Domestic shares surged on Thursday, tracking gains in global peers amid hopes that governments will roll out more stimulus measures to support their economies. Initial signs of peaking out of Covid-19 infections in major hotspots like Italy and the US also supported buying. The trading was volatile due to expiry of weekly index options on NSE.
The barometer index, the S&P BSE Sensex, surged 1265.66 points or 4.23% at 31,159.62. The Nifty 50 index soared 363.15 points or 4.15% at 9,111.90.
The S&P BSE Mid-Cap index added 3.63% while the S&P BSE Small-Cap index rose 3.15%. Both these indices underperformed the Sensex.
The market breadth favored the buyers. On the BSE, 1863 shares rose and 535 shares fell. A total of 178 shares were unchanged.
The domestic equity market will remain closed on Friday, 10 April 2020, on account of Good Friday.
Covid-19 Crisis:
Odisha has extended the lockdown in the state till April 30 and shut educational institutional institutions till June 17 to curb the spread of Covid-19.
Meanwhile, the Brihanmumbai Municipal Corporation (BMC) has marked out 381 containment zones to prevent COVID-19 transmission. With 143 cases of coronavirus reported in Mumbai on Thursday, the total number now stands at 839. The total number of positive cases in Maharashtra is 1297 till now.
Economy:
The Reserve Bank of India (RBI) on Thursday said the global macroeconomic outlook is overcast with the COVID-19 pandemic, with massive dislocations in global production, supply chains, trade and tourism. Financial markets across the world are experiencing extreme volatility; global commodity prices, especially of crude oil, have declined sharply. COVID-19 would impact economic activity in India directly due to lockdowns, and through second round effects operating through global trade and growth. The impact of COVID-19 on inflation is ambiguous, with a possible decline in food prices likely to be offset by potential cost-push increases in prices of non-food items due to supply disruptions.
Meanwhile, headline inflation stayed above the upper tolerance band of the inflation target band during December 2019-February 2020, led by a spike in vegetable prices. While it has peaked and vegetable prices are on the ebb, the impact of COVID-19 on inflation is ambiguous relative to that ongrowth, with a possible decline in prices of food items being offset by potential cost-push increases in prices of non-food items due to supply disruptions.
Aggregate demand is expected to be impacted adversely by likely recession in the global economy, caused by disruptions in global supply chains, travel and tourism, and lockdowns in many economies. Domestic production will also be impacted by the nation-wide lockdown. In the near-term, the challenge is to mitigate the adverse impact of COVID-19, the RBI said in its latest monetary policy report.
Numbers to Track:
In the foreign exchange market, the partially convertible rupee edged higher to 76.28 compared with its previous closing of 76.34.
The yield on 10-year benchmark federal paper rose to 6.494% as compared with 6.441% in the previous trading session.
In the commodities market, Brent crude for June 2020 settlement was up $1.51 to $34.35 a barrel. The contract rose 97 cents or 3.04% to settle at $32.84 a barrel in the previous trading session.
Meanwhile, the alliance of OPEC and non-OPEC producers will meet today and discuss production cuts in crude oil. Oil prices have been in a tailspin for weeks as Russia and Saudi Arabia have engaged in a battle over market share.
MCX Gold futures for 5 June 2020 settlement rose 0.78% to Rs 45,290.
Global Markets:
Shares in Europe and Asia advanced on Thursday as market participants continued to hope that the coronavirus pandemic is reaching a peak.
The Bank of Korea on Thursday kept its benchmark interest unchanged at 0.75%.
Back in Europe, the Bank of England (BoE) has agreed temporarily to finance U.K. government borrowing if funds cannot immediately be raised from debt markets, a measure last seen significantly during the financial crisis.
In US, stocks jumped on Wednesday on hopeful signs about the coronavirus outbreak in the United States was close to a peak, with health insurers getting an additional lift from Bernie Sanders' decision to suspend his presidential campaign.
The US Federal Reserve on Wednesday released the minutes from last month's two emergency meetings. These showed officials grew increasingly concerned by the swiftness with which the pandemic was harming the U.S. economy and disrupting financial markets, prompting them to take "forceful action." The Fed viewed no major economic recovery until next year as a worst-case scenario of the coronavirus outbreak. The Fed also fretted about a lack of future ammunition to combat economic distress.
