Key benchmark indices ended with heavy losses after a volatile session on Monday. Sentiment was dented by weak global cues amid concern over rising coronavirus infections as countries open up after lockdowns. The US Dow Jones futures were down 500 points, indicating a weak opening in the US stock market later today.
As per provisional closing, the barometer S&P BSE Sensex tumbled 552.09 points or 1.63% at 33,228.89. The Nifty 50 index lost 159.20 points or 1.6% at 9,813.70.
Selling pressure was broad based with private banks and metals losing the most. A firmness in index heavyweight Reliance Industries (RIL) supported the indices at lower levels.
The Nifty 50 index opened lower at 9,919.35 and declined further in early trade. The index hit an intraday low of 9,726.35 in early afternoon trade on heavy selling pressure. The 50-unit index pared losses in afternoon trade amid bargain hunting and managed to close above 9800 mark. The index ended above its 20-day moving average (DMA) placed at 9,619.48 and below its 10 DMA placed at 10,023.47.
The broader market ended lower. The S&P BSE Mid-Cap index fell 1.19% while the S&P BSE Small-Cap index was down 0.02%.
The market breadth was positive. On the BSE, shares 1333 rose and 1,234 shares fell. A total of 176 shares were unchanged. In Nifty 50 index, the breadth was even with 8 stocks advancing and 42 stocks declining.
COVID-19 Update:
Total COVID-19 confirmed cases worldwide stood at 79,14,866 far with 4,33,472 deaths. India reported 1,53,106 active cases of COVID-19 infection and 9,520 deaths, according to the data from the Ministry of Health and Family Welfare, Government of India.
Economy:
India's inflation based on wholesale price index (WPI) contracted by 3.21% in May. The Department of Promotion of Industry and Internal Trade (DPIIT) resumed releasing detailed wholesale price index (WPI) data after suspending it for a month. Food inflation also eased to 1.13% in May from 2.55% in the preceding month.
Q4 Results Today:
Tata Motors (down 4.6%), Ashoka Buildcon (up 0.48%), Can Fin Homes (down 2.71%), JK Tyre & Industries (up 6.70%), Intellect Design Arena (up 0.28%), Narayana Hrudayalaya (up 1.5%), Pfizer (up 0.04%), Shoppers Stop (up 1.29%), Shilpa Medicare (up 4.35%) and CCL Products (India) (down 0.33%) are some of the companies that will announce their quarterly earnings today.
Earnings Impact:
Eicher Motors declined 2.24% after the company's consolidated net profit slumped 44.2% to Rs 304.28 crore on 11% drop in net sales to Rs 2,190.32 crore in Q4 March 2020 over Q4 March 2019. Royal Enfield sold 1,63,083 motorcycles in the quarter, registering a decline of 17% from 1,97,567 motorcycles sold over the same period last year. VE commercial vehicles (CV) sold 11,629 trucks and buses in the quarter, registering a decline of 45% from 21,010 trucks and buses sold over the same period in the last financial year. Meanwhile, the board approved 10-for-1 stock split. The company will split each share of face value Rs 10 each into 10 equity shares of face value Re 1 each.
Grasim Industries dropped 3.2%. The company reported a 32% surge in net profit to Rs 1,506 crore on a 11.3% decline in net sales to Rs 19,902 crore in Q4 March 2020 over Q4 March 2019. Net profit was aided by write back of deferred tax liabilities and lower exceptional charge in the current year. In its outlook, Grasim said its products will be impacted by the COVID-19 led general economic slowdown. The company has initiated various measures to reduce its fixed costs and conserve cash as part of its comprehensive business continuity plan.
Bharat Heavy Electricals (BHEL) slumped 7% after the PSU company reported a consolidated net loss of Rs 1,532.18 crore in Q4 March 2020 as against net profit of Rs 680.77 crore in Q4 March 2019. Net sales for Q4 March 2020 tumbled 53.7% to Rs 4,594.10 crore from Rs 9,912 crore in the corresponding period last year. BHEL said spread of COVID-19 pandemic temporarily disrupted the operations of the company. The manufacturing facilities and site executions during 23 March 2020 to 31 March 2020 were inoperative, which along with the COVID impact globally (before the lockdown in India) impacted the revenues for the year. BHEL assessed the impact on revenue for the year at around Rs 4,000 crore.
