Shares tumble as pandemic fears hit risk appetite

Domestic shares declined for the fourth straight session on Wednesday amid weak global cues. The Nifty ended below the 11,700 mark. The spread of the coronavirus has rattled investors across the globe who fear new outbreaks will push down global demand.

The S&P BSE Sensex, fell 392.24 points or 0.97% at 39,888.96, its lowest closing level since 3 February 2020.

The Nifty 50 index declined 119.40 points or 1.01% at 11,678.50, its lowest closing level since 1 February 2020.

In the broader market, the BSE Mid-Cap index fell 1.34% and the BSE Small-Cap index fell 0.82%.

The market breadth was weak. On the BSE, 830 shares rose and 1629 shares fell. A total of 149 shares were unchanged.

The Nifty 50 index tumbled 3.72% and the Sensex plunged 3.47% in four sessions amid fears of a greater impact on economic growth from the rapid spread of the coronavirus outside China.

Investors were also cautious ahead of the India's December quarter gross domestic product (GDP) numbers to be released on Friday, 28 February 2020. India's GDP grew 4.5% in Q2 September 2019, the lowest since Q4 March 2013.

Numbers to Watch:

The yield on 10-year benchmark federal paper fell to 6.343% at 16:45 IST compared with 6.367% at close in the previous trading session.

In the foreign exchange market, the rupee edged higher against the dollar. The partially convertible rupee was hovering at 71.655, compared with its close of 71.85 during the previous trading session.

In the commodities market, Brent crude for April 2020 settlement fell 84 cents to $54.11 a barrel. The contract fell $1.35 or 2.40% to settle at $54.95 a barrel in the previous trading session.

Foreign Markets:

Shares in Europe and Asia fell across the board on Wednesday as a US warning to Americans to prepare for the possibility of a coronavirus pandemic drove another Wall Street tumble and pushed yields on safe-haven Treasuries to record lows.

China, the epicenter of the outbreak, reported 406 new confirmed cases and an additional 52 deaths as of 25 Feb. Meanwhile, South Korea, where there is the second largest outbreak, reported a jump of 169 new cases, bringing the country's total to 1,146 infected. It reported one additional death, bringing the total number of fatalities to 11.

In Europe, Italy remains the key concern for the region with the virus now having spread south, beyond its initial outbreak in the northern regions of Lombardy and, to a lesser extent, Veneto.

In US, stocks closed with the Dow Jones Industrial Average registering its worst two day loss on record after the Centers for Disease Control and Prevention warned Americans to prepare for a coronavirus outbreak and investors attempted to assess the impact of the epidemic in China on global trade and travel.

Buzzing Indian Index:

The Nifty Auto index declined 2.15% to 7,207.95, extending its losing streak to third consecutive session. The index has slumped 6.36% in three sessions.

Ashok Leyland (down 3.23%), Maruti Suzuki India (down 2.73%), Hero MotoCorp (down 1.99%), Eicher Motors (down 1.69%), Mahindra & Mahindra (down 1.22%), Escorts (down 0.49%) and Bajaj Auto (down 0.01%) declined.

Tata Motors fell 3.57%. The auto major on Wednesday said its board approved committee has approved allotment of 5000 rated, listed, unsecured, redeemable, non-convertible debentures E28-B series of face value Rs 10 lakh each, at par, aggregating Rs 500 crore in two tranches of Rs 250 crores each, on private placement basis. The announcement was made during market hours today, 26 February 2020.

TVS Motor Company fell 0.25%. The two-wheeler maker in an exchange filing on 24 February said that it estimates Coronavirus would lead to a 10% drop in production for February 2020. The company said that its direct dependency on China for the import of automobile components has been limited but some Tier II suppliers have been impacted adversely which would lead to drop in the planned production for the month of February 2020. China is a key part of the global automobile supply chain.

The S&P BSE Telecom index rose 0.25% to 1,213.56 after the Telecom Regulatory Authority of India (TRAI) released telecom subscription data for the month of December 2019 yesterday, 25 February 2020.

Bharti Airtel (down 0.10%) and Reliance Industries (down 1.76%) declined. Vodafone Idea rose 0.51%.

Reliance Jio Infocomm, controlled by Reliance Industries (RIL), recorded a sharp fall in mobile phone user additions in December 2019. Jio added 82,308 mobile users, taking its subscriber base past 37 crore in December. This was lower than 9.1 million and 5.6 million customer additions reported by the company in October and November respectively last year.

