The market corrected sharply on Thursday amid weak global cues triggered by rising death toll from coronavirus spreading in China. Meanwhile, India on Thursday reported its first case of the novel coronavirus in Kerala. The patient, a student of the China's Wuhan University, is stable and in isolation at a hospital, a statement from the Health Ministry said.
Domestic benchmarks were volatile due to monthly expiry of the January series of derivatives contracts. The barometer BSE S&P Sensex fell 284.84 points or 0.69% to 40,913.82. The Nifty 50 index lost 93.70 points or 0.77% to 12,035.80.
In the wider market, the BSE Mid-Cap index fell 1.26% and the BSE Small-Cap index fell 0.92%. Both these indices underperformed the Sensex.
The market breadth was weak. On the BSE, 817 shares rose and 1613 shares fell. A total of 167 shares were unchanged.
Numbers to Watch:
The yield on 10-year benchmark federal paper fell to 6.556% at 16:45 IST compared with 6.568% at close in the previous trading session.
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In the foreign exchange market, the rupee edged lower against the dollar. The partially convertible rupee was hovering at 71.4825, compared with its close of 71.275 during the previous trading session.
In the commodities market, Brent crude for April 2020 settlement fell $1.53 to $57.38 a barrel. The contract fell 83 cents or 1.39% to settle at $58.68 a barrel during the previous trading session.
Foreign Markets:
Shares in Europe and Asia fell across the board on Thursday as worries about the spread of a new virus from China sent investors heading for safe instruments like gold & bonds.
The number of confirmed deaths from the virus in China has climbed to 170 with 7,711 people infected. Chinese factories have extended holidays, global airlines cut flights and Sweden's Ikea said it would shut all stores in China.
US stock market ended little changed on Wednesday, with better-than-expected results from blue-chip names, including Apple, offset by lingering concerns related to China's coronavirus outbreak.
Further, the US Federal Reserve held its benchmark fed funds interest rate steady in a range between 1.5% and 1.75% on Wednesday, saying the economy remained on a moderate growth path. But Fed Chairman Jerome Powell acknowledged that the coronavirus epidemic in China introduces "uncertainty" into the outlook and also called asset valuations "somewhat elevated."
Buzzing Indian Segment:
The Nifty Pharma index tumbled 2.09% to 8,237.05, underperforming all other sectoral indices on the NSE. The media reported that China's coronavirus pandemic could potentially threaten to disrupt India's $39-billion drug production by halting or severely affecting the flow of imports of bulk drugs and intermediates from China. India reportedly imports 70% of its raw materials from China. This may slow down to a trickle if the restrictions in the neighboring country continue for a few more weeks, media reports said.
Piramal Enterprises (down 7.27%), Glenmark Pharmaceuticals (down 4.59%), Cipla (down 2.32%), Lupin (down 2.13%), Cadila Healthcare (down 1.83%), GlaxoSmithKline Pharmaceuticals (down 1.81%), Sun Pharmaceutical Industries (down 1.79%), Alkem Laboratories (down 0.84%), Divi's Laboratories (down 0.1%) and Dr. Reddy's Laboratories (down 0.01%) declined.
Aurobindo Pharma fell 5.52%. The US drug regulator classified the inspection of Aurobindo Pharma's Unit 7 facility as Official Action Indicated (OAI). The company said it will work closely with the regulator to comprehensively address the issues.
Strides Pharma Science surged 4.86% after consolidated net profit jumped 230.81% to Rs 92.33 crore in Q3 December 2019 from Rs 27.91 crore in Q3 December 2018. Revenue from operations in the December quarter stood at Rs 732.44 crore, up by 28.5% from Rs 569.89 crore in the same period last year.
Stocks in Spotlight:
Bajaj Auto rose 1.70%. The auto maker's consolidated net profit rose 8.32% to Rs 1,322.44 crore on a 1.99% rise in net sales to Rs 8,005.88 crore in Q3 December 2019 over Q3 December 2018. Consolidated profit before tax advanced 3.22% to Rs 1,732.12 crore in Q3 December 2019 as against Rs 1,677.99 crore in Q3 December 2018. Tax expense, during the quarter fell 10.39% to Rs 409.68 crore as compared to Rs 457.22 crore in corresponding quarter last year. EBITDA margin stood at 18.4% in Q3 December 2019 as compared to 16.7% in Q3 December 2018.
Bajaj Auto's domestic volumes fell 13% to 6.39 lakh units in Q3 December 2019 as compared to 7.35 lakh units in Q3 December 2018. Exports grew 7% to 5.62 lakh units in Q3 December 2019 as against 5.24 lakh units in Q3 December 2019. Total volumes fell 5% to 12.02 lakh units in Q3 December 2019 over 12.59 lakh units in Q3 December 2018.
