The domestic equity indices ended with steep losses on Tuesday as mixed global cues and rising COVID-19 cases weighed on investors sentiment. The Nifty closed below the 14,500 mark after hitting a high of 14,723.40 in early trade. Strength in public sector banks was offset by weakness in pharma and auto stocks.
The barometer index, the S&P BSE Sensex, fell 465.01 points or 0.95% at 48,253.51. The Nifty 50 index declined 137.65 points or 0.94% at 14,496.50.
Reliance Industries (down 2.18%), HDFC bank (down 1.74%), HDFC (down 1.73%) and Infosys (down 1.65%) were major drags.
The market breadth was negative. The BSE Mid-Cap index lost 0.50% and the BSE Small-Cap index slipped 0.57%.
Among the sectoral indices on the BSE, the S&P BSE Oil & Gas index (up 0.72%), the S&P BSE Utilities index (up 0.19%) and the S&P BSE Capital Goods index (up 0.06%) outperformed the S&P BSE Sensex. The S&P BSE Healthcare index (down 1.50%), the S&P BSE Energy index (down 1.36%) and the S&P BSE Telecom index (down 1.33%) underperformed the S&P BSE Sensex.
COVID-19 Update:
Total COVID-19 confirmed cases worldwide stood at 15,35,53,270 with 32,13,573 deaths. India reported 34,47,133 active cases of COVID-19 infection and 2,22,408 deaths while 1,66,13,292 patients have been discharged, according to the data from the Ministry of Health and Family Welfare, Government of India.
India on Monday reported 3,57,229 fresh COVID-19 cases. With this, the cumulative caseload nears 20.3 million, according to MoHFW. In the past seven days alone, India has added 26,13,415 infections to its tally. As many as 3,438 deaths were reported. The country now has 3.44 million active cases.
The six most affected states by total cases are Maharashtra (4,771,022), Kerala (1,664,789), Karnataka (1,601,865), Uttar Pradesh (1,313,487), Tamil Nadu (1,207,112), and Delhi (1,194,552).
Economy:
Due to slow pace of vaccinations and uncertainty around the number of those infected and dead in the second COVID-19 wave, global brokerage firm Barclays cut India's FY22 GDP growth estimate to 10% from earlier 11%. If the ongoing localised lockdowns continue till June 2021, it will lead to economic losses amounting to $38.4 billion, it said.
In a more pessimistic scenario of the pandemic not being brought under control soon and mobility restrictions continuing till August 2021, the growth can fall to 8.8%, Barclays warned. The country's economy is estimated to contract by 7.6% in FY21 as the pandemic-induced lockdowns led to chilling of economic activity, hurt jobs and demand.
Numbers to Watch:
The yield on 10-year benchmark federal paper rose to 6.015% as compared with 6.001% 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 73.8525, compared with its close of 73.95 during the previous trading session.
MCX Gold futures for 4 June 2021 settlement fell 0.60% to Rs 47,037.
The US Dollar index (DXY), which tracks the greenback's value against a basket of currencies, rose 0.42% to 91.33.
In the commodities market, Brent crude for July 2021 settlement rose $1.28 at $68.84 a barrel. The contract rose 80 cents, or 1.20% to settle at $67.56 a barrel in the previous trading session.
Foreign Markets:
Shares in Europe and Asia were mixed as investors monitor global recovery prospects and a fresh round of corporate earnings. Markets in Japan and China were closed for holidays.
In US, the S&P 500 and the Dow indexes ended higher on Monday amid a largely upbeat earnings season, while the Nasdaq came under pressure from declines in some high-flying growth stocks, as the rotation into cyclical and "economy reopening" stocks continued.
New York Governor Andrew Cuomo announced that most capacity restrictions will be lifted across New York, New Jersey and Connecticut, while 24-hour subway service will resume in New York City later this month.
The U.S. economy is doing better but is "not out of the woods yet," Federal Reserve Chair Jerome Powell reportedly said on Monday in remarks that flagged an upcoming central bank study documenting the disproportionate blow suffered by the less educated and working parents during the coronavirus downturn.
U.S. manufacturing activity grew at a slower pace in April. The ISM's index of national factory activity fell to a reading of 60.7 last month after surging to 64.7 in March, which was the highest level since December 1983.
