The market surged on Friday, as recovery in global stock markets triggered bargain hunting in domestic shares. The key indices came off day's high after Maharashtra announced lockdown across major cities in the state. However, the state government clarified that stock exchanges, clearing corporations, depositories, stockbrokers and Sebi registered participants will be exempted from the lockdown.
The barometer index, the S&P BSE Sensex, jumped 1627.73 points 5.75% at 29,915.96. The Nifty 50 index was surged 482 points or 5.83% at 8,745.45.
In the broader market, the S&P BSE Mid-Cap index added 4.18% while the S&P BSE Small-Cap index rose 4.03%.
The market breadth was positive. On the BSE, 1448 shares rose and 1007 shares fell. A total of 150 shares were unchanged.
The Nifty slumped 16.99% in the past four sessions to 8,263.45 on Thursday (19 March), from its closing high of 9,955.20 on 13 March 2020.
Four Cities of Maharashtra Locked Down:
In a major decision, Maharashtra government on Friday (20 March) ordered its residents from Mumbai, Pune, Pimpri-Chinchwad and Nagpur to stay at home unless required to make essential trips. The measure was aimed at containing the rapidly expanding coronavirus outbreak. Banks, grocery stores and medical shops, clinics and hospitals will remain open. Trains and buses will continue to operate.
Fitch Ratings on Friday cut India's growth forecast to 5.1% for FY 2020-21, saying the coronavirus outbreak is likely to hit business investment and exports. Fitch had in December 2019 projected India's growth at 5.6% for 2020-21 and 6.5% in the following year.
Fitch said the number of people affected by coronavirus will keep rising in the coming weeks but that the outbreak will remain contained. However, there are downside risks to this scenario.
Coronavirus has infected more than 245,000 people and killed more than 10,000 across the world. More than 88,000 people have recovered.
India has reported 5 deaths and over 195 cases so far. In his address to the nation, PM Narendra Modi called for Janata Curfew on 22 March 2020 and urged people to avoid panic buying.
Numbers to Track:
In the foreign exchange market, the partially convertible rupee traded at 75.14 compared with its previous closing of 75.12.
The yield on 10-year benchmark federal paper fell to 6.259% compared with 6.410% in the previous trading session.
In the commodities market, Brent crude for May 2020 settlement was up 3.16% to $29.37 a barrel. The contract rose 14.49% or $3.59 to settle at $28.47 a barrel in Wednesday's trading session.
MCX Gold futures for 3 April 2020 settlement rose 2.14% to Rs 40,685.
European stocks extended gains while most Asian markets ended higher on Thursday following the overnight rebound in the US market, as massive relief packages announced by global central banks and governments to ease the economic impact of the coronavirus pandemic boosted investor sentiment.
China's loan prime rates (LPR) on Friday were kept unchanged from their February levels, with both the 1-year and 5-year LPR left steady at 4.05% and 4.75%, respectively.
Developments on the ongoing global coronavirus outbreak continued to be watched. Europe has now become the epicenter of the global coronavirus pandemic, with Italy's death toll surpassing that of China, where the virus originated, and cases rising exponentially across the continent.
Central banks from across the globe, ranging from Australia's Reserve Bank of Australia to the U.S. Federal Reserve, have cut interest rates and announced plans to buy bonds in recent days as authorities worldwide race to combat the economic impact of the coronavirus outbreak.
In US, stocks closed modestly higher on Thursday, in another volatile session, as central banks and governments pledged support for the economic shocks from the coronavirus pandemic.
The Nifty FMCG index surged 8.77% to 26,073.30. Hindustan Unilever (up 11.75%), Nestle India (up 7.94%), Britannia Industries (up 6.24%) and Dabur India (up 6.07%) advanced.
The Nifty IT index rallied 8.52% to 12,306.15. The index tumbled 16.24% in the past four trading sessions.
Wipro (up 10.77%), TCS (up 9.90%), HCL Technologies (up 7.91%) and Infosys (up 7.25%), climbed.
