Domestic shares slumped on Monday amid weak global cues as the number of coronavirus cases outside China surged. The Nifty ended below its 100 days simple moving average placed at 11,955.66.
The S&P BSE Sensex, lost 806.89 points or 1.96% at 40,363.23, as per the provisional closing data. The Nifty 50 index fell 242.25 points or 2.01% at 11,838.60, as per the provisional closing data.
Global sentiment took a beating following reports that South Korea put the country on high alert after the number of infections hit more than 700 and deaths rose to seven. In Italy, officials said the number of cases jumped to above 150 from just three last week.
US stock futures pointed to sharp declines on Wall Street at the open on Monday. Dow Jones futures pointed to an implied opening plunge of about 740 points today.
Back home, the S&P BSE Mid-Cap index shed 1.60% while the S&P BSE Small-Cap index fell 1.58%.
The market breadth was weak. On the BSE, 749 shares rose and 1768 shares fell. A total of 181 shares were unchanged. In Nifty 50 index, all 50 stocks declined.
Namaste Trump:
US President Donald Trump and his wife Melania are in India on a 36-hour trip that will see them visiting Ahmedabad, Agra and New Delhi. It is Trump's first presidential visit to India and the fifth official visit by a serving US president to the country since 2000.
Last week, Trump said that both the countries were working on a major trade deal. However, US officials clarified on Friday that Trump's visit will not result in even a limited trade deal as they have concerns over India's trade barriers.
Buzzing Index:
The Nifty Metal index tumbled 5.56% to 2,467.10, declining the most among the sectoral indices on the NSE.
Jindal Steel & Power (down 8.79%), JSW Steel (down 7.24%), Steel Authority of India (down 6.52%), Vedanta (down 6.01%), Tata Steel (down 5.89%), Hindalco Industries (down 5.24%), Hindustan Copper (down 4.65%), National Aluminium Company (down 4.38%), NMDC (down 2.67%) and Hindustan Zinc (down 0.96%) declined.
Prices of industrial metals have come under pressure as mounting fears that the new flu-like virus will grow into a pandemic have heightened worries of a slowdown in global economic growth. China is reportedly the largest producer and consumer of industrial metals. Given such a dominant market share any slowdown in the Chinese economy has a major impact on metal prices and global markets.
Stocks in Spotlight:
Aurobindo Pharma crashed 16.27% to Rs 502. The drug maker said that the USFDA inspection at its Unit IV is still open and under review. The drug regulator has also rescinded the Voluntary Action Initiated (VAl) status given to the facility.
Bharti Infratel tumbled 4.78% to Rs 215.30. The company said it has received Foreign Direct Investment (FDI) approval for its proposed merger with Indus Towers. The company in a regulatory filing said, "Please be informed that FDI approval for merger of Indus Towers with Bharti Infratel has been received late evening yesterday (21 Feb). Bharti Infratel's board will meet on Monday (24 February) to take stock and decide the future course of action.
Max Financial Services surged 4.82% to Rs 592.40 while Axis Bank lost 2.55% to Rs 725. Axis Bank, Max Financial Services and its subsidiary Max Life Insurance Company on Thursday (20 February) signed a confidentiality and exclusivity arrangement to explore the possibility of the private lender entering into a long-term strategic partnership with Max Life. Max Life is currently the largest non-bank owned private life insurer in India. Max Financial Services presently holds a 72.5% stake in Max Life while Mitsui Sumitomo Insurance and Axis Bank hold 25.5% and 2% stake, respectively. Axis Bank and Max Life have had a successful bancassurace (banca) arrangement for nearly a decade. The new premium generated through this banca arrangement has aggregated to over Rs 12,000 crore over this period, while maintaining high persistency. Both companies have invested extensively in product and need-based sales training, thereby leading to consistent increase in productivity.
