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Budget News

  • Benchmarks pare gains; breadth positive
  • May 26,2020  11:30
  • The benchmark indices pared gains in mid-morning trade. At 11:29 IST, the barometer index, the S&P BSE Sensex, was up 157.47 points or 0.51% at 30,830.06. The Nifty 50 index added 50.65 points or 0.56% at 9,089.90.

    The undertone of the market was still positive as several countries across the globe have now moved to lift restrictions as early as next week. FMCG shares were in demand.

    In the broader market, the S&P BSE Mid-Cap index rose 0.84% while the S&P BSE Small-Cap index gained 0.45%.

    The market breadth was positive. On the BSE, 1113 shares rose and 848 shares fell. A total of 144 shares were unchanged. In the Nifty 50 index, 39 shares advanced while 11 stocks declined.

    Foreign portfolio investors (FPIs) sold shares worth Rs 1,353.90 crore, while domestic institutional investors (DIIs), were net sellers to the tune of Rs 344.16 crore in the Indian equity market on 22 May, provisional data showed.

    COVID-19 Update:

    Total COVID-19 confirmed cases worldwide stood at 54,97,538 far with 3,46,269 deaths. India reported 80,722 active cases of COVID-19 infection and 4,167 deaths, according to the data from the Ministry of Health and Family Welfare, Government of India.

    Buzzing Index:

    The Nifty FMCG index rose 1.12% to 28,096.35, resuming uptrend after a day's decline. The index has added 2.95% in the past one week while benchmark Nifty 50 rose 0.25% during the same period.

    Nestle India (up 2.46%), Godrej Consumer Products (up 1.92%), Tata Global Beverages (up 1.9%), Marico (up 1.58%), Hindustan Unilever (up 1.1%), Britannia Industries (up 0.93%), Dabur India (up 0.62%), Jyothy Laboratories (up 0.25%) and Procter & Gamble Hygiene & Health Care (up 0.23%) edged higher.

    ITC rose 1.31% to Rs 188.80. The company has entered into a share purchase agreement (SPA) to acquire 100% stake of Sunrise Foods (SFPL), which is engaged in the business of spices under the trademark 'Sunrise'. The proposed acquisition is aligned with ITC's strategy to rapidly scale up its FMCG businesses in a profitable manner.

    Sunrise is the market leader in eastern India in the fast-growing Spices category with a rich heritage and brand legacy of over 70 years. Over the years, the brand has built a loyal consumer franchise, anchored on a differentiated product portfolio tailored to regional tastes and preferences, both in the basic and blended spice segments.

    Earnings Impact:

    Jindal Steel & Power (JSPL) soared 7.37% to Rs 103.50 after consolidated net profit stood at Rs 305.62 crore in Q4 March 2020 compared with net loss of Rs 2,713.34 crore in Q4 March 2019. Consolidated net sales dropped 13.27% to Rs 8,810.68 crore in Q4 March 2020 over Q4 March 2019.

    The company reported a pre-tax profit of Rs 370.35 crore in Q4 March 2020 compared with a pre-tax loss of Rs 3,425.52 crore in Q4 March 2019. Current tax expense stood at Rs 764.32 crore in Q4 March 2020 as against Rs 50.63 crore in Q4 March 2019. The Q4 earnings were announced on Monday, 25 May 2020.

    EBITDA jumped 20% to Rs 2,220 crore in Q4 March 2020 from Rs 1,845 crore in Q4 March 2019. EBITDA margin improved to 25% in Q4 FY20 as against 18% in Q4 FY19.

    On a consolidated basis, JSPL steel production grew 5% to 2.11 million tonnes (MT) in Q4 March 2020 from 2.01 million tonnes (MT) in Q4 March 2019. Steel sales slipped 2% to 1.93 MT in Q4 March 2020 as compared to 1.98 MT in Q4 March 2019.

    With regards to COVID-19 pandemic, JSPL has been nimble and agile in these uncertain times, changing its business model to market & sell its steel products in overseas markets more than domestic markets. The company focused its efforts towards securing full export order book to ensure continuous operation of its plant, even during the lockdown periods announced by the Government of India.

    Just Dial gained 1.67% to Rs 353.45 after consolidated net profit jumped 21.6% to Rs 76.07 crore on 1.2% rise in net sales to Rs 234.95 crore in Q4 March 2020 over Q4 March 2019. Other income stood at Rs 38.10 crore for the quarter (up 18.3% YoY), aided by MTM gains on investment portfolio due to decline in bond yields versus Rs 26.40 crore in Q3 December 2020 and Rs 32.20 crore in Q4 March 2019.

    Consolidated profit before tax (PBT) gained 18% to Rs 97.54 crore in Q4 March 2020 from Rs 82.71 crore in Q4 March 2019. Tax expenses stood at 16.52 crore in Q4 March 2020, declining 3.6% from Rs 171.13 crore in Q4 March 2019.

    Just Dial said business was impacted due to nation-wide lockdown owing to COVID-19. Total Traffic (unique visitors) for the quarter ending 31 March 2020 stood at 138.9 million, a drop of 0.1% as compared to the same period last year. Total active listings stood at 29.4 million as on 31 March 2020, an increase of 14.1% YoY and 2.7% QoQ. Total ratings & reviews stood at 109.7 million at the end of quarter, up 14.7% YoY. Active paid campaigns at the end of quarter stood at 536,236, up 7.1% YoY and 0.2% QoQ. The Q4 earnings were announced on Monday, 25 May 2020.

    Global Markets:

    Overseas, Asian stocks are trading higher on Tuesday as investors looked to a re-opening world economy.

    Japanese shares led gains after the Japanese Prime Minister Shinzo Abe on Monday announced the lifting of the state of emergency for the entire nation, as the coronavirus outbreak there eases. As per reports, Abe has said that he would work to increase the government's stimulus packages to more than 200 trillion yen ($1.9 trillion), or about 40% of Japan's annual output.

    Investor sentiment received a boost after American biotech firm Novavax said Monday it started the first human study of its experimental coronavirus vaccine. The firm said it expects initial results on safety and immune responses in July.

    In Hong Kong, investors are moving on from last week's sharp losses. On Friday, the Hang Seng reportedly had its worst day in nearly five years after Beijing moved to pass a controversial national security law, a blow to the financial hub's autonomy.China's foreign ministry commissioner in Hong Kong, Xie Fang, moved to reassure rattled investors on Monday evening. The legislation won't affect freedoms of speech, press, publication and assembly, Xie said, according to state-run news agency reports. He reportedly added that the controversial legislation will protect the law-based operation of international businesses in Hong Kong.

    In economic news, Singapore cut its 2020 economic forecasts for the third time this year. The Singapore economy is now expected to shrink by between 4.0% and 7.0% this year, according to the country's Ministry of Trade and Industry.

    In US, markets were closed on Monday for Memorial Day.

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