Key benchmark indices reversed gains and hit fresh intraday low in afternoon trade, tracking a weak opening in European shares and a correction in US index futures. At 13:40 IST, the barometer index, the S&P BSE Sensex fell 246.71 points or 0.70% at 35,183.72. The Nifty 50 index slipped 66.45 points or 0.63% at 10,404.55.
The broader market declined. The S&P BSE Mid-Cap index fell 0.14%. The S&P BSE Small-Cap index lost 0.71%.
The market breadth was positive. On the BSE, shares 1319 rose and 1307 shares fell. A total of 134 shares were unchanged.
Foreign portfolio investors (FPIs) bought shares worth Rs 168.96 crore, while domestic institutional investors (DIIs) were net buyers to the tune of Rs 454.48 crore in the Indian equity market on 23 June, provisional data showed.
Meanwhile, SEBI has extended last date to announce Q4 & FY20 results to 31 July 2020 from 30 June 2020.
COVID-19 Update:
Investors were spooked by rising coronavirus cases across the globe. Total COVID-19 confirmed cases worldwide stood at 92,64,569 far with 4,77,601 deaths. India reported 1,83,022 active cases of COVID-19 infection and 14,476 deaths, according to the data from the Ministry of Health and Family Welfare, Government of India.
Gainers & Losers:
Hero MotoCorp (up 4.72%), Tata Motors (up 4.50%), ITC (up 4.17%), GAIL (India) (up 2.07%) and Reliance Industries (up 1.98%) advanced.
Power Grid Corporation of India (down 3.15%), IndusInd Bank (down 3.13%), Cipla (down 2.39%), ICICI Bank (down 2.11%) and Bharti Airtel (down 1.82%) declined.
Q4 Results Today:
Indian Oil Corporation (down 0.45%), Gail (India) (down 0.25%), Power Finance Corporation (up 0.50%), Canara Bank (up 1.14%), United Breweries (up 3.64%), Prestige Estates Projects (down 2.61%), PNC Infratech (up 3.34%), Indoco Remedies (down 0.40%), Future Consumer (up 5%), Bombay Burmah Trading Corp. (up 1.10%), General Insurance Corporation of India (up 0.29%), Rail Vikas Nigam (up 0.25%), ESAB India (up 0.11%), Balmer Lawrie & Co. (up 0.08%) and Sharda Cropchem (up 2.15%) are some of the companies that will announce their quarterly earnings today.
Earnings Impact:
Asian Paints soared 5.27%. On a consolidated basis, the company's net profit declined 2.1% to Rs 461.89 crore on 7.1% fall in net sales to Rs 4,635.59 crore in Q4 March 2020 over Q4 March 2019. Profit before tax stood at Rs 699.22 crore in Q4 March 2020, declining 5.3% from Rs 738.30 crore in the same period last year. Total tax expense declined 13.2% to Rs 218.97 crore in Q4 March 2020 from Rs 252.31 crore in Q4 March 2019.
Berger Paints India jumped 5.61%. The company reported a 6.4% drop in consolidated net profit to Rs 103.72 crore on a 8% fall in net sales to Rs 1,354.84 crore in Q4 March 2020 over Q4 March 2019. Profit before tax stood at Rs 159.21 crore in Q4 March 2020, falling 12.5% from Rs 181.92 reported in Q4 March 2019. Consolidated EBITDA (excluding other income) fell 7.6% to Rs 208.40 crore in quarter ended 31 March 2020 from Rs 225.60 crore registered in the same period last year.
Bank of Baroda surged 5.15% after the bank posted a net profit of Rs 506.59 crore in Q4 March 2020 compared with a net loss of Rs 991.37 crore in Q4 March 2019. Net Interest Income (NII) increased by 5.02% to Rs 6,798 in the fourth quarter from Rs 6,473 crore in the same period last year. Global net interest margin (NIM) during Q4 FY20 increased to 2.67% from 2.62% and domestic NIM increased to 2.78% from 2.68%. The ratio of gross NPAs to gross advances stood at 9.40% as on 31 March 2020 as against 10.43% as on 31 December 2019 and 9.61% as on 31 March 2019. The ratio of net NPAs to net advances stood at 3.13% as on 31 March 2020 as against 4.05% as on 31 December 2019 and 3.33% as on 31 March 2019.
