MARKET WRAP: Sensex settles 606 pts higher; metals, financial stocks jump

Topics Markets | Coronavirus | Axis Bank

NSE's benchmark index Nifty settled at 9,553, up 172 points or 1.84 per cent.
The domestic equity market settled in the positive territory for the third straight day on Wednesday, supported by buying in financial, IT, auto, and metal stocks.

The S&P BSE Sensex rallied 606 points or nearly 2 per cent to settle at 32,720. HDFC emerged as the biggest gainer on the index - up 7 per cent. HDFC Bank, HCL Tech, and Mahindra & Mahindra (M&M) were next on the list. On the flip side, Axis Bank (down 3.6 per cent) settled as the top loser on the index.

NSE's benchmark index Nifty settled at 9,553, up 172 points or 1.84 per cent. Volatility index India VIX continued to slide and ended 4.3 per cent lower at 33.83 levels. 

Among sectoral indices, Nifty Metal index was the top gainer - up 3.74 per cent at 1,724 levels, followed by Nifty Financial Service index (up 3.43 per cent). Nifty IT ended over 2 per cent higher at 13,425 levels. 

In the broader market, the S&P BSE MidCap index ended at 11,840.20, up 1 per cent while the S&P BSE SmallCap index settled at 10,975, up over 1 per cent. 

Buzzing stocks

Shares of Housing Development Finance Corporation (HDFC) traded higher for the third straight day on the BSE as investors indulged in some value buying after the price erosion during the coronavirus-induced sell-off. It settled at Rs 1,837 apiece on the BSE, up over 7 per cent. READ MORE 

Ruchi Soya Industries has entered the list of top 200 most-valued companies by market capitalisation (market-cap) following a sharp run-up in its share price. At the close, the company's m-cap stood at Rs 11,558.51 crore on the BSE. The stock ended at Rs 390.70 apiece. READ MORE

Axis Bank ended over 4 per cent lower at Rs 438.85 apiece on the BSE after the bank made massive Rs 7,730 crore provisions in the March quarter of FY20 (Q4FY20), of which Rs 3,000 crore worth provisions were due to coronavirus (Covid-19)-induced uncertainty. This pushed the bank in the red zone, with the lender posting a surprise Rs 1,388-crore net loss in the recently concluded quarter. READ MORE

Global Markets

European shares struggled to maintain early gains on Wednesday, as a slide in defensive stocks countered upbeat forecasts from German automakers and sensor specialist AMS as well as a bounce in oil prices. 

In Asia, China shares settled higher after the country’s biggest listed banks posted solid first-quarter profits, and as investors saw signs of lockdown easing, but lingering worries over the coronavirus pandemic capped gains. At the close, the Shanghai Composite index was up 0.44 per cent at 2,822.44. The blue-chip CSI300 index ended 0.46 per cent higher.

In commodities, oil prices gained after US stockpiles rose less than expected and gasoline stocks fell and buoyed by hopes demand will improve as some European countries and US cities moved to ease coronavirus lockdowns.

June Brent crude futures were up 2.30 per cent, or 47 cents, to $20.93 a barrel at the time of writing of this report, after hitting $21.60 a barrel. The more active July contract added 22 cents, or 0.97 per cent, to $22.96 a barrel.

US West Texas Intermediate (WTI) crude futures jumped 12.56 per cent or $1.55 to $13.89 after a 27 per cent plunge over the first two days of this week.

