Sensex slides 205 pts, Nifty settles below 12200

Key equity market barometers declined for the second straight session on Tuesday. The sentiment was dented after the International Monetary Fund (IMF) lowered India's growth forecast. Subdued quarterly results by key index constituents and negative global cues also put pressure on domestic shares.

The barometer BSE S&P Sensex fell 205.10 points or 0.49% to 41,323.81. The Nifty 50 index lost 54.70 points or 0.45% to 12,169.85.

In the broader market, the BSE Mid-Cap index fell 0.21% while the BSE Small-Cap index ended flat at 14,651.76.

The market breadth was negative. On the BSE, 1107 shares rose and 1396 shares fell. A total of 171 shares were unchanged.

 

Economy:

The International Monetary Fund (IMF) on Monday (20 January) said global growth, estimated at 2.9% in 2019, is projected to increase to 3.3% in 2020 and inch up further to 3.4% in 2021. Compared to the October World Economic Outlook (WEO) forecast, the estimate for 2019 and the projection for 2020 represent 0.1% reductions for each year while that for 2021 is 0.2% lower. A more subdued growth forecast for India accounts for the lion's share of the downward revisions.

India's growth is estimated at 4.8% in 2019, projected to improve to 5.8% in 2020 and 6.5% in 2021 (1.2 and 0.9 percentage point lower than in the October WEO), supported by monetary and fiscal stimulus as well as subdued oil prices. India's domestic demand has slowed more sharply than expected amid stress in the non bank financial sector and a decline in credit growth, IMF said.

Numbers to Watch:

The yield on 10-year benchmark federal paper fell to 6.642% at 16:45 IST compared with 6.639% 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 71.23, compared with its close of 71.11 during the previous trading session.

In the commodities market, Brent crude for March 2020 settlement fell 49 cents to $64.36 a barrel. The contract rose 35 cents or 0.54% to settle at $65.20 a barrel during the previous trading session.

Foreign Markets:

Shares in Europe and Asian declined on Tuesday after IMF cut its global growth forecasts, primarily due to a sharp slowdown in India and other emerging markets.

Investors in Asia were also concerned about the economic impact of a Chinese disease outbreak rose. Officials in China are racing to contain the spread of a new "coronavirus" that has left at least four people dead and sickened hundreds after it was confirmed the infection can spread between humans. Beyond China, the outbreak has so far spread as far as Thailand, Japan and South Korea.

Meanwhile, Japan's central bank left its key interest rate unchanged and revised up its economic growth outlook. The Bank of Japan left its policy rate at -0.1% and reaffirmed its commitment to increase holdings of government bonds. Board members raised their projection of economic growth in the year that starts in April to 0.9% from 0.7%.

The European central bank also is due to make an interest rate decision this week.

Buzzing Indian Segment:

The Nifty Auto index declined 1.28% to 8,245.90 after the Federation of Automobile Dealers Associations (FADA) released vehicle registration data for the month of December 2019.

Mahindra & Mahindra (down 2.42%), Maruti Suzuki India (down 2.1%), TVS Motor Company (down 2.09%), Tata Motors (down 1.85%), Eicher Motors (down 1.46%), Escorts (down 1.29%), Hero Motocorp (down 0.55%) and Bajaj Auto (down 0.47%) declined.

FADA, the industry apex body for auto dealers, noted that after two months of positive sales during the festive period in October 2019 and its spillover effect in November 2019, automobile sales fell once again in December 2019. Total vehicle registration fell 15% to 16,06,002 units December 2019 as against 18,80,995 units in December 2018.

With the December de-growth being the highest in current financial year, FADA shifted its stance to "very cautious" for the near and mid-term. It looks forward to demand spurring initiatives in the Union Budget for faster revival of the much needed sustainable growth.

Shares of three telecom firms were in action after the Supreme Court on Tuesday agreed to hear the modification plea filed by telecom operators on giving them more time to pay off adjusted gross revenue (AGR) related dues.

Vodafone Idea (up 21.81%) and Bharti Infratel (up 8.34%) and Bharti Airtel (up 0.41%) advanced.

The telecom operators had filed the modification plea in the Supreme Court on Monday (20 January), seeking more time to pay AGR dues to the government. The deadline to pay off AGR dues is 23 January.

