly food. IT added that banks may remain risk averse unless IBC proceedings speed up. Further, cut in capex by government may adversely hurt growth. Industrial activity is rebounding, showing signs of pick up, it said.
Economic Survey called for measures to make it easier to start new business, register property, pay taxes, enforce contracts. Weak global growth impacting India as well as investment slowdown due to financial sector issues had led to growth dropping to a decade low in current fiscal, the survey said, adding 5% growth projected for 2019-20 is the lowest it could fall for now.
Numbers to Track:
The yield on 10-year benchmark federal paper rose to 6.582% at 14:25 IST compared with 6.558% in the previous trading session.
In the foreign exchange market, the rupee edged higer against the dollar. The partially convertible rupee was trading at 71.36, compared with its previous closing low of 71.58.
In the commodities market, Brent crude for March 2020 settlement was up 65 cents at $58.94 per barrel. The contract rose $1.52 or 2.54% to settle at $58.29 a barrel in the previous session.
MCX Gold futures for 5 February 2019 settlement fell 0.70% to Rs 40,690.
Stocks in Spotlight:
State Bank of India (SBI) was up 2.74%. SBI reported a 41.18% jump in standalone net profit to Rs 5583.36 crore in Q3 December 2019 over Q3 December 2018. Total income rose 9.22% to Rs Rs 76797.91 crore in Q3 December 2019 over Q3 December 2018. SBI said that this is the highest ever quarterly net profit recorded by the Bank. Profit before Tax (PBT) for Q3FY20 stood at Rs 10,970 crore increasing by 65.74% on year on year basis. The bank's gross non-performing assets (NPAs) stood at Rs 1,59,661.19 crore as on 31 December 2019 as against Rs 1,61,635.05 crore as on 30 September 2019 and Rs 1,87,764.57 crore as on 31 December 2018. Net interest income (NII), difference between interest earned and interest expended, increased by 22.42% to Rs 27,779 on YoY basis. Net Interest Margin (NIM) improved to 3.59% in Q3FY20 from 2.97% reported in Q3FY19. The bank's provisions and contingencies (excluding tax provisions) reduced by 41.35% and stood at Rs 8193.06 crore in Q3 December 2019 as against Rs 13970.42 crore posted in Q3 December 2018.
Bank of India rose 1.44% to Rs 67 after reporting a net profit of Rs 105.52 crore in Q3 December 2019 as compared to a net loss of Rs 4737.56 crore in Q3 December 2018. Total income rose 13.98% to Rs 13,338.09 crore in Q3 December 2019 from Rs 11,701.84 crore in Q3 December 2018. Gross non-performing assets (NPAs) stood at Rs 61,730.54 crore as on 31 December 2019 as against Rs 61,475.60 crore as on 30 September 2019 and Rs 60,797.55 crore as on 31 December 2018. Provisions and contingencies fell 55.39% to Rs 4015.20 crore in Q3 December 2019 from Rs 9000.72 crore Q3 December 2018.
NOCIL slumped 12.47% to Rs 96.20 after consolidated net profit slumped 53.20% to Rs 20.99 crore on a 25.6% decline in net sales to Rs 194.31 crore in Q3 December 2019 over Q3 December 2018. Revenue was hit as prolonged slowdown resulted into temporary oversupply scenario leading to price suppression. Price suppression to some extent was net off through internal efficiency, the company said. Consolidated profit before tax tanked 57.5% to Rs 29.39 crore in Q3 December 2019 as against Rs 69.12 crore in Q3 December 2018.
V-Guard's consolidated net profit jumped 29.7% to Rs 44.24 crore in Q3 December 2019 as against Rs 34.1 crore reported in Q3 December 2018. Company's consolidated net Revenue from operations for the quarter ended 31 December 2019 was at Rs 631.89 crore, posting an increase of 5% over previous year's Rs 601.31 crore. The company reported that subdued demand conditions impacted top-line growth the quarter. Consumer Durables segment grew well, but other segments were impacted more by the overall slowdown. Consolidated profit before tax (PBT) for Q3 December 2019 stood at Rs 58.46 crore, up 32.6% from Rs 44.1 crore reported in Q3 December 2018.
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