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Nifty hovers near 8950; Europe opens in red

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Key equity indices traded sideways with decent gains in afternoon trade. Buying was broad based with auto and FMCG shares trading firm.

At 13:25 IST, the barometer index, the S&P BSE Sensex, was up 162.3 points or 0.54% at 30,358.47. The Nifty 50 index added 62.35 points or 0.7% at 8,941.45.

In the broader market, the S&P BSE Mid-Cap index rose 0.62% while the S&P BSE Small-Cap index advanced 0.55%.

The market breadth was almost even. On the BSE, 1039 shares rose and 1043 shares fell. A total of 140 shares were unchanged. In the Nifty 50 index, 37 shares advanced while 13 shares declined.

Sentiment got a boost after the country's finance minister Nirmala Sitharaman reportedly said the government remains open to more economic measures as and when needed.

Sitharaman on Sunday (17 May) announced the fifth and final tranche of economic stimulus package to deal with the economic fallout of the COVID-19 pandemic. The booster measures announced on Sunday related to MGNREGS, healthcare and education, businesses, de-criminalisation of the Companies Act, ease of doing business, public sector enterprises, and resources related to state governments.

The 20 lakh crore economic stimulus package has been divided into five tranches and each tranche focuses to deal with the fallout of the coronavirus pandemic. The government, in its first four tranches of the stimulus package, focussed on addressing the land, labour, liquidity, and laws with little extra budget spending.

Gainers & Losers:

Bharat Petroleum Corporation (up 4.45%), UPL (up 4.03%), Grasim (up 3.75%), GAIL (India) (up 3.73%) and Mahindra & Mahindra (up 3.45%) were top gainers in Nifty 50 index.

Bharti Infratel (down 9.62%), IndusInd Bank (down 3.45%), Hero MotoCorp (down 2.6%), and Bharti Airtel (down 1.23%) were top losers in Nifty 50 index.

Q4 Results Today:

Bajaj Auto (up 0.69%), Dr. Reddy's Laboratories (up 0.55%) and UltraTech Cement (up 1.96%) are Nifty 50 companies that will announce their quarterly earnings today.

Jubilant Foodworks (up 0.91%), Ajanta Pharma (up 0.08%), GHCL (up 2.89%), JK Lakshmi Cement (up 0.8%), JSW Energy (up 1.9%), Kalpataru Power Transimission (down 0.29%) and Strides Pharma Science (up 3.18%) are some of the companies that will announce their quarterly res ult today.

Earnings Impact:

Bajaj Finance gained 1.22%. The NBFC major's consolidated net profit declined 19% to Rs 948 crore on 36% increase in total income to Rs 7,231 crore in Q4 March 2020 over Q4 March 2019. On a consolidated basis, profit before tax (PBT) stood at Rs 1,278 crore in Q4 FY20, down by 29% from Rs 1,812 crore reported in Q4 FY19. Net interest income jumped 38% to Rs 4,684 crore in Q4 FY20 over Q4 FY19. New loans booked during Q4 FY20 increased by 3% to 6.03 million from 5.83 million in Q4 FY19.

Loan losses and provisions for Q4 FY20 was Rs 1,954 crore as against Rs 409 crore in Q4 FY19. During the quarter, the company has taken an accelerated charge of Rs 390 crore for two identified large accounts, an additional provision of Rs 129 crore on account of recalibration of its ECL model and a contingency provision of Rs 900 crore for COVID-19.

Adjusted for these additional provisions of Rs 1,419 crore, loan losses and provisions for Q4 FY20 was Rs 535 crore.

Ujjivan Small Finance Bank surged 5.27% after net profit rose 14.7% to Rs 73.15 crore on 34.4% rise in total income to Rs 809.65 crore in Q4 March 2020 over Q4 March 2019. Net interest income (NII) jumped 46% to Rs 466 crore in Q4 FY20 over Q4 FY19. Net interest margin (NIM) stood at 11.2% in Q4 March 2020 as compared to 10.8% in Q4 March 2019. The bank's gross non-performing assets (NPAs) stood at Rs 137.14 crore as on 31 March 2020 as against Rs 129.45 crore as on 31 December 2019 and Rs 97.85 crore as on 31 March 2019. The ratio of gross NPAs to gross advances stood at 0.97% as on 31 March 2020 as against 0.95% as on 31 December 2019 and 0.92% as on 31 March 2019. The bank's provisions and contingencies stood at Rs 96.88 crore in Q4 March 2020, almost seven times compared to Rs 12.37 crore in Q4 March 2019. The bank has made total provision of Rs 70 crore for COVID-19 as on 31 March 2020, out of which Rs 48.97 crore is in respect of accounts in default but standard against the potential impact of COVID-19. The bank clarified that provisions held are in excess of the RBI prescribed norms.

Larsen & Toubro Infotech rallied 6.94% after consolidated net profit jumped 13.49% to Rs 427.50 crore on a 7.14% increase in net sales to Rs 3,011.90 crore in Q4 March 2020 over Q3 December 2019. Consolidated profit before tax rose 10.32% to Rs 551.40 crore in Q4 March 2020 as against Rs 499.80 crore in Q3 December 2019. EBITDA margin improved to 19.2% in Q4 March 2020 as compared to 18.8% in Q3 December 2019 and 19.2% in Q4 March 2019.

Global Markets:

European markets opened lower as second wave of Covid-19 virus continued to spook investors. Asian markets were mixed after China kept its benchmark lending rate unchanged.

China held its benchmark lending rate steady on Wednesday, mirroring the central bank's decision last week to keep borrowing costs on medium-term funding for financial institutions unchanged. The one-year loan prime rate (LPR) remained at 3.85% from last month's fixing, while the five-year LPR was also steady at 4.65% from previously.

Investors also watched for market reaction to a media report released overnight that raised concerns about the trial results for a potential coronavirus vaccine from Moderna. That initial positive development had sent global markets rallying earlier in the week.

The US equity market finished volatile session lower for the first time in four sessions on Tuesday, 19 May 2020, as investors elected to book profit after a strong rally in the prior session, due to mixed batch of corporate results from major retailers and reports that Moderna Inc.'s coronavirus vaccine study didn't produce enough critical data to assess its success.

However, market losses were capped after Federal Reserve Chairman Jerome Powell, in a statement, said that the central bank is ready to use all the weapons in its arsenal to help the U. S. economy endure the coronavirus pandemic.

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

First Published: Wed, May 20 2020. 13:28 IST