Weak market breadth; metal stocks tumble

Equity indices extended early losses and hit the day's low amid broader selloff. All the sectoral indices on the NSE were in the red. Metal, realty and pharma stocks witnessed steep selling. At 10:26 IST, the barometer index, the S&P BSE Sensex, fell 333.18 points or 0.68% at 48,701.20. The Nifty 50 index was down 128.1 points or 0.89% at 14,305.55.

In the broader market, the S&P BSE Mid-Cap index tumbled 2.35% while the S&P BSE Small-Cap index declined 1.75%.

The market breadth was weak. On the BSE, 680 shares rose and 1891 shares fell. A total of 127 shares were unchanged.

COVID-19 Update:

Total COVID-19 confirmed cases worldwide stood at 9,50,22,922 with 20,30,515 deaths. India reported 2,08,012 active cases of COVID-19 infection and 1,52,419 deaths while 1,02,11,342 patients have been discharged, according to the data from the Ministry of Health and Family Welfare, Government of India.

Economy:

Excise duty mop-up jumped 48% in the current fiscal on the back of a record increase in taxes on petrol and diesel, that more than made up for the below normal fuel sales. Excise duty collection during April-November 2020, was at Rs 1,96,342 crore, up from Rs 1,32,899 crore mop-up during the same period in 2019, according to data from the Controller General of Accounts (CGA).

Results Today:

Mindtree (down 1.15%), Indiabulls Real Estate (up 0.43%), IndiaMART InterMESH (down 0.66%), IRB Infrastructure Developers (down 0.52%), Majesco (up 5%), Rallis India (down 1.55%), Maharashtra Scooters (down 0.99%), Shakti Pumps (up 0.28%), Snowman Logistics (down 1.96%), Trident (up 2.72%) and Vishwaraj Sugar Industries (up 0.82%) are some of the companies that will announce their quarterly earnings today.

Buzzing Index:

The Nifty Metal index slipped 2.64% to 3,358.20. The index has lost 5% in three trading days.

Hindalco Industries (down 4.79%), Steel Authority of India (down 4.13%), Jindal Steel & Power (down 3.98%), Coal India (down 3.7%), Tata Steel (down 3.69%), Vedanta (down 3.27%), National Aluminium Company (down 3.2%), JSW Steel (down 2.82%) and NMDC (down 2.46%) declined.

Earnings Impact:

HDFC Bank rose 1.78% after the private lender reported 18.1% rise in net profit to Rs 8,758.29 crore on 4.1% increase in total income to Rs 37,522.92 crore in Q3 FY21 over Q3 FY20. Net interest income for the quarter ended 31 December 2020 grew by 15.1% to 16,317.6 crore from 14,172.9 crore for the quarter ended 31 December 2019, driven by advances growth of 15.6%, and a core net interest margin for the quarter of 4.2%. The bank's focus on deposits helped in maintaining a healthy liquidity coverage ratio at 146%, well above the regulatory requirement.

On the asset quality side, gross non-performing assets (NPAs) stood at Rs 8,825.56 crore as on 31 December 2020 as against Rs 11,304.60 crore as on 30 September 2020 and Rs 13,427.25 crore as on 31 December 2019. The bank's provisions and contingencies rose by 12.2% to Rs 3,414.13 crore in Q3 FY21 over Q3 FY20. The bank held floating provisions of Rs 1,451 crore and contingent provisions of Rs 8,656 crore as on 31 December 2020.

Pre-provision Operating Profit (PPOP) improved by 17.3% Rs 15,186.02 crore in the third quarter as compared to the corresponding quarter of the previous year. The total credit cost ratio was at 1.25% in the quarter ending 31 December 2020 as compared to 1.41% in the quarter ending 30 September 2020 and 1.29% in the quarter ending 31 December 2019.

L&T Finance Holdings slipped 5.33% after the company's consolidated net profit fell 51.4% to Rs 287.75 crore on 3% decline in total income to Rs 3622 crore in Q3 December 2020 over Q3 December 2019. As a prudent measure, the company continues to carry an additional provision of Rs 1,739 crore in Q3 December 2020. This is on account of macro prudential provisions, COVID-19 and accelerated Expected Credit Losses (ECL) provisions on Stage 1 & 2 assets, which are over and above the ECL model on GS3 and Stage 1 & 2 assets. The NBFC's Average Assets under Management (AAUM) of the investment management business stood at Rs 68,976 crore in Q3 December 2020. The AUM for equity and fixed income asset classes as on 31 December 2020 stood at Rs 38,906 crore and Rs 22,483 crore, with a growth of 9% and 20%, respectively, QoQ basis.

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