PNB Housing Finance fell 3.8% after the housing financier reported a consolidated net loss of Rs 242.06 crore in Q4 March 2020 compared with net profit of Rs 379.77 crore in Q4 March 2019. Pre-tax loss stood at Rs 327.24 crore in Q4 FY20 as against a pre-tax profit of Rs 545.07 crore in Q4 FY19. Total income fell 9.1% to Rs 1,951.84 crore in the fourth quarter from Rs 2,148.19 crore in the corresponding year last year. Net Interest Income declined 19.9% to Rs 488.1 crore in Q4 FY20 from Rs 609.7 crore in Q4 FY19. Net Interest Margin for Q4 March 2020 stood at 2.61% compared to 3.18% for Q4 March 2019. Provisions & Write-offs in the March quarter jumped to Rs 754.84 crore as against Rs 10.11 crore in the same period last year. The company created additional Covid-19 provision of Rs 471 crore during the quarter representing 27% of the total provision as on 31 March 2020.
Buzzing Index:
The Nifty PSU Bank index gained 1.28% to 1,369.30, barring weak sentiment. The index has added 2.1% in two trading days.
Bank of India (up 16%), Bank of Maharashtra (up 6.67%), UCO Bank (up 3.89%), Indian Bank (up 3.76%), Central Bank of India (up 2.48%), Union Bank (up 2.44%), Indian Overseas Bank (up 2.44%) and Punjab National Bank (up 1.82%) were top gainers in PSU Bank segment.
Stocks in Spotlight:
Reliance Industries (RIL) gained 1.52%. The stock hit an intraday high of Rs 1626.70 which is a record high for the counter. RIL's partly paid-up shares listed on exchanges on Monday (15 June) at a premium. The company issued 44.26 crore partly paid-up shares with face value of Rs 2.5 per share under the rights issue at Rs 314.25 per share. The Rs 53,124 crore rights issue, which opened for subscription on 20 May 2020, concluded on 3 June and garnered 1.6 times subscription. RIL issued shares at Rs 1,257 apiece in the rights issue. The entire payment has to be paid in three tranches. The holders of the partly-paid up shares will have to pay second installment of Rs 314.25 in May 2021 and the balance Rs 628.5 in November 2021. RIL's partly-paid up shares will be converted to fully-paid up shares in November 2021.
Meanwhile, RIL on Saturday (13 June) said global alternative asset firm TPG will invest Rs 4,546.80 crore in Jio Platforms for a 0.93% stake and L Catterton, one of the world's largest consumer focused private equity firms, will invest Rs 1,894.50 crore in Jio Platforms for a 0.39% equity stake. With this investment, Jio Platforms has raised Rs 104,326.95 crore from leading global investors including Facebook, Silver Lake, Vista Equity Partners, General Atlantic, KKR, Mubadala, ADIA, TPG and L Catterton since 22 April 2020.
Cadila Healthcare (down 0.8%) and Dr Reddy's Laboratories (up 0.16%) have entered into a non-exclusive licensing agreement with Gilead Sciences to register, manufacture and sell remdesivir, a potential treatment for COVID-19. Remdesivir, an investigational antiviral therapy developed by Gilead, received Emergency Use Authorization (EUA) by the US FDA to treat hospitalised patients with severe COVID-19 illness.
Tata Power gained 2.5% after the company in a regulatory filing during market hours today announced that it has received a Letter of Award (LoA) from Gujarat Urja Vikas Nigam (GUVNL) to develop a 120 MW solar project in Gujarat. The energy will be supplied to GUVNL under a Power Purchase Agreement (PPA), valid for a period of 25 years from scheduled commercial operation date. The project is required to be commissioned within 18 months from the date of execution of the PPA.
Global Markets:
Shares in Europe and Asia tumbled on Monday after China reported an outbreak of new infections in Beijing and re-imposed precautions to prevent it from spreading. Investors fear that gradual lifting of lockdowns and restarting of travel could result in fresh waves of coronavirus cases.
Chinese economic data for May released Monday stated that the industrial production in the country for that month rose 4.4% year-on-year while retail sales declined 2.8% year-on-year in May.
In Europe, investors are keenly looking forward to travel restrictions being lifted between most European countries on Monday while in the UK, non-essential shops are set to reopen as long as social distancing measures are in place.
The US stocks finished session finished session higher after bouncing between losses and gains on Friday, 12 June 2020, as bargain hunting following a sharp losses a day earlier. However, market gains were capped as continued worries about the economy amid emerging second wave of the epidemic.
Meanwhile, a separate report from the Labor Department showed a bigger than expected jump in US import prices in the month of May. The Labor Department said import prices surged up by 1% in May after plunging by 2.6% in April.
Fears of an emerging second wave of the epidemic in the US persist, with half a dozen states, including Texas and Arizona, facing rising infections of COVID-19. The Federal Reserve's indication earlier this week of a long road to recovery and rising COVID-19 cases in the United States have cast a pall over investor bets on a swift economic rebound.
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