The domestic equity benchmarks ended with steep losses on Thursday, extending losses for the fifth straight session. Barring few bank stocks, shares declined across sectors. Trading was volatile as the January 2021 F&O contracts expired today, 28 January 2021. Global cues were weak as rising coronavirus cases and uneven distribution of vaccine rollouts triggered selling pressure.
The barometer index, the S&P BSE Sensex, tumbled 535.57 points or 1.13% to 46,874.36. The Nifty 50 index lost 149.95 points or 1.07% to 13,817.55. Both the indices have corrected a little over 5.5% each in the five consecutive sessions.
State Bank of India (up 2.47%), ICICI Bank (up 1.12%) and Ultratech Cement (up 0.72%) supported the indices. Hindustan Unilever (down 3.65%), HDFC Bank (down 2.81%) and HDFC (down 1.69%) dragged.
In the broader market, the BSE Mid-Cap index fell 0.46% and the BSE Small-Cap index slipped 0.45%.
The market breadth was positive. On the BSE, 1551 shares rose and 1324 shares fell. A total of 165 shares were unchanged.
COVID-19:
Total COVID-19 confirmed cases worldwide stood at 10,08,50,283 with 21,73,938 deaths. India reported 1,73,740 active cases of COVID-19 infection and 1,53,847 deaths, according to the data from the Ministry of Health and Family Welfare, Government of India.
A total of 23,28,779 beneficiaries have so far been vaccinated for COVID-19 through 41,599 sessions held till the evening of January 27, the twelfth day of the immunisation drive, according to a provisional report of the Union Health Ministry.
Numbers to Watch:
The yield on 10-year benchmark federal paper fell to 5.937% as compared with 5.954% at close in the previous trading session.
In the foreign exchange market, the rupee edged lower against the dollar. The partially convertible rupee was hovering at 73.05, compared with its close of 72.9250 during the previous trading session.
In the commodities market, Brent crude for March 2021 settlement fell 9 cents at $55.72 a barrel. The contract fell 10 cents, or 0.18% to settle at $55.81 a barrel in the previous trading session.
Foreign Markets:
Shares in Europe and Asia tumbled on Thursday following a plunge on Wall Street in the previous session.
Japan's retail sales declined 0.3% year-on-year in December, according to data released by the country's Ministry of Economy, Trade and Industry.
US stocks suffered their biggest one-day percentage drop in three months on Wednesday, adding to losses after the latest Fed statement as major indexes were also pressured by a slump in Boeing and a selling of long positions by hedge funds.
The U.S. Federal Reserve left its benchmark interest rate anchored near zero following the conclusion of its two-day meeting Wednesday. The Fed also said it will keep buying at least $120 billion of bonds a month.
In his post-meeting news conference, US Federal Reserve Chairman Jerome Powell said that the U.S. economy was a long way from full recovery and still short of policy makers' inflation and job goals. The central banker made it clear that the U.S. central bank was nowhere near exiting massive support for the economy during the ongoing coronavirus pandemic, as officials left their benchmark interest rate unchanged near zero.
Buzzing Index:
The Nifty IT index fell 2.18% to 25,301.25, extending losses for third day. The index has declined 4.49% in the three sessions.
Info Edge (India) (down 3.24%), Wipro (down 3.01%), HCL Technologies (down 2.46%), Mindtree (down 2.31%), Infosys (down 1.88%), TCS (down 1.78%), Mphasis (down 1.6%), Tech Mahindra (down 1.51%), Larsen & Toubro Infotech (down 1.39%) and Coforge (down 1.06%) declined.
Earnings Impact:
Bank of Baroda (BoB) slumped 9.61%. BoB reported a net profit of Rs 1,061.11 crore in Q3 FY21 compared with net loss of Rs 1,406.96 crore in Q3 FY20. Net interest income improved 8.65% to Rs 7,749 crore in Q3 December 2020 from Rs 7,132 crore in Q3 December 2019. Operating profit in the third quarter stood at Rs 5,591 crore, up by 12.77% from Rs 4,958 crore in the same period last year.
Provisions and contingencies declined by 44.7% to Rs 3,956.68 crore in Q3 December 2020 from Rs 7,155.42 crore in Q3 December 2019.
