Key benchmarks were trading near the day's low in afternoon trade due to weak global cues. At 13:20 IST, the barometer index, the S&P BSE Sensex dropped 477.17 points or 1.39% at 33,769.88. The Nifty 50 index lost 139.15 points or 1.38% at 9,977.
The Nifty fell below its 10-day moving average (DMA) placed at 9992.55. The 20 DMA is placed at 9547.68, which could act as near-term support level.
Broader markets outperformed the benchmark indices. The S&P BSE Mid-Cap index fell 0.18%. The S&P BSE Small-Cap index rose 0.04%.
The market breadth was almost even. On the BSE, shares 1,181 rose and 1,144 shares fell. A total of 143 shares were unchanged. In Nifty 50 index, 12 stocks advanced while 38 stocks declined.
Economy:
The Organisation for Economic Co-operation and Development (OECD) has kept India's growth at -3.7% for the ongoing fiscal and warned that growth could drop further to -7.3% in the event of a second Covid-19 outbreak, according to its Economic Outlook (EO) released on Wednesday. This was in sharp contrast to the 5.1% growth it had projected for FY21 in the interim EO in March. The latest report forecast a strong recovery in the coming fiscal to 7.9% in the 'single-hit' scenario versus an 8.1% rebound in the 'double-hit' Covid-19 scenario, stated the OECD.
Meanwhile, Standard & Poor's retained India's sovereign credit rating at BBB- with stable outlook. The ratings agency said, "While risks to India's long-term growth rate are rising, ongoing economic reforms, if executed well, should keep the country's growth rate ahead of peers." S&P has forecast India's economy to shrink by 5% this fiscal.
Foreign portfolio investors (FPIs) sold shares worth Rs 919.26 crore, while domestic institutional investors (DIIs) were net buyers to the tune of Rs 500.70 crore in the Indian equity market on 10 June, provisional data showed.
COVID-19 Update:
Total COVID-19 confirmed cases worldwide stood at 73,60,239 far with 4,16,201 deaths. India reported 1,37,448 active cases of COVID-19 infection and 8,102 deaths, according to the data from the Ministry of Health and Family Welfare, Government of India.
Gainers & Losers:
IndusInd Bank (up 7.98%), Hero MotoCorp (up 1.80%), Nestle India (up 1.36%), M&M (up 1.25%) and IOCL (up 1.06%) were top gainers in Nifty 50 index.
Sun Pharmaceutical Industries (down 3.48%), Tech Mahindra (down 2.97%), Gail (India) (down 2.85%), Zee Entertainment Enterprises (down 2.66%) and Bharti Infratel (down 2.15%) were top losers in Nifty 50 index.
Q4 Results Today:
Dixon Technologies (India) (down 0.16%), EID-Parry (India) (up 1.39%), IIFL Wealth Management (down 1.75%), KNR Constructions (up 1.50%), Redington (India) (up 2.18%), Shriram City Union Finance (down 0.79%), Sundram Fasteners (down 1.27%) and Westlife Development (up 0.67%) are some of the companies that will announce their quarterly earnings today.
Earnings Impact:
Shriram Transport Finance Company advanced 2.23%. The automobile financier reported 70.1% slump in consolidated net profit to Rs 223.38 crore on 7.5% increase in total income to Rs 4,173.04 crore in Q4 March 2020 over Q4 March 2019. Total assets under management (AUM) as on 31 March 2020 stands at Rs 1,09,749.24 crore as compared to Rs 1,04,482.28 crore as on 31 March 2019. The company said business has picked up in the rural market due to harvest season and subsequent activities of Kharif sowing has started. In spite of the moratorium, the company has been able to collect from 84%, 23% and 52% borrowers in the months of March, April and May 2020 respectively. The company had liquidity buffer of Rs 10,422 crore and SLR investments of Rs 1,824 crore as on 31 March 2020.
Mahanagar Gas rallied 4.56% after the company reported 24.8% jump in net profit to Rs 166.59 crore despite a 5% fall in net sales to Rs 686.55 crore in Q4 FY20 over Q4 FY19. The company's profitability was aided by lower total expenditure (down 13% Y-o-Y) and lower tax expense (down 4.7% Y-o-Y) as they stood at Rs 442.72 crore and Rs 57.68 crore in the fourth quarter. The term 'Y-o-Y' indicates year-on-year comparison.
Indian Hotels Company slipped 1.51% after consolidated net profit dropped 35.4% to Rs 74.32 crore on 14.6% decline in net sales to Rs 1,062.98 crore in Q4 March 2020 over Q4 March 2019. Other income for the quarter Rs 24.67 crore towards gain on sale of residential flats. Consolidated EBITDA declined 24% to Rs 246 crore from Rs 322 crore posted in the same period last year.
Century Textiles & Industries skid 4.80% after consolidated net profit dropped 32.1% to Rs 82.11 crore on a 8.7% fall in net sales to Rs 770.03 crore in Q4 March 2020 over Q4 March 2019. The company's interest cost surged 65.4% to Rs 25.16 crore while the depreciation costs rose 22.2% to Rs 58.14 crore in the fourth quarter as compared to the same period last year. The company said the COVID-19 pandemic in the last month of the FY 2020 has affected all the businesses of Century Textiles and Industries, impacting the overall revenue adversely. Though the scenario is grim currently, it is expected to show signs of revival from the second half of this financial year across the businesses.
Global Markets:
The US Dow index futures were down 597 points on Thursday as investors took some money off the table following a relentless comeback rally. European markets opened lower while Asian stocks traded lower on Thursday, amid profit selling.
In US, stocks finished mostly lower Wednesday even though the Federal Reserve pledged to hold interest rates unchanged at near zero through 2022, while keeping up at least its current pace of bond buying to support credit markets through the pandemic.
The Dow and S&P 500 closed lower for a second day, while the Nasdaq Composite booked its first finish above the 10,000 level and set a new intra-day record, led by gains in Amazon, Apple, Alphabet and Netflix.
The US Federal Reserve held interest rates near zero on Wednesday after a two-day Federal Open Market Committee meeting. Most policymakers expect historically low rates to last through 2022. The central bank also set a floor for its asset purchases, pledging to take in at least $80 billion in Treasury every month and $40 billion worth of mortgage-backed securities. The US central bank expects the US economy to contract by 6.5% in 2020 before expanding by 5% in 2021.
Chairman Jerome Powell said that delays in rolling out the Fed's $600 billion Main Street Lending Program were used to make 'very positive' changes. The chair added that yield-curve control remained a potential next step for keeping borrowing costs low through the long economic recovery.
"To support the flow of credit to households and businesses, over coming months the Federal Reserve will increase its holdings of Treasury securities and agency residential and commercial mortgage-backed securities at least at the current pace to sustain smooth market functioning, thereby fostering effective transmission of monetary policy to broader financial conditions," the Fed said.
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