Nifty Bank index ended around 5 per cent lower at 18,202.50 levels. (Image: iSTOCK)
Equity market once again came under selling pressure on Wednesday as concerns over economic fallout due to nationwide lockdown to contain the spread of coronavirus (Covid-19) pandemic weighed on the investor sentiment. The S&P BSE Sensex lost 1,203 points or over 4 per cent to end at 28,265 while NSE's Nifty ended at 8,254, down 344 points or 4 per cent.
Meanwhile, MSCI has deferred its decision on increasing foreign inclusion factor (FIF) for the Indian markets. Many were hoping the index provider would increase India’s weight after news rules pertaining to FPI limits kicked in from April 1. This came as a surprise negative developments for the markets, which were as it facing weak trades after the opening bell.
Among Sensex stocks, Tech Mahindra (down over 9 per cent) emerged as the biggest loser on the index. TCS (down over 6 per cent), and Infosys (down 5.65 per cent) were next on the losers' list.
It was a bad day for auto stocks as well as most automakers posted dismal sales figures for March. Maruti Suzuki India Ltd (MSIL), the country's largest passenger car manufacturer, for instance, reported 47 per cent year-on-year fall in its total sales to 83,792 units while Ashok Leyland reported a whopping 90 per cent decline in total vehicles sales at 2,179 units.
As a result, Nifty Auto index ended 1.73 per cent lower at 4,649 levels with 13 out of 15 constituents ending in the red.
Nifty Bank index ended around 5 per cent lower at 18,202.50 levels. The government's proposed PSB merger scheme came into effect from today. The consolidation, that will merge 10 PSBs into four, comes at a time when the country and financial system is grappling with adverse fallout of the Covid-19 pandemic. READ MORE
In the broader market, the S&P BSE MidCap index ended over 2 per cent lower at 10,340 levels while the S&P BSE SmallCap index lost over a per cent to end at 9,507-mark.
Markets will remain closed on Thursday (April 2) on account of Ram Navami.
World markets fell on Wednesday as the coronavirus threat ensured an ugly start to the second quarter for equities and commodities. Tokyo’s Nikkei slumped 4.5 per cent after the worst plunge in factory activity in almost a decade. The pan-European STOXX 600 sank 3.2 per cent and Wall Street futures dived 3.1 per cent after a dire forecast of likely US coronavirus deaths.
Blue-chip Chinese stocks failed to hold their gains, however, though Australian shares bounced 3.5 per cent.
In commodity markets, oil slid to $25 a barrel on Wednesday, within sight of its lowest in 18 years, as a report showing a big rise in US inventories and a widening rift within OPEC heightened oversupply concerns.
MARKET COMMENT | Vinod Nair, Head of Research at Geojit Financial Services
"The first day of the financial year started off on a negative note, impacted by the negative global markets and also domestic uncertainties with regards to Bank Stressed assets and Auto numbers. FIIs have net sold around Rs 62,000 crores in Equity in March and with virus infections increasing, markets are anticipating a worsening of the situation."
SECTOR WATCH | Nifty IT tumbles around 5.5%
MARKET AT CLOSE | Top losers and gainers on the S&P BSE Sensex
The Sensex slipped 1,203 points or over 4 per cent to 28,265.31 levels while the NSE's Nifty50 ended at 8254 points, down 344 points or 4 per cent.
BSE IT index tumbles 5.6%
Asia's factory activity plunges as coronavirus shock deepens: Reuters
Factory activity contracted sharply across most of Asia in March as the coronavirus pandemic paralyzed economic activity across the globe, with sharp falls in export power-houses Japan and South Korea overshadowing a modest improvement in China.
NEWS ALERT :: India's fiscal deficit in 2020-21 may shoot up to 6.2%: Fitch
>> "At Fitch Solutions, we are revising our forecast for India's FY2020/21 (AprilMarch) central government fiscal deficit to widen to 6.2 per cent of GDP, from 3.8 per cent of GDP previously (estimated by Fitch Solutions), which reflects our view that the government will miss its initial target of 3.5 per cent by a wider margin," the agency said.
NEWS ALERT | PM Narendra Modi to hold talks with all CMs via video conferencing tomorrow
>> Says, even though the Company has put in place a business continuity plan, due to the restriction in the movement of goods and employees, we anticipate certain delays in the deliveries of our products to our customers.
