Equity indices ended a volatile session with steep losses on Wednesday, led by weakness in banks and auto shares. The Nifty hit a record high of 15,800.45 in early afternoon trade. However, a sharp round of profit selling in afternoon trade dragged the benchmarks lower. All the sectoral indices on the NSE ended in the red. Negative global stocks triggered profit selling in domestic shares.
The barometer index, the S&P BSE Sensex, slipped 333.93 points or 0.64% at 51,941.64. The Nifty 50 index lost 104.75 points or 0.67% at 15,635.35.
Reliance Industries (down 1.8%), Larsen & Toubro (down 1.8%), ICICI Bank (down 1%), Bajaj Finserv (down 1.46%) and Bajaj Finance (down 1.43%) were major drags.
Selling was broad based. The BSE Mid-Cap index fell 0.71% and the BSE Small-Cap index lost 0.95%.
The market breadth was negative. On the BSE, 1,465 shares rose and 1,722 shares fell. A total of 153 shares were unchanged.
COVID-19 Update:
Total COVID-19 confirmed cases worldwide stood at 17,40,01,158 with 37,47,385 deaths. India reported 12,31,415 active cases of COVID-19 infection and 3,53,528 deaths while 2,75,04,126 patients have been discharged, according to the data from the Ministry of Health and Family Welfare, Government of India.
As many as 92,596 people have tested positive for COVID-19 in the last 24 hours, the Union health ministry said on Wednesday. This marks a slight uptick in the new reported cases after falling to a 63-day low of 86,498 on Tuesday. The positivity rate now stands at 4.67%. India has recorded a positivity rate below 10% for 16 consecutive days now. The cumulative caseload has reached 2,90,89,069.
Economy:
The World Bank, on 8 June 2021, projected India's economy to grow at 8.3% in 2021. Earlier, the World Bank had estimated Indian economy to grow at a pace of 10.1% in FY 2021-22. Citing the reason to slash the FY22 growth of Indian economy, the global lending and monitoring body said that India has been hampered by the largest outbreak of coronavirus cases that any country has seen since the beginning of the pandemic.
In India, an enormous second COVID-19 wave is undermining the sharper-than-expected rebound in activity seen during the second half of FY2020/21, especially in services. With surging COVID-19 cases, foot traffic around work and retail spaces has again slowed to more than one-third below pre-pandemic levels since March, in part due to greater restrictions on mobility, World Bank said in its latest Global Economic Prospects report.
The World Bank on Tuesday upgraded its growth forecast, with the global economy now expected to grow 5.6% in 2021. That compared against an earlier forecast in January for a 4% global economic expansion in 2021. Still, the organization warned in a Tuesday press release that global output will be about 2% below pre-pandemic projections by the end of this year in spite of the recovery.
Numbers to Watch:
The yield on 10-year benchmark federal paper rose to 6.016% as compared with 6.006% 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 72.97, compared with its close of 72.89 during the previous trading session.
MCX Gold futures for 5 August 2021 settlement fell 0.12% to Rs 49,066.
The US Dollar index (DXY), which tracks the greenback's value against a basket of currencies, fell 0.10% to 89.99.
In the commodities market, Brent crude for August 2021 settlement rose 23 cents at $72.45 a barrel. The contract rose 73 cents, or 1.02% to settle at $72.22 a barrel in the previous trading session.
Foreign Markets:
Shares in Europe and Asia declined on Wednesday ahead of the latest inflation data from the U.S., which could lead the Federal Reserve to taper asset purchases sooner rather than later. The U.S. consumer price index for May is set to be released Thursday.
China's factory gate prices increased at the fastest pace since September 2008, official data showed on Wednesday, while consumer inflation also accelerated but at a slower-than-expected rate.
The producer price index (PPI) rose 9.0% from a year earlier in May, according to a statement from the National Bureau of Statistics.
Meanwhile, a COVID-19 outbreak in southern China is curbing activity at some of the country's biggest ports, stoking fears that further disruption in international trade risk pushing up the price of its exports. More than 100 new cases have been reported since late May in Guangdong province, one of China's most important manufacturing hubs, leading to strict counter-measures from the government.
Wall Street stocks finished a choppy session little changed Tuesday as markets digested data showing a lower US trade deficit.
The US trade deficit dipped by $6.1 billion to $68.9 billion in April, slightly larger than expected, as exports rose and imports fell, according to Commerce Department data.
Earnings Impact:
GAIL (India) fell 3.34%. On a consolidated basis, GAIL (India) reported a 47.4% decline in net profit to Rs 2,486.62 crore in Q4 FY21 compared with Rs 4,728.37 crore in Q4 FY20. Revenue from operation fell 12.16% to Rs 15,757.16 crore in Q4 FY21 as against Rs 17,938 crore in Q4 FY20. Profit before tax declined 10.56% to Rs 3,218.85 crore in Q4 FY21 over Q4 FY20.
