Domestic shares pared losses in afternoon trade after the Maharashtra government dispelled rumours of another lockdown in the state. At 13:20 IST, the barometer index, the S&P BSE Sensex was down 473.51 points or 1.41% at 33,064.86. The Nifty 50 index fell 149.65 points or 1.51% at 9,752.35.
Lockdown will not be reintroduced in Maharashtra, tweeted chief minister Uddhav Thackeray's office on Friday, quelling rumours about a possible reintroduction of a total shutdown amid spike in coronavirus cases in the state.
The Nifty 50 index hit a low of 9,544.35 in early trade as US stocks crashed overnight as cautious commentary from the Federal Reserve and rising coronavirus infection rates prompted investor concern. The Nifty bounced back from its 20-day moving average (DMA) placed at 9,575.61, which will act as near term support level.
In the broader market, the S&P BSE Mid-Cap index fell 0.60%. The S&P BSE Small-Cap index lost 1.10%. Both these indices fell lesser than the Sensex.
The market breadth was weak. On the BSE, shares 705 rose and 1,608 shares fell. A total of 138 shares were unchanged. In Nifty 50 index, 15 stocks advanced while 34 stocks declined.
Foreign portfolio investors (FPIs) sold shares worth Rs 805.14 crore, while domestic institutional investors (DIIs) were net sellers to the tune of Rs 874.35 crore in the Indian equity market on 11 June, provisional data showed.
COVID-19 Update:
Total COVID-19 confirmed cases worldwide stood at 75,16,656 far with 4,21,498 deaths. India reported 1,41,842 active cases of COVID-19 infection and 8,498 deaths, according to the data from the Ministry of Health and Family Welfare, Government of India.
Economy:
Ratings agency Standard and Poor (S&P) expects India's real GDP growth in FY21 to contract 5%. S&P also mentioned that India's recovery from COVID-19 will be the key to its sovereign rating. The credit ratings agency pegs India's real GDP growth at 8.5% for FY22. Fiscal deficit may rise to 11% of GDP in FY21, owing to weak revenue generation that will account for the bulk of the rise in overall deficit. However, India's wide range of structural trends, including healthy demographics and competitive unit labour costs work in its favour, according to S&P.
Derivatives:
The NSE's India VIX, a gauge of market's expectation of volatility over the near term, surged 7.44% to 31.86. The Nifty June 2020 futures were trading at 9,745, a discount of 7.35 points compared with the spot at 9,752.35.
On the options front, the Nifty option chain for 25 June 2020 expiry showed maximum call open interest (OI) of 21.64 lakh contracts at the 10,000 strike price. Maximum put OI of 36.38 lakh contracts was seen at 9,000 strike price.
Gainers & Losers:
Bharti Infratel (up 4.74%), Shree Cement (up 1.93%), Vedanta (up 1.09%), Bharti Airtel (up 0.84%) and Asian Paints (up 0.80%) were top gainers in Nifty 50 index.
Tata Motors (down 4.90%), Zee Entertainment Enterprises (down 4.89%), ONGC (down 4.37%), Axis Bank (down 4.26%) and IndusInd Bank (down 4.02%) were top losers in Nifty 50 index.
Q4 Results Today:
Eicher Motors (down 1.42%), Hindalco Industries (down 0.59%), Mahindra & Mahindra (down 0.69%), Gujarat Industries Power (down 1.31%), Castrol India (down 2.49%), Alkali Metals (down 6.38%), Indo Count Industries (down 1.74%), IOL Chemicals & Pharmaceuticals (up 0.88%), Mangalore Chemicals & Fertilisers (down 2.16%) and Suprajit Engineering (down 1.03%) are some of the companies that will announce their quarterly earnings today.
Earnings Impact:
KNR Constructions declined 2.70% after consolidated net profit declined 27.8% to Rs 74.66 crore on 4.6% decline in net sales to Rs 730.14 crore in Q4 March 2020 over Q4 March 2019. Consolidated EBITDA rose 4% to Rs 187.43 crore in Q4 March 2020 from Rs 180.57 crore in the corresponding period last year. EBITDA margin improved to 25.7% in Q4 March 2020 from 23.6% in Q4 March 2019. As of 31 March 2020, KNR Construction recorded an order book of Rs 5,229.70 crore out of which Rs 3,656.10 crore is from road sector and Rs 1,573.60 crore is from irrigation sector.