On the asset quality side, The ratio of gross NPAs to gross advances stood at 8.48% as on 31 December 2020 as against 9.14% as on 30 September 2020 and 10.43% as on 31 December 2019. The ratio of net NPAs to net advances stood at 2.39% as on 31 December 2020 as against 2.51% as on 30 September 2020 and 4.05% as on 31 December 2019. Proforma GNPA ratio and NNPA ratio at 9.63% and 3.36% as of 31 December 2020.
Maruti Suzuki India fell 3.56%. The automaker posted a 24% jump in standalone net profit to Rs 1941.40 crore on 13.29% rise in revenue from operations to Rs 23,457.8 crore in Q3 FY21 over Q3 FY20.
The operating profit for the quarter was at Rs 1484.80 crore, a growth of 19.3% over the same period previous year on account of higher sales volume and cost reduction efforts partially offset by increase in commodity prices and adverse foreign exchange movement. Net profit for the quarter increased due to the above factors and higher non-operating income.
Maruti sold a total of 495,897 vehicles during the quarter ended December 2020, higher by 13.4% compared to the same period previous year. Sales in the domestic market stood at 467,369 units, growing by 13%. Exports jumped 20.6% year on year to 28,528 units in Q3 FY21 over Q3 FY20.
Colgate-Palmolive (India) gained 1.43% after the company's net profit jumped 24.7% to Rs 248.40 crore on a 7.8% rise in net sales to Rs 1,224.21 crore in Q3 FY21 over Q3 FY20. Domestic net sales for the quarter reported a healthy 10.1% growth.
Hindustan Unilever (HUL) fell 3.65%. HUL reported an 18.8% rise in net profit to Rs 1921 crore on a 21% rise in revenue from operations to Rs 11,862 crore in Q3 FY21 over Q3 FY20.
HUL said that the growth during the quarter was competitive and profitable with reported turnover growth of 20% and profit after tax growth of 19%. Domestic consumer growth (excluding the impact of merger of GSK CH and acquisition of 'VWash') grew at 7%. Higher mobility, consumer relevant innovations and investments behind market development are driving business momentum. HUL said its business fundamentals remained strong with 86% of its business gaining penetration. Health, hygiene and nutrition forming 80% of the portfolio continue to grow in double digits and the company has seen significant improvement in discretionary categories.
Foods & refreshment sustained the high growth momentum growing at 19%. Beauty & personal care grew 9% with robust performance across categories and strong double-digit growths in skin cleansing, hair care and oral care. Household care continued its strong performance across segments delivering double-digit growth.
Axis Bank jumped 6.16%. The private lender's net profit tanked 36.45% to Rs 1116.60 crore while total income fell 1.13% at Rs 19,274.39 crore in Q3 December 2020 over Q3 December 2019. PAT was adversely impacted by about Rs 1,050 crore on account of prudent expense and provisioning charges in Q3.
The bank's provisions and contingencies jumped 32.65% to Rs 4,604.28 crore in Q3 FY21 over Rs 3,470.92 crore in Q3 FY20. The bank holds cumulative provisions (standard+additional other than NPA) of Rs 11,856 crore at the end of Q3FY21. This is over and above the NPA provisioning included in PCR calculations. These cumulative provisions translate to standard asset coverage of 2.08% as on 31st December 2020.
The bank's operating profit for the quarter grew 6% YoY to Rs 6,096 crore. While the lender's net interest income (NII) grew 14% to Rs 7,373 crore, net interest margin (NIM) improved by 2 bps to 3.59% in Q3 FY21 over Q3 FY20.
IDBI Bank advanced 2.17% after net profit stood at Rs 378.42 in Q3 December 2020 as against a net loss of Rs 5,763.04 crore in Q3 December 2019. Total income fell 4.55% to Rs 5,932.25 in Q3 December 2020 as compared to Rs 6,215.60 crore in Q3 December 2019. Profit before tax (PBT) jumped 11.51% to Rs 842.95 crore in Q3 FY21 as against Rs 755.89 crore in Q3 FY20. Provision for taxes tumbled 92.87% to Rs 464.53 crore in Q3 FY21 as compared with Rs 6,518.93 crore in Q3 FY20.
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