Key benchmark indices continued trading lower in afternoon trade. FMCG and pharma stocks bucked weak market trend. At 13:20 IST, the barometer index, the S&P BSE Sensex fell 190.26 points or 0.55% at 34,678.72. The Nifty 50 index slipped 57.45 points or 0.56% at 10,247.85. Surging COVID-19 cases and an IMF downgrade to economic projections dented investors' confidence.
Investors were also cautious amid media reports that China has significantly ramped up its military presence in Pangong Tso, Galwan Valley and several points in eastern Ladakh. According to the reports, People's Liberation Army of China has increased its troops and weaponry along the Line of Actual Control in Arunachal Pradesh, Sikkim and Uttarakhand. India has rubbished China's claim of sovereignty over the Galwan Valley, and said that unilateral attempt to change status quo on LAC will not be accepted.
The broader market was positive. The S&P BSE Mid-Cap index gained 0.24% while the S&P BSE Small-Cap index rose 0.13%.
The market breadth was positive. On the BSE, shares 1,318 rose and 1,234 shares fell. A total of 126 shares were unchanged. In Nifty 50 index, 14 stocks advanced while 36 stocks declined.
Foreign portfolio investors (FPIs) bought shares worth Rs 1,766.90 crore, while domestic institutional investors (DIIs) were net sellers to the tune of Rs 1,524.90 crore in the Indian equity market on 24 June, provisional data showed.
COVID-19 Update:
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Total COVID-19 confirmed cases worldwide stood at 94,31,973 far with 4,82,805 deaths. India reported 1,86,514 active cases of COVID-19 infection and 14,894 deaths, according to the data from the Ministry of Health and Family Welfare, Government of India.
Economy:
The International Monetary Fund (IMF) on 24 June 2020 projected a sharp contraction of 4.5% for the Indian economy in 2020, a historic low, citing the unprecedented coronavirus pandemic that has nearly stalled all economic activities, but said the country is expected to bounce back in 2021 with a robust 6% growth rate.
The IMF projected the global growth at -4.9% in 2020, 1.9 percentage points below the April 2020 World Economic Outlook (WEO) forecast. Given the unprecedented nature of this crisis, as is the case for almost all countries, this projected contraction is a historic low, Gita Gopinath, IMF's Chief Economist, said as she released the World Economic Outlook Update.
Gainers & Losers:
ITC (up 2.55%), Hero MotoCorp (up 2.19%), Gail (India) (up 2.12%), Bajaj Finance (up 1.03%) and Bajaj Auto (up 0.94%) were top gainers in Nifty 50 index.
Asian Paints (down 2.89%), BPCL (down 2.42%), Hindalco Industries (down 2.41%), Eicher Motors (down 2.29%) and Axis Bank (down 2.10%) were major losers in Nifty 50 index.
Q4 Results Today:
Ashok Leyland (down 0.09%), Container Corporation of India (up 2.05%), Apollo Hospitals Enterprise (up 0.94%), Endurance Technologies (down 1.83%), Engineers India (up 7.12%), Galaxy Surfactants (down 1.93%), Hindustan Aeronautics (up 1.25%), IDFC (down 1.40%), Indian Overseas Bank (up 0.64%), J.B.Chemicals & Pharmaceuticals (down 2.38%), Future Supply Chain Solutions (up 5%), ICRA (up 1.01%), Indiabulls Ventures (up 5%), Insecticides (India) (up 2.12%) and Ion Exchange (India) (down 0.75%) are some of the companies that will announce their quarterly earnings today.
Earnings Impact:
Indian Oil Corporation (IOCL) declined 1.90% after the PSU OMC reported a consolidated net loss of Rs 7,782.55 crore in Q4 March 2020 as against net profit of Rs 6,004.88 crore in Q4 March 2019. Consolidated net sales of Q4 March 2020 stood at Rs 1,18,007.32, declining 6.4% from Rs 1,26,076 crore in Q4 March 2019. IOCL reported a one-time loss of Rs 11,304.64 crore in Q4 March 2020 on the back of a significant fall in oil prices which lead to a write down in valuation of inventories below cost for the specified period of Rs 6,855.35 crore. On a standalone basis, IOCL reported a net loss of Rs 5,185.32 crore in Q4 March 2020 as against a net profit of Rs 6,099.27 crore in Q4 March 2019. Net sales declined 6.2% to Rs 1,18,439.08 crore in Q4 March 2020 over Q4 March 2019. Average Gross Refining Margin (GRM) for the period April-March 2020 declined 98% to $0.08 per barrel from $5.41 per barrel in April-March 2019.
United Breweries (UBL) slipped 1.30% after liquor manufacturer's net profit tumbled 39.2% to Rs 41.58 crore on 12.6% decline in net sales to Rs 1,425.11 crore in Q4 March 2020 over Q4 March 2019. During the quarter, revenue from the beer segment was at Rs 3,095.25 crore (down 10.40% Y-o-Y) and Rs 4.66 crore from non-alcoholic beverages (down 7.17% Y-o-Y). "COVID-19 impacted performance in the March Quarter 2020. The full year performance was negatively impacted by elections in Q1, overall economic slowdown, unfavorable policy changes in Andhra Pradesh and input cost increases. The price increases taken by the company in the markets of Karnataka, Maharashtra, Rajasthan and Goa helped partially offset increased input prices of barley and new glass bottles resulting in less than 2% reduction in gross margin. In Q4 gross margin increased marginally due to a combination of positive price/mix and more stable input costs" UBL said.
