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Market cuts initial losses

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Capital Market
Last Updated : May 07 2020 | 11:05 AM IST

Volatility struck bourses in early trade as the key indices cut losses after seeing a gap-down opening. At 9:24 IST, the barometer index, the S&P BSE Sensex, was down 86.28 points or 0.27% at 31,599.47. The Nifty 50 index was down 25.45 points or 0.27% at 9,245.45.

The S&P BSE Mid-Cap index was up 0.66%. The S&P BSE Small-Cap index was up 0.56%.

The market breadth, indicating the overall health of the market, was positive. On the BSE, 618 shares rose and 419 shares fell. A total of 62 shares were unchanged.

Cues to watch:

The near-term market direction would be a function of the spread and intensity of COVID-19 cases and incremental government/regulatory actions to restart the economy.

The Bank of England will declare its policy decision later this evening. Investors now await Thursday's U.S. weekly jobless claims data and Friday's monthly nonfarm payrolls and unemployment report.

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Stocks in news:

Shares of Hindustan Unilever (HUL) dropped 3.65% to Rs 1,936.55. GlaxoSmithKline Pte and Horlicks reportedly plan to sell 5.69% stake in HUL via block deals at a price band Rs 1,850 - 1,950 per share for $3.3-3.5 billion. GSK is expected to sell the stake today, 7 May 2020.

Maruti Suzuki India gained 1.9%. Maruti Suzuki India would re-start production of vehicles at its Manesar plant from the 12 May 2020. All activities would be carried out strictly in accordance with the Government regulations and guidelines and observing the company's own concern for the highest standards of safety.

Tata Consultancy Services (TCS) fell 0.2%. TCS announced that Continental Bank in the US has selected TCS BaNCS Cloud for banking to digitally transform its business.

Dr. Reddy's Laboratories rose 1.4%. Dr. Reddy's Laboratories announced approval of ELYXYB (celecoxib oral solution 25 mg/mL) by the U.S. Food and Drug Administration (USFDA). ELYXYB (previously known as DFN-15) is indicated for the acute treatment of migraine with or without aura in adults. ELYXYB is the latest product emerging from Dr. Reddy's portfolio of successful acute migraine treatments. The company is working to commercialize this product through partners.

Adani Transmission slipped 0.66%. Adani Transmission said that the board of directors will on Saturday, 9 May 2020 consider to recommend to raise funds by issue of Equity Shares / Convertible Bonds through Qualified Institutional Placement [QIP] / GDR / ADR / FCCBs / FCEBs / Convertible Securities.

Yes Bank jumped 9.38%. Yes Bank's total income rose 44.4% to Rs 12,115.53 crore in Q4 March 2020 over the corresponding period last year. The bank reported loss from ordinary activities after tax of Rs 3,668 crore in Q4 March 2020 as compared to net loss of Rs 1,507 crore in Q4 March 2019. The result was announced after market hours on Wednesday (6 May 2020).

Global Markets:

Overseas, Asian stocks were trading lower on Thursday, digesting weak overnight cues from the U.S. amid mixed corporate earnings and worsening macro data. Markets in Singapore, Malaysia and Indonesia are closed for holidays.

On the economic data front, China's Caixin/Markit services Purchasing Managers' Index for April showed that the country's services sector slumped for the third straight month. It came in at 44.4, an improvement from the 43 reading in March but still off the 50-level that separates growth from contraction.

In US, stocks closed mixed, as investors pored over data showing a collapse in private-sector employment in April and weighed the easing of lockdowns imposed by the coronavirus pandemic. Investors also parsed corporate quarterly updates from some of the nation's largest companies, with Walt Disney Co.'s profit diving more than 90% in the second quarter due to the hit from the pandemic on the entertainment giant.

The Dow Jones Industrial Average fell 218.45 points, or 0.91%, to finish at 23,664.64. The S&P 500 lost 20.02 points, or 0.70%, to end at 2,848.42. The Nasdaq Composite added 45.27 points, or 0.51%, to close at 8,854.39.

Labor-market data released Wednesday from payment processor Automatic Data Processing Inc. ADP, showed private-sector employers shed more than 20 million jobs in April.

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First Published: May 07 2020 | 9:26 AM IST

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