Covid-19: Trump approves 90-day delay of tariffs for most-favoured nations
Some 400 chief executives of small, medium, and large companies from across the country urged Trump in a letter on Tuesday to delay the collection of duties for a period of 90 to 180 days to give companies access to cash that would normally be paid to the the U.S. government, given virus-related shutdowns. READ MORE
Escorts shares skid 12% as tractor sales more than halve in March
For the entire financial year 2019-20 (FY20), Escorts reported 10.8 per cent year-on-year decline in total tractor sales at 86,018 units. It had sold 96,412 tractors in FY19. READ MORE
COVID-19 IMPACT :: Shree Cement to shut all production facilities and offices till 14th April, 2020: BSE filing
Wipro Ltd, Wipro Enterprises Ltd and Azim Premji Foundation have together committed Rs 1125 Crore towards tackling the unprecedented health and humanitarian crisis arising from #COVID19 pandemic outbreak. pic.twitter.com/AMJUkMCGKu
NEWS ALERT :: GSFC starts manufacturing unit at Sikka, Jamnagar: BSE filing
>> Says, has started producing DAP there at partial load and which may be increased gradually.
>> The dispatch of product/s has commenced through road and the rail dispatch has shall also commence soon.
>> The other plants shall also be gradually started based on the situation prevailing on account of COVID19 pandemic.
MARKET CHECK | HUL plunges nearly 6% after hitting fresh 52-week high in early trade
RBL Bank slips 20% in 4 days, nears new low ahead of Q4 business update
In the past one month, the share price of RBL Bank has tanked 55 per cent despite management clarification last month that the bank is a well-capitalised and profitable entity. In comparison, the S&P BSE Sensex was down 24 per cent during the same period. READ MORE
MARKET CHECK :: Nifty50 tests 8,200 level
MARKET CHECK :: Selling pressure mounts
HPCL, BPCL, Indian Oil poised for gains with oil prices at 18-year low
The soft crude oil prices bode well for these companies, which may see a rise in their marketing margins, decline in working capital requirements and zero risks of subsidy burden. Even the government will get an opportunity to roll out more reforms on kerosene and cooking gas pricing, which will be positive for the OMCs. Thus, despite near term concerns on fuel demand getting impacted led by recent shutdown in the country and also weak refining margins, OMCs still remain well placed for growth, feel analysts who see demand rebounding fast once the lockdown gets over. READ MORE
MARCH AUTO SALES | Escorts total sales down 54.3% at 5,444 units vs 11,905 units (YoY)
- Total exports down 54.4 per cent YoY at 216 units vs 474 units
NEWS ALERT :: Grasim approves issue of NCDs for an amount not exceeding Rs 1,000 cr: BSE filing
>> The Board considered and approved issue of Non-Convertible Debentures (NCDs) on private placement basis, for an amount not exceeding Rs. 1,000 Crore, in one or more tranches.
Europe opens sharply lower
BROKERAGE VIEW:: ICICI Securities on Embassy Office Parks REIT
We are upgrading our Rating on the Embassy Office Parks REIT to BUY from HOLD post the 23% COVID-19 induced correction in unit price over the last one month. We have cut our FY21-22E revenue/NOI estimates by 3-4% factoring in lower occupancies in the two operational hotels (less than 5% of portfolio revenue) and leasing delays and arrive at a revised March 2020 DCF based target price of Rs423/unit (earlier Rs433/unit). While concerns over the medium-term demand outlook for offices in India remains a key risk, the recent rollback in the Dividend Distribution Tax for investors, FY22E distribution yield of 7.7% and high-quality tenant mix in the REIT’s portfolio makes risk-reward favourable in our view.
BROKERAGE VIEW:: Edelweiss Securities on Hero MotoCorp
We expect HMCL to gain market share given its distribution reach and faster recovery in rural demand. However, our concerns with respect to its scooter, premium motorcycle and export franchise persist. We maintain ‘BUY/SO’ with TP of Rs 2,263 (15x September 2021E core PE plus cash per share of Rs 396). At CMP, the stock trades at attractive FY21/22E PE of 11.3x/9.5x.
MARKET ALERT :: Sensex extends decline, down 1,200 pts
BROKERAGE VIEW:: Edelweiss Securities on Logistics sector
After a sombre FY20, the hope of a recovery in the logistics sector in FY21 has withered. Specifically: i) trucking profitability due to low utilisation; and ii) our medium-term thesis of a shift from road to rail due to low fuel costs are now in question. Nevertheless, the market carnage has driven down stock prices into a value zone. We highlight: i) TCI Express (TCIE) and Mahindra Logistics (MLL) as our preferred growth picks given their asset-light business models; ii) our recent upgrade of Concor to ‘BUY’ as the current valuation factors in a much beyond the worse-case scenario of purchase of Railways’ land; and iii) the recent upgrade of VRL; and iv) that we remain negative on Blue Dart as the dip in its FY21 volumes offsets the potential uptick in profitability.
