A sharp sell-off in the fag-end of the session engulfed markets on Tuesday as incidents of localised lockdowns increased in the country. The economically important state of Maharashtra tightened Covid-19-related curbs, allowing shops to stay open only between 7 AM and 11 AM, while eastern state of Jharkhand announced a complete lockdown for a week, starting Wednesday. Uttar Pradesh government has also announced weekend lockdown across the state.
Given that India is grappling with a stronger second wave of Covid-19, Sameer Narang, chief economist at Bank of Baroda, believes that the government needs to announce a fresh stimulus package, tailor made for people and businesses impacted the most. He suggests that states can announce incentives for MSME investments to build supply chains under the Centre's PLI scheme. In addition to this, he says, RBI window of restructuring for MSMEs can be extended.
Amid this, the BSE barometer Sensex dropped over 1,000 points from day's high to hit a low of 47,438 in the intra-day trade as investors dumped IT and financial stocks, and heavyweights like Reliance Industries, HUL, and Ultratech Cement.
The index, however, staged a mild recovery to eventually close at 47,706, down 244 points or 0.5 per cent, with Ultratech Cement, HCL Tech, HDFC, Tech M, HUL, ITC, and HDFC Bank leading the list of losers. All these stocks declined between 1 per cent and 5 per cent.
On the NSE, the 50-share index hit an intra-day low of 14,207 before settling at 14,296 levels, down 63 points or 0.44 per cent. About 27 of the 50 constituents ended the day in the red. Bucking the trend, however, were players like Dr Reddy's Labs, Bajaj twins, HDFC Life, Bajaj Auto, M&M, Maruti Suzuki, and Tata Consumer Products, rising up to 3.5 per cent.
The broader markets, on the contrary, managed to duck the bear onslaught and supported the overall market breadth. The S&P BSE MidCap and SmallCap indices gained 0.5 per cent each.
Individually, shares of Mukand scaled a 13-year high of Rs 119, up 7 per cent, on the BSE in intra-day trade, and extending its five-day winning streak, after rating agency Acuité Ratings & Research upgraded the ratings of the firm's various credit facilities and exposures with a 'stable' outlook. In the past five trading days, the stock has rallied 39 per cent.
Since March 23, however, the stock of the company has zoomed 113 per cent from the level of Rs 55.80, as compared to a 3.7 per cent decline in the S&P BSE Sensex. It was trading at its highest level since January 2008 today.
Those of Everest Kanto Cylinder, meanwhile, hit an over 10-year high of Rs 110.70, soaring 20 per cent on the BSE in the intra-day trade today. The stock was trading higher for the fifth straight day, having rallied 44 per cent alone in the past two trading days, on expectation of strong earnings growth. It was quoting at its highest level since July 2010.
Given the acute shortage of oxygen cylinders amid rising Covid-19 cases in India, the company is expected to see a surge in demand in its medical equipment segment.
Lastly, shares of Macrotech Developers, formerly known as Lodha Developers, moved higher by 11 per cent to Rs 514 on the BSE in the intra-day trade on Tuesday, and surpassed its issue price of Rs 486. MDL had made a weak debut on the bourses on Monday as the stock listed at Rs 439, a 10 per cent discount from its issue price. With today’s gain, the stock has recovered 22 per cent from its Monday’s low of Rs 421 on the BSE.
Overall market breadth was tilted towards bulls with 1,654 stocks advancing on the BSE as against 1,228 stocks that declined.
Sectorally, the Nifty IT index, which was down 1.4 per cent, faced the hardest knock amid weakness in global tech stocks. That apart, the Nifty FMCG and Bank indices ended 0.64 per cent and 0.35 per cent lower, respectively.
On the upside, the Nifty Pharma index ended 1.3 per cent higher at 13,427 after hitting a record high of 13,522 (up 2 per cent) in the intra-day trade. Individually, Cipla, Gland Pharma, JB Chemicals and Pharmaceuticals, Max Healthcare, Neuland Laboratories and Apollo Hospital Enterprises hit their respective record highs today while Sun Pharma, Cadila Healthcare, Glenmark Pharmaceuticals, Panacea Biotech and RPG Life Sciences hit 52-week highs in the intra-day trade as the Indian government will open up vaccination to anyone over 18 years of age starting May 1.
In another development, global healthcare major Johnson & Johnson today sought an approval from India's drug regulator DGCI to conduct a clinical trial of its single-dose Covid-19 vaccine in the country.
On the earnings front, FMCG major Nestle India today reported a net profit of Rs 602 crore for the March quarter of CY21, up 14.6 per cent YoY, from Rs 525 crore reported in the previous year period. It's domestic sales increased 11 per cent and the company declared an interim dividend of Rs 25 per share. Ahead of the result, the stock ended unchanged at Rs 17,086 on the BSE.
Global markets
Global shares edged further back from record highs on Tuesday as lofty sovereign bond yields and rising global Covid-19 cases had investors questioning high equity valuations. MSCI’s broadest index of Asia-Pacific shares outside Japan added 0.2 per cent but Japan’s Nikkei dropped 2 per cent on worries that the possible reintroduction of Covid-19 emergency measures in the country’s biggest cities would slow the economic recovery.
In Europe, the UK’s blue-chip FTSE 100 fell 0.4 per cent, Germany’s DAX was down 0.1 per cent and France’s CAC 40 declined 0.7 per cent. The pan-regional STOXX 600 index dropped 0.5 per cent.
Note: Domestic markets shall remain shut on Wednesday, April 21, on account of Ram Navami holiday
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