Domestic shares tumbled sharply on Wednesday on across the board selling pressure. Barring the Nifty FMCG index, all the sectoral indices on the NSE declined. Banks and financial shares tumbled.
As per provisional closing data, the barometer index, the S&P BSE Sensex, tumbled 937.66 points or 1.94% to 47,409.93. The Nifty 50 index lost 271.40 points or 1.91% to 13,967.50.
In the the broader market, the S&P BSE Mid-Cap index fell 1.46%. The S&P BSE Small-Cap index slipped 0.45%. The decline in both the indices was lesser than the Sensex.
Sellers outnumbered buyers. On the BSE, 1075 shares rose and 1839 shares fell. A total of 150 shares were unchanged.
Investor sentiment was dented after the new coronavirus variant resulted in fresh lockdowns and other restrictions on movement in certain counties across the globe. Domestic shares were also under pressure ahead of monthly derivatives expiry on Thursday and the upcoming Union Budget.
COVID-19 Update:
Total COVID-19 confirmed cases worldwide stood at 10,02,70,602 with 21,57,355 deaths. India reported 1,76,498 active cases of COVID-19 infection and 1,53,724 deaths while 1,03,59,305 patients have been discharged, according to the data from the Ministry of Health and Family Welfare, Government of India.
A total of 20,29,424 beneficiaries have so far been vaccinated for COVID-19 through 36,572 sessions held till the evening of 26 January 2021, the eleventh day of the immunisation drive, according to a provisional report of the Union Health Ministry.
Economy:
The International Monetary Fund (IMF) on Tuesday raised its forecast for global economic growth in 2021 and said the coronavirus-triggered downturn in 2020 would be almost a full percentage point less severe than expected. It said multiple vaccine approvals and the unveiling of vaccinations in some countries in December had boosted hopes of an eventual end to the pandemic.
IMF projected an impressive 11.5% growth rate for India in 2021, making the country the only major economy of the world to register a double-digit growth this year amidst the coronavirus pandemic.
The IMF's growth projections for India in its latest World Economic Outlook Update released on Tuesday reflected a strong rebound in the economy, which is estimated to have contracted by 8% in 2020 due to the pandemic.
India's economy, the IMF said, is projected to grow by 6.8% in 2022 and that of China by 5.6%. With the latest projections, India regains the tag of the fastest developing economies of the world.
Buzzing Index:
The Nifty Pharma index fell 2.42% to 12,447.75. The index had added 1.71% to 12,756.75.
Aurobindo Pharma (down 4.66%), Dr. Reddy's Labs (down 3.55%), Sun Pharma (down 2.93%), Divi's Labs (down 2.5%), Cadila Healthcare (down 1.58%), Alkem Laboratories (down 1.26%), Biocon (down 1.1%) and Lupin (down 0.64%) declined.
Meanwhile, Torrent Pharma (up 0.57%) and Cipla (up 0.33%) advanced.
Results Today:
Among the Nifty stocks, Axis Bank (down 3.72%) and Hindustan Unilever (up 0.05%) will announce Q3 earnings today.
Earnings impact:
Larsen & Toubro (L&T) shed 0.21% to Rs 1358.55. On a consolidated basis, the infrastructure major's net profit rose 4.87% to Rs 2466.71 crore on 1.78% decline in revenue from operations to Rs 35,596.42 crore in Q3 December 2020 over Q3 December 2019.
L&T said that the Covid-19 restrictions continued to have an impact on project site execution and Hyderabad metro operations that led to a marginal decline in consolidated revenue of 2% over the corresponding quarter of the previous year. International revenue during the quarter at Rs 12,967 crore constituted 36% of the total revenue.
The consolidated profit was boosted largely due to higher profit from IT & TS segment and sale of commercial property in the realty segment. PAT also includes gain on divestment of Rs 209 crore from discontinued operations in Q3 December 2020.
The group order inflow in Q3 December 2020 registered a strong growth of 76% over the corresponding quarter of the previous year and stood at Rs 73,233 crore. International orders during the quarter constituted 14% of the total order inflow.