BROKERAGE VIEW:: Emkay Global Financial Services on Nippon India
RATING: HOLD | Target Price: Rs 232
Nippon Life Asset Management (NAM India) has witnessed volatile trends recently, with a sharp decline in equity AUMs, drying inflows (debt/equity) due to the slowing economy and rising redemptions as the fear of Covid-19 is gradually gripping the markets.
We downgrade the stock to Hold from Buy, with a revised TP of Rs232 (Rs398 earlier), corresponding to 21x P/FY22E EPS with 26% RoEs for FY22E. We cut our earnings estimate by 10.3%/1% for FY20/21E due to a decline in yields. We downgrade the stock to EW from OW in NBFC Emkay Alpha Portfolio (EAP).
BROKERAGE VIEW:: Motilal Oswal Financial Services on RIL
RATING: BUY | TARGET PRICE: Rs 1,523
Given the current shutdown of retail stores (except grocery), Reliance Retail could see 4-5% revenue loss; however, the pace of recovery is key. Thus, we have reduced our target multiple to 19x EV/EBITDA to capture this impact (21x earlier), with revised target price of Rs 450 (v/s Rs 500 earlier).
Shares of steel manufactures were under pressure on Wednesday and fell by up to 10 per cent on the National Stock Exchange (NSE) on concerns that the first quarter of the current financial year (Q1FY21) could be a record-low quarter in terms of sales and operating profit on the back of exceptionally weak demand. Jindal Steel & Power (JSPL) shares were locked in 10 per cent lower circuit at Rs 74.30, its lowest level since January 10, 2017 on the NSE. READ MORE
MARKET UPDATE | 194 stocks are locked in upper circuit in an otherwise weak market
The list includes names such as include SpiceJet, Graphite India, KEI Industries, Balrampur Chini Mills, Delta Corp and Edelweiss Financial Services
MARCH AUTO SALES | SML Isuzu’s total auto sales down 75.6% at 488 units Vs 2,003 units (YoY)
NEWS ALERT | HUL sets April 17 as record fate for the merger of GSK with company: BSE filing
CORONAVIRUS UPDATE :: Total cases cross 1,600-mark
Death toll due to coronavirus rises to 38 in country; number of cases increases to 1,637: Health Ministry
Maruti, Bajaj Auto, M&M: Trading strategies for auto stocks as sales slide
NIFTY AUTO INDEX: The trend looks weak below 5,000 levels as per the daily chart. Although the current formation suggests consolidation with lower support around 4,600 levels, the overall trend remains weak. Despite the fact that the Relative Strength Index (RSI) rising upward in an oversold condition, the index needs to conquer significant resistance of 5,000 levels. READ MORE
Bajaj Finance climbs 6% off day's low in a weak market
HUL, Dabur: Analysts bet on rural-focused FMCG stks amid Covid-19 lockdown
Stocks across-the-board, including the marquee large-cap names, have fallen like a pack of cards. However, there are a few outliers that have outperformed the market amid this crisis. Fast-moving consumer goods (FMCG) major Hindustan Unilever (HUL) is one such example. The stock hit a fresh lifetime high of Rs 2,324.45 on the BSE on Wednesday. READ MORE
NEWS ALERT :: RBI ANNOUNCES STEPS TO FIGHT COVID-19
>> Says, the time period for realization and repatriation of export proceeds for exports made up to or on July 31, 2020, has been extended to 5 months from the date of export.
>> Reserve Bank had constituted an Advisory Committee to review the Ways and Means limits for State Governments and Union Territories (UTs).
>> It has been decided to increase WMA limit by 30 percent from the existing limit for all States/UTs to enable the State Governments to tide over the situation arising from the outbreak of the COVID-19 pandemic. The revised limits will come into force with effect from April 1, 2020 and will be valid till September 30, 2020.
