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Budget News

  • Nifty settles above 9500 level ahead of GDP data
  • May 29,2020  16:50
  • Key market barometers ended with modest gains on Friday, ahead of India's Q4 GDP data to be released later today. The buying was supported by hope of further opening up of the economy. The barometer S&P BSE Sensex surged 223.51 points or 0.69% at 32,424.10. The Nifty 50 index gained 90.20 points or 0.95% at 9,580.30.

    The Nifty opened lower at 9422.20 and hit an intraday low of 9376.90 in early trade. The index recouped losses in mid-morning and traded sideways near the flat line in the afternoon. Buying spree in last one hour of trade push the index above 9500 mark.

    The broader market rallied. The S&P BSE Mid-Cap index surged 1.90% while the S&P BSE Small-Cap index rallied 1.14%.

    There were more buyer than sellers. On the BSE, 1419 shares rose and 931 shares fell. A total of 161 shares were unchanged.

    The Sensex and the Nifty have risen about 6% in the three straight sessions.

    The Centre is expected to put out details of a possible lockdown extension soon. The nationwide lockdown was first announced by Prime Minister Narendra Modi on March 24 for 21 days in a bid to combat the coronavirus pandemic. It was first extended till May 3 and again till May 17. The fourth phase of the lockdown ends on May 31.

    Economy:

    India's Q4 gross domestic product (GDP) data will be announced by the National Statistical Office (NSO) today, 29 May 2020. The Indian economy expanded 4.7% YoY in Q3 December 2019.

    On the macro front, foreign direct investment (FDI) in India grew by 13% to a record of $49.97 billion in the 2019-20 financial year, data showed. The country had received FDI of $44.36 billion during April-March 2018-19.

    COVID-19 Update:

    Total COVID-19 confirmed cases worldwide stood at 58,29,474 far with 3,60,776 deaths. India reported 89,987 active cases of COVID-19 infection and 4,706 deaths, according to the data from the Ministry of Health and Family Welfare, Government of India.

    Numbers to Track:

    The yield on 10-year benchmark federal paper rose to 6.016% compared with previous closing of 5.99% in the previous trading session.

    In the foreign exchange market, the partially convertible rupee edged higher to 75.62 compared with its previous closing of 75.76.

    In the commodities market, Brent crude for July 2020 settlement was down $1.11 to $34.18 a barrel. The contract rose 1.58% to settle at $35.29 a barrel in the previous trading session.

    MCX Gold futures for 5 June 2020 settlement rose 0.51% to Rs 46,640.

    Global Markets:

    European markets snapped their winning streak and traded with losses on account of re-escalating US-China tensions. Reports say that Washington D.C. has piled up pressure on Beijing accusing China for the coronavirus outbreak and, more recently, a new security law for Hong Kong that threatens the special administrative region's autonomy, according to Secretary of State Mike Pompeo.

    Meanwhile, France is set to enter its second phase of its coronavirus lockdown easing with restaurants, bars and cafes to reopen from 2 June 2020. In the U.K., groups of six people from different households will be allowed to meet in gardens as well as parks from Monday onwards, provided households remain 2 meters apart.

    Asian markets closed on a mixed note on Friday as investors watch for market reaction to China's controversial national security law for Hong Kong that was approved on Thursday.

    The U.S., Australia, Canada and the U.K. governments issued a joint statement Thursday reiterating their deep concern regarding Beijing's decision to impose a national security law on Hong Kong, after China's parliament, the National People's Congress passed legislation Thursday that could greatly curtail democratic freedoms.

    On the economic data front, Japan's retail sales fell 13.7% year-on-year in April, according to data released today showed.

    In US, Wall Street ended lower on Thursday following a late-session reversal, with Facebook weighing on the market after President Donald Trump said he would sign an executive order related to social media companies and would hold a news conference on China on Friday.

    On the economic front, US GDP contracted at an annual 5% pace in the first quarter instead of 4.8%, revised government data showed.

    Buzzing Indian Segments:

    The Nifty Pharma index climbed 3.21% to 9,768.60. Divis Laboratories (up 4.92%), Aurobindo Pharma (up 4.37%), Dr. Reddy's Laboratories (up 4.35%), GlaxoSmithKline Pharmaceuticals (up 3.63%), Sun Pharmaceutical Industries (up 3.53%), Glenmark Pharmaceuticals (up 3.36%), Cipla (up 3.07%), Abbott India (up 1.23%) and Strides Pharma (up 0.63%) advanced.

    Cadila Healthcare rose 1.89% after the company's formulations manufacturing facility located at Baddi, Himachal Pradesh received an establishment inspection report (EIR) from the US drug regulator. The United States Food & Drug Administration (USFDA) had conducted the inspection at the facility from 2nd to 9th March 2020.

