Nifty trades below 9300; PSU OMCs bleed

The market traded in a narrow range with modest gains in afternoon trade. The Nifty was trading below 9300 mark. At 13:33 IST, the barometer index, the S&P BSE Sensex, was up 284.04 points or 0.9% at 31,737.55. The Nifty 50 index was up 73.60 points or 0.8% at 9,279.55.

The broader market was positive. The S&P BSE Mid-Cap index added 0.63% while the S&P BSE Small-Cap index rose 0.64%.

The market breadth was negative. On the BSE, 980 shares rose and 1147 shares fell. A total of 152 shares were unchanged. In Nifty 50 index, 32 stocks advanced while 18 stocks declined.

 

Gainers & Losers:

Hero MotoCorp (up 3.71%), HDFC (up 3.55%), HDFC Bank (up 3.26%), ICICI Bank (up 2.96%) and Bharti Airtel (up 2.83%) were top gainers in Nifty 50 index.

Bharti Infratel (down 5.28%), UPL (down 2.82%) and Coal India (down 2.79%) were top losers in Nifty 50 index.

ITC was down 6.27% and Axis Bank was down 0.62%. The government is reportedly seeking to raise around to Rs 22,000 crore by selling its entire stake in ITC and Axis Bank.

Economy:

The IHS Markit India Services Business Activity Index posted 5.4 in April, an extreme decline from 49.3 in March, and indicative of the most severe contraction in services output since records began in December 2005. Activity fell severely as a result of the nationwide lockdown, leading businesses to shut down their operations as demand collapsed.

Commenting on the latest survey results, Joe Hayes, Economist at IHS Markit, said: "The Indian services economy posted its worst ever month-on-month drop in business activity during April. The extreme slide in the headline index, which fell by over 40 points, shows us that the strict lockdown measures have led to the sector essentially grinding to a complete standstill. "The composite output index, which is a weighted average of manufacturing and services output, also signalled what is by far the worst contraction in economic activity since data collection began in late-2005. Historical comparisons with GDP data suggest that India's economy contracted at an annual rate of 15% in April. It is clear that the economic damage of the COVID-19 pandemic has so far been deep and far-reaching in India, but the hope is that the economy has endured the worst and things will begin to improve as lockdown measures are gradually lifted."

Q4 Results Today:

Adani Enterprises (up 0.94%), Yes Bank (down 1.32%) and Kansai Nerolac Paints (down 0.36%) are some of the companies that will announce their Q4 March 2020 result today.

Earnings Impact:

NIIT Technologies surged 15.66% after the IT solutions provider announced decent Q4 numbers. On a consolidated basis, net profit fell 7.9% to Rs 113.60 crore on a 3.3% increase in revenue to Rs 1109.3 crore in Q4 March 2020 over Q3 December 2019. Consolidated EBITDA stood at Rs 198.8 crore in Q4 March 2020, rising by 2.5% quarter on quarter (QoQ) from Rs 194 crore reported in Q3 December 2019. EBITDA margin dropped to 17.9% in Q4 March 2020 from 18.1% in Q3 December 2019.

SBI Life Insurance Company added 3.4% after sturdy Q4 March 2020 numbers. The company's net profit rose 15.94% to Rs 530.67 crore in Q4 March 2020 as against Rs 457.68 crore in Q4 March 2019. Net premium earned increased by 4.67% to Rs 11,862.98 crore in Q4 March 2020 from Rs 11,333.02 crore in Q4 March 2019. Profit before Tax (PBT) jumped 8.22% to Rs 521.59 crore in Q4 March 2020 over Q4 March 2019. Net profit rose 7.18% to Rs 1,422.17 crore in the year ended March 2020 (FY20) as against Rs 1,326.80 crore in the year ended March 2019 (FY19). Net premium earned jumped 22.60% to Rs 40,324.01 crore in FY20 from Rs 32,890.35 crore in FY19. Profit before Tax (PBT) increased by 2.96% to Rs 1,413.54 crore in FY20 over FY19. The annualized premium equivalent (APE), a measure of new business written by a life insurance company, rose 11% to Rs 10740 crore for FY2020 as compared to Rs 9700 crore for FY2019.

Buzzing Segment:

Shares of public sector oil marketing companies declined after the government on Tuesday hiked the excise duty on petrol and diesel by Rs 10 and Rs 13 respectively. Hindustan Petroleum (down 5.43%), Bharat Petroleum Corporation (down 2.94%) and Indian Oil Corporation (down 2.73%) declined.

The Government notified that the changes will come into effect from 6 May 2020. Inspite of steep hike in excise duty the retail prices of petrol and diesel will remain unchanged as PSU OMCs will absorb the excise duty charges. Oil companies in India have not cut petrol and diesel prices since 16 March 2020, despite global crude oil prices falling to lowest in two decades.

Global Markets:

European markets opened mixed while Asian stocks were trading higher as investors weigh opening up of economies from the lockdown with caution. Markets in Japan and Thailand are closed on Wednesday for holidays.

In US, stocks ended slightly higher Tuesday for a second straight day, but finished well off session highs, as investors watched business restrictions begin to ease in the U.S. and Europe and progress toward an early vaccine to prevent the further spread of the COVID-19 pandemic.

The US economy could start to recover in the second half of the year after what is shaping up to be the worst recession in decades, but growth is likely to be slow and uneven, several top Federal Reserve policymakers indicated on Tuesday.

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