As per provisional closing, the barometer S&P BSE Sensex jumped 242.52 points or 0.72% at 33,780.89. The Nifty 50 index spurted 70.90 points or 0.72% at 9,972.90.
The Nifty 50 index hit a low of 9,544.35 in early trade as US stocks crashed overnight as cautious commentary from the Federal Reserve and rising coronavirus infection rates prompted investor concern. The Nifty bounced back from its 20-day moving average (DMA) placed at 9,575.61, which will act as near-term support level. Strong buying support in late trade pushed the index near 10,000 mark.
The broader market ended with decent gains. The S&P BSE Mid-Cap index surged 0.96% while the S&P BSE Small-Cap index was up 0.13%.
The market breadth was almost even. On the BSE, shares 1248 rose and 1,254 shares fell. A total of 151 shares were unchanged. In Nifty 50 index, the breadth was even with 29 stocks advancing and 21 stocks declining.
COVID-19 Update:
Total COVID-19 confirmed cases worldwide stood at 75,16,656 far with 4,21,498 deaths. India reported 1,41,842 active cases of COVID-19 infection and 8,498 deaths, according to the data from the Ministry of Health and Family Welfare, Government of India.
Economy:
Ratings agency Standard and Poor (S&P) expects India's real GDP growth in FY21 to contract 5%. S&P also mentioned that India's recovery from COVID-19 will be the key to its sovereign rating. The credit ratings agency pegs India's real GDP growth at 8.5% for FY22. Fiscal deficit may rise to 11% of GDP in FY21, owing to weak revenue generation that will account for the bulk of the rise in overall deficit. However, India's wide range of structural trends, including healthy demographics and competitive unit labour costs work in its favour, according to S&P.
Q4 Results Today:
Eicher Motors (up 2.54%), Hindalco Industries (up 0.62%), Gujarat Industries Power (down 0.62%), Castrol India (down 1.81%) and IOL Chemicals & Pharmaceuticals (up 0.1%) are some of the companies that will announce their quarterly earnings today.
Earnings Impact:
Mahindra & Mahindra (M&M) jumped 7.42%. M&M reported a net loss of Rs 3,255 crore in Q4 March 2020 compared with net profit of Rs 969 crore in Q4 March 2019. Revenues fell 35% YoY to Rs 9,005 crore in Q4 FY20. The company reported a pre-tax loss of Rs 2,687.72 crore in the fourth quarter. It had recorded a pre-tax profit of Rs 1,410.34 in the same period last year. The operating margin (OPM) improved to 13.6% in Q4 FY20 from 13.5% in Q4 FY19. The company's profitability was impacted due to one-time loss of Rs 3,577.64 crore in Q4 FY20.
While the total vehicle sales were down by 47% to 86,351 units, tractor sales rose marginally (by 0.5%) to 57,164 units in Q4 March 2020 over Q4 March 2019. Total exports (vehicles and tractors) during the March quarter tumbled 57% year-on-year (YoY) to 5,783 units. The company said earnings were impacted due to the lower industry volumes in both automotive and tractor segments, transition to BS VI and the abrupt lockdown due to the COVID situation. The company, however, increased its market share in the domestic tractor market to 39.1% in Q4 FY20, a growth of 3.7% over corresponding quarter previous year and continued to maintain its operating margin.
KNR Constructions declined 2% after consolidated net profit declined 27.8% to Rs 74.66 crore on 4.6% decline in net sales to Rs 730.14 crore in Q4 March 2020 over Q4 March 2019. Consolidated EBITDA rose 4% to Rs 187.43 crore in Q4 March 2020 from Rs 180.57 crore in the corresponding period last year. EBITDA margin improved to 25.7% in Q4 March 2020 from 23.6% in Q4 March 2019. As of 31 March 2020, KNR Construction recorded an order book of Rs 5,229.70 crore out of which Rs 3,656.10 crore is from road sector and Rs 1,573.60 crore is from irrigation sector.
Westlife Development slipped 0.2% after the company reported a consolidated net loss of Rs 25.27 crore in Q4 March 2020 as against a net profit of Rs 1.28 crore reported in Q4 March 2019. Consolidated net sales remained flat at Rs 332.88 crore in the quarter ending March 2020 compared to Rs 333.75 crore posted in the same period last year. Westlife said that QSR business and inventory includes food items which are perishable in nature with a short shelf life. Based on the current situation of COVID-19 and continuous lock down, the company expected reduced demand and footfalls. Accordingly, the company has made provision for write off food inventory of Rs 16.63 crore in the quarter ended on 31 March 2020.
