Shares hit the day's high; Nifty crosses 9800 mark

The domestic equity barometers extended early gains and hit the day's high in morning trade. Sentiment got a boost following the government's decision to start a phased reopening of the economy. Strong cues from other Asian stocks also supported buying.

At 10:27 IST, the barometer index, the S&P BSE Sensex, was up 848.60 points or 2.62% at 33,272.70. The Nifty 50 index was added 244.45 points or 2.55% at 9,824.75.

In the broader market, the S&P BSE Mid-Cap index was gained 1.97% while the S&P BSE Small-Cap index rose 2.89%.

The market breadth, indicating the overall health of the market, was strong. On the BSE, 1621 shares rose and 308 shares fell. A total of 112 shares were unchanged. In the Nifty 50 index, 47 shares advanced while 3 stocks declined.

Domestic macroeconomic data:

India's economy grew at 3.1% in Q4 March 2020. The gross domestic product (GDP) had expanded by 5.7% in the corresponding quarter of 2018-19, according to data released by the National Statistical Office (NSO). In 2019-20, the Indian economy grew by 4.2% against 6.1% expansion recorded in 2018-19. The government has also revised down the GDP growth in Q1, Q2, and Q3 to 5.2%, 4.4%, and 4.1% respectively.

Estimates will undergo revision as statutory data submission deadlines were extended by government in view of Covid-19 outbreak, Ministry of Statistics and Programme Implementation (MOSPI) said in a press note.

Meanwhile, the growth rate of Index of Eight Core Industries for April 2020 declined by 38.1% (provisional) compared to decline of 9% (provisional) in March 2020.

Lockdown update:

Union Ministry of Home Affairs (MHA) has issued guidelines for a phased-wise reopening of the economy from 1 June 2020. The new rules allow religious places, shopping malls, hotels and restaurants to open from June 8. The government has decided to allow all activities prohibited earlier in areas outside containment zones in a phased manner.

Buzzing Index:

The Nifty Metal index rose 3.93% to 1,953.75, extending gains for fifth day. The index has added 14.2% in five sessions.

JSW Steel (up 7.56%), Tata Steel (up 6.44%), Jindal Steel & Power (up 4.98%), NMDC (up 4.06%), Hindustan Copper (up 3.26%), National Aluminium Company (up 3.06%), Hindalco Industries (up 2.81%), Vedanta (up 2.6%), Hindustan Zinc (up 2.31%) and Steel Authority of India (up 1.49%) advanced.

Earnings today:

V-Guard Industries (up 3.28%), Orient Electric (up 5.95%) and Welspun Enterprises (up 4.63%) will announce their quarterly earnings today.

Earnings impact:

IDBI Bank hit an upper circuit of 20% at Rs 24.35 after the bank reported a net profit of Rs 135 crore as against net loss of Rs 4918.44 crore in Q4 March 2019. The bank returned to profit after reporting net loss for last 13 quarters. Total income rose 4.7% to Rs 6924.94 crore in Q4 March 2020 from Rs 6616.06 crore in Q4 March 2019. Profit before tax (PBT) stood at Rs 289.66 crore in Q4 March 2020 as against a pre-tax loss of Rs 7136.90 crore in Q4 March 2019.

IDBI Bank posted net interest income of Rs 2356 crore in Q4 March 2020, rising 46% year-on-year from Rs 1609 crore posted in the same period last year. Net interest margin stood at 3.8% in Q4 March 2020, rising 154 basis points from 2.26% in Q4 March 2019.

Gross non-performing assets (NPAs) stood at Rs 47,272.37 crore as on 31 March 2020 as against Rs 49,502.68 crore as on 31 December 2019 and Rs 50,027.94 crore as on 31 March 2019. The ratio of gross NPAs to gross advances stood at 27.53% as on 31 March 2020 as against 28.72% as on 31 December 2019 and 27.47% as on 31 March 2019. The ratio of net NPAs to net advances stood at 4.19% as on 31 March 2020 as against 5.25% as on 31 December 2019 and 10.11% as on 31 March 2019.

Provisions and contingencies declined 81.4% to Rs 1584.14 crore in Q4 March 2020 from Rs 8532.78 crore in Q4 March 2019. Provision coverage ratio (including technical write-offs) is 93.74% as on 31 March 2020.

As on 31 March 2020, the bank said it made COVID-19 related provisions of Rs 247 crore in Q4 March 2020 against standard assets. As a result of increased recovery from resolution of bad loans, there was write back of Rs 1,511 crore as against provision of Rs 7,233 crore in the same period last year.

Meanwhile the media reported that sale of government's stake in IDBI Bank may be delayed beyond March 2021, due to depressed valuation amid COVID-19 pandemic.

Adani Power surged 5.36% to Rs 38.35 after the company said that its board will meet on 3 June 2020 to consider a proposal to delist equity shares of the company from the BSE and the NSE. The promoter group collectively held 74.97% stake in the company as on 29 May 2020.

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