Key equity benchmarks tumbled on Wednesday, tracking weak global stock markets. The barometer index, the S&P BSE Sensex, fell 310.21 points or 1.01% at 30,379.81. The index surged as much as 878.34 points in morning trade.
The Nifty 50 index lost 68.55 points or 0.76% at 8,925.30. The index jumped 267.35 points at the day's high of 9,261.20 in morning trade.
The trading sentiment was weak globally due to the ongoing coronavirus pandemic. While the global COVID-19 cases have surpassed 1.98 million, the Indian cases currently stood at 11,555 with nearly 400 deaths, according to the data from Johns Hopkins University.
Prime Minister Narendra Modi on 14 April 2020, extended a nationwide lockdown until 3 May to contain the spread of the coronavirus. Under the lockdown, only essential businesses - such as groceries and pharmacies - are allowed to remain open. City transport services are limited to emergency staff and those with special travel passes. All trains and flights have been suspended.
However, the Union Home Ministry on Wednesday said select public activities would be allowed across states from 20 April. The ministry said in case a new area is added to the list of containment zones in the country, the relaxed guidelines would be suspended in that area until it turns covid-19 free.
In the broader market, the BSE Mid-Cap index rose 1.32% and the BSE Small-Cap index gained 1.17%. Both these indices outperformed the Sensex.
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The market breadth was strong. On the BSE, 1436 shares rose and 957 shares fell. A total of 177 shares were unchanged.
Economy:
India is likely to have a normal monsoon this year, the India Meteorological Department (IMD) said on Wednesday (15 April). Southwest monsoon seasonal (June to September) rainfall over the country as a whole is likely to be normal (96-104%), IMD said.
India receives about 70% of its annual rainfall during the monsoon that generally begins in June before starting to retreat by September. IMD issues operational forecast for the southwest monsoon season (June to September) rainfall for the country as a whole in two stages. The first stage forecast is issued in April and the second stage forecast is issued in May/June.
India's wholesale inflation (WPI) cooled off to 1% in March, from 2.26% in February, government data showed on Wednesday.
Meanwhile, the all-India general CPI inflation declined to 5.91% in March 2020, compared with 6.58% in February 2020. The core CPI inflation eased to 4.03% in March 2020 compared with 4.08% in February 2020. Among the CPI components, inflation of food and beverages declined to 7.82% in March 2020 from 9.45% in February 2020.
Softer inflation could clear the path for further monetary easing by the Reserve Bank of India.
The International Monetary Fund (IMF) on Tuesday (14 April) projected a gross domestic product (GDP) growth of 1.9% for India in 2020, amid coronavirus pandemic that has nearly stalled all economic activities across the world. However, IMF said India is among the only two major countries, which will register a positive growth rate in 2020. The other being China, for which the IMF has projected a growth rate of 1.2%.
Numbers to Watch:
The yield on 10-year benchmark federal paper fell to 6.425% as compared with 6.495% at close in the previous trading session.
In the foreign exchange market, the rupee edged lower against the dollar. The partially convertible rupee was hovering at 76.44, compared with its close of 76.27 during the previous trading session.
In the commodities market, Brent crude for June 2020 settlement fell $1.22 at $28.38 a barrel. The contract fell $2.14, or 6.74% to settle at $29.60 a barrel in the previous trading session.
Foreign Markets:
European shares slipped on Wednesday, despite the region starting to lift restrictive measures in various countries to allow the economies to gradually restart.
Spain reopened some construction sites and manufacturing industries Monday, Italy has allowed some parts of the country to reopen bookshops and stationary shops, as well as shops selling children's clothes, on Tuesday. Denmark is due to reopen elementary schools and kindergartens on Wednesday.
Other countries, such as the UK and France, meanwhile, are looking to extend lockdown measures into early May.
Meanwhile, Asian markets ended mostly lower as the economic impact of the coronavirus pandemic continued to weigh on investor sentiment.
Confidence among investors was further hit on Tuesday after the International Monetary Fund (IMF) said the global economy in 2020 will likely suffer the worst financial crisis since the Great Depression this year, due to the impact of the Covid-19 pandemic. The IMF now expects the global economy to contract by 3% in 2020. By contrast, in January it had forecast a global gross domestic product expansion of 3.3% for this year.
China's central bank on Wednesday stepped up policy support for its embattled economy, cutting a key rate to a record-low and reducing the amount banks must hold as reserves by around $28 billion as the coronavirus crisis slammed the brakes on growth.
In US, stocks jumped on Tuesday as optimism that the Trump administration could move to ease lockdowns from the coronavirus outbreak overshadowed worrying earnings reports from JPMorgan and Wells Fargo.
The US said Tuesday that it will suspend funding to the World Health Organization (WHO) while it reviews the agency's response to the Covid-19 pandemic, President Donald Trump announced Tuesday, saying the international health agency made mistakes that "caused so much death" as the coronavirus spread across the globe.
Buzzing Index:
The Nifty FMCG index surged 4.13% to 29,686.95, after a day's pause. The index had slipped 1.53% in the previous trading session.