Dr Reddy's Laboratory fell 2.48% to Rs 3175.80. The drug maker said it has received the Establishment Inspection Report (EIR) from the USFDA, for its formulations manufacturing plant at Duvvada, Visakhapatnam, indicating closure of the audit. As intimated earlier, the facility has been classified as voluntary action indicated (VAI).
Mahindra & Mahindra lost 2.46% to Rs 511.85.The automaker said that its wholly-owned arm Mahindra Renewables will sell its entire stake in three subsidiaries to CLP India, a part of Hong Kong-based CLP Group, for nearly Rs 340 crore. Mahindra Renewables (MRPL) has agreed to sell its entire stake aggregating 100% stake in Cleansolar Renewable Energy (CREPL), Divine Solren (DSPL) and Neo Solren (NSPL), wholly-owned subsidiaries of MRPL, to CLP India. In the fiscal ended 31 March 2019, CREPL had a turnover of Rs 39.15 crore, while DSPL's and NSPL's turnover stood at Rs 54.18 crore and Rs 42.68 crore, respectively. The transaction is expected to be completed by 31 May 2020.
KEC International rose 1.17% to Rs 343 after the company announced the acquisition of a power transmission tower manufacturing facility in Dubai. The company said that the acquisition is done through it is wholly owned subsidiary, KEC Towers LLC. The manufacturing facility, which was acquired at an auction sale conducted by Emirates Auction Authority, has an installed capacity of 50000 MT per annum.
Prince Pipes and Fittings lost 1.82% to Rs 178.40. The PVC pipe maker announced that CARE Ratings had revised the rating for the company's long term bank facilities worth a total of Rs 239.24 crore to CARE A- from CARE BBB+. The ratings agency has also revised its rating on the short term bank facilities worth Rs 252 crore from CARE A3+ to CARE A2+.
PNB Housing Finance fell 2.87% to Rs 405 after it informed that CRISIL downgraded its rating on the long-term debt instruments, bank facilities and fixed deposit programme of the company to 'CRISIL AA/FAA+' from 'CRISIL AA+/FAAA'. CRISIL has also revised the outlook on the long-term ratings to 'Stable' from 'Negative'. The rating on the commercial paper (CP) issue and the short-term non-convertible debentures has been reaffirmed at 'CRISIL A1+'.
GMR Infrastructure (GIL) surged 7.63% to Rs 25.40 after the company announced a strategic partnership with Groupe ADP for its airports business. GMR Infrastructure said that it has signed a share purchase agreement pursuant to which Groupe ADP will hold 49% stake in GMR Airports (GAL) for an equity consideration of Rs 10,780 crore, valuing GAL at the base post money valuation of Rs 22,000 crore.
Global Markets:
Shares in Europe and Asia tumbled on Monday as investors focus on the continuing spread of the coronavirus and watch as Italy grapples with the largest coronavirus outbreak outside of Asia.
Coronavirus concerns continued to dominate headlines Europe. There are widespread apprehensions over the spread of the virus in northern Italy.
A third person infected with the coronavirus died in Italy on Sunday, a regional official has reportedly said, and more than 130 cases have been reported there since Friday. The government has placed a dozen towns in the north under quarantine and closed down schools, museums and cinemas while other public events, including soccer matches, have been cancelled and the Venice Carnival cut short.
Iran and South Korea have also seen a sharp rise in cases of the virus.
On Monday morning, the Korea Centers for Disease and Control and Prevention reported that seven people have died from COVID-19. The number of cases has risen to 161 new cases, bringing the total to 763 nationwide - the country with the most cases outside the mainland.
Meanwhile in China, the center of the epidemic, the National Health Commission reported an additional 150 deaths and 409 new confirmed cases as of Feb. 23.
In US, stocks slumped on Friday as the spread of the COVID-19 epidemic from China to neighboring countries amplified worries about the impact on supply chains and global economic growth.
Stocks also came under pressure after IHS Markit reportedly said business in the US contracted in February for the first time in four years owing to disruptions caused by the coronavirus and growing angst over the outcome of the 2020 presidential election.
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