>> Based on the review and empirical analysis of CCyB indicators, it has been decided that it is not necessary to activate CCyB for a period of one year or earlier, as may be necessary
Gas distribution companies' shares rally; Indraprastha Gas surges 10%
Shares of city gas distribution companies rallied up to 10 per cent intra-day on the BSE on Wednesday after the government cut the domestic natural gas price for the April-September period to $2.39 per million British thermal unit (mBtu). Among individual stocks, Indraprastha Gas surged 10 per cent to Rs 427.70 and Gujarat Gas gained 6.04 per cent to Rs 246.65. Adani Gas was up 5.5 per cent while Mahanagar Gas and GAIL India were both up over 2 per cent each in an otherwise weak market. READ MORE
NEWS ALERT :: RBI announces extension of realisation period of export proceeds
>> Also, review of limits of way and means advances of states/UTs
>> Relaxes implementation of countercyclical capital buffer
ABB Power locked in 5% upper circuit for second day after market debut
ABB Power Products and Systems India is the standalone legal entity of ABB’s Power Grids. The company had de-merged from ABB India with effect from December 1, 2019. ABB Power Products and Systems India allotted 1 equity share for every 5 equity share held in ABB India. READ MORE
NEWS ALERT | Coal India's FY20 production down 0.8% at 602.14 mt Vs 606.89 mt
>> Offtake down 4.3% at 581.73 mt Vs 608.14 mt (YoY)
>> March production up 6.5% at 84.36 mt Vs 79.19 mt, offtake down 10.3% at 53.45 mt Vs 59.60 mt (YoY)
Reliance Industries slides over 5%
After Rs 21,000-cr turnover in 2019-20, HAL eyes higher growth this year
This achievement comes despite “difficulties in cash flows, interruptions in operations due to workmens' agitation and the interruption arising in March due to the Covid-19 lockdown. It has affected the final tests and certification of certain additional aircraft that were under final stages of production,” said HAL in a press release. READ MORE
Covid-19 lockdown: MF equity flows could see a 10-15% dip in March
The Rs 27-trillion mutual fund (MF) industry could see some slowdown in equity flows in March. Industry estimates (up to March 27 for 80 per cent industry assets) suggest equity flows for the industry dipping 10-15 per cent to Rs 9,100 crore to Rs 9,700 crore.
Industry players say flows have shown resilience in a highly volatile month, which also saw the closure of MF branch offices because of the coronavirus-induced lockdown. READ MORE
March Auto Sales :: Ashok Leyland reports 91% YoY decline in domestic sales
March Auto Sales :: Eicher Motors' total sales slump 83% YoY
>> Total domestic sales at 1,409 units, down 81% YoY
>> Total exports at 67 units, down 94.5% YoY
>> Total sales at 1,499 units vs 8,676 units
TVS Motor hits over 4-yr low ahead of March auto sales nos
The stock of the company, which primarily makes two-wheelers and three-wheelers, was trading at its lowest level since March 2016. In the past two months, it has tanked 40 per cent as compared to a 25 per cent decline in the benchmark S&P BSE Sensex. READ MORE
MARKET UPDATE:: Nifty breaches 8,300 on the downside
IndusInd Bank falls 16% off day's high
Financials exert pressure; NIfty Bank index down 5%
MARKET ALERT :: 44 of 50 Nifty constituents in the red
MARKET ALERT :: Sharp decline in Sensex
FY20 IN REVIEW :: Gold imports fell to a decade low, March saw 75% decline
The import is estimated at 559.6 tonnes for the financial year, which ended on Monday. It is believed to the lowest in at least a decade. In FY19, the gold import stood at 775.4 tonnes.
In terms of return from investment in gold, FY20 was fantastic -- it gave a 36 per cent return to Indian investors. READ MORE
NEWS ALERT | Govt package is one that assumes that crisis will be over within few weeks: Abhijit Banerjee on CNBC TV18
-- If the lockdown lasts longer, bigger package will be needed: Banerjee
Biocon gains 5% as manufacturing unit in Malaysia gets EIR from USFDA
Shares of Biocon jumped 5 per cent to Rs 285 on the BSE on Wednesday intra-day after the company’s insulin manufacturing facility In Malaysia received the Establishment Inspection Report (EIR) from the US health regulator. “Biocon Sdn Bhd, a subsidiary of Biocon has received the EIR from the US Food and Drug Administration (USFDA) for the pre-approval inspection (PAI) of its insulin manufacturing facility in Malaysia, for insulin glargine,” the company said in a regulatory filing. READ MORE
MARKET VOICE :: Every market downturn offers an opportunity
For quite some time now, Indian markets have been considered as being among the most expensive among the top 20 global markets, with the Nifty even clocking a 75 per cent premium to the emerging markets (Ems). However, the recent sharp fall has resulted in correction of 79 per cent stocks by over 50 per cent, and we now stand at significant undervaluation. This means sticky price-to-earnings (P/E) has been washed away, in probably what can be deemed as the fastest decline in valuations, from near 25x trailing twelve months (TTM) to sub-17.5x. With FY20E earnings per share (EPS) at 520, we currently stand at P/E levels of 16x, on TTM basis. READ MORE
Vinay Khattar, head of research at Edelweiss Wealth Management
MARCH AUTO SALES | Maruti Suzuki India's total sales down 47% at 83,792 units vs 1.58 lakh units (YoY)
>> Total sales for FY20 at 1,563,297 unit
>> This includes 76,976 units in the domestic market, 2,104 units of domestic OEM sales and 4,712 units of exports.
