Sensex Zooms 622 Points; Healthcare, Capital Goods and Finance Stocks Rally
Closing

Indian share markets witnessed positive trading activity throughout the day and ended on a strong note.

Benchmark indices rose sharply in the afternoon session today, tracking mixed cues from global markets, backed by buying pressure in banking, financials and pharma stocks.

At the closing bell, the BSE Sensex stood higher by 622 points (up 2.1%) and the NSE Nifty closed higher by 187 points (up 2.1%).

The SGX Nifty was trading at 9,077, up by 193 points, at the time of writing.

The BSE Mid Cap index and the BSE Small Cap index ended their day up by 1.5% and 1.1%, respectively.

On the sectoral front, gains were largely seen in the healthcare sector, capital goods sector and finance sector.

Asian stock markets finished on a mixed note. Japanese stocks gained today, supported by hopes that the government would allow economic and social activities to resume in response to a decline in new coronavirus infections.

Investor sentiment also got a boost after the Bank of Japan said it would hold an emergency meeting on Friday to decide the details of a loan programme for small firms.

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The Nikkei ended 0.8% higher on the back of above news. Meanwhile, the Hang Seng and the Shanghai Composite ended their day down by 0.1% and 0.5%, respectively.

European shares edged lower today as doubts over a potential COVID-19 vaccine reignited fears about the slow recovery from a looming global recession.

Gold prices are trading up by 0.3% at Rs 47,210 per 10 grams.

The rupee is trading at 75.79 against the US$.

Note that the coronavirus impact has shaken markets worldwide. After all, 2020 has already seen one of the worst market crashes in history.

Will the 2020 Market Crash Be Worse than 2009?

Naturally, there is an atmosphere of fear all round.

Is it time to sell stocks now? Will the correction get worse?

History has shown that after years like the one we had just now, the next 3 years are good for the markets. In fact, these corrections are the rare times when you find businesses with solid fundamentals at reasonable valuations.

If you can find good businesses that can survive the current crisis, you will do well in the long run.

Moving on, market participants were tracking Bajaj Auto share priceAjanta Pharma share price and UltraTech Cement share price as these companies announced their March quarter results today.

In news from the pharma sector, Dr Reddy's Laboratories reported a 76% year-on-year (YoY) jump in its net profit for the quarter ended March 31, 2020 (Q4FY20).

For Q4FY20, the company's net profit stood at Rs 7,642 million against Rs 4,344 million in the corresponding quarter of the previous financial year.

Revenues came in at Rs 44.3 billion. E came at Rs 10 billion against an estimate of Rs 9.3 billion, while EBITDA margin came at 22.6%.

The company said that its global generics segment clocked a 20% YoY jump to Rs 36.4 billion.

Among the geographies, Europe's segment saw a jump of 80% YoY in revenue, while North America and emerging markets rose 21% and 15% YoY, respectively. India segment rose 5% YoY.

The company's board of directors also recommended a final dividend of Rs 25 per equity share for the financial year 2019-20.

Dr Reddy's Laboratories share price ended the day up by 5.9%.

Speaking of the pharma sector, in December 2019, co-head of Research at Equitymaster, Tanushree Banerjee had predicted that pharma could be the sector to see a big rebound in 2020.

And rightly so, most pharma companies have re-emerged as the safer bets for investors in the ongoing market turmoil. Last month, the Indian rupee touched a new record low of Rs 76.92 against the US dollar. Most pharma companies generate their revenues through exports. Hence, a depreciating rupee is a positive development for them.

As per Tanushree, in a post Covid-19 world, healthcare expenditures globally will see a big rejig.

Tanushree has her eyes on an exciting tech stock. The company in question is developing its medical division. It's focusing on telemedicine, which Tanushree believes will be a huge growth driver in a post Corona world.

Moving on to news from the power sector, Tata Power share price was in focus today.

