Closing Bell: Sensex, Nifty end lower on rising coronavirus cases
Indian shares ended lower on Monday as a jump in coronavirus cases stoked fears of renewed restrictions that could hit business activities, dimming hopes of a quick economic recovery. The Sensex ended 210 points lower at 34,961 while the Nifty fell 70 points to settle at 10,312. Index heavyweights Infosys, RIL, Axis Bank and HDFC contributed the most to the losses. Meanwhile, on the global front, MSCI’s broadest index of Asia-Pacific shares outside Japan fell 0.6 percent.
Broader markets also fell during the day with Nifty Midcap and Nifty Smallcap down 1.6 percent and 1.3 percent, respectively. On the Nifty index, HDFC Bank, Britannia, Cipla, Kotak Bank, and ITC were the top gainers while Coal India, Axis Bank, Hindalco, Tech Mahindra, and SBI led the losses.
S&P affirms China; flags risk to growth from coronavirus, tensions with US
Credit rating agency S&P Global Ratings on Monday affirmed China’s sovereign credit ratings at ‘A+/A-1’ with a stable outlook, amid the ongoing coronavirus outbreak. S&P said China is likely to maintain above-average economic growth relative to other middle-income economies in the next few years. However, it said that the growth is likely to come under pressure from the coronavirus outbreak, efforts to restructure the Chinese economy and US-China tensions.
Lockdown analysis: Consumer debt in April fell 16X more than last year, finds SBI Research
The first month of lockdown saw a fall in consumer debt by a whopping Rs 50,076 crore. While the month of April usually sees a decline in consumer leverage, the fall is almost 16 times higher than the same period last year. These findings have been highlighted by the research department of State Bank of India in their latest SBI Ecowrap report. The overall short-term consumer leverage which recorded a fall includes credit card spends, personal loans, advances against FD, shares, bonds outstanding, etcetera.
Soumya Kanti Ghosh, Group Chief Economist at SBI noted in the report, “There is an interesting shift in possible consumer behaviour during lockdown that could have wider positive ramifications for the India banking system.” Read more.
Mylan’s imports stalled at Mumbai Air cargo: Pharma company Mylan’s imports carrying key raw materials meant to be used for manufacturing of Remdesivir and Favipiravir stuck at Mumbai Air Cargo since last 5 days, sources told CNBC-TV18. Remdesivir and Favipiravir are used for the treatment of COVID-19.
S&P affirms China’s ratings: Credit rating agency S&P Global Ratings has affirmed China’s sovereign credit ratings at ‘A+/A-1’ with a stable outlook, amid the ongoing coronavirus outbreak. The rating agency said China is likely to maintain above-average economic growth relative to other middle-income economies in the next few years.
Mines Ministry to set up an inter-ministerial panel that will include officials from almost 10 govt bodies, to mull course correction around aluminium imports; Move to encourage export of value added pdts to support downstream industry & engage w/assns & provide recos, srcs say pic.twitter.com/1ehcgwzlYd
— CNBC-TV18 (@CNBCTV18Live) June 29, 2020
Ashok Leyland shares fall over 6% after CLSA maintains ‘Underperform’ call
The share price of Ashok Leyland declined over 6 percent on Monday after global research firm CLSA maintained its ‘Underperform’ rating on the stock. The stock fell as much as 6.78 percent to hit an intraday low of Rs 48.80 on the BSE. CLSA has maintained its ‘Underperform’ rating on the stock but raised the target price to Rs 53 from Rs 47 per share earlier. The brokerage also raised its FY21-22 EBITDA by 6-8 percent and does not expect any meaningful positive triggers in the near term. It believes that the truck cycle is likely to revive only in FY22.
Kotak Bank and IndusInd Bank are least preferred private bank stocks: UBS
UBS, in a recent report has said that Kotak Bank and IndusInd Bank are the least preferred among private bank stocks due to exposure to vulnerable corporates. “IndusInd has a relatively higher exposure to vulnerable corporates, at 24.7 percent of total loans. Kotak also has greater-than-expected exposure to vulnerable corporates, at 13.4 percent of total loans,” the report mentioned. Among public sector banks, SBI and PNB are the brokerage’s least preferred stocks, whereas ICICI Bank and Axis Bank are their top bank picks due to their retail liability franchises and inexpensive valuations.