    Lupin fell 1.32%. The drug major's consolidated net profit jumped 32% to Rs 391.29 crore on 0.4% slip in net sales to Rs 3,791 crore in Q4 March 2020 over Q4 March 2019. The jump in net profit was supported by a 185% surge in other income and an exceptional gain of Rs 83 crore. The exceptional gain was due to profit on sale of its stake in Kyowa Pharmaceutical Industry. Consolidated profit before tax (PBT) dropped 16% to Rs 496.36 crore in Q4 March 2020 as against Rs 590.64 crore in Q4 March 2019. Current tax expenses fell 68.9% to Rs 96.51 crore in Q4 March 2020 as compared to Rs 310.44 crore in Q4 March 2019. EBITDA fell 13.9% to Rs 733.90 crore in Q4 March 2020 from Rs 852.50 crore in Q4 March 2019. EBITDA margin stood at 19.4% in Q4 FY20 as against 22.4% in Q4 FY19. Investment in R&D for continued operations amounted to Rs 344.20 crore (9.1% of sales) for Q4 FY20. Total formulations sales fell 1.5% to Rs 3462.40 crore while total API sales rose 12.8% to 328.60 crore in Q4 March 2020 over Q4 March 2019.

    The Nifty Realty index jumped 4.28% to 180.10. The index rose 10.12% in four sessions.

    Prestige Estates (up 8.30%), Phoenix Mills (up 8.14%), Godrej Properties (up 4.81%), DLF (up 4.68%), HDIL (up 4.55%), Oberoi Realty (up 4.37%), Peninsula Land (up 4.17%), Anant Raj (up 1.68%), Unitech (up 0.81%), Omaxe (up 0.79%), Mahindra Lifespace Developers (up 0.14%) and Brigade Enterprises (up 0.10%) advanced.

    Stocks in Spotlight:

    ITC (up 3.62%), Larsen & Toubro (up 3.24%) Hindustan Unilever (up 2.37%), HDFC (up 2.08%) and ICICI Bank (up 1.64%) were some of the index movers.

    Vodafone Idea surged 12.71% on media reports that Google was considering buying 5% stake in the Indian telecom player. The scrip jumped 34.88% to hit the day's high at Rs 7.85 on the BSE. The counter clocked a volume of 23.68 crore shares as against its average trading volume of 5.51 crore shares in the past one quarter. For Vodafone Idea, an investment by Google could boost the likelihood of its survival, the reports added. A foreign brokerage reportedly said that such a deal would be a strategic positive for Vodafone Idea but have little impact on leverage. Capital raise could become easier if Google invests, it added.

    The company, however, clarified that it constantly evaluates various opportunities for enhancing the stakeholders' value. Currently, there is no proposal as reported by the media that is being considered at the board.

    Wipro soared 6.65% after the IT major appointed Capgemini executive Thierry Delaporte as its chief executive officer and managing director. Delaporte will take over as the Chief Executive Officer and Managing Director of the company, effective 6 July 2020. Abidali Neemuchwala will relinquish his position as CEO and MD on 1 June. Neemuchwala left the technology firm after four years due to personal commitments. Rishad Premji will oversee the day to day operations of the company until 5 July.

    Earnings Impact:

    CEAT advanced 4.99%. The company's consolidated net profit declined 19.6% to Rs 51.72 crore on 10.6% fall in net sales to Rs 1573.41 crore in Q4 March 2020 over Q4 March 2019. Consolidated EBITDA stood at Rs 203 crore in Q4 March 2020, rising 22.29% from Rs 166 crore in the same period last year. EBITDA margin rose to 12.9% in Q4 March 2020 from 9.4% in Q4 March 2019. The company said it has made provisions for unusable semi finished inventory and raw materials aggregating to Rs 13.27 crore due to abrupt stoppage of production facilities. The company further said it has not capitalized further borrowing cost due to temporary suspension related to ongoing capital project, contract manpower cost and export detention aggregating to Rs 2.67 crore. These costs have been disclosed as exception items.

    HeidelbergCement India gained 3.81% after standalone net profit grew 9% to Rs 66.29 crore on 4.7% decline in net sales to Rs 509.29 crore in Q4 March 2020 over Q4 March 2019. Sales volume for Q4 March 2020 1090 kilotonne (KT), declining 10% from 1211 KT in Q4 March 2019. EBITDA rose 1.9% to to Rs 127.3 crore in quarter ending March 2020 as against Rs 124.9 crore posted in the same period last year. EBITDA margin grew by 164 basis points to 25% in Q4 March 2020 from 23.4% in Q4 March 2019. EBITDA per tonne jumped 13.2% to Rs 1,168 in Q4 March 2020 from Rs 1032 in Q4 March 2019.

    LT Foods spurted 7.80% after consolidated net profit surged 167.10% to Rs 58.34 crore on 18.8% jump in net sales to Rs 1,197.95 crore in Q4 March 2020 over Q4 March 2019. Consolidated profit before tax soared 149.80% to Rs 82.50 crore in Q4 March 2020 as against Rs 33.03 crore in Q4 March 2019. Current tax expenses stood at Rs 29.35 crore in Q4 March 2020 as compared to Rs 5.24 crore paid in Q4 March 2019. EBITDA grew 54% to Rs 150 crore in Q4 March 2020 from Rs 98 crore in Q4 March 2019. EBITDA margin improved to 12.3% in Q4 FY 2020 as against 9.6% in Q4 FY 2019, aided by operational efficiencies. The result was declared after market hours yesterday, 28 May 2020.

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