Indoco Remedies shed 1.38% extending decline for second day. The stock has lost 6.4% in two days. The company's consolidated net profit fell 53.4% to Rs 5.36 crore on 7.4% rise in net sales to Rs 263.14 crore in Q4 March 2020 over Q4 March 2019. On a standalone basis, the company's tumbled 53.6% to Rs 5.4 crore on 7.4% increase in net sales to Rs 263.17 crore in Q4 March 2020 over Q4 March 2019. EBITDA rose 16.84% to Rs 33.30 crore during the quarter. EBITDA margin stood at 12.7% in Q4 FY20, higher than 11.7% in Q4 FY19. The domestic formulation business grew by 10.3% and the international formulation business rose 12.5% during the quarter.
Prestige Estates Projects fell 0.33% after the realty major's consolidated net profit dropped 88.9% to Rs 15.40 crore on 0.2% rise in net sales to Rs 1,982.30 crore in Q4 March 2020 over Q4 March 2019. Consolidated profit before tax stood at Rs 90.3 crore in Q4 March 2020, tumbling 57% from Rs 210.3 crore in Q4 March 2019. Total tax expenses declined 43% to Rs 39.20 crore in Q4 March 2020 from Rs 68.40 crore in Q4 March 2019.
Canara Bank dropped 4.89% after the bank reported net loss of Rs 3,259.33 crore in Q4 March 2020 as against net loss of Rs 551.53 crore in Q4 March 2019. Total income rose 1.6% to Rs 14,222.39 crore in Q4 FY20 over Q4 FY19. Pre-tax loss stood at Rs 3,334.51 crore in Q4 March 2020 compared with pre-tax loss of Rs 2,550.04 crore incurred in Q4 March 2019. Gross non-performing assets (NPAs) stood at Rs 37,041.15 crore as on 31 March 2020 as against Rs 36,644.97 crore as on 31 December 2019 and Rs 39,224.12 crore as on 31 March 2019. The ratio of gross NPAs to gross advances stood at 8.21% as on 31 March 2020 as against 8.36% as on 31 December 2019 and 8.83% as on 31 March 2019. The ratio of net NPAs to net advances stood at 4.22% as on 31 March 2020 as against 5.05% as on 31 December 2019 and 5.37% as on 31 March 2019. Provisions and contingencies slipped 2.68% to Rs 5,375.38 crore in Q4 March 2020 over Rs 5,523.50 crore in Q4 March 2019. The provision coverage ratio of the bank was at 75.86% as on 31 March 2020.
General Insurance Corporation of India (GIC Re) rallied 4.55% after consolidated net profit soared 36.4% to Rs 1,260.02 crore on 43.1% jump in total income to Rs 9,886.85 crore in Q4 March 2020 over Q4 March 2019. Consolidated profit before tax (PBT) dropped 26.1% to Rs 1,123.19 crore in Q4 March 2020 as against Rs 1,520.04 crore in Q4 March 2019. On a consolidated basis, GIC Re reported net loss of Rs 186.46 crore in the year ended March 2020 (FY20) as against net profit of Rs 2,757.57 crore in the year ended March 2019 (FY19). Total income rose 15.59% to Rs 52,098.44 crore in FY20 over FY19. Consolidated gross premium income of the company surged 12.94% to Rs 51,515.02 crore in FY20 from Rs 45,611.32 crore in FY19. Investment income of the group grew 10.84% to Rs 7,146.88 crore in FY20 as against Rs 6,447.75 crore in FY19.
Global Markets:
European markets opened lower while most Asian stocks declined on Thursday after a sharp retreat overnight on Wall Street as new coronavirus cases in the U.S. climbed to their highest level in two months. Markets in Hong Kong, Taiwan and Shanghai were closed for holidays. Global markets continue to digest the IMF's latest forecast for the global economy and warning of soaring debt levels.
The rise in new infections is stoking worries that re-openings of businesses closed earlier to fight the pandemic may have to be curtailed, despite indications that economies are recovering from lockdowns that are being eased in countries across the globe.
The US stock market finished session lower on Wednesday, 24 June 2020, as investor sentiment was dampened by reports showing the increase in number of newly confirmed coronavirus cases and as the US signaled possible new tariffs on European goods.
The U.S. Trade Representative said it was weighing new tariffs on $3.1 billion (RM13.2 billion) in European goods amid a dispute over subsidies to planemaker Airbus, ratcheting up a fresh trade war tensions with the European Union. The Trump administration also has been threatening to reimposing tariffs on imports of aluminum from Canada on July 1 as the new USMCA, or the United States Mexico Canada Agreement, which replaced the North American Free Trade Agreement, is set to take effect.
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