(With inputs from Reuters)


Market closing comment :: Sahaj Agrawal, Head of Research- Derivatives at Kotak Securities

Market continues to remain in medium term uptrend. Nifty is expected to test 9,900-10,000 levels in the next few weeks. Broader participation is increasing which is a positive sign and reinforces the positivity. On the down side, trend support is seen only at 8,900. We expect the broader markets to remain positive over the next few weeks. Traders can consider buying on dips; Banking and Metals expected to provide further momentum while Pharma and FMCG expected to witness profit booking

Market closing comment :: Vinod Nair, Head of Research at Geojit Financial Services

Nifty closed above the 9,500-mark and almost all sectoral indices traded positive, except for the defensives, FMCG and Pharma. Expectations of lockdown measures easing and company specific news about restarting operations gave support to the markets. The volatile crude oil prices were also up because of a lesser than forecasted increase in US oil inventories. Tomorrow we have the results of index heavyweights Reliance and HUL

Sectoral trends on NSE at Close | Metals, financials gain; FMCGs dip

Sensex Heatmap at Close | HDFC, HCL Tech settle as top gainers


>> The S&P BSE Sensex settled the day at 32,720.16 level, advancing 605.64 points or 1.89 per cent

>> The NSE's NIfty50, meanwhile, topped 9,500-mark to close at 9,553.35 level, up 172.45 points or 1.84 per cent 

NEWS ALERT | Banks borrow Rs 2,000 cr via the Special Liquidity facility announced for MFs: RBI

(as reported by CNBC-TV18)

BUZZING STOCK | HCL Tech trades at day's high

Heatmap: Top gainers and losers on the BSE Sensex at this hour

MARKET CHECK | Top 5 losers on the BSE at this hour

Ruchi Soya m-cap crosses Rs 10,000 crore

Ruchi Soya Industries has entered the list of top 200 most-valued companies by market capitalisation (market-cap) following a sharp run-up in its share price. At 01:45 pm, the company's m-cap stood at Rs 11,559 crore on the BSE. Ruchi Soya Industries is at number 185 position in the overall m-cap ranking. The company stood ahead of Dalmia Bharat, GMR Infrastructure, Polycab India, Crisil, Cummins India, IDFC First Bank, ICICI Securities and Tata Communications, which have market-capitalisation of Rs 10,000 crore. READ MORE

Nifty Metal index, up 4 per cent, lead sectoral gainer

Tech Mahindra Q4 preview: What analysts expect; key things to watch out for

When information technology (IT) major Tech Mahindra announces its results for the March quarter (Q4FY20) on Thursday (April 30), among key developments to watch out for will be its update on the execution of large deals it won in the past four-five months, and a timeline of progress on its 5G rollout in the midst of the Covid-19 crisis. READ MORE

Covid-19 fallout: UBS pegs FY21 India growth at -0.4%, a four decade low

Weaker-than-expected economic activity due to the nation-wide lockdown due to the coronavirus pandemic and a looming global recession is likely to hit Indian economy hard with UBS expecting real GDP to contract to -0.4 per cent in financial year 2020-21 (FY21). The global research and brokerage house has been trimming its expectations gradually and had earlier forecast a growth of 2.5 per cent. READ MORE


US Federal Reserve likely to renew vow to use all tools to support economy

The Federal Reserve, which has pumped trillions of dollars in emergency funding into the US financial markets to stem the damage from the coronavirus pandemic, is expected to reiterate on Wednesday its promise to do whatever it takes to support the world's largest economy. The US central bank may also signal how long, and by what benchmark, it plans to leave interest rates near zero after the recovery begins from what many economists forecast will be the sharpest downturn in recorded US history. READ MORE  

Rupee closing

Rupee ends higher at 75.67/$ vs Tuesday's closing of 76.18 against the US dollar

Deepak Nitrite rallies 10% on heavy volumes, inches toward record high

In the past one week, the stock has surged 17 per cent after Deepak Phenolics, a wholly-owned subsidiary of the company, commenced commercial production of Isopropyl Alcohol (‘IPA’) at its manufacturing facility situated at Dahej, Gujarat effective April 21, 2020.
This facility has the manufacturing capacity of 30,000 MT of IPA annually. IPA product is a solvent and majorly used by pharma companies and is also used for manufacturing sanitizer. READ MORE

Earnings Alert | Hexaware Technologies Q4 nos

>> Consolidated net profit at Rs 174.9 crore

>> Consolidated revenue at Rs 1541.8 crore

MARKET CHECK | Top 5 gainers on the BSE at this hour

European indices open mixed

(Source: Reuters)