Union Bank of India dropped 4.87%. The bank reported a standalone net loss of Rs 2,503.18 crore in Q4 March 2020 as compared with net loss of Rs 3,369.23 crore in Q4 March 2019. Standalone total income jumped 17.5% to Rs 11,306.99 crore in Q4 March 2020 over Rs 9,621.01 crore in Q4 March 2020. The bank's provisions and contingencies dropped 39.27% to Rs 3,501.69 crore in Q4 March 2020 over Rs 5,766.15 crore in Q4 March 2019. The ratio of gross NPAs to gross advances stood at 14.15% as on 31 March 2020 as against 14.86% as on 31 December 2019 and 14.98% as on 31 March 2019. The ratio of net NPAs to net advances stood at 5.49% as on 31 March 2020 as against 6.99% as on 31 December 2019 and 6.85% as on 31 March 2019.
Aster DM Healthcare declined 2.95% after consolidated net profit tanked 33.4% to Rs 146.31 crore on 4.6% rise in net sales to Rs 2,301.37 crore in Q4 March 2020 over Q4 March 2019. EBITDA slipped 10% to Rs 316 crore in Q4 FY20 as against Rs 350 crore in Q4 FY19. EBITDA margin declined to 13.7% in Q4 FY20 from 15.9% in Q4 FY19. The company believes that the COVID-19 pandemic will only have a short-term impact on its operations and after easing of the lockdown restrictions, the business is expected to return to normal. The management believes that the company will not have any challenge in meeting its financial obligations for the next 12 months based on the financial position and liquidity as on the date of the balance sheet and as on date of signing of these financial results.
Finolex Industries' rallied 5.43%. The PVC pipe manufacturer's consolidated net profit tanked 37.1% to Rs 58.66 crore on 20.5% decline in net sales to Rs 766.11 crore in Q4 March 2020 over Q4 March 2019. Consolidated profit before tax (PBT) dropped 37.8% to Rs 88.73 crore in Q4 March 2020 as against Rs 142.73 crore in Q4 March 2019. Current tax expenses slumped 41.3% to Rs 27.58 crore in Q4 March 2020 as against Rs 47.01 crore paid in Q4 March 2019. The Q4 results was released post market hours yesterday, 23 June 2020. EBITDA slipped 29% to Rs 104.10 crore in Q4 FY20 as against Rs 146.50 crore in Q4 FY19. EBITDA margin improved to 13.6% in Q4 FY20 from 15.2% in Q4 FY19. Commenting on the Q4 performance, Prakash P. Chhabria, the executive chairman of Finolex Industries, has stated that: "The poor market conditions continuing from previous quarter were further affected by pandemic and subsequent lockdown. Though decline in volumes was more than 20% in both PVC resin and PVC pipes segments, the margin in PVC pipes segment was higher at 10.0% during the quarter."
Global Markets:
The US Dow Jones futures were down 125 points, indicating a weak opening in the US stock market today.
European shares declined at opening bell on Wednesday as the recent surge in the number of global coronavirus cases weighed on investor sentiment. However, most Asian shares were trading higher.
Several US states are witnessing record infections while the death toll in Latin America surpassed the 100,000 mark on Tuesday. White House health advisor Dr. Anthony Fauci warned on Tuesday that parts of the U.S. are beginning to see a disturbing surge of Covid-19 cases.
The European Union is reportedly preparing to bar US travellers because of the surge of cases in the country, putting it in the same category as Brazil and Russia, according to reports from a US-based media company.
The Bank of Japan reportedly said: It is still unclear when the spread of COVID-19 will subside on a global basis, as the spread is continuing in emerging economies in particular. It seems inevitable that the negative impact on the global economy, including Japan, will become prolonged without effective vaccines and medicines. Due to expectations for the future, prices in financial markets have been high compared with the current severe situation of the real economy. It is necessary to closely monitor future developments in the markets to see whether there will be a correction in asset prices, the BoJ added.
The US stock market finished session higher on Tuesday, 23 June 2020, as investor sentiment was bolstered by assurances from President Trump about the US-China trade deal, improving economic data, and speculation of additional stimulus to bolster the economy. The continued strength on Wall Street was also widely attributed to White House adviser Lawrence Kudlow statement that tax rebates and direct mail cheques are on the table in the next coronavirus relief bill.
The Commerce Department released a report showing a substantial increase in new home sales in the month of May. The report said new home sales spiked by 16.6% to an annual rate of 676,000 in May from a significantly downwardly revised rate of 580,000 in April.
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