TeamLease Services jumped 5.26% after the company reported a consolidated net profit of Rs 19.6 crore in Q4 FY21 as against a net loss of Rs 29.4 crore in Q4 FY20. Operating revenue rose 1% to Rs 1,340.5 crore during the quarter as compared to the same period last year. EBITDA increased by 32% to Rs 26 crore in Q4 FY21 from Rs 19.6 crore in Q4 FY20. EBITDA margin was at 1.9% as on 31 March 2021 as compared with 1.5% as on 31 March 2020. Profit before tax in the fourth quarter stood at Rs 25.4 crore, up by 13% from Rs 22.4 crore in Q4 FY20.
Ion Exchange (India) hit an upper circuit of 20% at Rs 2,036.20 after the company's consolidated net profit jumped 144.2% to Rs 70.48 crore on 26.8% rise in net sales to Rs 445.15 crore in Q4 March 2021 over Q4 March 2020. Profit before tax soared 127.9% to Rs 89.80 crore in Q4 FY21 as against Rs 39.41 crore in Q4 FY20. During the financial year, Ion Exchange (India)'s consolidated net profit climbed 52.23% to Rs 143.33 crore on 2.04% decline in revenue from operations to Rs 1,449.52 crore in FY 2021 over FY 2020.
Galaxy Surfactants declined 1.19%. The company posted a 25.3% rise in consolidated net profit to Rs 78.68 crore on 19.3% rise in net sales to Rs 783.52 crore in Q4 FY21 over Q4 FY20. The company said its total volume grew by 8.4% year on year to 63,007 MT in Q4 FY21 from 58,130 MT in Q4 FY20. Total revenue (including other income) stood at Rs 786.1 crore in Q4 FY21, 19.7% YoY growth on account of better sales volumes in both performance surfactants and specialty care business and better sales mix. Profit before tax increased 14% to Rs 93.02 crore in Q4 FY21 over Q4 FY20. EBITDA stood at Rs 120 crore in Q4 FY21, registering a 16.9% YoY growth driven by increasing share of specialty, better product mix due to new products and higher capacity utilization. EBITDA margin fell to 15.3% in Q4 FY21 from 15.6% in Q4 FY20.
Max Financial Services fell 1.83%. On a consolidated basis, Max Financial Services reported a net profit of Rs 70 crore in Q4 FY21, steeply higher than net profit of Rs 6.7 crore in Q4 FY20. Total income increased 129% to Rs 9,760 crore in the fourth quarter from Rs 4,266 crore in Q4 FY20. Excluding investment gains, the company's revenue has grown by 21% during the quarter. Max Life is the sole operating subsidiary of Max Financial Services and is India's largest non-bank private life insurer and the fourth largest private life insurance company. Max Life's recorded a gross premium of Rs 7,106 crore in Q4 FY21, an increase of 21% from Rs 5,873 crore in Q4 FY20. Individual APE grew 35% in the quarter under review to Rs 1,893 crore from Rs 1,398 crore in the year-ago period.
Engineers India fell 4.67% after the PSU company reported 79.2% decline in consolidated net profit to Rs 24.93 crore in Q4 FY21 as against Rs 119.69 crore in Q4 FY20. Net sales during the quarter increased by 30.9% year-on-year (YoY) to Rs 1,131.90 crore. Among segments, revenue from Consultancy & Engineering Projects segment was at Rs 419.87 crore (up 1.9% YoY) and revenue from Turnkey Projects segment was at Rs 712.02 crore (up 57.5% YoY) in the fourth quarter. Total expense rose by 27.9% to Rs 970.39 crore in Q4 FY21 over Q4 FY20, due to higher cost of technical assistance/sub-contracts, higher raw material costs and higher finance costs.
Petronet LNG slumped 7.86%. The PSU company reported 70.9% jump in consolidated net profit to Rs 637.92 crore in Q4 FY21 as against Rs 373.20 crore in Q4 FY20. Net sales during the quarter fell 11.6% to Rs 7,575.32 crore as compared with the same period last year. Profit before tax (PBT) in Q4 FY21 stood at Rs 870.67 crore, up 74% from Rs 500.43 crore in Q4 FY20.
Prestige Estates Projects fell 1.25%. The real estate company's consolidated net profit zoomed to Rs 1,350.50 crore as against net profit of Rs 51.10 crore reported in the same period last year. Net sales rose 14.4% to Rs 2,268.10 crore in Q4 March 2021 over Q4 March 2020. Profit before tax soared to Rs 1,731.90 crore in Q4 FY21 as against Rs 90.30 crore in Q4 FY20.
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