Promoter, PE stake may go up in private banks; IndusInd, HDFC Bank to gain

Lenders are staring at unexpected asset quality losses due to the slowdown in economic activity after the countrywide lockdown. This would impact the capital adequacy of banks adversely. “Promoters may increase their stake up to 26 per cent from the current levels. For private banks not backed by promoters, a single-entity PE may be allowed to pick 15 per cent in the bank,” said a source. READ MORE

Franklin crisis: Hindsight is 20-20, but key manager could have done better

One industry veteran remembered how an earlier fund that Santosh Kamath managed with another fund house faced a sudden lumpy redemption. The underlying scheme had exposure to an airline, which has since run into financial trouble, but was robust at the time. But a large liquidation could cause problems, it was felt. READ MORE

MARKET ALERT :: Nifty tops 9,500-mark for the first time since March 16

Stocks that hit 52-week low in an otherwise firm market

CHALET HOTELS 146.45 144.00 -0.07
GODREJ INDS. 261.60 257.20 0.71
MAHINDRA LIFE. 185.50 179.95 -0.03
QUESS CORP 204.95 199.00 1.74
» More on 52 Week Low

US Federal Reserve likely to renew vow to use all tools to support economy

The US central bank may also signal how long, and by what benchmark, it plans to leave interest rates near zero after the recovery begins from what many economists forecast will be the sharpest downturn in recorded US history. READ MORE

Life after Covid-19: How the Indian automotive sector can be future-ready

The return of daily life and manufacturing activity to near normalcy in China and South Korea, along with extended lockdown in India, gives hope for a U-shaped economic recovery. Our analysis indicates that the Indian automotive sector will start to see recovery in the third quarter of FY21. We expect the industry demand to be down 15-25 per cent in FY21. With such degrowth, OEMs, dealers and suppliers with strong cash reserves and better access to capital will be better positioned to sail through. READ MORE

Diversified model, US outlook to help Dr Reddy's stock trade better

Dr Reddy’s Laboratories stock has gained more than 50 per cent from its March lows and is trading close to its four-year highs. Investor confidence in the drugmaker’s prospects not only stems from expectations of strong growth in India, but also from improving prospects in the US operations. READ MORE

Despite rebound, airline stocks to underperform; investors advised caution

Aviation stocks - SpiceJet and InterGlobe Aviation (IndiGo) - have rebounded by 7-23 per cent since their lows in March. The gains came on the back of a market rally, expectations of a relief package by the government, falling crude oil prices and renegotiation of lease rentals. Investors, however, should be cautious given a weak outlook for FY21 and higher fixed cost structure of the airline industry. READ MORE

Rupee at day's high

(Source: Bloomberg)

HDFC twins top contributors to Sensex's gain today

Covid-19 impact: SpiceJet says pilots will not be paid for April and May

Low cost airline SpiceJet has told its pilots that most of them will not get paid for the months of April and May. The airline instead will roster its pilots in a way that most get chances to operate the company's cargo aircraft in order to get minimal pay. Pilots who are operating cargo aircraft are getting paid according to the hours they fly. READ MORE

IOL Chemicals & Pharmaceutical's stock more than doubles from March lows

“A Three Star Export House recognition certificate has been issued to the Company in accordance with the provisions of the Foreign Trade Policy 2015‐2020 by upgrading its Two Star Export House status. The certificate shall be valid for a period of five years,” IOL Chemicals said in exchange filing. READ MORE

MFs' risk aversion towards NBFCs continues, exposure falls to 19% in March

Debt mutual funds (MFs) have further pruned their exposure to the non-banking financial company (NBFC) space in March. The overall sectoral exposure to NBFCs, including housing finance companies (HFCs), fell to 19 per cent in March 2020. READ MORE