In its outlook, L&T said that new project opportunities are mostly seen in water, transportation, power transmission & distribution and renewable energy a green fuels. The prospects for IT & technology services segment appear promising with increased opportunities in technology led outsourcing and digital transformation.
Marico rose 0.50% to Rs 412.40 after the company posted a 13% rise in consolidated net profit to Rs 312 crore in Q3 FY21 from Rs 276 crore in Q3 FY20.
Consolidated revenue from operations rose by 16.34% to Rs 2122 crore in Q3 FY21 on the back of a strong domestic volume growth of 15% and a constant currency growth of 8% in the international business.
The FMCG company's consolidated profit before tax came at Rs 394 crore in Q3 FY21, rising 10% year on year from Rs 358 crore in Q3 FY20. Tax expense for the quarter ended December 2020 remained unchanged at Rs 82 crore.
Marico's consolidated EBITDA grew by 11% to Rs 413 crore but EBITDA margin slipped 90 basis points to 19.5% in Q3 FY21 over Q3 FY20. Marico said it worked on meticulously driven cost saving initiatives and rationalised advertising spends in discretionary categories.
Jyothy Labs fell 4.09% to Rs 151.20. On a consolidated basis, the company reported 18.2% jump in net profit to Rs 53.2 crore on 13.3% rise in revenue from operations to Rs 477 crore in Q3 FY21 over Q3 FY20. The company's FMCG sales grew by 15.1% while volume grew by 15%.
The revival of the consumer sentiment is reflecting in company's performance across our brand portfolio. The company said that it had been focussing on innovative measures to cater to consumer demands and strengthening distribution led by digital technology across channels. Additionally, the company's strategic investments in increasing advertisement spends to strengthen the core brands backed by cost rationalisation and product innovation have been at the forefront of driving growth.
During the quarter, the company has witnessed demand acceleration in the General Trade and Ecommerce Platform with gradual recovery in Modern Trade stores ('MT') and Canteen Stores Department ('CSD') operations. The growth during the quarter was aided by strong rural demand and improving urban consumption trends.
Emami shed 0.46% to Rs 482.70. On a consolidated basis, the company reported 44.67% jump in net profit to Rs 208.96 crore on 14.89% rise in revenue from operations to Rs 933.61 crore in Q3 December 2020 over Q3 December 2019.
Emami said it continued its growth momentum in the third quarter with an all-round record performance across brands, channels and geographies. The company posted a strong growth in its domestic business led by 13% growth in volumes. The domestic business grew by 16% and international business grew by 26% during the quarter.
While rural markets continued to perform better, growth in urban markets also picked up. All the channels continued to perform well and posted convincing growth with e-commerce channel growing by 3.5x during the quarter. Modern Trade also registered a strong growth of 51% during the quarter.
Global Markets:
The US Dow Jones index futures were down 111 points, indicating a weak opening in US stocks today.
European shares were trading lower while Asian shares ended mixed on Wednesday, amid the uncertainty surrounding the ongoing coronavirus pandemic.
In US, the S&P and Nasdaq slipped on Tuesday from record closing levels as investors digested a batch of corporate earnings results, while an expected policy announcement from the Federal Reserve on Wednesday helped to limit moves.
The Biden administration signaled Tuesday that it could be open to tweaking eligibility for future stimulus checks. President Joe Biden's $1.9 trillion proposal calls for $1,400 direct deposits, but the plan has drawn critiques from a bipartisan group of lawmakers because of its lofty price tag.
Investors were also waiting for a new policy statement from the Federal Reserve as the central bank began its two-day meeting on Tuesday. Former Fed Chair Janet Yellen was confirmed as Treasury secretary, becoming the first woman to hold the position.
On the coronavirus front, Moderna said on Monday that its vaccine does provide some protection against a variant found in South Africa, while officials in Minnesota reported the first U.S. confirmed case of a strain found in Brazil.
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