Barometers extended their winning streak to sixth straight session on Wednesday. Buying was broad based with banks and realty stocks making big moves while IT stocks lagged.
As per provisional closing, the barometer S&P BSE Sensex gained 284.01 points or 0.84% at 34,109.54. The Nifty 50 index gained 90 points or 0.9% at 10,069.10.
Global cues were positive as hopes of more stimulus and further easing in social restrictions around the world eclipsed worries over coronavirus. The sentiment was also boosted by Prime Minister Narendra Modi's comment that India's economy would get back on track supported by systematic reforms.
The Nifty opened at 10,108.30 and edged higher in early trade. The index hovered near the day's high for most part of the session. Strong buying in mid-afternoon trade pushed Nifty at day's high of 10,176.20. The index eased below 10,100 as profit selling emerged in last hour of trade.
The broader market pared gains after a rally in morning trade. The S&P BSE Mid-Cap index rose 0.31% while the S&P BSE Small-Cap index gained 1.24%.
Buyers outpaced the sellers. On the BSE, shares 1,667 rose and 855 shares fell. A total of 137 shares were unchanged. In Nifty 50 index, 34 stocks advanced while 16 stocks declined.
Cyclone Nisarg:
Cyclone Nisarg intensified into a severe cyclonic storm Wednesday morning, and crossed the Maharashtra coast this afternoon. The storm made landfall close to Alibagh in Raigad district, which is just over 100 km south of Mumbai.
India Meteorological Department tweeted: "The landfall process will be completed by next 1 hr. It is likely to move northeastwards and weaken into a cyclonic storm during next 6 hours."
COVID-19 Update:
Total COVID-19 confirmed cases worldwide stood at 63,83,805 far with 3,80,331 deaths. India reported 1,01,497 active cases of COVID-19 infection and 5,815 deaths, according to the data from the Ministry of Health and Family Welfare, Government of India.
Economy:
The IHS Markit India Services Business Activity Index recorded 12.6 in May. Although the headline figure rose from April's unprecedented low of 5.4, it remained at a level which, prior to the coronavirus pandemic, was unparalleled in over 14 years of data collection and pointed to an extreme drop in services activity across India.
The Composite PMI Output Index, which measures combined services and manufacturing output, signalled a further severe contraction in private sector business activity during May. Posting 14.8, from 7.2 in April, the latest reading was consistent with a further decline in output which was unparalleled prior to the COVID-19 outbreak.
Commenting on the latest survey results, Joe Hayes, Economist at IHS Markit, said: "Service sector activity in India is still effectively on hold, latest PMI data suggest, as output fell at an extreme rate once again during May. Given the stringency of the lockdown measures imposed in India, it is no surprise to see the severity of the declines in April and May. Demand for services, both domestically and overseas, continued to plummet in May as clients' businesses remained closed and footfall remains drastically below normal levels. With economic output set to fall enormously in the first half of 2020, it is clear that the recovery to pre-COVID-19 levels of GDP is going to be very slow."
Q4 Results Today:
Aurobindo Pharma (up 2.12%), BPCL (up 2.65%), Cholamandalam Investment and Finance Company (down 0.82%), Dishman Carbogen (up 4.93%), DCM Shriram (up 0.42%) and MAS Financial Services (up 0.26%) are some of the companies that will announce their quarterly earnings today.
Earnings Impact:
Britannia Industries jumped 1.04% after the packaged foods maker's consolidated net profit surged 26% to Rs 374.75 crore on 1.6% rise in net sales to Rs 2,807.78 crore in Q4 March 2020 over Q4 March 2019. Consolidated profit before tax stood at Rs 457.72 crore in Q4 March 2020, rising 1.6% from Rs 449.92 crore in Q4 March 2019. Net profit was aided by a significant drop in tax expenses. Total tax expenses declined 45.4% to Rs 84.92 crore in Q4 March 2020 from Rs 155.65 crore reported in the same period last year. Commenting on the performance, Varun Berry, Managing Director, said that on the cost front, the company witnessed moderate inflation in the prices of key raw materials for the bakery business. Commodity prices at global level too witnessed a moderation due to low demand on account of lockdown in most parts of the world.
InterGlobe Aviation (IndiGo) soared 8.68%. InterGlobe Aviation reported a consolidated net loss of Rs 870.81 crore in Q4 March 2020 as against consolidated net profit of Rs 595.83 crore in Q4 March 2019. Pre-tax loss stood at Rs 1,289.77 crore in Q4 FY20 as against pre-tax profit of Rs 626.07 crore in Q4 FY19. Net sales during the quarter rose 5.3% YoY (year-on-year) to Rs 8,299.06 crore. Closure of flight operations during national lockdown on account of COVID-19 significantly impacted revenue for the quarter.
