The Sensex and the Nifty ended with small gains after a volatile session on Monday. Profit selling emerged at higher levels after recent run up in share prices. The barometer S&P BSE Sensex rose 83.34 points or 0.24% at 34,370.58. The Nifty 50 index added 25.30 points or 0.25% at 10,167.45.
In the broader market, the BSE Mid-Cap index rose 0.23% and the BSE Small-Cap index gained 0.93%.
The market breadth was strong. On the BSE, 1810 shares rose and 859 shares fell. A total of 157 shares were unchanged.
The Nifty opened higher at 10,326.75 and hit the day's high of 10,328.50 in morning trade amid upbeat global cues. The index hovered near the day's high till early afternoon trade. Profit selling emerged in the afternoon trade, which dragged the index to the day's low of 10,120.25 in mid-afternoon trade. The index firmed up once again in late trade.
The Nifty failed to hold above its 100-day simple moving average placed at 10,304.35. This level could act as a crucial resistance in near term. The Nifty has surged 12.61% in nine sessions from its closing low of 9,029.05 on 26 May 2020.
COVID-19 Update:
Total COVID-19 confirmed cases worldwide stood at 70,16,794 far with 4,02,874 deaths. India reported 1,24,981 active cases of COVID-19 infection and 7,200 deaths, according to the data from the Ministry of Health and Family Welfare, Government of India.
Amid spike in coronavirus cases, hotels, shopping malls and places of worship are reopening in India from today, 8 June.
Numbers to Watch:
The yield on 10-year benchmark federal paper fell to 5.809% as compared with 5.821% at close in the previous trading session.
In the foreign exchange market, the rupee edged higher against the dollar. The partially convertible rupee was hovering at 75.55, compared with its close of 75.58 during the previous trading session.
In the commodities market, Brent crude for August 2020 settlement rose 47 cents at $42.77 a barrel. The contract rose $2.31, or 5.78% to settle at $42.30 a barrel in the previous trading session.
Foreign Markets:
European markets were mixed as a fourteen-day quarantine comes into force for any travellers arriving in the U.K. on Monday. The move comes as most European countries continue to relax restrictions. Aviation and tourism chiefs have said the move will damage their industries and some airlines are considering a legal challenge to the quarantine measures.
Asian stocks closed higher on Monday after a surprise recovery in US employment gave further confidence of a quick economic recovery after many weeks of lockdowns aimed at controlling the coronavirus pandemic.
China's exports in May fell 3.3% compared with a year earlier, but imports plunged 16.7%, customs data showed on Sunday. China posted a trade surplus of $62.93 billion last month, compared with $45.34 billion surplus in April.
In US, stocks ended sharply higher on Friday after jobs report showed surprise jump in payrolls, fall in unemployment rate. Shares of airlines jumped, as the industry added more summer flights.
In economic data, the Labor Department said non-farm payroll employment jumped by 2.51 million jobs in May after plummeting by a revised 20.69 million jobs in April. Employment rose sharply in leisure and hospitality, construction, education and health services, and retail trade, according to the Labor Department. With the unexpected rebound in employment, the Labor Department said the unemployment rate dropped to 13.3% in May from 14.7% in April.
Buzzing Indian Index:
The Nifty Pharma index fell 1.41% to 9,939.10 on profit booking. The index surged 6.53% in the past seven sessions.
Cipla (down 2.43%), GlaxoSmithKline Pharmaceuticals (down 1.89%), Cadila Healthcare (down 1.62%), Dr. Reddy's Laboratories (down 1.47%), Wockhardt (down 1.4%), Strides Pharma (down 1.12%), Sun Pharmaceutical Industries (down 1.05%), Alkem Laboratories (down 0.95%) and Glenmark Pharmaceuticals (down 0.5%) declined.
Abbott India lost 2.81% to Rs 16603.30 after the company's net profit fell 2% to Rs 110.97 crore on a 6.1% rise in revenue from operations to Rs 961.20 crore in Q4 March 2020 over Q4 March 2019. Profit before tax (PBT) stood at Rs 148.93 crore in the Q4 FY20, down by 15.7% from Rs 176.60 crore reported in Q4 FY19. Current tax expenses in the fourth quarter declined by 40% year-on-year to Rs 36.76 crore. The board recommended final dividend of Rs 107 and special dividend of Rs 143 per equity share of Rs 10 each for the year ended 31 March 2020.
Divis Laboratories declined 1.95% to Rs 2412.50. The company's consolidated net profit jumped 32.96% to Rs 388.23 crore on 9.67% increase in revenue from operations to Rs 1,389.71 crore in Q4 March 2020 (Q4 FY20) over Q4 March 2019 (Q4 FY19). Other income surged 87.88% to Rs 76.73 crore in Q4 FY20 over Q4 FY19. It includes forex gain of Rs 57.10 crore in Q4 FY20. The firm reported forex loss of Rs 6.11 crore in Q4 FY19.
Lupin shed 0.53%. The pharma major announced that the US Food and Drug Administration (US FDA) has granted Orphan Drug Designation (ODD) to mexiletine hydrochloride for the treatment of myotonic disorders. The FDA grants ODD status to medicines intended for the treatment, diagnosis or prevention of rare diseases or disorders that affect fewer than 200,000 people in the US.