Stocks in Spotlight:
Escorts spurted 17.73% to close at Rs 675.20. Kubota Corporation, a leading global tractor and machinery manufacturer from Japan, will acquire 10% equity stake, on a post capital reduction basis in Escorts in order to integrate and deepen their relationship towards achieving their mutual ambition of global leadership.
As part of the deal, Escorts will issue and allot 1,22,57,688 equity shares through a preferential issue to Kubota at Rs 850 per equity share, subject to shareholders' and necessary regulatory approvals. Kubota's investment will constitute 9.1% of the equity stake on a pre capital reduction or 10% on a post capital reduction basis for a total investment of Rs 1041.90 crore.
Hero MotoCorp rose 6.51%. The company said it commenced commercial production at its new greenfield manufacturing facility, situated at Chittoor in Andhra Pradesh. This facility is the company's eighth manufacturing plant and sixth in India.
Meanwhile, the Hero MotoCorp has filed an interlocutory application before the Supreme Court of India seeking relaxation of the deadline set for sale or registration of BS-IV vehicles i.e. 31 March 2020.
Hero MotoCorp said that in view of the completely unforeseen developments that have arisen out of the prevailing force majeure situation on account of COVID-19, the company has prayed for an extension of time for a period of three months, as this has hampered all aspects of industry. The Ministry of Finance has also declared that the COVID-19 should be considered as a case of natural calamity and force majeure be invoked.
State Bank of India advanced 2.85%. SBI informed that a meeting of the central board of the bank will be held on 27 March 2020 to consider the extension of approval accorded by central board for raising equity capital from market up to Rs 20,000 crore from the market till 31 March, 2021 subject to the approval of shareholders, RBI and Gol. The board of the bank also approved divestment of entire equity stake (19.99%) held in A Little World.
Godrej Properties (GPL) jumped 8.32% after the company announced its entry into the Faridabad market with its first residential plotted development. This project will offer approximately 95,000 square meters (1 million sq. ft.) of plotted development potential offering attractive plot sizes along with good lifestyle amenities. The site is strategically located and offers a well-developed social infrastructure with multiple schools, hospitals, and retail spaces in vicinity. This micro-market also has excellent road connectivity to both Delhi and Noida. Shares of Godrej Properties were down 5.65% at Rs 620.
Syngene International added 1.77%. The company announced on Thursday (19 March 2020) that the newly setup manufacturing facility of the company situated at Mangalore Special Economic Zone, Karnataka has commenced operations and successfully processed the first order upon receipt of all statutory licences and clearances from relevant authorities. The company's third quarter business performance was driven primarily by growth in discovery services and supported by steady performance in development services and the dedicated R&D centres.
Biocon surged 8.83%. The drug maker announced that it has received the Establishment Inspection Report (EIR) from the US Food and Drug Administration (FDA) for the post-approval and Good Manufacturing Practice (GMP) inspection of its small molecules API (active pharmaceutical ingredient) manufacturing facility at Bengaluru, conducted between 20 and 26 February 2020. The EIR has been closed with a 'VAI' classification for the observations. At the conclusion of the inspection last month the agency had issued a Form 483, with two observations, which were procedural in nature and are being addressed by the company.
Rites jumped 8.06%. The company informed that its board has approved the closure of the joint venture agreement with BNV Gujarat Rail, subject to the further approval. The joint venture (JV) company named BNV Gujarat Rail was incorporated on 9 December 2016 and subsequently a joint venture agreement was signed between Rites, Shapoorji Pallonji Roads and PCM Cement Concrete.
Praj Industries surged 9.57% after the company said its board will meet on 27 March 2020 to consider buyback of equity shares.
ICICI Lombard General Insurance Company fell 1.60%. The insurance company said it has rolled out a focused 'COVID-19 Protection Cover'. The policy has been launched in group insurance mode. Amid the contagious pandemic, this policy on diagnosis of COVID-19 (+ve) will pay 100% of the sum insured irrespective of hospitalization expenses.
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