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Broader market rallies; auto stocks zoom

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Key domestic barometers extended gains in morning trade amid significant volatility. Investors risk appetite improved after the government announced resumption of domestic airline operations from 25 May, almost two month after the operations were suspended on March 25.

At 10:23 IST, the barometer index, the S&P BSE Sensex, was up 160.30 points or 0.52% at 30,978.91. The Nifty 50 index rose 45.05 points or 0.50% at 9,111.60.

The broader market surged. The S&P BSE Mid-Cap index added 1.34% while the S&P BSE Small-Cap index gained 1.21%.

The market breadth, indicating the overall health of the market, was strong. On the BSE, 1123 shares rose and 485 shares fell. A total of 86 shares were unchanged.

The sentiment, however, was cautious after ratings agency ICRA said that modest fiscal support, extension of lockdown, looming labour supply mismatches suggest deeper GDP contraction of 5% in FY2021.

"The immediate fiscal support under the 'Aatma Nirbhar Bharat Abhiyan' announced by the Government of India (GoI) is estimated at a modest 10% of the substantial total package of Rs. 21.0 trillion. With the further extension of the lockdown, and the expectation of substantial delays in getting the full supply chain operational, especially given the likelihood of enduring labour mismatches following the return of migrant workers to their home states, we now anticipate the GDP contraction in Q1 FY2021 to be deeper, and the subsequent economic recovery in India to be shallower and more delayed than our earlier assessment. Accordingly, we now expect Indian GDP (at constant 2011-12 prices) in FY2021 to record a sharper year-on-year (YoY) decline of 5.0% relative to our earlier expectation of 1.0-2.0%," ICRA said in a report.

COVID-19 Update:

Total COVID-19 confirmed cases worldwide stood at 49,96,634 far with 3,28,120 deaths. India reported 63,624 active cases of COVID-19 infection and 3,435 deaths, according to the data from the Ministry of Health and Family Welfare, Government of India.

In a bid to contain the spread of the novel coronavirus pandemic, the Centre on 17 May 2020 extended the nationwide lockdown till 31 May 2020.

Buzzing Index:

The Nifty Auto index rose 1.66% to 5,696.80, extending gains for third day. The index has added 4.91% in three sessions.

Bajaj Auto (up 4.53%), Hero MotoCorp (up 3.26%), TVS Motor Company (up 2.8%), Escorts (up 1.17%), Eicher Motors (up 1.16%), Ashok Leyland (up 1.04%), Maruti Suzuki India (up 1%) and Tata Motors (up 0.9%) advanced.

Meanwhile, Mahindra & Mahindra was down 0.64%.

Q4 Results Today:

Bajaj Finserv (up 0.43%), Hindustan Zinc (up 1.85%), Colgate-Palmolive (India) (up 0.71%), Bajaj Holdings & Investment (up 3.59%), Tata Metaliks (up 2.08%), Birla Corporation (up 4.35%) and Hawkins Cookers (up 2.63%) are some of the companies that will announce their quarterly earnings today.

Earnings Impact:

Jubilant FoodWorks rose 3.38% to Rs 1576. On a consolidated basis, the company reported a 58% drop in net profit to Rs 32.53 crore on 4.1% rise in net sales to Rs 908.75 crore in Q4 March 2020 over Q4 March 2019. Net profit was impacted after the company made an exceptional item for the quarter ending 31 March 2020 of Rs 12.39 crore. The company said exceptional item were related to expenses consequential of Covid-19 pandemic situation.

Domino's Same-store-sales growth (SSG) which refers to the year-over-year growth in sales for restaurants opened before previous financial year stood at -3.4% in Q4 March 2020 compared with 6% posted in the same period last year. Like for Like (LFL) sales growth for Domino's Pizza stood at -2.3% in Q4 March 2020 as against 7.4% in Q4 March 2019.

Chennai Petroleum Corporation slumped 5.29% to Rs 51 after the company reported a standalone net loss of Rs 1637.56 crore in Q4 March 2020 as compared to a net loss of Rs 29.33 crore in Q4 March 2019. Net sales in the fourth quarter declined 13.63% to Rs 8,609.51 crore as against Rs 9,968.43 crore reported in the corresponding period last year.

Average gross refining margin (GRM) dropped to $1.18 per barrel in Q4 March 2020 as compared to $3.70 per barrel in Q4 March 2019. The GRM was significantly impacted by inventory losses on account of steep fall in crude / product prices during the year end caused by the COVID-19 Pandemic situation.

In terms of Covid-19 related impact, Chennai Petroleum said that the offtake of petroleum products in April/May 2020 had been sluggish and accordingly, the capacity utilization had been low, which would be normalised based on turnaround of the situation.

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(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Thu, May 21 2020. 10:24 IST