Domestic shares tumbled sharply on Wednesday on across the board selling pressure. Barring the Nifty FMCG index, all the sectoral indices on the NSE declined. Banks and financial shares tumbled.
The barometer index, the S&P BSE Sensex, tumbled 937.66 points or 1.94% to 47,409.93. The Nifty 50 index lost 271.40 points or 1.91% to 13,967.50.
HDFC Bank (down 3.60%), HDFC (down 3.33%), Reliance Industries (down 2.29%) and ICICI Bank (down 2.94%) were major drags.
In the broader market, the BSE Mid-Cap index fell 1.38% and the BSE Small-Cap index slipped 0.52%.
Sellers outnumbered buyers. On the BSE, 1066 shares rose and 1847 shares fell. A total of 151 shares were unchanged.
Investor sentiment was dented after the new coronavirus variant resulted in fresh lockdowns and other restrictions on movement in certain counties across the globe. Domestic shares were also under pressure ahead of monthly derivatives expiry on Thursday and the upcoming Union Budget.
COVID-19:
Total COVID-19 confirmed cases worldwide stood at 10,02,70,602 with 21,57,355 deaths. India reported 1,76,498 active cases of COVID-19 infection and 1,53,724 deaths while 1,03,59,305 patients have been discharged, according to the data from the Ministry of Health and Family Welfare, Government of India.
A total of 20,29,424 beneficiaries have so far been vaccinated for COVID-19 through 36,572 sessions held till the evening of 26 January 2021, the eleventh day of the immunisation drive, according to a provisional report of the Union Health Ministry.
Economy:
The International Monetary Fund (IMF) on Tuesday raised its forecast for global economic growth in 2021 and said the coronavirus-triggered downturn in 2020 would be almost a full percentage point less severe than expected. It said multiple vaccine approvals and the unveiling of vaccinations in some countries in December had boosted hopes of an eventual end to the pandemic.
IMF projected an impressive 11.5% growth rate for India in 2021, making the country the only major economy of the world to register a double-digit growth this year amidst the coronavirus pandemic.
The IMF's growth projections for India in its latest World Economic Outlook Update released on Tuesday reflected a strong rebound in the economy, which is estimated to have contracted by 8% in 2020 due to the pandemic.
India's economy, the IMF said, is projected to grow by 6.8% in 2022 and that of China by 5.6%. With the latest projections, India regains the tag of the fastest developing economies of the world.
Numbers to Watch:
The yield on 10-year benchmark federal paper rose to 5.955% as compared with 5.954% at close in the previous trading session.
In the foreign exchange market, the rupee edged higher against the dollar. The partially convertible rupee was hovering at 72.9250, compared with its close of 72.94 during the previous trading session.
In the commodities market, Brent crude for March 2021 settlement rose 30 cents at $56.21 a barrel. The contract rose 3 cents, or 0.05% to settle at $55.91 a barrel in the previous trading session.
Foreign Markets:
The US Dow Jones index futures were down 269 points, indicating a weak opening in US stocks today.
European shares were trading lower while Asian shares ended mixed on Wednesday, amid the uncertainty surrounding the ongoing coronavirus pandemic.
In US, the S&P and Nasdaq slipped on Tuesday from record closing levels as investors digested a batch of corporate earnings results, while an expected policy announcement from the Federal Reserve on Wednesday helped to limit moves.
The Biden administration signaled Tuesday that it could be open to tweaking eligibility for future stimulus checks. President Joe Biden's $1.9 trillion proposal calls for $1,400 direct deposits, but the plan has drawn critiques from a bipartisan group of lawmakers because of its lofty price tag.
Investors were also waiting for a new policy statement from the Federal Reserve as the central bank began its two-day meeting on Tuesday. Former Fed Chair Janet Yellen was confirmed as Treasury secretary, becoming the first woman to hold the position.
On the coronavirus front, Moderna said on Monday that its vaccine does provide some protection against a variant found in South Africa, while officials in Minnesota reported the first U.S. confirmed case of a strain found in Brazil.
Earnings impact:
Hindustan Unilever (HUL) fell 0.34%. 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. The FMCG major's profit before tax rose 16.46% year-on-year to Rs 2,596 crore in Q3 FY21. EBITDA grew by 16.7% to Rs 2854 crore in Q3 FY21 from Rs 2445 crore in Q3 FY20. EBITDA margins at 24% remain healthy. HUL said it has significantly dialed up investments behind its portfolio and in building future-fit capabilities. Net revenue management and savings agenda has enabled it to drive healthy bottom line.
Larsen & Toubro (L&T) shed 0.12%. On a consolidated basis, the infrastructure major's net profit rose 4.87% to Rs 2466.71 crore on 1.78% decline in revenue from operations to Rs 35,596.42 crore in Q3 December 2020 over Q3 December 2019.
L&T said that the Covid-19 restrictions continued to have an impact on project site execution and Hyderabad metro operations that led to a marginal decline in consolidated revenue of 2% over the corresponding quarter of the previous year. International revenue during the quarter at Rs 12,967 crore constituted 36% of the total revenue.
The consolidated profit was boosted largely due to higher profit from IT & TS segment and sale of commercial property in the realty segment. PAT also includes gain on divestment of Rs 209 crore from discontinued operations in Q3 December 2020.
The group order inflow in Q3 December 2020 registered a strong growth of 76% over the corresponding quarter of the previous year and stood at Rs 73,233 crore. International orders during the quarter constituted 14% of the total order inflow.
Marico rose 0.52% after the company posted a 13% rise in consolidated net profit to Rs 312 crore in Q3 FY21 from Rs 276 crore in Q3 FY20. Consolidated revenue from operations rose by 16.34% to Rs 2122 crore in Q3 FY21 on the back of a strong domestic volume growth of 15% and a constant currency growth of 8% in the international business.
Marico's consolidated EBITDA grew by 11% to Rs 413 crore but EBITDA margin slipped 90 basis points to 19.5% in Q3 FY21 over Q3 FY20. Marico said it worked on meticulously driven cost saving initiatives and rationalised advertising spends in discretionary categories.
Jyothy Labs fell 3.65%. On a consolidated basis, the company reported 18.2% jump in net profit to Rs 53.2 crore on 13.3% rise in revenue from operations to Rs 477 crore in Q3 FY21 over Q3 FY20. The company's FMCG sales grew by 15.1% while volume grew by 15%.
Emami fell 0.49%. On a consolidated basis, the company reported 44.67% jump in net profit to Rs 208.96 crore on 14.89% rise in revenue from operations to Rs 933.61 crore in Q3 December 2020 over Q3 December 2019.
Stocks in Spotlight:
NALCO jumped 3.68% to Rs 47.90 after the company's board approved a proposal to buyback upto 13,02,79,083 equity shares, or 6.98% equity, at Rs 57.50 each.
RITES fell 1.42% after the EPC company said it secured consulting work order of Rs 61.25 crore from Kerala Infrastructure Investment Fund Board (KIIFB).
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