Debt-laden Vodafone Idea lost 36.44 lakh users in December, while Bharti Airtel lost 11,050 users over November 2019. Consequently, Vodafone Idea and Airtel's customer bases fell to 33.26 crore and 32.72 crore respectively, as per latest subscriber data collated by TRAI.

Stocks in Spotlight:

JSW Steel fell 1.12%. Ratings agency Fitch has revised the outlook on the company to ''negative'' from ''stable''. Fitch has affirmed its long-term issuer default (IDR) rating on the company to "BB". The outlook on the IDR has been revised to negative from stable. The agency has also affirmed JSW's senior unsecured rating and the rating on its senior unsecured notes at "BB". The revision of the outlook reflects the risks in JSW's ability to deleverage and generate positive free cash flow (FCF) because of the various challenges in the Indian market, Fitch said. The disclosure was made during trading hours on Wednesday, 26 February 2020.

Cipla slipped 0.68%. The company has received a warning letter from US drug regulator for its Goa facility. The United States Food and Drug Administration (USFDA) had inspected Cipla's Goa facility from 16 to 27 September 2019. The company said that it remains committed to maintaining the highest standards of compliance and will work closely with the agency to comprehensively address all the observations.

Interglobe Aviation rose 1.49% to Rs 1397.25 after the company denied media reports suggesting violations in corporate governance and listing disclosure norms of the firm. With reference to news quoting "Sebi finds undisclosed related party transaction in preliminary inquiry," InterGlobe Aviation clarified post market hours on Tuesday (25 February) that the news item is factually incorrect and the company has not received any communication from Sebi in this regard. The media reported that a preliminary probe by the Securities and Exchange Board of India (Sebi) has suggested violation of certain listing disclosure norms as also of fair corporate governance practices at the company.

Salasar Techno Engineering added 1.21%. The company secured an order for construction of 132/33KV, 2X50 MVA sub-station at Nathkuchi along with associated transmission line from Assam Electricity Grid Corporation. The order, worth Rs 45 crore, is to be executed by 20 February 2022.

India Cements hit an upper circuit of 20% at Rs 104.60 after Radhakishan Damani's brother, Gopikishan Damani purchased 2.75% stake in the company. Gopikishan Damani bought 85.22 lakh shares or 2.75% stake at Rs 82.70 per share on NSE yesterday (25 February).

ITD Cementation India added 1.91% after ICRA removed the rating watch with developing implication and assigned a stable outlook on the credit instruments worth Rs 4900 crore of the company. The long term rating for the company is now denoted as [ICRA]A (Stable) and short term rating as [ICRA] A1.

Shilpa Medicare slumped 5%. In an exchange filing made during market hours, the drug maker said that United States Food and Drug Administration (USFDA) conducted Good Manufacturing Practices (GMP) inspection of Shilpa Medicare's finished dosage formulation facility (sterile and non-sterile) located at 5-20 to 5-26, Pharmaceutical Formulations SEZ, TSIIC, Jadcherla, Telangana State, India between 13 and 25 of February 2020. At the conclusion of inspection, the US drug regulator issued Form 483, with 15 observations. The company is preparing responses to the observations, which will be submitted to the Agency within 15 business days. The company is committed to address these observations promptly.

Sanofi India rose 1.61% after the company announced robust Q3 numbers after market hours yesterday. On a standalone front, net profit jumped 22.69% to Rs 97.30 crore in Q4 December 2019 (Q4FY19) as against Rs 79.30 crore reported in Q4 December 2018 (Q4FY18). Revenue from operations soared 13.75% year-on-year (Y-o-Y) to Rs 826.30 crore in Q4FY19. Meanwhile, the company recommended a dividend of Rs 106 per equity share of Rs 10 for the year ended 31 December 2019. In addition, after reviewing the cash requirements for the firm's operations, a one-time special dividend of Rs 243 per equity share of Rs 10 is also being recommended. The stock hit an intraday high of Rs 7637.55 which is also a record high for the counter.

Godawari Power & Ispat gained 2.41% after the company said it commenced commercial production in rolling mill and iron ore beneficiation plant from 25 February 2020. These facilities will help company sell valued added products, the company said in a notification post market hours on Tuesday (25 February).

Aurobindo Pharma rose 1.18%. The drug maker said its Unit VIII, API manufacturing facility at Hyderabad received the Establishment Inspection Report (EIR) with Voluntary Action Initiated (VAI) status from US drug regulator.

Bandhan Bank fell 2.38%. The bank said the Reserve Bank of India (RBI) has allowed Bandhan Bank to expand its branch network after considering the efforts made by the private lender to comply with the licensing conditions.

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