The company on Tuesday posted a two-fold jump in its consolidated net profit to Rs 4.8 billion in Q4FY20. It has a consolidated net profit of Rs 1.7 billion in the year ago period.

The company, in its earnings release, said that the jump in consolidated net profit was due to due to gain on sale of Cennergi investment offset by impairment provision in SEO & reversal of MAT Credit due to transition to new tax regime in the renewables business.

The company's revenue slipped 9.4% to Rs 68.8 billion, as compared to Rs 76 billion in the corresponding quarter last year mainly due to delay in project execution in solar EPC business on account Covid-19, lower power demand and lower coal price.

Earnings before interest, taxes, depreciation, and amortisation (EBITDA) for the quarter was up 6% at Rs 20.1 billion as compared to Rs 19 billion during the previous quarter.

In other news, power utility company CESC said a board panel has approved raising Rs 3 billion through issuance of non-convertible debentures (NCDs).

As per reports, proceeds of the issue will be utilised for capital expenditure and general corporate purposes.

The issue is proposed to be listed on the Wholesale Debt Market segment of the NSE.

CESC share price ended the day down by 0.7%.

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


Indian Indices Trade Higher; L&T and Tata Steel Top Gainers
12:30 pm

Share markets in India are presently trading on a positive note. The BSE Sensex is trading up by 221 points while the NSE Nifty is trading up by 73 points.

The BSE Mid Cap index and the BSE Small Cap index are trading up by 0.7% and 0.5%, respectively.

Barring telecom stocks and IT stocks, all sectoral indices are trading in green with stocks in the energy sector and FMCG sector witnessing most of the buying interest.

The rupee is currently trading at 75.68 against the US$.

Gold prices are currently trading up by 0.4% at Rs 47,245.

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Note that the coronavirus impact has shaken markets worldwide. Businesses are seeing unprecedented shifts in a virus struck, locked down economy.

As per Richa Agarwal, editor of our premium smallcap service Hidden Treasure, there are robust smallcap businesses that are not just resilient but likely to emerge stronger from this crisis.

Richa has shared her views on these smallcaps, in the video below. Tune in now...

Moving on, market participants are tracking Bajaj Auto share price, Ajanta Pharma share price and UltraTech Cement share price as these companies are scheduled to announce their March quarter results later today.

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In news from the macroeconomic space, Finance Minister Nirmala Sitharaman defended the government's stimulus measures, saying she remains open to more measures as and when needed as the impact of the coronavirus pandemic and the consequent lockdown unfolds.

Sitharaman said that decisions were made by various government departments and took cognisance of the best way to spend the public money.

She told The Economic Times that the government's restrained fiscal policy was informed by history. "Mostly I would say, coming from the learning based on the experiences of 2008-13, that's one of the reasons why we have taken this course," she said.

In the wake of the 2008 financial crisis, the then United Progressive Alliance (UPA) government led by the Congress had announced a substantial stimulus package, but it eventually led to a spike in inflation, balance of payments crisis and currency depreciation.

On the issue of a bigger stimulus through monetisation, she said all suggestions had been considered and this was the call that had been taken.

She countered the criticism from various quarters that the package was largely made up of supply-side measures and didn't contain much that would boost demand.

She said the package has been designed in such a way that every sector benefits, responding to the question that there was no direct support for stressed industries such as aviation and hospitality.

The measures announced by the finance minister included free food grains for the poor, support packages for micro small and medium enterprises and a host of sectors, easy loans for struggling business besides a slew of reforms aimed at creating a self-reliant India.

Prime Minister Narendra Modi announced a Rs 20 trillion stimulus package and the finance minister announced the allocation of the funding to various sectors over a series of five press conferences last week.

However, investors were disappointed by the measures announced. Indian share markets crashed over 3% on Monday as the measures announced failed to provide any near-term relief.

It is interesting to note that unlike the previous stimulus packages, this one is no longer a tiny fraction of India's GDP.

This is the largest stimulus package ever announced by India.