Westlife Development slipped 1.21% after the company reported a consolidated net loss of Rs 25.27 crore in Q4 March 2020 as against a net profit of Rs 1.28 crore reported in Q4 March 2019. Consolidated net sales remained flat at Rs 332.88 crore in the quarter ending March 2020 compared to Rs 333.75 crore posted in the same period last year. Westlife said that QSR business and inventory includes food items which are perishable in nature with a short shelf life. Based on the current situation of COVID-19 and continuous lock down, the company expected reduced demand and footfalls. Accordingly, the company has made provision for write off food inventory of Rs 16.63 crore in the quarter ended on 31 March 2020.
E.I.D.-Parry (India) dropped 3.18% after the company reported 46.7% fall in standalone net profit to Rs 68.84 crore on a 8% rise in net sales to Rs 608.35 crore in Q4 March 2020 over Q4 March 2019.
IIFL Wealth Management skid 1.77% after the company reported a consolidated net loss of Rs 2.96 crore in the fourth quarter. The firm had reported a consolidated net profit of Rs 83.53 crore in the corresponding period last year. Total income rose 17.8% to Rs 433.06 crore in Q4 FY20 over Q4 FY19.
Stocks in Spotlight:
SBI Life Insurance Company rose 1.92%. State Bank of India (SBI) lost 2.40%. Promoter State Bank of India (SBI) offered to sell a total of 2.10 crore shares, or 2.1% stake, in SBI Life Insurance Company through an offer for sale (OFS). The floor price for the OFS was set at Rs 725 each, a 2.22% discount to the closing price of Rs 741.45 on Thursday.
The OFS opened on Friday (12 June) for non-retail investors, while both retail as well as non-retail investors will be able to subscribe on Monday (15 June). The company has set aside 21 lakh shares of retail investors and 1.89 crore shares for non-retail investors.
As on 13:25 IST, the OFS received subscription for 19,06,656 shares or 10.09% against the non-retail offer size of 1.89 crore shares.
SBI is reducing stake in the insurance unit to achieve minimum public shareholding of 25%. As of 31 March 2020, SBI held 57.60% stake in SBI Life.
Global Markets:
The US Dow index futures was up 400 points. European markets were trading higher while Asian stocks came off day's low on Friday. Key indices in Indonesia and Singapore bounced back.
Asian stocks fell sharply in early trade following an overnight slump on the Wall Street amid fears of a COVID-19 resurgence in the United States and a longer global economic recovery.
In Europe, Great Britain on Thursday said that it had agreed on an intensified timetable in July for negotiations over a new free trade agreement with the EU, ahead of the Brexit transition period that concludes by the end of the year.
The U.K. posted the biggest monthly fall in GDP (Gross Domestic Product) in the country's history in April 2020, according to data released Friday by the Office for National Statistics. GDP fell by 20.4% compared to March 2020.
In US, Wall Street plummeted on Thursday as investors reacted to renewed fears of a pandemic resurgence. The pandemic already has caused unemployment to soar in the United States as parts of the economy shut down. A second wave of infections could force many businesses to close again after just having reopened.
The US Federal Reserve released a gloomy economic outlook at the end of its two-day monetary policy meeting on Wednesday. Fed Chairman Jerome Powell on Wednesday said the pandemic could result in permanent economic damage and an extended period of high unemployment. Fed officials estimate that the US economy will shrink 6.5% this year, before expanding 5% in 2021.
Treasury Secretary Steve Mnuchin was quoted by the media saying that shutting the economy for a second time is not a viable option, a day after Fed Chairman Jerome Powell was cautious in his outlook.
President Donald Trump criticizing the US central bank, tweeted: The Federal Reserve is wrong so often. I see the numbers also, and do MUCH better than they do. We will have a very good Third Quarter, a great Fourth Quarter, and one of our best ever years in 2021.
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