Earnings impact:
Larsen & Toubro (L&T) rose 0.62%. The construction major's consolidated net profit fell 6.5% to Rs 3,197.07 crore on 2.2% rise in net sales to Rs 44,245.28 crore in Q4 March 2020 over Q4 March 2019. Profit before tax (PBT) stood at Rs 4,382.13 crore in Q4 FY20, down by 14.9% from Rs 5,150.61 crore in Q4 FY19. Profit before tax (PBT) stood at Rs 4,382.13 crore in Q4 FY20, down by 14.9% from Rs 5,150.61 crore in Q4 FY19. The company bagged orders worth Rs 1,86,356 crore at the group level during the year ended 31 March 2020, registering growth of 9% compared to the previous year. International orders during the year at Rs 60,094 crore increased to 32% of the total order inflow.
Vedanta slipped 0.28% after the company reported a net loss of Rs 12,521 crore in Q4 March 2020 as against net profit of Rs 2,615 crore in Q4 March 2019. The profit was impacted by exceptional loss of Rs 17,132 crore in Q4 FY20 due to impairment of assets at oil & gas, copper and iron ore business. Revenue from operations declined 16% to Rs 19,513 crore in Q4 March 2020 from Rs 23,092 crore in Q4 March 2019. Revenue fell due to lower commodity prices further impacted by COVID-19, lower volumes at zinc, oil & gas, steel business and lower power sales at TSPL partially offset by higher volume at aluminium and iron ore business, and rupee depreciation.
Jyothy Labs fell 0.89%. The company's consolidated net profit dropped 60.2% to Rs 26.59 crore on 23.8% fall in net sales to Rs 393 crore in Q4 March 2020 over Q4 March 2019. Consolidated profit before tax (PAT) tanked 68.5% to Rs 23.23 crore in Q4 March 2020 as against Rs 73.75 crore in Q4 March 2019. Jyothy Labs' expected mid-single digit sales growth for the quarter before the lockdown. However, due to the nationwide lockdown, the company's portfolio of household insecticide (HI) and personal care (soaps) was severely impacted.
Sumitomo Chemical India fell 2.75%, amid profit booking. The agrochemicals manufacturer reported a consolidated net profit of Rs 22.91 crore in Q4 March 2020 as compared to a net loss of Rs 1.12 crore in Q4 March 2019. Net sales during the period rose 5.7% year-on-year (YoY) to Rs 445.77 crore. Profit before tax (PBT) stood at Rs 31.61 crore in Q4 FY20, up by 75.3% from Rs 18.03 crore in Q4 FY19.
Stocks in Spotlight:
Reliance Industries (RIL) fell 0.67% to Rs 1570.05 after the company on Sunday announced that a wholly-owned subsidiary of the Abu Dhabi Investment Authority (ADIA) invested Rs 5,683.50 crore in Jio Platforms. This investment values Jio Platforms at an equity value of Rs 4.91 lakh crore and an enterprise value of Rs 5.16 lakh crore. ADIA's investment will translate into a 1.16% equity stake in Jio Platforms on a fully diluted basis. Jio Platforms has so far raised Rs 97,885.65 crore from leading global investors including Facebook, Silver Lake, Vista Equity Partners, General Atlantic, KKR, Mubadala and ADIA in less than seven weeks.
Shares of RIL hit a record high of Rs 1624 in intraday trade today.
Meanwhile, RIL informed post market hours on Friday (5 June) that Silver Lake and its co-investors will invest an additional Rs 4,546.80 crore in Jio Platforms, in addition to the Rs 5,655.75 crore of investment by Silver Lake announced on 4 May 2020. This brings the aggregate investment by Silver Lake and its co-investors to Rs 10,202.55 crore. Silver Lake's investment will translate into a 2.08% equity stake in Jio Platforms on a fully diluted basis.
RIL informed during market hours on Friday (5 June) that Abu Dhabi-based Mubadala Investment Company will invest Rs 9,093.60 crore in Jio Platforms for a 1.85% equity stake. Mubadala Investment Company is a sovereign investor managing a global portfolio, aimed at generating sustainable financial returns for its shareholder, the Government of Abu Dhabi.
IndusInd Bank surged 6.89% after the bank's promoters said that they would buy additional shares from the open market. Currently, the promoters hold 14.68% stake in the bank.
Mahindra and Mahindra (M&M) fell 2.73%. The auto maker has allotted 6.19% 5,000 rated, listed, unsecured, redeemable non-convertible debentures (NCDs) of Rs 10 lakh each for cash at par, aggregating to Rs 500 crore on a private placement basis. The NCDs are proposed to be listed on the wholesale debt market segment of BSE.
Tata Power Company slipped 2.84%. The integrated power utility has signed a memorandum of understanding (MoU) with MG Motor. As part of the association, Tata Power will deploy 50KW DC superfast chargers at select MG dealership locations and offer end-to-end EV charging solutions to MG dealerships spread across India.
Shriram Transport Finance Company rose 2.64% after US-based global investment management firm T Rowe Price increased its stake in the Indian firm to 5.36% on 3 June 2020 from 4.77% held earlier. On 3 June 2020, T. Rowe Price Associates purchased 13.53 lakh equity shares or 0.59% stake in Shriram Transport Finance Company. The disclosure was made on Saturday, 6 June 2020.
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