Domestic stocks are trading lower in early trade as trading resumed after a local holiday as an overnight surge in crude oil prices impacted sentiment. Higher crude oil prices could increase fiscal deficit, current account deficit and stoke fuel price inflation. Local stock markets were closed on Thursday (2 April 2020) on account of Ram Navami.
At 9:18 IST, the barometer index, the S&P BSE Sensex, was down 292.13 points or 1.03% at 27,973.18. The Nifty 50 index was down 87.20 points or 1.06% at 8,166.60.
The S&P BSE Mid-Cap index was down 0.75%. The S&P BSE Small-Cap index was down 0.49%.
The market breadth, indicating the overall health of the market, was negative. On the BSE, 415 shares rose and 515 shares fell. A total of 73 shares were unchanged.
Stocks in news:
Hero MotoCorp lost 3.85%. Hero MotoCorp said its total two-wheeler sales stood at 334,647 units in March 2020, down 42.43% from 581,279 units in March 2019.
Cipla gained 3.59%. Cipla announced the successful completion of Phase-3 clinical end-point study for fluticasone propionate and salmeterol inhalation powder (100/50 mcg).
Aurobindo Pharma slumped 10%. Aurobindo Pharma on Thursday (2 April) said that it terminated the agreement to buy the US generic oral solids and dermatology businesses from US-based Sandoz Inc.
Cadila Healthcare fell 1.84%. Cadila Healthcare on Thursday (2 April 2020) said that Zydus Cadila received final approval from the United States Food and Drug Administration (USFDA) to market Lamotrigine extended-release tablets USP in multiple strengths of 25 mg, 50 mg, 100 mg, 200 mg, 250 mg, and 300 mg.
ICICI Bank dropped 5.09%. ICICI Bank has announced a reduction in its savings bank account interest rate and term deposits. ICICI Bank has announced a reduction in its savings bank account interest rate with effect from 9 April 2020. For savings account balance below Rs 50 lakh, the interest rate will be reduced to 3.25% per annum (pa) from 3.5% pa and for above Rs 50 lakh it will be reduced to 3.75% pa from 4% pa. ICICI Bank also announced reduction in rates of term deposits of value Rs 2 crore by upto 50 basis points across various tenures effective April 3, 2020.
Meanwhile, Moody's Investors Service on April 2 has reportedly changed the outlook for Indian banking system to negative from stable, as it expects deterioration in banks' asset quality due to disruption in economic activity from the coronavirus outbreak. It said banks' asset quality will deteriorate across the corporate, small and medium enterprises and retail segments, leading to pressure on profitability and capital.
On the macro front, the Nikkei Manufacturing Purchasing Managers' Index, compiled by IHS Markit, declined to 51.8 in March from February's 54.5, its lowest since November.
Global Markets:
Overseas, stocks in Asia were little changed in Friday trade. The moves came after an overnight surge in oil prices, which saw U.S. crude futures soaring more than 24%.
On the economic data front, a private survey released Friday showed China's services sector shrank further in March. The Caixin/Markit services Purchasing Managers' Index (PMI) for March was at 43 following a record low of 26.5 in February. PMI readings below 50 indicate contraction, while figures above that level signify an expansion.
In US, stock benchmarks on Thursday finished near the highs of the session, as investors appeared to focus on hope that a detente between some of the biggest oil producers on the planet might be achieved to substantially curb oil production and stabilize battered prices.
US President Donald Trump reportedly tweeted that he had been in contact with Saudi Arabian Crown Prince Mohammed bin Salman and that he expected the Saudis and Russia to cut production of 10 million to 15 million barrels a day.
In economic news, the government said that the U.S. trade deficit narrowed to $39.9 billion in February from $45.5 billion in January.
The U.S. Labor Department said Thursday that initial jobless claims surged to more than 6 million last week, reaching a new record as coronavirus-related shutdowns roll through the country.
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