Hindustan Unilever (up 6.07%), GlaxoSmithKline Consumer Healthcare (up 5.09%), Britannia Industries (up 4.88%), Dabur India (up 4.83%), Nestle India (up 4.27%), Marico (up 4.12%), Tata Consumer Products (up 3.99%), Godrej Consumer Products (up 2.31%), Colgate Palmolive (India) (up 2.10%) and Bajaj Consumer Care (up 0.68%) advanced.
Stocks in Spotlight:
IT major Wipro slipped 1.53% to Rs 186.55. On a consolidated basis, Wipro's net profit declined 5.29% to Rs 2,326.10 crore on 1.55% increase in revenue to Rs 15,711 crore in Q4 March 2020 over Q3 December 2019. The company's IT services segment revenue was at $2,073.70 million in Q4, a decrease of 1% QoQ, the IT major said after market hours today, 15 April 2020.
The company estimated that the IT services revenues for Q4 March 2020 were negatively impacted by COVID-19 by approximately $14 -$16 million (0.7%-0.8% of revenues).
"Due to the uncertainty around the course of the COVID-19 pandemic, we do not have visibility into the extent to which it will disrupt our operations, and we have decided to not provide revenue guidance for the quarter ending 30 June 2020. We anticipate that we will resume providing revenue guidance when we have increased certainty of both demand and supply side factors," Wipro said.
Hindalco Industries rose 1.10% after completion of acquisition of US-based Aleris Corporation by Hindalco through its wholly-owned subsidiary Novelis Inc.
NTPC added 1.41% to Rs 89.90. The company on Monday informed about its plans to raise Rs 4,374.10 crore on 16 April 2020 through private placement of unsecured non-convertible bonds in the nature of debentures at a coupon of 6.55% p.a. with a door-to-door maturity after 3 years 1 day. The proceeds will be utilized for funding of capital expenditure, refinancing of existing loans and other general corporate purposes. The bonds are proposed to be listed on both NSE & BSE.
Dr. Reddy's Laboratories gained 1.59%. The drug maker, along with its subsidiaries today announced the launch of authorized generic version of NitroDur (nitroglycerin) Transdermal Infusion System. The combined market for all Nitrogylcerin Transdermal Patch products had U.S. sales of approximately $14.7 million MAT for the most recent twelve months ending in January 2020 according to IQVIA Health.
Separately, Dr. Reddy's Laboratories along with its subsidiaries announced the launch of Amphetamine Sulfate Tablets USP, a therapeutic equivalent generic version of Evekeo (amphetamine sulfate) Tablets approved by the U.S. Food and Drug Administration (USFDA). Amphetamine Sulfate Tablets, USP is a Schedule II drug.
Larsen & Toubro (L&T) rose 1.64%. The heavy civil infrastructure business of L&T Construction has secured two 'significant' contracts to build Regional Rapid Transit System (RRTS) Infrastructure from National Capital Region Transport Corporation (NCRTC) in Uttar Pradesh. As per the L&T's classification, the valuation of the 'significant' order stands between Rs 1,000 crore and 2,500 crore.
DCB Bank jumped 4.66%. The private bank on 13 April 2020 said its total deposits stood at Rs 30,373 crore in Q4 March 2020, up by 6.81% from Rs 28,435 crore in Q4 March 2019. Gross advances of the private lenders rose 7.61% to Rs 25,677 in Q4 March 2020 from Rs 23,859 crore in Q4 March 2019. While the bank's CASA witnessed a year-on-year and a sequential decline, term deposits showed increasing trend during the same period.
InterGlobe Aviation fell 5.43%. Indigo during market hours today (15 April) announced that has suspended the operation of all its scheduled commercial international and domestic flights until 3 May 2020 in light of the extension of the national lockdown.
Metropolis Healthcare fell 6.28% to Rs 1258.95 on BSE after the counter witnessed block deals in early trade today, 15 April 2020. On the BSE, the counter clocked a volume of 82.85 lakh shares as against its average trading volume of 6,836 shares in the past one quarter. The stock hit a low of Rs 1152.50 on BSE in early trade today.
The media reported that Carlyle group has launched a block deal to nearly exit the multinational pathology chain owner. CA Lotus Investments, an investment arm of Carlyle group, plans to sell 65.51 lakh shares of Metropolis Healthcare. The floor price of the issue has been fixed at Rs 1,110 a share. CA Lotus Investment held 14.31% stake or 71.79 lakh shares of Metropolis as on 31 December 2019.
Jindal Steel & Power (JSPL) tumbled 3.98%. The company bagged a 2308-ton supply order from Rail Vikas Nigam (RVNL) for development of Kolkata Metro Corporation. The company has also bagged a contract to supply 12,000 tonnes of special grade Rail Blooms to France rail hayange, France. V.R. Sharma, MD, JSPL, said that the French export order is valued at around Rs 50 crore.
The company, post trading hours on Monday (13 April 2020), informed that credit rating agency, CRISIL, placed its ratings on the bank facilities and non-convertible debentures of the company under 'rating watch with negative implications'.
CRISIL said the rating action is on account of heightened risk of liquidity stretch in the event of any unfavorable outcome from the discussions with the lenders of its subsidiaries viz. Jindal Steel and Power (Mauritius) (JSPML) and Jindal Steel and Power (Australia) to provide moratorium on debt repayment (JSPAL).
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