The media reported that the development will allow telecom operators to negotiate a sustainable payment schedule for AGR dues. The Cellular Operators Association of India had earlier sought a 14-year period to pay off these dues.

The apex court last week dismissed pleas of these operators to review its earlier judgement that had asked telecom operators to pay more than Rs 1 lakh crore in AGR dues. According to reports, Bharti Airtel has to pay Rs 35,586 crore to the government while Vodafone Idea owes Rs 50,000 crore

Stocks in Spotlight:

Media firm Zee Entertainment Enterprises surged 4.86% to Rs 283.95. The firm will announce its Q3 result today, 21 January 2020.

ICICI Prudential Life Insurance Company rose 0.12%. Consolidated net profit rose 1.80% to Rs 301.77 crore in Q3 December 2019 as against Rs 296.43 crore in Q3 December 2018. Net premium earned rose 8.66% to Rs 8,131 crore in Q3 December 2019 from Rs 7,482.95 crore in Q3 December 2018. The insurance company reported a 1.98% rise in Profit before Tax (PBT) to Rs 303.06 crore in Q3 December 2019 over Q3 December 2018.

Hindustan Aeronautics (HAL) jumped 7.84% after the company announced renewal and enhancement of working capital limit to Rs 12,050 crore, from Rs 7,300 crore earlier.

ICICI Securities rose 1.39% to Rs 429.25 after consolidated net profit rose 35.64% to Rs 137.23 crore on 4.42% increase in total income to Rs 422.67 crore in Q3 December 2019 over Q3 December 2018. Consolidated profit before tax (PBT) jumped 17.10% to Rs 185.10 crore in Q3 December 2019 as against Rs 158.07 crore in Q3 December 2018, supported by growth in retail equities and allied business.

Monnet Ispat & Energy fell 3.82% after the company reported net loss of to Rs 137.15 crore in Q3 December 2019, higher than net loss of Rs 77.66 crore in Q3 December 2018. Net sales rose 16% to Rs 570.17 crore in Q3 December 2019 over Q3 December 2018. Total expenditure rose 28.4% to Rs 607.98 crore in Q3 December 2019 over Q3 December 2018, primarily on account of sharp rise in inventories as they stood at Rs 74.44 crore as on 31 December 2019.

Can Fin Homes hit an upper circuit limit of 20% at Rs 467.20. Net profit surged 40.6% to Rs 106.61 crore in Q3 December 2019 as compared to Rs 75.82 crore reported in Q3 December 2018. The company reported profit before tax (PBT) of Rs 145.57 crore in Q3 December 2019, up by 20.4% from Rs 120.89 crore in Q3 December 2018. Net Interest Income (NII) increased to Rs 168.63 crore in Q3 December 2019 from Rs 156.11 crore in Q2 September 2019 and Rs 136.11 crore in Q3 December 2018. Net interest income is difference between interest earned and interest expended.

Info Edge (India) slipped 1.54% after the company said that Zomato has acquired Uber Eats' business in India in an all-stock deal. The all-stock transaction gives Uber 9.99% ownership in Zomato. Post acquisition, Info Edge (India)'s shareholding in Zomato will reduce to about 22.71% on fully converted & diluted basis.

Granules India fell 5.10% after consolidated net profit rose 6.15% to Rs 64.02 crore on 11.42% increase in net sales to Rs 703.95 crore in Q3 December 2019 over Q3 December 2018. Consolidated profit before tax (PBT) gained 2.45% to Rs 88.90 crore in Q3 December 2019 over Rs 86.77 crore in Q3 December 2018. Total tax expense fell 6% to Rs 24.87 crore in Q3 December 2019 as compared to Rs 26.46 crore in Q3 December 2018. The result was announced during trading hours today, 21 January 2020.

KEI Industries rose 2.66%. On a consolidated basis, KEI Industries reported a 50.4% rise in net profit to Rs 72.52 crore in Q3 December 2019 (Q3FY20) over Q3 December 2018 (Q3FY19). Net sales stood at Rs 1314.22 crore in Q3FY20 as against Rs 1088.18 crore in Q3FY19, registering a rise of 20.8%. Pending order as on date is approximately Rs 4173 crore.

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