Sundram Fasteners declined 2.75% after consolidated net profit fell 52.7% to Rs 53.39 crore on 26% decline in net sales to Rs 808.47 crore in Q4 March 2020 over Q4 March 2019. Consolidated profit before tax (PBT) stood at Rs 70.22 crore in Q4 March 2020, tumbling 53% from Rs 148.41 crore in Q4 March 2019. Current tax expense stood at Rs 21.51 crore, declining 24.53% from Rs 28.50 crore in Q4 March 2019. In view of the nationwide lockdown due to Coronavirus pandemic, the operations of the company came to a halt from 24 March 2020, which impacted the sales performance of the company during April and May 2020. The result was announced after market hours yesterday, 11 June 2020.
IIFL Wealth Management skid 1.15% after the company reported a consolidated net loss of Rs 2.96 crore in the fourth quarter. The firm had reported a consolidated net profit of Rs 83.53 crore in the corresponding period last year. Total income rose 17.8% to Rs 433.06 crore in Q4 FY20 over Q4 FY19.
Buzzing Index:
Banks shares reversed losses and ended with decent gains after the Supreme Court in its hearing today (12 June) indicated that it was not considering a complete waiver of interest but was only concerned that postponement of interest should not accrue further interest on it. The Nifty Bank index regained 20,000 mark after hitting day's low of 19,526.10 in morning trade.
The apex court was hearing a petition seeking a waiver of interest during the period of moratorium on loan repayments. The Reserve Bank of India (RBI) granted a moratorium on loans instalments due between March 1 and May 31, which was later extended till August 31.
SC today reportedly asked Solicitor General Tushar Mehta to convene a meeting of the Finance Ministry and the Reserve Bank of India (RBI) officials over the weekend to decide whether interest incurred on EMIs during the moratorium period can be charged by banks. The top court said these are not normal times, and it is a serious issue, as on one hand moratorium is granted and then, the interest is charged on loans during this period.
The Nifty Bank index rose 0.57% to 20,641.85. The index rallied 5.7% from its intraday low of 19,526.10.
Bandhan Bank (up 5.68%), RBL Bank (up 4.27%), IDFC First Bank (up 2.01%), HDFC Bank (up 1.59%), SBI (up 1.27%), IndusInd Bank (up 1.19%), PNB (up 0.61%) and ICICI Bank (up 0.4%) were top gainers in bank segment.
Stocks in Spotlight:
SBI Life Insurance Company rose 1.3%. State Bank of India (SBI) up 0.85%. Promoter State Bank of India (SBI) offered to sell a total of 2.10 crore shares, or 2.1% stake, in SBI Life Insurance Company through an offer for sale (OFS). The floor price for the OFS was set at Rs 725 each, a 2.22% discount to the closing price of Rs 741.45 on Thursday. The OFS opened on Friday (12 June) for non-retail investors, while both retail as well as non-retail investors will be able to subscribe on Monday (15 June). The company has set aside 21 lakh shares of retail investors and 1.89 crore shares for non-retail investors.
As on 15:30 IST, the OFS received subscription for 3,85,44,675 shares or 203.94% against the non-retail offer size of 1.89 crore shares. SBI is reducing stake in the insurance unit to achieve minimum public shareholding of 25%. As of 31 March 2020, SBI held 57.60% stake in SBI Life.
Lupin was down 0.9%. Pharmaceutical major Lupin announced that it has received approval for its Albendazole Tablets USP, 200 mg, from the U.S. FDA, to market a generic equivalent of Albenza Tablets, 200 mg, of Impax Laboratories Inc. Albendazole Tablets USP, 200 mg, are an anthelmintic drug indicated for treatment of parenchymal neurocysticercosis due to active lesions caused by larval forms of the pork tapeworm and cystic hydatid disease of the liver, lung, and peritoneum, caused by the larval form of the dog tapeworm. Albendazole Tablets USP (RLD: Albenza) had an annual sales of approximately $34 million in the U.S. (IQVIA MAT April 2020).
Global Markets:
The US Dow index futures was up 596 points. European markets were trading with strong gains while Asian stocks came off day's low and ended with small losses on Friday.
In Europe, Great Britain on Thursday said that it had agreed on an intensified timetable in July for negotiations over a new free trade agreement with the EU, ahead of the Brexit transition period that concludes by the end of the year.
The U.K. posted the biggest monthly fall in GDP (Gross Domestic Product) in the country's history in April 2020, according to data released Friday by the Office for National Statistics. GDP fell by 20.4% compared to March 2020.
In US, Wall Street plummeted on Thursday as investors reacted to renewed fears of a pandemic resurgence. The pandemic already has caused unemployment to soar in the United States as parts of the economy shut down. A second wave of infections could force many businesses to close again after just having reopened.
The US Federal Reserve released a gloomy economic outlook at the end of its two-day monetary policy meeting on Wednesday. Fed Chairman Jerome Powell on Wednesday said the pandemic could result in permanent economic damage and an extended period of high unemployment. Fed officials estimate that the US economy will shrink 6.5% this year, before expanding 5% in 2021.
Treasury Secretary Steve Mnuchin was quoted by the media saying that shutting the economy for a second time is not a viable option, a day after Fed Chairman Jerome Powell was cautious in his outlook.
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