European shares inch higher, Wirecard surges
European shares edged higher on Monday as investors clung to hopes of a quicker economic recovery in the continent even as coronavirus cases surged globally. The pan-European STOXX 600 index rose 0.2 percent after opening in the red, lifted by automakers .SXAP and travel & leisure companies. European markets have outperformed in the recent weeks, helped by its relative success in reopening its economy and the European Union’s proposed 750 billion euro ($841.73 billion) recovery fund.
Andhra Paper share surges 17% after Radhakishan Damani buys stake
Andhra Paper share price added more than 17 percent intraday on June 29 after Radhakishan Damani-owned Bright Star Investments acquired stake in the company. On June 26, Bright Star Investments acquired 1.25 percent equity stake in Andhra Paper via open market transactions. Bright Star bought 5 lakh shares in the company at Rs 206.23 per share, the bulk deals data showed on the National Stock Exchange.
ITC shares gain 4% on strong Q4 earnings
The share price of cigarette major ITC gained over 4 percent in the early trade on Monday after the company reported a 9.05 percent on-year rise in Q4FY20 standalone net profit to Rs 3,797.08 crore supported by lower tax cost and robust operating performance in FMCG segment. The stock rose as much as 4.1 percent to Rs 203.10 per share on the BSE. ITC’s revenue from operations during the quarter fell 6.4 percent to Rs 11,420.04 crore from Rs 12,206.03 crore, YoY, hit by nationwide lockdown that starting March. The company’s cigarette volumes were down by around 9-10 percent.
Sobha FY20 net profit down 5% to Rs 281.5 cr, sales bookings at Rs 2,881 crore
Bengaluru-based realty firm Sobha Ltd has reported a 5 percent decline in its consolidated net profit at Rs 281.5 crore for the last fiscal despite higher income and achieved strong sales bookings of Rs 2,881 crore. Its net profit stood at Rs 297.1 crore in the financial year 2018-19. Total income, however, rose to Rs 3,825.7 crore in 2019-20 from Rs 3,515.6 crore in the preceding fiscal. Net profit in the fourth quarter of FY20 fell to Rs 50.7 crore from Rs 113.3 crore in the year-ago period. Total income for the March quarter dipped to Rs 927.6 crore from Rs 1,421.6 crore in the corresponding period of the previous year.
China’s factory activity likely slowed in June on subdued global demand: Reuters poll
China’s factory activity likely grew for the fourth month June but the pace may be waning, as global demand stayed subdued while a fresh coronavirus outbreak in the Chinese capital and rising worldwide cases threaten to undermine a gradual domestic recovery. The official manufacturing Purchasing Manager’s Index (PMI), due for release on Tuesday, is expected to ease to 50.4 in June, from 50.6 in May, according to the median forecast of 29 economists polled by Reuters. A reading above 50 indicates an expansion in activity.
Asia stocks retreat as virus threatens economic reopening
Asian share markets began the week with a cautious tone on Monday as the relentless spread of the coronavirus finally made investors question their optimism on the global economy, benefiting safe harbour bonds and crimping oil prices. MSCI’s broadest index of Asia-Pacific shares outside Japan fell 1.3% and further away from a four-month top hit last week. Japan’s Nikkei shed 2.2 percent and Chinese blue chips 0.9 percent.
Pakistan Stock Exchange Terror Attack: 2 dead, 3 injured in firing, says report
Aterrorist attack was reported near the Pakistan Stock Exchange in Karachi on Monday, killing two people and leaving three injured, DawnNewsTV reported. The report said that at least 5 terrorists tried to enter the trading hall.
Top stock picks by Nooresh Merani of nooreshtech.co.in
1) Infosys is a buy, which has given a breakout above Rs 740 yesterday and has been sustaining well relatively today. So stop loss at Rs 720 and a short-term target price of Rs 780.
2) Second is a sell on Piramal Enterprises, which has recovered very sharply from the lows but going forward a little longer in the chart, Rs 1,350-1,400 was a major support, which was broken and now it should act as a resistance. So at current levels it would be a short with a stop loss of Rs 1,340 and a target price of Rs 1,220 on the lower side.
