The domestic equity benchmarks ended near the day's low after a volatile trade on Thursday. Bourses witnessed bouts of volatility on account on weekly index options expiry on the NSE. The Nifty ended a tad above the 14,900 mark. Fertilizer shares were in demand after the government hiked DAP fertilizer subsidy by 140%.
As per provisional closing data, the barometer index, the S&P BSE Sensex, declined 337.78 points or 0.68% to 49,564.86. The Nifty 50 index lost 124.10 points or 0.83% at 14,906.05.
The broader market outperformed the benchmark indices. The S&P BSE Mid-Cap index lost 0.16% while the S&P BSE Small-Cap index rose 0.22%.
Buyers outpaced sellers. On the BSE, 1661 shares rose and 1425 shares fell. A total of 162 shares were unchanged.
Investors assessed the minutes from the US Federal Reserve's meeting in April that flagged the possibility of a debate on scaling back asset purchases.
Meanwhile, the Dow Jones 30 Futures were currently down 178 points, indicating a weak start to the equities on Wall Street today.
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COVID-19 Update:
Total COVID-19 confirmed cases worldwide stood at 16,49,14,739 with 34,17,982 deaths. India reported 31,29,878 active cases of COVID-19 infection and 2,87,122 deaths while 2,23,55,440 patients have been discharged, according to the data from the Ministry of Health and Family Welfare, Government of India.
The country recorded 2,76,110 new COVID-19 cases and 3,874 deaths in the last 24 hours, according to the Union Health Ministry. The total tally of the viral infection now stands at 2,57,72,440.
The government on Thursday urged all the states and Union territories to declare Mucormycosis, also known as black fungus, as an epidemic. A disease can be declared as an epidemic by making it a notifiable disease under the Epidemic Diseases Act 1897.
The Union Health Ministry in its letter to states and Union territories has also asked to make it mandatory for all government and private health facilities to report all suspected and confirmed cases to the health department and subsequently to the Integrated Disease Surveillance Project (IDSP) surveillance system.
Economy:
The Global Trade Update by the United Nations Conference on Trade and Development (UNCTAD) on Wednesday said that in Q1 2021, the value of global trade in goods and services grew by about 4% quarter-over-quarter and by about 10% year-over-year.
UNCTAD said that India, China and South Africa fared 'relatively better' than other major economies during the first quarter of 2021 even as global trade recovery from COVID-19 impact reached a new high.
The data for India said that import of goods grew 45% in Q1 2021 relative to the 2020 average while services imports were up 14%. Export of goods for India grew 26% for the period under review while services exports grew 2%.
Buzzing Segment:
Shares of nine fertilizer companies advanced in trade on Thursday after the government on Wednesday increased its share of subsidy for di-ammonia phosphate (DAP) fertilizer by 140% from Rs 500 to Rs 1,200 per bag.
National Fertilizers (up 5.48%), Rashtriya Chemicals & Fertilizers (up 4.58%), Fertilizers & Chemicals Travancore (up 4.14%), Coromandel International (up 3.44%), Gujarat State Fertilizers & Chemicals (up 3.35%) Chambal Fertilisers & Chemicals (up 3.12%) and Deepak Fertilisers & Petrochemicals (up 2.03%) advanced.
The government has decided to increase the subsidy for DAP fertiliser from Rs. 500 per bag to Rs. 1200 per bag, which is an increase of 140%. Thus, despite the rise in international market prices of DAP, it has been decided to continue selling it at the older price of Rs 1200 and the central government has decided to bear all the burden of price hike.
Last year, the actual price of DAP was Rs 1,700 per bag. In which the Central Government was giving a subsidy of Rs 500 per bag. So the companies were selling fertilizer to farmers for Rs 1200 per bag.
Recently, the international prices of phosphoric acid, ammonia etc. used in DAP have gone up by 60% to 70%. So the actual price of a DAP bag is now Rs 2400, which could be sold by fertilizer companies at Rs 1900 after considering a subsidy of Rs 500. With the latest decision, farmers will continue to get a DAP bag for Rs 1200.
The central government spends about Rs 80,000 crore on subsidies for chemical fertilisers every year. With the increase in subsidy in DAP, Government of India will spend an additional Rs 14,775 crore as subsidy in Kharif season.
Earning Impact:
Relaxo Footwears rose 1.17% to Rs 1,025.05 after the company's standalone net profit surged 97.23% to Rs 102.17 crore on a 38.31% jump in revenue from operations to Rs 747.68 crore in Q4 March 2021 over Q4 March 2020.