Dabur India slipped 2.75%. The FMCG company's consolidated net profit gained 8.62% to Rs 398.87 crore on a 6.99% rise in net sales to Rs 2,352.97 crore in Q3 December 2019 over Q3 December 2018. Consolidated profit before tax advanced 4.95% to Rs 482.34 crore in Q3 December 2019 as against Rs 459.57 crore in Q3 December 2018. Tax expense, during the quarter fell 8.33% to Rs 85.79 crore as compared to Rs 93.59 crore in corresponding quarter last year. Segment-wise, revenues from healthcare business grew 10.7%, revenues from home & personal care (HPC) rose 3.5% and foods segment registered a de-growth of 1.7%.
Colgate-Palmolive (India) fell 6.04%. On a standalone basis, net profit rose 3.64% to Rs 199.10 crore in Q3 December 2019 as against Rs 192.10 crore reported in Q3 December 2018. Excluding the impact of prior year tax reversals in previous year, the net profit after tax has increased by 9% in the current year. The company reported net sales of Rs 1,136 crore for the quarter ended 31 December 2019, an increase of 4.1% over the same quarter of the previous year. The company reported volume growth of 2.3% for Q3 December 2019. Profit before tax (PBT) for Q3 December 2019 stood at Rs 267.43 crore, down by 5.09% from Rs 281.77 crore reported in Q3 December 2018. Total tax expenses declined 23.8% to Rs 68.33 crore in Q3 FY20 from Rs 89.67 crore posted in Q3 FY19.
LIC Housing Finance lost 4.05%. The housing financing company's consolidated net profit fell 0.83% to Rs 602.25 crore in Q3 December 2019 as against Rs 607.29 crore reported in Q3 December 2018. Total revenue from operations jumped 12.09% year-on year (YoY) to Rs 5005.36 crore in Q3 December 2019. Profit before tax (PBT) for Q3 December 2019 (Q3 FY20) stood at Rs 751.36 crore, down by 13.8% against Rs 871.57 crore in Q3 December 2018 (Q3 FY19). Tax expenses fell 43.57% to Rs 149.14 crore in Q3 FY20 from Rs 264.28 crore reported in Q3 FY19.
Vaibhav Global jumped 6.42%. On consolidated basis, net profit jumped 25% to Rs 65.56 crore in Q3 December 2019 as against Rs 52.51 crore reported in Q3 December 2018. Net sales for the quarter rose 10.3% and stood at Rs 563.27 crore as against Rs 510.59 crore reported in the same period last year. Profit before tax (PBT) for Q3 December 2019 stood at Rs 81.82 crore, up by 27% from Rs 64.46 crore reported in Q3 December 2018. Tax expenses jumped 598% to Rs 20.72 crore in Q3 FY20 from Rs 2.97 crore posted in Q3 FY19.
Larsen & Toubro added 0.42%. The water & effluent treatment business of L&T Construction has secured a 'Large' EPC order from Narmada Valley Development Authority (NVDA), Government of Madhya Pradesh to execute the Indira Sagar-Parwati Phase III & IV Lift Micro Irrigation Project. As per L&T's classification, the valuation of the 'large' order lies between Rs 2,500 crore and Rs 5,000 crore.
Himadri Speciality Chemical advanced 0.89%. The commercial operations of the proposed expansion of 60,000 MTPA plant for manufacturing carbon black at West Bengal have commenced. The overall capacity of carbon black has increased to 1,80,000 MTPA, it added.
Pidilite Industries rose 1.48%. The company on 29 January reported a 53.8% jump in consolidated net profit to Rs 341.78 crore in Q3 December 2019 as against Rs 222.29 crore reported in Q3 December 2018. Consolidated net sales posted a marginal growth of 4.3% year on year (YoY) to Rs 1926.59 crore. Profit before tax (PBT) for Q3 December 2019 (Q3 FY20) stood at Rs 454.53 crore, up by 37.5% against Rs 330.59 crore posted in Q3 December 2018 (Q3 FY19). Tax expenses declined 10.7% to Rs 105.69 crore in Q3FY20 from Rs 118.38 crore reported in Q3FY19.
Interglobe Aviation fell 3.18%. The special resolution proposed by Interglobe Aviation co-promoter Rakesh Gangwal was defeated in the company's extraordinary general meeting (EGM) on Wednesday. The resolution has not been passed as only 48.56% of the votes cast were in its favour, while 51.44% were against, according to an exchange filing. The resolution required support from at least 75% shareholders. The EGM was action packed with Gangwal, who requested the meeting, not showing up. Gangwal proposed the EGM earlier this month seeking for a change in Articles of Association (AoA). The proposal was to remove articles related to transfer and acquisition of the company's shares, including 'Right of First Refusal' and 'Tag Along Right' from AoA. The resolution primarily failed after co-founder Rahul Bhatia's Interglobe Enterpise's voted against it. The Bhatia family and Inter-Globe Enterprises (IGE) together own 38.23%, while Gangwal, his wife Sobha Gangwal and a trust hold 36.65%.
HDFC Bank shed 0.72%. The Reserve Bank of India (RBI) imposed a monetary penalty of Rs 1 crore on the bank for failure to undertake on‐going due diligence in case of 39 current accounts opened for bidding in Initial Public Offer.
Delta Corp fell 4.17%. Goa CM has reportedly said that people of the state can't enter casinos operating there from 1 February 2020.
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