At about 10.2%, it is among the biggest stimulus packages announced over the past few months by governments all around the world. This is evident in the chart below:

Now, executing the package, keeping India's long-term economic interests in mind, will be the key.

Moving on to news from IT sector, shares of Larsen & Toubro (L&T) Infotech rallied over 7% today after the company posted revenue growth of 4.7% in constant currency terms on a sequential basis in the March quarter (Q4FY20).

In rupee terms, the firm's revenue grew by 7.1% quarter on quarter (QoQ) at Rs 30.1 billion, while consolidated net profit rose 13% year-on-year to Rs 4.3 billion.

The company reported 10.3% jump in profit before tax (PBT) at Rs 5.5 billion over the previous quarter.

The company said it won two large deals in Q4 with net-new TCV in excess of US$ 100 million, culminating in a record eight large deal wins in FY20.

The company's board also recommended a final dividend of Rs 15.50 per equity share of face value of Rs 1 each.

L&T Infotech share price is presently trading up by 6.8%.

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


Sensex Opens Higher; Capital Goods and Realty Stocks Lead
09:30 am

Asian stock markets are lower today as Chinese and Hong Kong shares fall. The Shanghai Composite is off 0.3% while the Hang Seng is down 0.1%. The Nikkei 225 is trading up by 0.7%. Meanwhile, the S&P 500 closed lower on Tuesday, as investors focused on a report questioning Moderna's recent coronavirus vaccine early-stage trial results, wiping out modest gains on the benchmark index in the last hour of trading.

Back home, India share markets opened higher. The BSE Sensex is trading up by 127 points while the NSE Nifty is trading up by 49 points. The BSE Mid Cap index and BSE Small Cap index opened up by 0.3% and 0.1% respectively.

Except IT stocks and power stocks, all sectoral indices are trading in green with capital goods stocks, realty and telecom stocks witnessing maximum buying interest.

Moving on, gold prices are currently trading down 0.8% at Rs 47,050.

The rupee is currently trading at 75.63 against the US$.

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The rupee strengthened by as much as 30 paise to 75.61 against the US dollar on Tuesday amid a mixed trend in Asian currencies.

The rupee moved in a range of 75.61-75.79 during the four-hour session, having started the day at 75.77 against the greenback.

Sharp gains in domestic equity markets and weakness in the dollar supported the rupee. The rupee ended at 75.64 against the US currency.

At this level, the rupee is down 6% against the greenback so far this year.

In a recent article titled The Sharp Fall in Indian Rupee: 6 Points to Know, we dive deeper and look at the factors behind rupee's depreciation.

We also reached out to Vijay Bhambwani, editor of Weekly Cash Alerts, who is closely tracking the Indian rupee in the current scenario. Here's what he has to say...

  • The onset of Corona virus has not been kind to the INR.

    The Rupee futures (USDINR) opened in March at 72.36 and have closed at 76.61 on April 09 2020. That is a decline of 5.87% in 6 short weeks.

    The implications of the same will be widespread. India is a net importing Country. Everything that we import will now be more expensive. Approximately two thirds of all our imports are fossil fuels. Fuels are what we call multiplier effect commodities. If fuel prices rise at the petrol pumps, everything from fruits, vegetables, grains to dairy and poultry products get expensive.

    That impact will be felt at a later date. I expect the trickle down effect to start appearing in prices after the April-June quarter is over.

    I have already factored in this aspect in my statistical data model and plan to identify such events to generate profitable trading opportunities for my WCA plan subscribers.

Vijay has also talked about the Indian currency in a special edition podcast from Investor Hour. He shares what's around the corner for Indian rupee and how should position oneself for potential gains.

You can listen the entire episode here...

Moving on to the news from pharma sector. As per an article in a leading financial daily, Dr. Reddy's Laboratories has launched FXR, a therapeutic equivalent generic version of Ocaliva (obeticholic acid), in India.

