Domestic shares ended with small losses on Tuesday, extending a steep sell-off a day earlier. Despite a positive start, the market barometers reversed trend by mid-afternoon trade and ended in the red. U.S. President Donald Trump's two-day visit failed to boost investor sentiment.
The barometer index, the S&P BSE Sensex, slipped 82.03 points or 0.2% at 40,281.20. The Nifty 50 index fell 16.20 points or 0.14% at 11,813.20.
In the broader market, the S&P BSE Mid-Cap index declined 0.44% while the S&P BSE Small-Cap index slipped 0.45%.
The market breadth was negative. On the BSE, 963 shares rose and 1470 shares fell. A total of 183 shares were unchanged.
President Trump reportedly said on Monday the two countries will sign defense deals worth $3 billion and that both sides were at the early stages of reaching an "incredible" trade agreement. However, fears of a global recession are running wild as countries battle the coronavirus.
Buzzing Index:
The Nifty Pharma index fell 2.14% to 7,942.20, as coronavirus woes continue to haunt the sector. The price of many pharmaceutical ingredients has reportedly spiked for Indian drugmakers following panic buying and Chinese raw material shortages caused by the coronavirus lockdown.
Piramal Enterprises (down 4.83%), Dr Reddy's Laboratories (down 2.79%), IPCA Laboratories (down 2.75%), Glenmark Pharmaceuticals (down 2.63%), Sun Pharmaceutical Industries (down 2.19%), Divi's Laboratories (down 2.12%), Cipla (down 1.07%), Cadila Healthcare (down 0.8%), Lupin (down 0.65%) declined.
GlaxoSmithKline Pharmaceuticals (up 2.27%), Wockhardt (up 2.05%), Strides Pharma Science (up 1.6%), Alkem Laboratories (up 1.36%), Aurobindo Pharma (up 0.13%) advanced.
Stocks in Spotlight:
Hindustan Unilever (HUL) added 0.68% to Rs 2231.05. HUL's board approved a proposal to form a new 100% subsidiary with an authorised share capital of Rs 2000 crore. This new subsidiary will leverage the growth opportunities in a fast-changing business environment and will help HUL in becoming more agile and customer-focused.
HDFC Bank fell 0.8% to Rs 1200.35. The bank's managing director (MD), Aditya Puri, sold a total 12.52 lakh equity shares of the bank on 11 and 12 February 2020. The announcement was made after trading hours yesterday, 24 February 2020.
State Bank of India (SBI) gained 1.04% to Rs 326.25. The price band of initial public offering (IPO) of SBI Cards and Payment Services has been fixed in the price range of Rs 750-755 per share. The issue will open for subscription on 2 March and close on 5 March. The IPO comprises a fresh issue of Rs 500 crore, while the offer for sale would see the promoters offload 13 crore shares.
JSW Steel rose 1.66% to Rs 263.10. The company said on Monday it has been declared as a preferred bidder for an iron ore mine in Odisha. The projected iron ore resource in this mine as per tender documents is 39.4 million tonnes.
Tech Mahindra added 0.37% to Rs 823.15. The IT major said it has acquired Zen3 Infosolutions (America) for $44 million. A further $22 million will be paid out after three years, based on financial performance. The all-cash transaction is expected to close by 1 April. Tech Mahindra said that the acquisition would bring strong capabilities in AI enablement services. This will also help it to bolster its enterprise application practice.
NTPC gained 0.46% to Rs 110.25 after the Competition Commission of India approved NTPC's 74.5% acquisition of THDC. The proposed acquisition is of issued and paid-up share capital of the THDC from the Government of India. THDC is a government company with 74.50% of its total shares held by the Government of India and 25.50% of its shares held by the Government of Uttar Pradesh as on 31 March 2019.
Navin Fluorine hit 20% upper circuit at Rs 1455.10 after the company said that it has entered into a $410 million (about Rs 2900 crore) multi-year contract with a global company for manufacture and supply of a high performance product in the fluorochemicals space. The project will entail an investment of about $51.50 million (Rs 365.50 crore) in the manufacturing facility and $10 million (Rs 71 crore) in captive power plant. The company will execute this capex and the project through its wholly owned subsidiary, Navin Fluorine Advanced Sciences. The facility will be located at Dahej, Gujarat. The capex will be funded through a mix of internal accruals and debt. The supplies are expected to commence from Q4 of FY2022.
Shilpa Medicare hit an upper-circuit limit of 5% at Rs 515.20 after its board approved the sale of biological unit of Shilpa Medicare through slump sale to Shilpa Biologicals, a wholly owned subsidiary of the firm. The biological unit is currently under construction stage and has not yet commenced commercial operations. The net worth of the proposed unit is estimated to be around 22% to 24% (i.e. Rs 321.77 crore approximately) on standalone financials basis. The consideration for the proposed sale will be paid in cash. The sale is expected to be completed on or before 31 March 2020 subjected to shareholder's approval. The announcement was made after market hours yesterday, 24 February 2020.
Shares of Camlin Fine Sciences surged 3.41% to Rs 69.70. The company's subsidiary, CFS Wanglong Flavors (Ningbo) located in Xiaocao's Town, Yuyao City, Zhejiang Province has re-started the manufacturing facility from 24 February 2020. The manufacturing facility was closed with a view to effectively strengthen the prevention and control of new coronavirus.
Linde India slumped 7.05% to Rs 717. The company reported a standalone net profit of Rs 634.50 crore in Q3 December 2019 as compared to a net profit of Rs 15.42 crore in Q3 December 2018. Net sales, however, declined 26.6% to Rs 412.82 crore in Q3 December 2019 as against Rs 562.79 crore reported in the same period last year.
Global Markets:
European shares extended losses while Asian markets ended mostly higher on Tuesday, following a heavy sell-off on Wall Street on Monday on heightened fears that the China coronavirus is rapidly developing in to a global pandemic that could cripple global supply chains and wreak far greater economic damage than first thought.
On Monday, the World Health Organization warned that a "sudden increase in new cases" outside of China is "deeply concerning," following a rise in infections of Covid-19 in Italy, South Korea and Iran.
However, the World Health Organization declined to declare the outbreak a pandemic, saying the rapidly spreading disease has pandemic potential but does not yet require that designation.
In US, the Dow finished more than 1,000 points lower on Monday, marking its third-worst daily point drop in history, as the spread of the COVID-19 illness beyond China raised worries that the hit to overseas economic growth could be more persistent than investors expected, hampering the prospects for a global recovery in 2020.
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