Sector watch :: PSU stocks gain; S&P BSE PSU index up 1.6%

HUL to announce Q4FY20 results on Thursday; here's what brokerages expect

Hindustan Unilever (HUL) is slated to announce its results for the fourth quarter ended March 2020 (Q4FY20) on April 30. According to analysts, most consumer goods companies would have taken a hit during the quarter under review due to Covid-19 lockdown, which has caused enormous logistical issues. Companies with higher exposure to food and daily essentials, analysts say, are expected to fare better this quarter as compared to those with a skew towards discretionary consumption. READ MORE

Delta Corp, Emami: Share buyback via open market route at seven-year high

Share buyback through open market transaction has picked up pace after a gap of seven years, with nearly a dozen companies announcing repurchase of their shares via this route in the past two months. A sharp fall in stock prices in the past couple of months has seen 11 companies announce buyback of their company’s shares via the open market route since March. READ MORE

STOCK UPDATE:: Hester Bioscienes hits 20% upper circuit as IIT Guwahati collaborates with Co to develop vaccine against Covid-19

BROKERAGE VIEW:: ICICI Securities on Axis Bank

Axis Bank has been looking to enter the life insurance business as a manufacturer for some time now and consummation of this deal would boost the symbiotic relationship between the two entities. This deal should further remove an important overhang on MAXF’s stock performance as it ensures that AXSB will continue as its Banca partner, thus, closing the valuation gap with its peers. At the same time, it will enable AXSB to benefit from wealth creation in the life insurance business, which has increased significantly over the recent past; benefits from healthy fee income opportunities would also continue. We are already valuing AXSB on SOTP basis and with this deal, we believe subs contribution in SOTP could potentially increase to ~11%. We maintain Buy with target price of Rs 620 (1.8x Sep’21E ABV for the bank).

BROKERAGE VIEW:: ICICI Securities on Defence sector

Given external budget constraints, we reduce FY21E/FY22E earnings and target prices for players like Bharat Electronics (BEL) and Garden Reach (GRSE). We also downgrade BEL to HOLD from Buy. Given the current scale of BEL’s operations, we see risks to its revenue growth in FY21E/FY22E. Similarly, we have reduced execution estimate for GRSE in FY22E, as we feel spending can be deferred. Given the scale of current operations, we see limited risks to our thesis of a one-time reset in execution leading to further value creation for GRSE. We maintain HOLD on Solar Industries (SOIL) and BUY on Midhani. We continue to view Midhani as a rare business pivoted to the country’s space budget, which should be more resilient than the defence budget.

BROKERAGE VIEW:: Anand Rathi Shares on Sadbhav Engineering

Rating: Buy | Target Price: Rs 64

Efforts are on to address bit by bit issues that appear to have plagued Sadbhav Engg.’s performance in the past few years. First it was leverage (mostly settled by monetising assets). The recent rejig of management and centralising power in the hands of one of the most experienced in the group seem to be more efforts to ensure a sharper focus on an execution ramp-up (also, to address lengthened WC), besides quicker decision-making. To enhance professionalism and accountability, a “BAC” has been constituted, to periodically review and critically analyse decisions. On the brighter medium- to long-term outlook and supportive valuations, we raise our rating to a Buy.

Raw material prices, cost controls prop up Ambuja Cements, ACC's March qtr

Ambuja Cements, like its subsidiary ACC, posted a strong operating performance for the March quarter (Q1) on Monday after market hours, even as the cement makers’ sales volume came under pressure. Ambuja’s sales volumes, impacted by the Covid-19-led disruption, at 5.77 million tonnes (MT) declined 10 per cent year-on-year (YoY) in Q1 (both companies follow the January-December accounting year). READ MORE

VIP, Safari Industries: Luggage stocks will take a long time to get going

At the bourses, the stock price of VIP Industries has tanked 56.6 per cent from its recent high of Rs 506.95 hit on February 11, 2020. As for Safari Industries, it has corrected 49.2 per cent from its recent peak of Rs 732.95, also hit on February 11. READ MORE

