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Sensex, Nifty drop on weak global stocks

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Last Updated : Jun 29 2020 | 10:04 AM IST

Domestic stocks are trading lower in early trade on weak global stocks on the back of rising Covid-19 cases worldwide. At 9:24 IST, the barometer index, the S&P BSE Sensex, was up 347.10 points or 0.99% at 34,824.17. The Nifty 50 index was down 96.35 points or 0.93% at 10,286.65.

The S&P BSE Mid-Cap index was off 0.41%. The S&P BSE Small-Cap index was down 0.53%.

The market breadth, indicating the overall health of the market, is negative. On the BSE, 697 shares rose and 972 shares fell. A total of 80 shares were unchanged.

Stocks in news:

ITC rose 1.64% after the company reported 9.09% rise in consolidated net profit to Rs 3,856.52 crore on 4.85% fall in total income to Rs 13,228.40 crore in Q4 March 2020 over Q4 March 2019. The company's board has recommended dividend of Rs 10.15 per share for the financial year ended 31st March 2020.

Coal India dropped 2.25% after the company reported 23.03% fall in consolidated net profit to Rs 4,637.95 crore on 2.92% fall in total income to Rs 29,481.41 crore in Q4 March 2020 over Q4 March 2019.

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NTPC fell 0.13%. The company reported a 71.64% drop in consolidated net profit to Rs 1,442.57 crore on a 29.05% rise in total income to Rs 33,156.91 crore in Q4 March 2020 over Q4 March 2019.

Bajaj Finance fell 2.31%. Bajaj Finance informed that S&P Global Ratings has, vide its letter dated 26 June 2020, downgraded the credit rating of the company from Long term rating of 'BBB-/Negative' and Short-term rating of 'A-3' to Long term rating of 'BB+/Stable' and Short-term rating of 'B'.

Sun TV Network declined 2.49% after the company reported 15.98% fall in consolidated net profit to Rs 245.24 crore on 17.22% fall in total income to Rs 818.81 crore in Q4 March 2020 over Q4 March 2019.

Oil India advanced 2.54% after the company reported a consolidated net profit of Rs 1,597.40 crore in Q4 March 2020 as against net loss of Rs 70.59 crore in Q4 March 2019. Total income rose 4.86% to Rs 3,792.49 crore in Q4 March 2020 over Q4 March 2019.

Glenmark Pharmaceuticals rose 2.21% after the company reported 36.28% rise in consolidated net profit to Rs 220.31 crore on 9.3% rise in total income to Rs 2,844.51 crore in Q4 March 2020 over Q4 March 2019.

Ruchi Soya Industries dropped 5% after the company reported net loss of Rs 41.25 crore in Q4 March 2020 as against net profit of Rs 32.11 crore in Q4 March 2019. Total income rose 1.01% to Rs 3,209.02 crore in Q4 March 2020 over Q4 March 2019.

Meanwhile, S&P Global Ratings said on June 26 that the Indian economy is in deep trouble with growth expected to contract by 5% in FY21. Difficulties in containing the virus, an anemic policy response, and underlying vulnerabilities, especially across the financial sector, are leading us to expect growth to fall by 5% this fiscal year before rebounding in 2021, S&P said in a report.

Banks may lend less than they normally would in a recovery to focus on the overhang from the pandemic. Private firms may prefer to stabilize debt rather than ramp up spending on new investments, even though demand is improving, S&P said.

Global Markets:

Overseas, Asian stocks are trading lower on Monday as the relentless spread of the coronavirus finally made investors question their optimism on the global economy.

Retail sales in Japan tumbled at a double-digit pace for the second straight month in May as the coronavirus pandemic and lockdown measures delivered a heavy blow to consumer confidence.

Retail sales fell 12.3% in May from a year earlier, pulled down by a slump in spending on big ticket items such as cars as well as clothing and general merchandise, trade ministry data showed on Monday. The decline followed a 13.9% drop in April, which was the biggest fall since March 1998.

In US, stock indexes closed with sharp losses on Friday, after Texas and Florida were forced to backtrack on reopening their economies as coronavirus cases rose further and a record number of new cases were reported nationwide.

Governors in Texas and Florida ordered all bars to close again on Friday, making the states the first to reverse some reopening measures after months of lockdowns.

The Federal Reserve's annual stress test of the major banks showed some banks could get close to minimum capital levels in scenarios related to the coronavirus pandemic. Because of this, banks must suspend share repurchase programs and cap dividend payments at current levels for the third quarter.

In U.S. economic data, consumer spending climbed in May to a record 8.2% after tumbling in April, as consumers used government stimulus checks to help Americans deal with job losses during the pandemic. However, personal incomes sank 4.2% last month, reflecting the mass unemployment. Social media stocks dropped after Unilever N.V. said it would join in halting advertising on the platforms until hate speech concerns were addressed.

In other economic reports, the final results of the consumer-sentiment survey in June slipped to 78.1 from an initial 78.9, the University of Michigan said Friday.

Back home, key domestic benchmarks ended with strong gains on Friday, supported by rally in IT shares. The barometer S&P BSE Sensex rallied 329.17 points or 0.94% at 35,171.27. The Nifty 50 index added 94.10 points or 0.91% at 10,383. Positive global cues boosted sentiment.

Foreign portfolio investors (FPIs) sold shares worth Rs 753.18 crore, while domestic institutional investors (DIIs), were net buyers to the tune of Rs 1,304.18 crore in the Indian equity market on 26 June, provisional data showed.

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First Published: Jun 29 2020 | 9:26 AM IST

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