Key barometers advanced further in afternoon trade led by banks and auto shares. At 13:20 IST, the barometer index, the S&P BSE Sensex jumped 264.87 points or 0.79% at 33,870.09. The Nifty 50 index advanced 68.75 points or 0.69% at 9,982.75.
The broader market was trading firm. The S&P BSE Mid-Cap index rose 0.68%. The S&P BSE Small-Cap index gained 0.91%.
The market breadth was strong. On the BSE, shares 1,457 rose and 902 shares fell. A total of 154 shares were unchanged. In Nifty 50 index, 31 stocks advanced while 18 stocks declined.
Banks shares firmed up after the Supreme Court (SC) on Wednesday, while hearing the plea challenging the levy of interest on loan repayments during the moratorium, said there is no merit in burdening customers, who have opted for the RBI-approved loan moratorium, with additional interest. The SC bench said the government cannot leave everything to be decided by banks. In conclusion, the bench asked the government to interfere in the matter soon and find a way to waive off additional interest during the moratorium. The matter will be heard next in the first week of August.
The Reserve Bank of India (RBI) granted a moratorium on loans installments due between March 1 and May 31, which was later extended till August 31. The Supreme Court on 4 June 2020 hearing criticised the RBI's response, saying that the economic aspect is not higher than health of the people. The judgement in the case will also have implications for non-banking finance companies (NBFCs), whose borrowers are covered under the moratorium. On 12 June 2020, the top court had indicated that it was not considering a complete waiver of interest but was only concerned that postponement of interest should not accrue further interest on it.
COVID-19 Update:
Total COVID-19 confirmed cases worldwide stood at 81,75,482 far with 4,43,730 deaths. India reported 1,55,237 active cases of COVID-19 infection and 11,903 deaths, according to the data from the Ministry of Health and Family Welfare, Government of India.
Meanwhile, the World Health Organization (WHO) has hailed dexamethasone as a lifesaving scientific breakthrough to treat severely ill coronavirus patients. Results of trials announced on Tuesday showed dexamethasone, which is used to reduce inflammation in other diseases, reduced death rates by around a third among the most severely ill Covid-19 patients admitted to hospital. The results suggest the drug should immediately become standard care in patients with severe cases of the pandemic disease, said the researchers who led the trials.
Gainers & Losers:
Maruti Suzuki India (up 4.96%), Axis Bank (up 3.70%), IndusInd Bank (up 3.34%), Bharti Airtel (up 2.55%) and Wipro (up 2.45%) were major gainers.
Bharti Infratel (down 2.50%), Mahindra & Mahindra (down 1.57%), PowerGrid Corporation of India (down 1.51%), Shree Cement (down 1.40%) and ITC (down 1.05%) were major losers.
Q4 Results Today:
Cummins India (up 0.44%), Indraprastha Gas (up 0.75%), JK Lakshmi Cement (up 4.54%), Pidilite Industries (up 1.85%), REC (down 0.28%), Muthoot Finance (up 0.82%), Natco Pharma (down 1.16%), HEG (up 2.50%), Fortis Healthcare (up 0.04%), Prataap Snacks (down 0.35%), Welspun Corp (up 1.73%), Triveni Engineering & Industries (up 1.84%), Indostar Capital Finance (up 0.02%), Gulf Oil Lubricants India (up 1.44%), Navneet Education (up 0.44%), Wheels India (down 0.41%) and FDC (down 0.12%) are some of the companies that will announce their quarterly earnings today.
Earnings Impact:
Hindustan Petroleum Corporation (HPCL) rose 1.60%. The PSU OMC's standalone net profit dropped 99.1% to Rs 26.80 crore on 2.6% decline in net sales to Rs 65,868.51 crore in Q4 March 2020 over Q4 March 2019. Q4 profit was impacted mainly because of inventory losses of Rs 1,002.93 crore due to drastic fall in oil prices accompanied with reduced movement in inventory (net impact Rs 750.51 crore). The company also suffered losses amounting to Rs 873.50 crore on account of foreign currency transactions and translations. Average Gross Refining Margin (GRM) during the year ended 31 March 2020 stood at $1.02 per barrel, declining 80% from $5.01 per barrel reported in the same period last year. The PSU OMC major recorded domestic sales volume of 9.25 Million Metric Tonne (MMT) in Q4 March 2020 as against 10.03 MMT in Q4 March 2019.