Ocaliva is a trademark of Intercept Pharmaceuticals. The drug is indicated for the treatment of primary biliary cholangitis (PBC). PBC is a rare chronic autoimmune disease characterised by destruction of small bile ducts in the liver.

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The launch of FXR represents Dr. Reddy's expertise to accelerate access to affordable alternatives for complex products, the reports noted.

The product, which is available in strengths of 5mg and 10mg tablets, would be an important addition to the company's hepatology portfolio.

Dr. Reddy's share price opened up by 0.7%.

Here's an interesting data on Dr. Reddy's Lab, investing just Rs 100,000 in Dr. Reddy's Labs in 1992, it would have given a whopping Rs 4.89 crores in 2014!

Profit Opportunities in the Rebirth of India

Co-head of Research, Tanushree Banerjee believes, the opportunities in the Rebirth of India are not only more profitable than the ones in 1991 but the gains could come faster too.

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


Fiscal Deficit of Centre and States, Rising Crude Oil Prices, Bharti Airtel Q4 Results, and Top Cues in Focus Today
Pre-Open

Indian share markets ended marginally higher yesterday.

Benchmark indices rose sharply in early trade yesterday, tracking firm cues from global markets and initial success in coronavirus vaccine trials.

In a significant development, an American biotechnology company Moderna said its initial vaccine tests in people have shown promising results and can stimulate an immune response against the coronavirus.

However, Indian share markets trimmed gains in the last hour of trading, led by weakness in European indices.

European markets fell yesterday as investors turned cautious over bleak economic data and feared of second wave of infections amid re-opening of many countries from lockdown.

At the closing bell yesterday, the BSE Sensex stood higher by 167 points (up 0.6%) and the NSE Nifty closed higher by 56 points (up 0.6%).

The BSE Mid Cap index ended the day up by 0.5%, while the BSE Small Cap index ended down by 0.2%.

On the sectoral front, gains were largely seen in the telecom sector, power sector and automobile sector, while PSU bank stocks witnessed selling pressure.

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The SGX Nifty was trading at 8,845, up by 19 points at the time of Indian stock market closing hours yesterday.

SGX NIFTY is a derivative of NIFTY index traded officially in Singapore stock exchange.

How it performs today and affects trades in Indian markets remains to be seen.

We will keep you updated about its movement in upcoming market commentaries. Stay tuned.

Note that the coronavirus impact has shaken markets worldwide. For the BSE Sensex, FY20 was the second worst year post FY08, the year of the global financial crisis.

Good Time to Start Investing Now?

Naturally, there is an atmosphere of fear all round.

Is it time to sell stocks now? Will the correction get worse?

History has shown that after years like the one we had just now, the next 3 years are good for the markets. In fact, these corrections are the rare times when you find businesses with solid fundamentals at reasonable valuations.

If you can find good businesses that can survive the current crisis, you will do well in the long run.

In the video below, Richa Agarwal, editor of our premium smallcap service Hidden Treasure, talks about robust smallcap businesses that are not just resilient but likely to emerge stronger from the coronavirus crisis.

Tune in now...

Crude Oil Prices Rise on Output Cuts

From the oil & gas sector, shares of oil and gas companies will be in focus today as crude oil prices extended gains into the fourth straight session yesterday, amid signs that producers are cutting output as demand picks up.

Shares of ONGC, Oil India, Petronet LNG, and Indraprastha Gas witnessed buying on the above news.

On Monday, oil prices jumped to their highest in over two months. Brent Crude futures for July delivery rose US$ 2.31, or 7%, to US$ 34.81 a barrel, while US West Texas Intermediate (WTI) crude rose US$ 2.39, or 8%, to US$ 31.82.

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As per a Reuters report, oil markets were boosted by signs that output cuts agreed by the Organization of the Petroleum Exporting Countries (OPEC) and others including Russia, a group known as OPEC+, are being implemented on the ground.