>> Co says, the sales during March 2020 are not comparable with sales in March 2019 due to the suspension of operations with effect from March 22nd 2020, in line with national policy.
PSB merger effect: State Bank of India, PNB slide 3%, Indian Bank jumps 8%
Shares of public sector banks, including State Bank of India (SBI) and Punjab National Bank (PNB), were trading mixed on the National Stock Exchange (NSE) on Wednesday as the government's proposed PSB merger scheme came into effect from today. The consolidation, that will merge 10 PSBs into four, comes at a time when the country and financial system is grappling with adverse fallout of the Covid-19 pandemic. READ MORE
MARKET UPDATE:: Broader indices outperform benchmarks
Biocon up over 4 per cent as subsidiary gets EIR from US FDA
YES Bank zooms 9% in a weak market
RBL Bank trades higher ahead of bank's statement on fourth quarter business parameter later in the day
Infosys falls 4% in early deals
Nifty Pharma index trades higher in a weak market; Biocon gains 3%
Liberty Shoes jumps 7%
YES Bank slides over 7%
>> Sebi has imposed penalty of Rs 50 lakh each on 2 promoter groups
IndusInd Bank jumps 5%
Sectoral trends at NSE during Opening Trade
Sensex Heatmap at Open
FIRST TRADE :: Nifty starts FY21 at 8,500-level
FIRST TRADE :: Sensex under pressure on first day of FY21
Market at Pre-Open
Stocks to watch: ONGC, CGDs, automobiles, PSU banks, SpiceJet, YES Bank
GAIL, CGDs, ONGC: Shares of city gas distribution companies (CGDs) such as Mahanagar Gas, Indraprastha Gas, Gujarat Gas, and oil companies such as GAIL, and ONGC, and RIL are expected to hog the limelight today as Natural gas prices on Tuesday were cut by a steep 26 per cent to its lowest rate since the pricing was made formula-driven in 2014. The move is likely to translate into lower CNG and piped cooking gas prices. READ MORE
FY20 IN REVIEW :: Bond, currency markets witness high volatility over Covid-19 fear
The rupee ended the 2019-20 fiscal year at Rs 75.6 dollar, and the 10-year yields closed at 6.1 per cent. At the start of the year, rupee and bond yields were at 69.2 a dollar and 7.4 per cent, respectively. READ MORE
FY20 IN REVIEW :: Stung by coronavirus, markets log biggest yearly loss since 2009
The domestic markets have logged their biggest yearly loss since 2008-09 — when they had declined 36 per cent on account of the global financial crisis — with the Nifty dropping 26 per cent in FY20. The mid- and small-cap indices, focused on the broader market, declined as much as 45 per cent. READ MORE
Two stocks HDFC Securities is bullish on
Short Term Trend would turn bullish above 8,660 in Nifty
Nifty is forming a bullish inverse head and shoulder formation on the daily line charts. However bullish confirmation would only come if Nifty sustains above 8,660. Above 8,660, Nifty could extend the rally towards 9,900 levels. The low of 8,244, formed on March 30, has become strong support for Nifty. Below 8,244 in Nifty, longs should be squared off. READ MORE
FII/FPI & DII trading activity on NSE, BSE and MSEI
Oil prices mixed, US inventory build-up heightens oversupply concerns
>> Crude oil benchmarks opened the month mixed on Wednesday, following their biggest-ever quarterly and monthly losses, overshadowed by fears of global oversupply as data showed a bigger-than-expected rise in inventories in the United States, Reuters reported.
>> Brent crude was down by 21 cents, or 0.8%, at $26.14 a barrel, while US West Texas Intermediate crude was up by 27 cents, or 1.3%, at $20.75 a barrel.
>> At 8:38 am, the index was at 8,532 level, down 32 points.
Asian stocks under pressure after biggest quarterly drop since 2008
Virus pushes Dow Jones to sharpest quarterly plunge in over three decades