Bosch rose 7.51% to Rs 15,906.55 after the company posted a net profit of Rs 481.95 crore in Q4 FY21, steeply higher than net profit of Rs 81.14 crore in Q4 FY20. Revenue from operations increased by 43.77% to Rs 3,215.87 crore in Q4 FY21 over Q4 FY20.
Indiabulls Housing Finance jumped 8.15% to Rs 209. On a consolidated basis, the company reported 101.5% jump in net profit to Rs 276.23 crore in Q4 FY21 as against Rs 137.06 crore in Q4 FY20. Total income declined by 18% year-on-year (YoY) to Rs 2421.96 crore during the quarter.
Net interest income declined by 7.7% to Rs 764 crore in Q4 FY21 from Rs 828 crore in Q4 FY20. Provisions and write offs in Q4 FY21 were at 316.49 crore, down by 40.9% from Rs 535.69 crore in Q4 FY20. Indiabulls Housing's loan book as on 31 March 2021 was at Rs 66,047 crore, lower by 9.61% as compared with Rs 73,065 crore as on 31 March 2021.
JK Tyre & Industries added 1.29% to Rs 125.20. The tyre maker reported a consolidated net profit of Rs 189.12 crore in Q4 FY21 as against a net loss of Rs 47.20 crore in Q4 FY20. Net sales grew by 63% to Rs 2,927.28 crore in Q4 FY21 over Q4 FY20.
Clariant Chemicals (India) slumped 7.95% to Rs 480.20. The company's net profit dropped 28.6% to Rs 10.97 crore on 29.1% surge in net sales to Rs 218.84 crore in Q4 March 2021 over Q4 March 2020.
Endurance Technologies gained 3.18% to Rs 1400. The auto ancillary company reported a 75.3% jump in consolidated net profit to Rs 187.29 crore on 33.6% rise in net sales to Rs 2132.90 crore in Q4 FY21 over Q4 FY20.
Tanla Platforms fell 1.51% to Rs 876.15. On a consolidated basis, the company's net profit stood at Rs 102.54 crore in Q4 FY21 compared with net loss of Rs 89.13 crore in Q4 FY20. Net sales rose 24.2% YoY to Rs 648.56 crore in Q4 FY21.
Stock in Spotlight:
Dredging Corporation of India (DCI) slipped 0.70% to Rs 390.75. The company has secured annual maintenance dredging contract worth Rs 122.50 crore from Cochin Port Trust. The work awarded through a tender, includes maintaining the channel and basin at Cochin Port from May 2021 to May 2022, the company said in a statement. DCI has commenced dredging at the port by deploying Dredge XV and Dredge VIII.
Tata Steel fell 5.35% to Rs 1102. Fitch Ratings has upgraded India's Tata Steel's (TSL) Issuer Default Rating (IDR) to 'BB', from 'BB-'. The outlook is stable.
The upgrade follows a significant improvement in TSL's financial profile in the financial year ended March 2021 (FY21), driven by a jump in margins following a faster recovery in the global steel market from the impact of the coronavirus pandemic than expected. The agency expects TSL's leverage to remain stable over the next three years, it said.
HPL Electric & Power hit an upper circuit of 5% at Rs 51.45 after the company bagged two orders worth over Rs 372 crore for its switchgear, wires and other related accessories for housing projects in the state of Andhra Pradesh. The current total order book of the company now stands over at Rs 700 crore.
Global Markets:
Most European shares advanced while Asian stocks ended on a mixed note on Thursday, 20 May 2021. Japan's exports grew the most since 2010 in April, supported by a favourable comparison with the sharp plunge seen during the pandemic last year. Data out on Thursday showed exports rose 38% in April from a year earlier, compared with a 16.1% rise in March.
China's benchmark lending rate was kept unchanged in May, with the one-year loan prime rate (LPR) sitting at 3.85%. The five-year LPR was also held steady at 4.65%.
Wall Street's main indexes closed lower on Wednesday after minutes from an April Federal Reserve meeting showed participants agreed the U.S. economy remained far from the central bank's goals, with some considering discussions on tapering its bond buying program.
The Fed's minutes said a strong pickup in economic activity would warrant discussions about tightening monetary policy in the coming months.
"A number of participants suggested that if the economy continued to make rapid progress toward the Committee's goals, it might be appropriate at some point in upcoming meetings to begin discussing a plan for adjusting the pace of asset purchases," according to minutes from the April 27-28 Federal Open Market Committee meeting published Wednesday.
In a press conference following last month's meeting, Chair Jerome Powell had said that it was premature to start talking about tapering.
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