Key benchmark indices ended near the day's low on Monday. Sentiment took a hit after Moody's cut 2021 GDP growth forecast to 5.8% from 6.7% earlier. State-run banks, exposed to the telecom operators, tumbled after the Supreme Court refused relief and asked telecom operators to pay adjusted gross revenue (AGR) dues by 17 March.
The barometer S&P BSE Sensex slipped 202.05 points or 0.49% at 41,055.69, as per the provisional closing data. The Nifty 50 index declined 67.65 points or 0.56% at 12,045.80, as per the provisional closing data.
Selling was wide spread. The S&P BSE Mid-Cap index fell 0.91% while the S&P BSE Small-Cap index lost 1.02%.
The market breadth favored the sellers. On the BSE, 831 shares rose and 1717 shares fell. A total of 168 shares were unchanged. In Nifty 50 index, 19 stocks advanced while 31 stocks declined.
Economy:
Moody's Investors Service has cut India's 2020 GDP growth forecast to 5.4% from 6.6%. The credit rating agency also trimmed its 2021 GDP forecast to 5.8% from 6.7%. The cut in growth forecast is on the back of coronavirus outbreak which could hurt India's recovery. It added that any recovery in the country may be lower than expected.
Last month, the Economic survey estimated GDP growth for Financial Year 2020-21 at 6-6.5% while FY20 GDP growth is estimated at 5%.
Meanwhile, India's exports declined 1.7% to $25.97 billion in January 2020 over a year ago. Meanwhile, merchandise imports fell at slower pace of 0.7% to $41.14 billion. The trade deficit rose 0.9% to $15.17 billion in January 2020 from $14.73 billion in January 2019.
Services exports increased 11.6% to $20 billion in December 2019 over December 2018. Meanwhile, India's services imports moved up 10.4% to $12.56 billion in December 2019. India's services trade surplus galloped 13.7% to $7.45 billion in December 2019 from $6.55 billion in December 2018.
India's foreign exchange reserves jumped by $1.70 billion and stood at record high of $473 billion in the week ended 7 February 2020. The foreign exchange reserves had stood at $471.30 a week ago.
Buzzing Index:
The Nifty PSU Bank fell 3.01% to 2,144.75, underperforming the other sectoral indices on the NSE.
Bank of Baroda (down 4.23%), Punjab National Bank (down 3.69%), Syndicate Bank (down 3.42%), Allahabad Bank (down 3.3%), Indian Bank (down 3.24%), Corporation Bank (down 2.88%), Bank of India (down 2.7%), Canara Bank (down 2.69%), IDBI Bank (down 2.26%), Andhra Bank (down 2.25%), United Bank of India (down 2.12%), Central Bank of India (down 2.04%), Union Bank of India (down 1.89%), Punjab & Sind Bank (down 1.74%), Bank of Maharashtra (down 1.67%), UCO Bank (down 1.41%) and State Bank of India (down 1.39%) declined.
Stocks in Spotlight:
Bharti Airtel advanced 0.03% to Rs 565.25 after the company said that it had paid Rs 10,000 crore to Department of Telecommunications (DoT) as part payment of its AGR dues. It includes an amount on behalf of Telenor India, merged with the company and Rs 500 crore on behalf of Bharti Hexacom, a subsidiary company. The telecom major said it is in a process of completing the self-assessment exercise expeditiously and will make the balance payment upon completion of the same, before the next date of hearing in the Supreme Court (SC).
Vodafone Idea fell 3.49% to Rs 3.32. The company said it will pay its dues linked to AGR in the next few days after assessing the amount. With respect to the filing of an application for modification of the supplementary order of the SC dated 24 October 2019, the teleco informed that post the hearing on Friday (14 February), the company has received letters from DoT directing immediate payment. The company is currently assessing the amount that it will be able to pay to DoT towards the dues calculated based on AGR, as interpreted by SC in its order dated 24 October 2019. The company proposes to pay the amount so assessed in the next few days. The company's ability to continue as a going concern is essentially dependent on a positive outcome of the application for modification of the Supplementary Order, Vodafone Idea said in an exchange filing made on Saturday evening.
ONGC fell 3.15% to Rs 100. The state-run oil major said its consolidated net profit dropped 47.8% to Rs 4,903.68 crore on 6.7% decline in net sales to Rs 1,09,443.39 crore in Q3 December 2019 (Q3 FY20) over Q3 December 2018 (Q3 FY19). Crude oil production during the quarter declined 3.5% to 5.82 Million Tonne (MT). Oil price realisation from nominated blocks dipped 10% to $59.73 per barrel during the December quarter.
Balkrishna Industries jumped 10.37% to Rs 1277.05 after the auto ancillary major posted stellar Q3 numbers. On a consolidated basis, net profit rose 48.2% to Rs 223.80 crore in Q3 December 2019 (Q3 FY20) from Rs 150.98 crore reported in Q3 December 2018 (Q3 FY19). Net sales declined 3.5% to Rs 1155.76 crore in Q3 FY20 from Rs 1197.84 crore in Q3 FY19. Profit before tax (PBT) stood at Rs 278.27 crore in Q3 FY20, up by 25.1% from Rs 222.43 crore in Q3 FY19.