Buzzing Indian Segment:
The Nifty PSU Bank index jumped 3.44% to 2,113.15. The index fell 2.75% in the past three sessions.
Punjab National Bank (up 9.28%), Bank of Baroda (up 6.38%), Union Bank of India (up 4.71%), Indian Bank (up 4.65%), Bank of India (up 4.58%), Bank of Maharashtra (up 4.05%), Central Bank of India (up 3.69%), Indian Overseas Bank (up 2.25%), UCO Bank (up 2.23%), Canara Bank (up 2.05%), Jammu & Kashmir Bank (up 1.46%) and SBI (up 0.14%) advanced.
Earnings Impact:
L&T Technology Services (LTTS) fell 7.91%. The company's consolidated net profit rose 4.5% to Rs 195.30 crore on 2.8% increase in revenue from operations to Rs 1,440.50 crore in Q4 FY21 over Q3 FY21. In USD terms, the revenue during Q4 FY21 stood at $197.50 million, registering a growth of 3.9% Q-o-Q (quarter-on-quarter). The EBIT margin was at 16.6% in Q4 FY21, rising 140 bps Q-o-Q. During the quarter, LTTS won six deals with TCV of $10 million plus, which includes two $25 million plus deals. The revenues from digital and leading-edge technologies stood at 52% during the quarter.
Tata Chemicals slumped 9.52% after the company reported 85% drop in consolidated net profit to Rs 29 crore on a 11% rise in income from operations to Rs 2,636 crore in Q4 FY21 over Q4 FY20. EBITDA declined by 29% to Rs 283 crore in Q4 March 2021 from Rs 400 crore in Q4 March 2020. EBITDA margin was at 11% as on 31 March 2021 as against 17% as on 31 March 2020. Effective working capital management lead to strong cash flow from operations i.e. Rs 2,037 crore in Q4 FY21 as against Rs 1,780 crore in Q4 FY20.
Home First Finance Company India climbed 4.39% after the company's net profit surged 150.8% to Rs 31 crore in Q4 FY21 from Rs 12 crore in Q4 FY20. Total income during the quarter increased by 28.1% year-on-year (Y-o-Y) to Rs 136 crore. Disbursement in Q4 FY21 were at Rs 452 crore, up by 30.4% from Rs 347 crore in Q4 FY20. Collection efficiency has improved further to 98.5% in March 2021 from 97.6% in December 2020. Bounce rates have improved to 17.3% in Q4 FY21 from 20.1% in Q3 FY21. Asset under management (AUM) registered a growth of 14.4% to Rs 4,141 crore in Q4 FY21 over Q4 FY20.
Suven Life Sciences slumped 8.88% after the company reported a consolidated net loss of Rs 21.69 crore in Q4 FY21 compared with net loss of Rs 25.74 crore in Q4 FY20. Total income during the quarter tumbled 75.3% year-on-year to Rs 2.88 crore. R&D and operational expense declined 31.4% to Rs 23.13 crore in Q4 FY21 over Q4 FY20.
Stocks in Spotlight:
ICICI Bank fell 0.91%. The Reserve Bank of India (RBI) has imposed a monetary penalty of Rs 3 crore on the private sector lender. The penalty, imposed under section of the Banking Regulation Act, 1949, has been levied for shifting certain investments from HTM category to AFS category in May 2017. The bank had transferred two separate categories of securities on two different dates from HTM to AFS in April and May of 2017, which it believed was permissible as per Master Circular on Prudential Norms for Classification, Valuation and Operation of Investment Portfolio by Banks' dated 1 July 2015. RBI has held that the shifting of securities the second time in May 2017 without explicit permission was in contravention of RBI directions.
HCL Technologies fell 0.68%. The IT company on Tuesday announced a multi-year contract with Hitachi ABB Power Grids to build a new greenfield digital foundation as part of a global transformation program. Through this engagement, HCL will help Hitachi ABB Power Grids in establishing a new, efficient and modern independent IT organization. The engagement will support its continued business transformation by reducing dependency on the historic ABB IT services infrastructure.
Bajaj Healthcare jumped 10.85% after the company announced the launch antiviral Favipiravir tablets, under the brand name Favijaj, for the treatment of mild to moderate COVID-19.
Bafna Pharmaceuticals hit an upper circuit of 5% at Rs 135.15 after the UK drug regulator approved the company's two newly added automated packaging lines.
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