NMDC gained 1.12%. The PSU miner consolidated net profit slumped 76.1% to Rs 347 crore on 12.5% fall in net sales to Rs 3,187.34 crore in Q4 March 2020 over Q4 March 2019. EBITDA margin stood at 48% in Q4 FY20 as compared to 63% in Q4 FY19. The iron ore production dropped 11% to 94.74 lakh tonnes (LT) in Q4 FY20 as against 105.87 LT in Q4 FY19. The iron ore sales skid 15% to 86.19 LT in Q4 March 2020 as compared to 101.69 LT in Q4 March 2019. The COVID-19 had a marginal effect on the operations of the company due to the lock down in the country in March 20. There has been a loss of around 10.01 LMT of production and 5.50 LMT of sale of iron ore during FY 2019-20 (in March 20). This has resulted in a loss in sale revenue around Rs 219 crore and PBT of Rs 120 crore.
Globus Spirits hit an upper circuit of 10% at Rs 118.85 after consolidated net profit surged 285.5% to Rs 19.35 crore in Q4 March 2020 over Q4 March 2019. Net sales were flat at Rs 271.51 crore as in Q4 March 2020 compared with the same period last year. Profit before tax (PBT) stood at Rs 22.22 crore in Q4 March 2020, surging 326% from Rs 5.21 crore in Q4 March 2019. The result was announced after market hours yesterday, 16 June 2020. Meanwhile, the company has recommended a final dividend of Re 1 per equity share.
Bank of Maharashtra declined 3.01% after the bank's net profit declined 20.5% to Rs 57.57 crore on a 1.2% increase in total income to Rs 3,198.30 crore in Q4 March 2020 over Q4 March 2019. Pre-tax loss stood at Rs 315.04 crore in Q4 March 2020 as against pre-tax profit of Rs 86.39 crore in Q4 March 2019. Gross non-performing assets (NPAs) stood at Rs 12,152.15 crore as on 31 March 2020 as against Rs 15,745.54 crore as on 31 December 2019 and Rs 15,324.49 crore as on 31 March 2019. The ratio of gross NPAs to gross advances stood at 12.81% as on 31 March 2020 as against 16.77% as on 31 December 2019 and 16.40% as on 31 March 2019. The ratio of net NPAs to net advances stood at 4.77% as on 31 March 2020 as against 5.46% as on 31 December 2019 and 5.52% as on 31 March 2019. Provisions and contingencies surged 119.41% to Rs 910.11 crore in Q4 March 2020 over Q4 March 2019. The provision coverage ratio of the bank was at 83.97% as on 31 March 2020.
Global Markets:
European markets opened higher while Asian continued trading higher on Wednesday. Japan's Nikkei 225 index fell 0.56% after the country's exports plunged 28.3% year-on-year in May.
The World Health Organization has warned that while the virus has slowed in parts of Europe it is gaining speed in other parts of the world, including parts of Africa and the Americas. A new cluster of cases in Beijing is also being watched closely.
The International Monetary Fund said the global economy is set to see a more significant contraction than it previously forecast. IMF Chief Economist Gita Gopinath said in a Tuesday blog post that the forthcoming June World Economic Outlook Update is expected to show negative growth rates even worse than previously estimated. The fund also said the current crisis, which it dubbed the Great Lockdown, is unlike anything the world has seen before.
Investors continue to watch for developments on the geopolitical front regionally, as tensions escalate along the Korean peninsula after North Korea reportedly destroyed a liaison office with the South.
In US, Wall Street advanced on Tuesday as the prospect of additional stimulus and a record jump in retail sales suggested the US economy could bounce back sooner than expected. U.S. retail sales jumped by 17.7% in May, the government said Tuesday. U.S. industrial production for May rose by 1.4%, as many factories resumed operations after shutdowns spurred by the coronavirus crisis, the Federal Reserve said Tuesday.
A full US economic recovery will not occur until the American people are sure that the novel coronavirus epidemic has been brought under control, Federal Reserve Chair Jerome Powell said on Tuesday, as he began the first of two days of hearings before US lawmakers. The longer the downturn lasts, the greater the potential for longer-term damage from permanent job loss and business closures, Powell added.
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