Buzzing Indian Index:
The Nifty Auto index surged 10.52% to 5,560.80, rising for third consecutive trading session. The index has advanced 23.09% in three trading sessions from its previous closing low of 4517.75 posted on 3 April 2020.
Mahindra & Mahindra (up 16.74%), Maruti Suzuki India (up 13.16%), Tata Motors (up 10.36%), Hero MotoCorp (up 9.65%), Bajaj Auto (up 8.86%), TVS Motor Company (up 7.42%), Escorts (up 7.39%), Ashok Leyland (up 4.22%) and Eicher Motors (up 3.87%) surged.
Stocks in Spotlight:
Larsen & Toubro (L&T) rose 0.58% after L&T Construction bagged 'major' contracts for its power transmission & distribution business in India and abroad. As per L&T's project classification, the valuation of the contracts won lies between Rs 5,000 to Rs 7,000 crore.
Titan Company surged 11.12%. The company in its quarterly update for Q4 March 2020 said that consequent to the serious disruptions in operations in March, revenue growth for the quarter and consequently for the year has been impacted severely. The company is working out its strategy to manage this crisis with particular focus on ensuring adequate liquidity is available till normalcy returns.
IDBI Bank jumped 7.05% after the bank said its board approved a proposal to sell 23-27% stake in insurance arm IDBI Federal Life Insurance. The board of directors, at its meeting held on Wednesday (8 April), has approved in principle the proposal to sell IDBI Bank's stake to the extent of 23-27%. IDBI Bank has 48% stake in the life insurance company while Federal Bank and Ageas Insurance own 26% each.
Cipla jumped 12.96% after the company received final approval for generic version of Proventil HFA Inhalation Aerosol (Albuterol Sulfate Inhalation Aerosol 90mcg (base)/actuation). Cipla's Albuterol Sulfate inhalation aerosol is the first AB-rated generic therapeutic equivalent version of Merck Sharp & Dohme Corp's Proventil HFA Inhalation Aerosol. It is used for treatment of acute episodes of bronchospasm or prevention of asthmatic symptoms.
Cadila Healthcare rose 0.21%. Zydus Cadila has received final approval from the United States Food & Drug Administration (USFDA) to market Imatinib Mesylate tablets (100 mg and 400 mg). This medication is used to treat certain types of leukemia (blood cancer), bone marrow disorders, skin cancer and tumors of the stomach and digestive system. The drug will be manufactured at the its formulation manufacturing facility at the SEZ, in Ahmedabad, Gujarat. The press filing was released during trading hours today, 9 April 2020.
Granules India fell 1.86%. The company announced that the US Food & Drug Administration has approved the Abbreviated New Drug Application (ANDA) filed by company's wholly owned foreign subsidiary, Granules Pharmaceuticals, Inc. for Butalbital, Acetaminophen and Caffeine Capsules USP, 50 mg/300 mg/40 mg. Butalbital, Acetaminophen and Caffeine Capsules are used for the relief of the symptom complex of tension (or muscle contraction) headache.
Aurobindo Pharma rose 4.97%. The company on Thursday (9 April) said it has received the final approval from the US Food & Drug Administration (USFDA) to manufacture and market Fluoxetine tablets, 10 mg and 20mg. Fluoxetine tablets are generic version of Eli Lilly's Prozac tablets. The product will be launched in April 2020. The approved product has an estimated market size of $42 million for the twelve months ending February 2020, according to IQVIA.
Kolte-Patil Developers spurted 6.64% after the company announced strategic land monetization in Pune for Rs 91 crore. On 8 April 2020, Kolte-Patil Developers (KPDL), through its subsidiary Kolte-Patil I-Ven Townships (Pune) (KPIT), entered into an agreement with Planet Smart City, a UK-based real estate developer, for strategic land monetization of a portion of Sector R10 in KPDL's township project Life Republic in Pune for Rs 91 crore. This portion of land measuring ~5.42 acres in Sector R10 has a residential development potential of 7.6 lakh square feet in terms of saleable area. Further, under the agreement, this land parcel in Sector R10 will be jointly developed by KPIT and Planet Smart City in the profit sharing model.
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