Strides Pharma commences export of Favipiravir tablets; stock surges 15%

Favipiravir is an antiviral medication that was initially developed to treat influenza in Japan. In February 2020, post the outbreak of Novel Coronavirus (Covid-19), Favipiravir was studied in China and several other countries as an experimental treatment of Covid-19. The drug has demonstrated positive outcomes, including a reduction in the duration of Covid-19 and improved lung conditions for the patients. READ MORE

Sector watch :: Nifty metal index trades as top gainer on NSE

Axis Bank tanks 6% on Rs 3,000 crore provisions in Q4 due to Covid-19

Even if one tries to take comfort from the fact that Rs 3,000 crore were created towards "probable" Covid-related asset quality pressure, it doesn’t bode well as loan loss provisioning rose to Rs 4,204 crore in Q4FY20, from Rs 2,962 crore in Q3FY20. Also, when seen against the provisions made by HDFC Bank and IndusInd Bank towards Covid-related exigencies, Axis’ numbers are too high. READ MORE

HDFC extends rally, jumps 5%; stock surges 15% in three days

Shares of Housing Development Finance Corporation (HDFC) were trading higher for the third straight day, up 5.5 per cent to Rs 1,808.50 on the BSE on Wednesday as investors indulged in some value buying after the price erosion during the coronavirus-induced sell-off. The stock of the country's largest private sector mortgage company has rallied 15 per cent in the past three trading days, as compared to 3.5 per cent rise in the S&P BSE Sensex. READ MORE

Rupee opening

Rupee opens stronger at 75.97/$ vs Tuesday's close of 76.17 against the US dollar

Rating downgrade by Moody's, negative outlook by Fitch likely, warns Nomura

India is on the cliff’s edge and is staring at a possibility of a downgrade in its sovereign rating by Moody’s and a negative outlook by Fitch in the backdrop of coronavirus pandemic that has brought the economic activity in the country to a standstill, said analysts at Nomura in a recent report. READ MORE

MARKET UPDATE:: Sensex extends gains, up 300 points now

IndusInd Bank dips 5%; top Sensex loser

Top gainers on BSE in early deals

STRIDES PHARMA 402.40 7.52
R C F 42.25 7.23
RAJESH EXPORTS 634.20 6.12
IFB INDS. 428.00 6.03
» More on Top Gainers

Most active stocks by volume

HDFC LIFE INSUR. 490.60 0.85
POWER FIN.CORPN. 92.65 1.98
AXIS BANK 441.80 -3.02
» More on Most Active Volume

HDFC surges 5%; top Sensex gainer

NTPC snaps 4-day losing streak

Ahead of results | Hexaware Tech surges over 3%

Biocon gains in opening deals

>> Biocon Ltd. and Mylan N. V.on Tuesday announced the launch of Fulphila, a biosimilar to Neulasta (pegfilgrastim), in Canada. Fulphila is approved by Health Canada to decrease the incidence of infection, as manifested by febrile neutropenia, in patients with non-myeloid malignancies receiving myelosuppressive anti-neoplastic drugs, Bengaluru- headquartered Biocon said in a statement.

L&T trades over 1% higher

>> The company on Tuesday issued and allotted 25,000 7.70% Rated Listed Unsecured Redeemable Non-Convertible Debentures of Rs 10 lakh each aggregating to Rs 2,500 crore which will mature on April 28, 2025.

Result Impact | Axis Bank declines 3% post Q4 nos

Sectoral trends on NSE at open

Top gainers and losers on S&P BSE Sensex at open

Opening Bell

Opening Bell

Top gainers and losers on S&P BSE Sensex at Pre-open

Market at Pre-open

Market at Pre-open

Coronavirus Update :: India cases reach 31,000-mark

Govt's second stimulus likely this week, may keep industry waiting

The industries seeking support from the government, and the ones that are worst hit by the lockdown such as aviation, hospitality, automobiles, real estate, and logistics will have to wait. Any support for sectors and big industry will only happen later, once the economic activity normalises to some extent, officials said. READ MORE

