US-China Trade Talks, Domestic Air Passenger Traffic, and Top Stocks in Focus Today

Thu, 20 Jun Pre-Open | Monish Vora, TM Team

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Indian share markets continued to witness volatility during closing hours yesterday and ended on a flat note.

Gains were seen in the realty sector and consumer durables sector, while stocks from the auto sector and healthcare sector witnessed selling pressure.

At the closing bell yesterday, the BSE Sensex stood higher by 66 points (up 0.2%) and the NSE Nifty stood flat.

The BSE Mid Cap index ended down by 0.7%, while the BSE Small Cap index ended the day down by 1.4%.

Top Stocks in Focus Today

From the engineering sector, market participants will be tracking Jain Irrigation share price today. The stock of the company tanked over 20% yesterday and were trading at their lowest levels since February 2005 after rating agency India Ratings and Research (Ind-Ra) downgraded the company's long-term issuer rating to 'IND BBB' from IND A-" with negative outlook.

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The rating agency said the downgrade reflects deterioration in the liquidity profile of the company on account of a delay in the realization of its receivables from its micro-irrigation systems (MIS) segment.

Reports state that Jain Irrigation had around 74% of its long-term debt obligations in foreign currency. The company hedges only a small portion of this debt, while profitability from overseas operations and derivatives help in mitigating the foreign exchange risk to an extent.

In the past four trading sessions, the stock has tanked 45% on reports of debt default.

From the healthcare sector, Wockhardt share price will be in focus today as the company is working on alternate options to raise funds and reduce debt.

The company is reportedly planning to sell a minority stake in its domestic formulations business, and this is a precautionary move in case the private equity funds do not fructify.

From the construction sector, IRB Infrastructure Developers share price will be in focus today as it is reported that the National Highways Authority of India (NHAI) was planning to find a new operator for the Mumbai-Pune Expressway after the company's agreement ends in August.

Domestic Air Passenger Traffic Rebounds in May 2019

In the news from the aviation space, domestic air passenger traffic saw a rebound in May 2019 as it rose by 2.96% after a slump in April.

According to the Directorate General of Civil Aviation (DGCA) data, domestic airlines flew 12.2 million passengers in May 2019, as against 11.9 million passengers carried in the same month of last year.

In April 2019, domestic air traffic dipped 4.5% year-on-year (YoY). This was the sharpest decline in at least five years. Suspension of operations by Jet Airways on April 17 due to lack of funds was one of the primary reasons why domestic air traffic saw a fall in that month.

In terms of market share, InterGlobe Aviation (IndiGo) maintained its lead position with 49% share of the domestic passenger market in May.

SpiceJet's market share increased from 13.1% in April to 14.8% in May, giving the carrier number two spot. The passenger load factor for SpiceJet was 93.9% in May.

From the Global Financial Markets...

China and the United States are said to rekindle trade talks ahead of a meeting next week between Presidents Donald Trump and Xi Jinping.

The news cheered financial markets on hopes that an escalating trade war between the two countries would abate.

Trump on Tuesday said that teams from the two sides would begin preparations for the leaders to sit down at the G20 summit in Osaka.

Also, China, which previously declined to say whether the two leaders would meet, confirmed the get-together.

Note that the world's two largest economies are in the middle of a trade war that has weighed on financial markets and damaged the world economy.

How the discussions pan out remains to be seen. We will keep you updated on all the developments form this space. Stay tuned.

To know what's moving the Indian stock markets today, check out the most recent share market updates here.

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