Emami shares slip 6% as March quarter profit more than halves
Shares of Emami slipped 6 percent to Rs 207 on the BSE on Monday after the company reported disappointing set of numbers for the quarter ended March 2020 (Q4FY20), impacted severely by the Covid-19 pandemic. The personal products company’s profit before tax before exceptional items (PBT) declined by 70 per cent year on year (y-o-y) to Rs 25.37 crore in Q4FY20, from Rs 84.77 crore in Q4FY19. Profit after tax during the quarter under review more-than-halved to Rs 23.36 crore from Rs 56.15 crore.
Pharma Ind sends SOS to top govt offices & PMO w.r.t delay in import clearances from China. Ind says key starting raw materials, intermediates, APIs, COVID-related MEDICAL devices stuck at Nhava Sheva & Delhi Airport: Sources to @TimsyJaipuria pic.twitter.com/P3frI3WAAv
— CNBC-TV18 (@CNBCTV18Live) June 29, 2020
SIAM requests govt to help clear up import congestion at ports
Auto industry body SIAM has requested government to help clear up import congestion at ports, sources informed CNBCTV-18. Sources say auto manufacturers may start feeling the impact of disruptions if the congestion at ports continues for another week. Electric vehicle manufacturers are likely to be impacted more due to import disruptions. Meanwhile, shipments continue to be stuck at sea for the seventh day after “unofficial” orders at commissionerates across the country withheld China-origin consignments for a 100 percent examination. There is still no move on actually conducting the examination and subsequent clearance of these stranded China-origin containers, worsening the congestion at ports, which were already struggling with month-long delays in import clearances during the COVID-19 lockdown, sources in the know told CNBC-TV18.
Foreign inflows help rupee strengthen against the US dollar
The Indian rupee has appreciated 0.72 percent this week against the US dollar on the back of robust foreign capital inflows in the Indian markets. From 76.19 on last Friday, the USD/INR spot was at 75.64 level today. On Friday, the Indian currency erased some intraday gains and ended at 75.64 level per dollar, amid buying seen in the domestic equity market. It opened higher by 14 paise at 75.52 per dollar against the previous close of 75.66.
IDBI Bank gains 5%, hits 52-week high on plan to sell stake in insurance JV
Shares of IDBI Bank were frozen in 5 per cent upper circuit at Rs 41.75 on the BSE on Monday after the bank said its board has approved a plan to offload 27 percent stake in IDBI Federal Life Insurance at a combined value of Rs 595 crore. IDBI Bank has 48 percent stake in IDBI Federal Life Insurance, which started operations in 2008. Federal Bank and its Dutch partner Ageas Insurance International NV have 26 percent stake, each.
ITC gains 4% on strong Q4 earnings, brokerages remain bullish
Shares of cigarette major ITC gained over 2 percent in the early trade on Monday after the company reported 9.05 percent on-year rise in Q4FY20 standalone net profit to Rs 3,797.08 crore supported by lower tax cost and robust operating performance in FMCG segment.
“ITC has been aggressive in its FMCG business – launching sanitizers and hand washes, leveraging its extensive distribution network and acquiring a key regional spice brand. However, it has lost around 40 days of cigarette sales due to the lockdown. Its hotels and paper segments, too, are likely to be impacted due to the loss of business. While it missed the Street estimates due to a decline in revenues across all segments, the performance of its FMCG segment has kindled hopes of an improved show in the latter part of the year,” said Rajit Rajoriya, Equity Research Associate, Angel Broking Ltd.
Technical view: The markets have opened in the middle of its current range which is between 10,200 and 10,450. Unless we do not cross or break one side, we will be sideways for the week. While the underlying tone still seems bullish, we would need to concentrate on the 10,200 levels which if broken can drop to levels closer to 10,000. On the upside we need to go past 10,450 on closing and then target 10,700, said Manish Hathiramani, Index Trader and Technical Analyst, Deen Dayal Investments.
Rupee opens: Indian rupee opened flat at 75.63 per dollar on Monday against Friday’s close of 75.64.
Gold rises as virus concerns lift safe-haven bid
Gold prices rose on Monday as worries over a surge in fresh COVID-19 infections globally dented investor optimism about a swift economic rebound and drove investors towards the safe-haven metal. Spot gold was up 0.2 percent at USD 1,773.43 per ounce by 0259 GMT. Prices were USD 5.63 shy of a near eight-year high of USD 1,779.06, hit last week. US gold futures rose 0.1 percent to USD 1,781.60.