Stocks to watch: Axis Bank, L&T, IDFC First Bk, Biocon, NLC India, Hexaware

Axis Bank: Axis Bank on Tuesday reported a standalone net loss of Rs 1,387.78 crore for March quarter of 2019-20 as provisioning for bad loans and contingencies soared. The private sector lender had reported a net profit of Rs 1,505.06 crore in the same quarter of the previous financial year. That apart, the bank's board gave approval to raise Rs 35,000 crore by issue of debt Instruments.
L&T: The company on Tuesday issued and allotted 25,000 7.70% Rated Listed Unsecured Redeemable Non-Convertible Debentures of Rs 10 lakh each aggregating to Rs 2,500 crore which will mature on April 28, 2025. READ MORE

India Inc wants govt to shift focus to economy amid Covid-19 outbreak

As the Centre remains undecided about its strategy to exit the lockdown, chief executive officers (CEOs) of top Indian companies have warned the government of an imminent depression in the economy and suggested that firms must learn to work in “new normal” conditions, with a Covid-19 vaccine still some time away. READ MORE

Nifty support shifts higher, next target at 9,650: Vinay Rajani of HDFC Sec

BUY IGL (469): | Target Rs. 500 | Stop-loss: Rs 450
The stock is in overall uptrend with higher tops and higher bottoms on the daily and weekly charts. The stock price is placed above all important moving averages. It has resumed its uptrend after running correction. Indicators and Oscillators setup is bullish on the short-to-medium term charts. READ MORE

BROKERAGE VIEW | UBS on Indian economy

>> Expects India's real GDP to contract to -0.4% in FY21 (previously +2.5%), compared with 4.1% YoY (previously 4.5%) estimated in FY20.

>> Base case: We expect current mobility restrictions remain in place until mid-May and then get lifted, and activity is largely back to normal by end-June.

>> Alternate, riskier scenario with longer lockdown: We assume the economic weaknesses in the short term could intensify and the significant secondary impacts (job losses, reduced income levels, corporate defaults, rising NPLs, rating downgrade, etc.) could delay a potential recovery. There is a risk India's real GDP could contract by a much larger magnitude of 3-4% YoY.

>> Fiscal stimulus: We expect the government COVID-19 stimulus to be scaled up to c3% of GDP in FY21. We think the fiscal slippage could be higher than that seen during the credit crisis at close to 5% of GDP. While we do not see an imminent sovereign rating downgrade, an outlook downgrade (stable to negative) cannot be ruled out. 

EXPERT VIEW | Radhika Rao, economist, DBS Bank

With the lockdown being extended and operations expected to resume only at a gradual pace, further stimulus becomes necessary to fray economic costs of households and businesses. We could see a targeted and incremental approach in the stimulus measures. General government fiscal deficit and debt levels are likely to rise, but the urgency of the situation will outweigh risks associated with a delay in consolidation plans. Going forward, the FRBM framework might also be reassessed to build in a larger cushion to defend against such exogenous and unexpected shocks, which materially derail the domestic growth outlook

Bulk deals on NSE as on Tuesday

Bulk deals on BSE as on Tuesday

FII/FPI & DII trading activity on NSE, BSE and MSEI

Rupee check

Source: Bloomberg

Oil prices climb as storage fills less rapidly than feared

>> Oil prices climbed on Wednesday, trimming some of this week’s steep losses after US stockpiles rose less than expected and hopes grew for demand to pick up as some European countries and U.S. cities moved to ease coronavirus lockdowns.

>> At 8:12 am, Brent crude futures were at $21.4/bbl, up 4.5 per cent.

SGX Nifty indicates positive start for indices

>> At 8:10 am, the index was at 9,450.50 level, up 52.75 points or 0.56 per cent.

Asia shares cautious ahead of Fed, corporate earnings

Source: Reuters

US Indexes drop as investors rotate from growth to value stocks

Source: Reuters

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