Muthoot Finance surged 17.73% to Rs 879. The NBFC said consolidated net profit surged 63.7% to Rs 841.09 crore in Q3 December 2019 (Q3 FY20) as against net profit of Rs 513.92 crore in Q3 December 2018 (Q3 FY19). Total income rose 35.8% year-on-year (YoY) to Rs 2,587.40 crore in Q3 FY20. The Kerala-based non-banking financial company (NBFC) reported a consolidated loan assets under management (AUM) for the nine month of current fiscal at Rs 43,436 crore, against Rs 35,939 crore in the year-ago period, an increase of 21%.
Hero MotoCorp slipped 0.30% to Rs 2284.85. The automaker said the company has commenced the dispatches of three more BS-VI products - Splendor+ in the motorcycle segment and Destini 125 and Maestro Edge 125 in the premium scooter segment. These launches come close on the heels of the BS-VI versions of the Splendor iSmart and HF Deluxe motorcycles and the Pleasure+ 110 scooter, which are already available in the market.
Indusind Bank slipped 0.21% to Rs 1173.90. The private lender informed that it has a loan exposure of Rs 995 crore towards the telecos, which is standard The bank also has a non-fund exposure in the nature of bank guarantees of Rs 2,409 crore. The entire exposure is secured.
JSW Steel edged 0.21% lower at Rs 288.40. The National Company Law Appellate Tribunal (NCLT) on Monday reportedly allowed JSW Steel to acquire of Bhushan Power & Steel (BPSL) for Rs 19,700 crore by providing it immunity from prosecution.
Intellect Design Arena slumped 5% to Rs 136.90. The company reported a consolidated net loss of Rs 11.38 crore in Q3 December 2019 as against a net profit of Rs 13.38 crore in Q3 December 2018. Net sales declined 14.7% to Rs 319.49 crore in Q3 December 2019 over Q3 December 2018. Pre-tax loss in the December quarter stood at Rs 7.84 crore as compared a pre-tax profit of Rs 15.50 crore in the same period last year. License revenue stood at Rs 49 crore (down 44.34%), AMC revenue was at Rs 63 crore (up 7.2% YoY) and SAAS revenue came in at Rs 33 crore (up 50% YoY) in quarter ended on 31 December 2019. Gross margin fell to Rs 149.22 crore in Q3 FY20, representing 46.6% of revenues, from Rs 183.23 crore in Q3 FY19 when it represented 48.5% of revenues. The company reported 91.48% fall in EBITDA to Rs 3.6 crore in Q3 December 2019 as compared to Rs 41.91 crore reported in Q3 December 2018.
CARE Ratings fell 3.31% at Rs 509 after the board decided to terminate the employment of Rajesh Mokashi as managing director (MD) & CEO of the company with effect from 16 July 2019. The company's board, as advised by Securities and Exchange Board of India (Sebi), vide its letter dated 12 February 2020, has decided to institute an inquiry in the matter of interference by officials of CARE including the erstwhile chairman and the erstwhile MD & CEO in the rating process in the last 3 years. The board has already initiated the process of appointing MD & CEO of CARE.
Glenmark Pharmaceuticals' consolidated net profit surged 64% to Rs 190.74 crore in Q3 December 2019 (Q3 FY20) as against Rs 116.33 crore reported in Q3 December 2018 (Q3 FY19). Net sales rose 5.1% year-on-year (Y-o-Y) to Rs 2,638.62 crore in Q3 FY20. Profit before tax (PBT) soared 75.9% to Rs 270.98 crore Y-o-Y. Current tax expenses jumped 77.4% to Rs 111.75 crore during the period under review. EBITDA climbed 1.2% to Rs 440.07 crore during Q3 FY20 as against Rs 434.68 crore in Q3 FY19. The result was announced after market hours on Friday, 14 February 2020. Shares of Glenmark Pharmaceuticals lost 7% to Rs 310.30.
Overseas markets:
European markets extended gains while Asian stocks ended mostly lower on Monday as investors weighed the near-term hit on global growth from a fast-spreading coronavirus outbreak in China, although expectations of further policy stimulus helped stem losses.
The People's Bank of China (PBoC) announced on Monday that it would provide medium-term funding of 200 billion yuan ($29 billion) to commercial lenders and cut its main interest rate by 10 basis points to 3.15%. The move is intended to shield the economy from the fallout of the coronavirus, which has now infected over 70,000 people and killed 1,770, according to China's National Health Commission.
Meanwhile, the Japanese economy shrunk at an annualized pace of 6.3% in the three months that ended in December.
In US, the Nasdaq and S&P 500 finished at records on Friday as investors parsed mixed data on the strength of the US consumer and monitored the spread of COVID-19 in China.
The US consumer January retail sales showed sluggish activity, underscored by a 3.1% drop in sales at clothing stores.
The US bond and stock markets will be closed on Monday in observance of Presidents Day.
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