Local stocks opened on a weak note as trading resumed after a long weekend. At 9:21 IST, the barometer index, the S&P BSE Sensex, was down 1451.71 points or 4.31% at 32,265.91. The Nifty 50 index was down 410.10 points or 4.16% at 9,449.80. Weak global stocks weighed on domestic bourses.
Domestic stock markets were closed on Friday, 1 May 2020 on account of Maharashtra Day.
The S&P BSE Mid-Cap index was off 3.28%. The S&P BSE Small-Cap index was down 2.82%.
The market breadth, indicating the overall health of the market, was weak. On the BSE, 293 shares rose and 1094 shares fell. A total of 57 shares were unchanged.
On May 1, the government announced extension of nationwide lockdown for two more weeks starting from May 4. However, several relaxations will be allowed as per zones. Apart from zone-wise restriction, there is a limited number of activities that will remain prohibited throughout the country, irrespective of zones
On the macro front, Markit Manufacturing PMI for April will be declared today, 4 May 2020.
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The output of eight Core Industries comprise 40.27% of the weight of items included in the Index of Industrial Production (IIP) dipped by 6.5% in March 2020. The cumulative output rose marginally by 0.6% in April-March FY2020.
Stocks in news:
Reliance Industries (RIL) fell 1.17%. On a consolidated basis, Reliance Industries (RIL)'s net profit fell 38.74% to Rs 6,348 crore on 2.5% decline in revenue to Rs 151,209 crore in Q4 March 2020 over Q4 March 2019.
EBITDA increased 7.6% to Rs 25,886 crore in Q4 March 2020 over Q4 March 2019. Decrease in Q4 revenue is primarily on account of 10.1% decline in refining and petrochemicals business revenues. Sharp fall of 20.5% Y-o-Y in average Brent oil price led to lower product price realization across the hydrocarbon chain. This was partially offset by continuing growth in consumer businesses, even amidst the operational issues posed by the pandemic. Digital services and retail business recorded an increase of 30% and 4.2% Y-o-Y respectively, in revenue during the quarter.
RIL after market hours on Thursday (30 April 2020) announced that its board approved the issuance of equity shares of Rs 10 each of the company on rights basis to eligible equity shareholders of the company as on the record date (to be notified later), of an issue size of Rs 53,125 crore. Shareholders can subscribe to one equity share for every 15 equity shares held as on the record date. The issue is priced at Rs 1,257.
Tech Mahindra lost 7.47%. On a consolidated basis, Tech Mahindra's profit after tax (PAT) fell 29.9% to Rs 804 crore on 1.7% decline in revenue to Rs 9,490 crore in Q4 March 2020 over Q3 December 2019. EBITDA fell 13.8% to Rs 1,348 crore in Q4 March 2020 over Q3 December 2019. EBITDA margins fell 200 bps to 14.2% in Q4 March 2020 over Q3 December 2019.
Hindustan Unilever (HUL) dropped 3.27%. The company's net profit declined 1.24% to Rs 1519 crore on a 9.4% decline in net sales to Rs 8,885 crore in Q4 March 2020 over Q4 March 2019. EBITDA for Q4 March 2020 stood at Rs 2065 crore, declining 11% year on year from Rs 2321 crore in Q4 March 2019. HUL said the spread of COVID-19 impacted the business from mid-March, which culminated into scaling down of operations post the national lockdown. Domestic Consumer Growth declined by 9% with a decline of 7% in underlying volume growth.
Maruti Suzuki India fell 5.36%. Maruti Suzuki India had zero sales in the domestic market, (including sales to OEM), in April 2020. This was because in compliance with the Government orders all production facilities were closed. Meanwhile, following resumption of port operations, the first export shipment of 632 units was undertaken from the Mundra port, ensuring that all guidelines for safety were followed.
Mahindra & Mahindra (M&M) slipped 5.55%. M&M announced that the company sold 733 vehicles in the export market during April 2020. Domestic sales of vehicles during the month was completely impacted by the ongoing Covid-19 pandemic and resulting national lockdown.
Mahindra & Mahindra's Farm Equipment Sector (FES) announced its tractor sales numbers for April 2020. Domestic sales in April 2020 were at 4,716 units, as against 27,495 units during April 2019. Total tractor sales (Domestic + Exports) during April 2020 were at 4,772 units, as against 28,552 units for the same period last year. Exports for the month stood at 56 units.
ICICI Lombard General Insurance Company dropped 3.59%. The company's net profit rose 23.8% to Rs 281.93 crore on 11.7% rise in total income to Rs 2,968.55 crore in Q4 March 2020 over Q4 March 2019.
AU Small Finance Bank fell 4.99%. AU Small Finance Bank's net profit rose 3.45% to Rs 122.32 crore on 35.65% rise in total income to Rs 1,366.60 crore in Q4 March 2020 over Q4 March 2019.
Global Markets:
Overseas, Asian stocks were trading lower as US-China tensions weigh on investor sentiment. Markets in China, Japan and Thailand are closed on Monday for holidays.
Meanwhile, tensions are rising between Washington and Beijing, as U.S. President Donald Trump reportedly said Sunday that he believed that a mistake in China was the cause of the spreading coronavirus pandemic, though he did not present any evidence for the claim.
In US, Wall Street sold off sharply on Friday after President Donald Trump revived a threat of new tariffs against China in response to the COVID-19 pandemic, which has brought global economies to a grinding halt.
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