Bullish oil investors have also become more optimistic as Saudi Arabia said it would cut an extra 1 million barrels a day in June, with the United Arab Emirates and Kuwait also contributing more than their targeted reductions.

The above development comes as a welcome breather as crude oil futures crashed last month and briefly went to negative prices, implying that investors would need to pay buyers to take delivery of crude oil amid dwindling storage space.

What effect crude oil prices have on Indian stocks markets and the Indian economy in the coming days remains to be seen. Meanwhile we will keep you updated on the latest developments from this space.

Speaking of crude oil, in one of his recent videos, Vijay Bhambwani has explained why he's expecting to recommend a short sell trade on crude oil to his subscribers.

You can check the same here: You Will Get a Chance to Short Crude Oil Once Again

Fiscal Deficit of Centre and States to Top 12% of GDP

As per an article in a leading financial daily, the combined fiscal deficit of the Centre and states will top 12% of the gross domestic product (GDP) because of the recent economy-boosting measures, and higher borrowings by States to meet COVID-19 emergencies.

According to a report, the combined fiscal gap will increase by 480 basis point (bps).

In case of the Centre, the fiscal gap will increase by 200 bps as earlier this month it hiked market borrowings by a whopping Rs 4.2 trillion or 54% over the budget estimate to Rs 12 trillion.

Another 80-bps increase will be on account of the fiscal boost.

In case of states, the fiscal gap will rise by 200 bps after the Centre hiked the borrowing limit of states to 5% of GDP on Sunday.

While the government claims it is pump-priming the pandemic stricken economy by a whopping Rs 20.9 trillion (10% of the GDP) package, in actual fiscal outgoes, this converts only into a paltry 0.8% of GDP, even though it has hiked the borrowing by a whopping Rs 4.2 trillion.

Further, the higher borrowing by states, which are actually spending much more than the Centre on COVID-19 control and management, will involve relaxing the Fiscal Responsibility and Budget Management Act (FRBM) guidelines.

This 2% more borrowing will increase their debt issuance by Rs 4.3 trillion, the reports noted.

It will be interesting to see how this pans out in the coming year. Stay tuned for more news from this space.

March Quarter Results: Bharti Airtel Sees 15.1% YoY Growth in Revenues

Market participants will be tracking Bajaj Finance share price, Nesco share price and Sanofi India share price as these companies announced their March quarter results (Q4FY20).

Nesco reported its net profit at Rs 529 million for Q4FY20 as against Rs 513 million reported in the same quarter previous year.

Meanwhile, Sanofi India reported net profit at Rs 854 million, down 8.1% year-on-year (YoY).

From the telecom space, Bharti Airtel share price hit a record high of Rs 591.95 on the BSE yesterday after the company reported 15.1% year-on-year (YoY) growth in its consolidated revenue at Rs 237.2 billion for Q4FY20.

Shares of the company surged as brokerages stayed upbeat on the scrip even after the telco reported a surprise Rs 52.4 billion loss for March quarter.

The telecom operator said it took a hit from an exceptional item of Rs 70 billion in the quarter, which comprised mainly of a charge on account of reassessment of regulatory cost based on a recent judgment on one-time spectrum charge (OTSC)-related matter.

Bharti Airtel's consolidated EBITDA (earnings before interest, taxes, depreciation and amortization) witnessed an increase of 51.7% YoY to Rs 103.3 billion in Q4FY20.

The company's domestic revenues reported a strong 14.4% YoY jump at Rs 174.4 billion during the quarter.

Mobile revenues witnessed a YoY growth of 21.8% primarily led by increase in 4G customer base coupled with improved tariffs.

Subscriber additions for the quarter were flat sequentially at 284 million, but 4G subscriptions grew 10% to 136 million.

The company delivered a strong 25.2% YoY growth in average revenue per user (ARPU) at Rs 154, as against Rs 123 in the same period last year. Sequentially, the ARPU rose 14.3% from Rs 135.

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