Domestic equity benchmarks corrected on Wednesday, snapping their recent rising streak. The profit selling was triggered following weak macroeconomic data and concerns over rising coronavirus cases.
After opening with steep losses, the key indices crawled higher as the session progressed and ended a tad below the flat line. Strength in PSU banks and auto shares negated weakness in pharma and metal stocks.
The barometer index, the S&P BSE Sensex fell 37.38 points or 0.10% at 38,369.63. The Nifty 50 index declined 14.10 points or 0.12% at 11,308.40. The Nifty added 3.96% in the previous six sessions.
Kotak Mahindra Bank (down 2.10%), TCS (down 0.99%) and Reliance Industries (down 0.30%) were major index shakers.
HCL Technologies (up 4.86%), State Bank of India (up 4.23%), Maruti Suzuki India (up 1.25%) and Infosys (up 0.75%) were major market movers.
In the broader market, the BSE Mid-Cap index fell 0.26% and the BSE Small-Cap index slipped 0.02%.
The market breadth was tilted towards the buyers. On the BSE, 1472 shares rose and 1261 shares fell. A total of 140 shares were unchanged.
Total COVID-19 confirmed cases worldwide stood at 20,292,486 with 741,380 deaths. India reported 6,43,948 active cases of COVID-19 infection and 46,091 deaths while 16,39,599 patients have been discharged, according to the data from the Ministry of Health and Family Welfare, Government of India.
India's industrial output fell for the fourth straight month, led by weakness across most segments except consumer non-durable goods. The Index of Industrial Production contracted by 16.6% in June over last year, compared to a revised contraction of 34% in May and a record 57.6% slide in April. In the April-June 2020 quarter, the index contracted by 35.9%.
India CPI numbers for July are due to be announced today. The domestic consumer prices in India increased 6.09% year-on-year (YoY) in June of 2020, compared with 6.27% in May 2020. The retail inflation in June had surpassed the Reserve Bank of India's (RBI) upper limit of 6%. The government has mandated the Indian central bank to keep inflation within the range of 4% with a margin of 2% on either side.
Numbers to Watch:
The yield on 10-year benchmark federal paper fell to 5.884% as compared with 5.903% at close in the previous trading session.
In the foreign exchange market, the rupee edged lower against the dollar. The partially convertible rupee was hovering at 74.83, compared with its close of 74.78 during the previous trading session.
In the commodities market, Brent crude for October 2020 settlement rose 65 cents at $45.15 a barrel. The contract fell 49 cents, or 1.09% to settle at $44.50 a barrel in the previous trading session.
MCX Gold futures for 5 October 2020 settlement was up 0.01% to Rs 51,932.
Cholamandalam Financial Holdings hit an upper circuit of 10% to Rs 371.35 after the company's consolidated net profit surged 78.61% to Rs 589.46 crore on 3.56% rise in total income to Rs 3,233.85 crore in Q1 June 2020 over Q1 June 2019. Profit before tax (PBT) soared 55.80% to Rs 794.25 crore in Q1 June 2020 as against Rs 509.78 crore in Q1 June 2019. Current tax expense for the quarter jumped 20.88% to Rs 239.80 crore as against Rs 198.37 crore in Q1 June 2019.
Bharat Forge jumped 5.28%. The company reported a consolidated net loss of Rs 127.32 crore in Q1 June 2020 as against net profit of Rs 171.92 crore posted in Q1 June 2019. EBITDA margin declined to 1% in Q1 June 2020 from 17.8% in Q1 June 2019.
Revenue from operations for Q1 June 2020 stood at Rs 1154.21 crore, tumbling 50% from Rs 2327.85 crore in the same period last year. The company clarified that a drop in revenue was due to the shutdown of manufacturing operations in the month of April and May on account of the lockdown imposed by the government to control the spread of the pandemic.
Adani Ports and Special Economic Zone (APSEZ) rose 1.91% after the company said that there had been been a steady increase in cargo throughput across ports from July 2020.
"During the month of July 2020, APSEZ handled cargo volume of 18.30 MMT, a growth of 6% on year on year basis and 31% over June 2020. This trend gives us confidence that worst is behind us and going forward cargo volume in FY21 is expected to stabilize", APSEZ further said.
However, the company delivered a weak set of numbers for the April-June quarter as lockdown measures announced by the government during the quarter to tame the spread of COVID-19 resulted in lower import and export, impacting cargo throughput in first quarter of FY21.
APSEZ reported 26% decline in consolidated net profit to Rs 758 crore on a 18% fall in revenue to Rs 2,293 crore in Q1 FY21 over Q1 FY20. Cargo volumes fell 27% to 41.41 MMT (million metric tonne) in Q1 June 2020 compared to 56.75 MMT in Q1 June 2019.
Sundram Fasteners added 4.14%. The TVS Group company reported a consolidated net loss of Rs 26.70 crore in Q1 June 2020 as against a net profit of Rs 95.52 crore in Q1 June 2019. Net sales tumbled 68.1% year-on-year (YoY) to Rs 362.76 crore in the first quarter. Earnings before depreciation and taxes (EBDT) for the quarter ended 30 June 2020 slumped 93.2% to Rs 12.35 crore from Rs 182.87 crore during the same period in the previous year.
Metropolis Healthcare rose 0.84%. The medical diagnostics company's consolidated net profit slumped 89.3% to Rs 2.88 crore on 29.6% drop in net sales to Rs 143.13 crore in Q1 June 2020 over Q1 June 2019.
Metropolis said it conducted 2.65 million tests from 1.37 million patient visits. Cost rationalization program initiated in April 2020 to reduce fixed costs by 9%, semi-variable cost by 12% and variable cost by 21%. Goal for second quarter is to scale up Non-COVID 19 tests and subsequent revenues.
In June 2020, the company achieved 100% revenues (including COVID-19 testing) compared to June 2019. With improving Non-COVID 19 revenues and cost rationalization measures we have achieved near normal EBITDA margin of 25.2% for June 2020.
Most markets in Europe and Asia advanced on Wednesday. The Dow Jones Futures 30 were trading 229 points higher, indicating a positive opening in US markets today.
The UK economy contracted by 20.4% in the second quarter of 2020, compared to the previous three months, as coronavirus-induced lockdowns hammered activity.
US stocks stumbled in late trade Tuesday, giving up early gains to end lower as a selloff in tech shares continued. Investors continued to assess the outlook for the US economy amid a decline in the number of new coronavirus cases recorded and a lack of progress toward additional coronavirus aid from Washington.
Enthusiasm around Russia's COVID-19 vaccine efforts faded throughout the day amid international skepticism about whether the vaccine was effective and safe, with doubts cast on the approach on testing.
The most important factor that surprised investors and caught some off guard was a sharp rise in Treasury yields. The yield on the 10-year Treasury note reportedly rose 7 basis points to 0.64% as investors shunned safe-haven assets.
That triggered a wave of gold selling and consequently, gold retreated on Tuesday from record territory and posted its steepest daily dollar slide in more than seven years, with December futures tumbling 4.6% to settle at $1,946.30 an ounce.
The jump in yields was driven by plans of the US Treasury to sell a record amount of sovereign debt this week.