Spandana Sphoorty hit an upper circuit of 5% at Rs 535 after the microfinance lender reported a 12.7% rise in net profit to Rs 83.04 crore on 63.8% rise in total income to Rs 439.77 crore in Q4 March 2020 over Q4 March 2019. Consolidated profit before tax stood at Rs 108.47 crore in Q4 March 2020, rising 0.6% from Rs 107.78 crore in Q4 March 2019. Income tax expense declined 28.36% to Rs 24.43 crore in Q4 March 2020 from Rs 34.10 crore in Q4 March 2019. Net interest income stood at Rs 263 crore in Q4 March 2020, jumping 56% from Rs 168 crore in the year ago period. Net interest margin improved to 16.6% in Q4 March 2020 from 15.9% in Q4 March 2019. The firm recorded a 67% jump in disbursement to Rs 2324 crore in Q4 March 2020 from Rs 1390 crore in Q4 March 2019. Total Assets Under Management (AUM) stood at Rs 6,829 crore in March 2020, rising by 74% from Rs 4372 crore in March 2019.
Zydus Wellness advanced 2.03% after the company reported a 10.9% rise in consolidated net profit to Rs 69.10 crore on 17.2% rise in net sales to Rs 487.87 crore in Q4 March 2020 over Q4 March 2019. Consolidated profit before tax stood at Rs 61.47 crore in Q4 March 2020, rising 24% from Rs 49.48 crore reported in Q4 March 2019. Adjusted EBIDTA was up by 20.9% to Rs 104.60 crore in Q4 March 2020 over Q4 March 2019.
Granules India fell 0.83%. The company's consolidated net profit jumped 44.2% to Rs 92.34 crore on 2.2% decline in net sales to Rs 599.88 crore in Q4 March 2020 over Q4 March 2019. Revenue during the quarter was impacted due to restriction imposed on paracetamol API (active pharmaceutical ingredients), PFI (Pharmaceutical Formulation Intermediates) and ED. Restriction removed for PFI and FD (Finished Dosages) on April 2020 and API by end of May 2020. Consolidated profit before tax soared 62.3% to Rs 136.70 crore in Q4 March 2020 as against Rs 84.22 crore in Q4 March 2019. Current tax expenses jumped 123% to Rs 35.93 crore in Q4 March 2020 as against Rs 16.11 crore paid in Q4 March 2019. The result was declared post trading hours yesterday, 2 June 2020.
Buzzing Segment:
Shares of hotel companies rose as investors cheered the easing of lockdown norms from 8 June 2020.
Lemon Tree Hotels (up 5%), EIH (up 2.12%), Indian Hotels Co. (up 0.71%), Mahindra Holidays & Resorts India (up 0.70%), TajGVK Hotels & Resorts (up 0.47%) and Indian Tourism Development Corporation (up 0.38%) were top gainers.
The Government on Saturday, 30 May 2020 issued guidelines for a phased re-opening of areas outside the containment zones, allowing hotels, restaurants and other hospitality services as well as shopping malls to open from 8 June 2020. However, it said that the ministry of Health and Family Welfare will issue Standard Operating Procedures for the above activities in consultation with central ministries and departments for ensuring social distancing to contain the spread of COVID-19.
Stocks in Spotlight:
Lupin gained 0.82% after it announced that it has received approval for its Meloxicam Capsules from U.S. FDA to market a generic equivalent of Vivlodex Capsules of Zyla Life Sciences US, Inc. The product would be manufactured at Lupin's Aurangabad facility, India, and is expected to be launched shortly. The announcement was made after market hours yesterday, 2 June 2020.
Syngene International has entered into collaboration with HiMedia Laboratories, a bioscience company with expertise in media manufacturing and diagnostics for over 45 years, to manufacture and distribute its ELISA kits. HiMedia will manufacture the kits at its facility in Mumbai and distribute it across India. Shares of Sygene International were trading 0.78% higher at Rs 373.80.
Global Markets:
Shares in Europe and Asia advanced on Wednesday as optimism over economies reopening from shutdowns cheered investors. In Europe, Lufthansa reported a net loss of 2.1 billion euros ($2.35 billion) for the first three months of the year.
Japan's services sector activity stayed deep in contraction in May, although the pace of decline moderated from the previous month, as restraining measures put in place over the coronavirus outbreak hurt business activity and the jobs market. The final seasonally adjusted au Jibun Bank Japan Services Purchasing Managers' Index (PMI) rose to a seasonally adjusted 26.5 in May from a record low 21.5 in the previous month.
US stocks ended higher for a second straight day Tuesday. Technology, industrial and health care sector shares accounted for majority of the gains. Energy stocks outperformed the remainder of the market as the price of brent crude rose ahead of a meeting of major oil producers. Bond yields climbed, another indicator of receding pessimism among investors.
Meanwhile, President Donald Trump reiterated threats to deploy military troops across cities facing protests if governors and local officials prove unable to contain violent demonstrations.
Major cities from Los Angeles to New York have been engulfed in nightly protests after George Floyd, a black man, died last Monday following a confrontation with police in Minneapolis in which a white police officer, Derek Chauvin, was captured on video driving his knee onto Floyd's neck until the handcuffed man lost consciousness and later died.
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