The equity barometers traded near the day's low in mid-morning trade. At 11:28 IST, the barometer index, the S&P BSE Sensex, fell 601.32 points or 1.88% at 31,407.29. The Nifty 50 index was down 163.50 points or 1.89% at 9,206.05.
A weak economic outlook by the US Fed weighed on global stock markets. Worries about a second wave of coronavirus infections also impacted trading sentiment. Investors shrugged off a number of measures announced by the Indian government to support MSMEs and NBFCs.
In the broader market, the S&P BSE Mid-Cap index added 0.09% while the S&P BSE Small-Cap index lost 0.27%.
The market breadth, indicating the overall health of the market, was negative. On the BSE, 791 shares rose and 1121 shares fell. A total of 109 shares were unchanged. In the Nifty 50 index, 12 shares advanced while 38 stocks declined.
Economy:
Finance Minister Nirmala Sitharaman on Wednesday unveiled measures entailing a series of initiatives for micro, small and medium enterprises, including Rs 3 lakh crore worth of collateral-free automatic loans for businesses. A subordinate debt of Rs 20,000 crore for stressed units, a Fund of Funds for equity infusion of Rs 50,000 crore, and revision in the definition of MSMEs are among the steps announced by the government to help MSMEs recover from disruptions caused by the coronavirus-related lockdown.
Further, the scheme introduced as part of PM Garib Kalyan Package (PMGKP) under which Government of India contributes 12% of salary each on behalf of both employer and employee to employees provident fund (EPF) will be extended by another 3 months for salary months of June, July and August 2020, the FinMin said. Total benefits accrued is about Rs 2500 crores to 72.22 lakh employees.
She further added that the statutory PF contribution of both employer and employee reduced to 10% each from existing 12% each for all establishments covered by EPFO for next 3 months. This will provide liquidity of about Rs.2250 Crore per month.
FinMin announced a Rs 30,000 crore special liquidity scheme for non-banking financial companies, microfinance companies, housing finance companies. Under this scheme investment will be made in both primary and secondary market transactions in investment grade debt paper of NBFCs/HFCs/MFIs.
Sitharaman also unveiled liquidity injection for power distribution companies. With demand reduction, DISCOMs are facing an unprecedented cash flow problem. PFC/REC will infuse liquidity of Rs 90,000 crore to DISCOMs against receivables.
The government announced extension of up to six months for all government contractors for completion of contractual obligations, including in respect of EPC and concession agreements.
It also offered relief to Real Estate Projects with repect to the registration and completion date for all registered projects will be extended up to six months.
On the tax front, the government announced immediate release of pending income tax refunds to charitable trusts and non-corporate businesses and professions. It also announced reduction in rates of 'Tax Deduction at Source (TDS)' and 'Tax Collected at Source (TCS)' by 25% for the remaining period of FY 20-21 and extended the due dates for various tax related compliances.
COVID-19 Update:
Total COVID-19 confirmed cases worldwide stood at 43,48,246 far with 2,97,220 deaths. India reported 49,219 active cases of COVID-19 infection and 2,549 deaths, according to the data from the Ministry of Health and Family Welfare.
Earnings Impact:
Schaeffler India lost 0.58% to Rs 3,284.95 after net profit fell 26.4% to Rs 78.35 crore on 20.8% decline in net sales to Rs 928.54 crore in Q1 March 2020 over Q1 March 2019. Total expenditure contracted by 19.9% to Rs 791.28 crore and interest payments fell 21.7% to Rs 0.94 crore in Q1 CY2020 over Q1 CY2019.
Depreciation costs during the quarter stood at Rs 44.42 crore, up by 17.5% from Rs 37.81 crore reported in the corresponding period last year. Profit before tax (PBT) fell 32.2% to Rs 110.07 crore in Q1 CY2020 from Rs 162.26 crore reported in Q1 CY2019. Current tax expenses stood at Rs 32 crore in Q1 March 2020, down by 39.1% from Rs 52.55 crore in Q1 March 2019.
"The impact of global health pandemic might be different from that estimated as at the date of approval of these financial results and the company will closely monitor any material changes to future economic conditions," the company said.
Siemens slipped 1.69% to Rs 1,026.50 after consolidated net profit tumbled 38.17% to Rs 175.70 crore on 21% decrease in net sales to Rs 2,756.90 crore in Q2 March 2020 over Q2 March 2019.The decline in revenues across the businesses is primarily due to deferred offtake by customers and slow-down in short-cycle business related to COVID-19 pandemic as well as continued weaker demand in large infrastructure projects. Siemens' order backlog for Q2 March 2020 stood at Rs 12,547 crore.
Consolidated profit before tax (PBT) slumped 46.01% to Rs 237 crore in Q2 March 2020 as against Rs 439 crore in Q2 March 2019. Current tax expenses also dropped 52.03% to Rs 69.50 crore in Q2 March 2020 as compared to Rs 144.90 crore paid in Q2 March 2019.
Sunil Mathur, the managing director (MD) and chief executive officer (CEO) of Siemens, said: While we continue to optimize our operations to meet the rapid changes in the economic environment, our performance in the coming quarters will be influenced greatly by a lifting of the lockdown.
Mphasis shed 0.70% to Rs 797.65. Consolidated net profit jumped 20.30% to Rs 353.23 crore on a 3.05% increase in net sales to Rs 2,346.15 crore in Q4 March 2020 over Q3 December 2019. Consolidated profit before tax soared 7.37% to Rs 414.99 crore in Q4 March 2020 as against Rs 386.50 crore in Q3 December 2019. Total tax expenses dropped 33.51% at Rs 61.76 crore in Q4 March 2020 as compared to Rs 92.90 crore paid in Q3 December 2019. The Q4 earnings were declared post trading hours yesterday, 13 May 2020.
The firm bagged $201 million worth TCV (total contract value) wins in direct international business, of which 79% in new-generation services. Direct core revenue grew 18% year-on-year (YoY) and 5% quarter-on-quarter (QoQ) on a reported basis. In constant currency, growth was 13.6% YoY and 2.6% QoQ.
Global Markets:
Overseas, Asian stocks are trading lower on Thursday as worries grew about a second wave of coronavirus infections.
On the economic data front, seasonally adjusted employment in Australia fell by 594,300 people in April as compared to March, according to data released by the country's Bureau of Statistics on Thursday.
In US, stock benchmarks closed sharply lower Wednesday as Wall Street digested a grim near-term economic outlook from Federal Reserve Chairman Jerome Powell, amid attempts by state and federal officials to restart businesses from a coronavirus-induced lockdown.
While the economic response has been both timely and appropriately large, it may not be the final chapter, given that the path ahead is both highly uncertain and subject to significant downside risks, Powell said. Meanwhile, President Donald Trump on Wednesday said that top coronavirus health expert Dr. Anthony Fauci's recent warning about the potentially dire consequences of reopening states and schools too soon was not an acceptable answer.
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