Key indices logged strong losses on Monday, as global crude oil prices spiked. Higher crude oil prices could increase fiscal deficit, current account deficit and stoke fuel price inflation. Crude oil prices rose to the highest in almost six months as the US government reportedly said it won't renew waivers to allow buyers to buy Iranian crude.
The Sensex fell 495.10 points or 1.26% to settle at 38,645.18. The index rose 17.94 points, or 0.05% at the day's high of 39,158.22. The index fell 554.63 points, or 1.42% at the day's low of 38,585.65.
The Nifty 50 index fell 158.35 points or 1.35% to settle at 11,594.45. The index fell 25.75 points, or 0.22% at the day's high of 11,727.05. The index fell 168.85 points, or 1.44% at the day's low of 11,583.95.
Domestic stocks drifted lower in early trade as trading resumed after a long weekend. Stock markets were shut on Friday, 19 April 2019, on account of Good Friday. Key indices cut losses in morning trade after an initial slide triggered by rise in crude oil prices. Stocks hovered in negative zone in mid-morning trade. Key equity indices extended losses in afternoon and mid-afternoon trade. Fresh selling dragged the key indices to intraday low in late trade.
The S&P BSE Mid-Cap index fell 1.53%. The S&P BSE Small-Cap index fell 1.44%.
The market breadth, indicating the overall health of the market, was weak. On the BSE, 739 shares rose and 1764 shares fell. A total of 194 shares were unchanged.
Among the sectoral indices on BSE, the S&P BSE Oil & Gas index (down 3.2%), the S&P BSE Energy index (down 2.73%) and the S&P BSE Realty index (down 2.54%), underperformed the Sensex. The S&P BSE IT index (up 0.58%), the S&P BSE Telecom index (down 0.12%) and the S&P BSE Consumer Durables index (down 0.14%), outperformed the Sensex.
Shares of three state-run oil marketing companies fell after Brent crude prices firmed up in international market. HPCL (down 6.11%), BPCL (down 5.99%) and Indian Oil Corporation (down 4.13%) edged lower.
Higher crude oil prices could increase under-recoveries of PSU OMCs on domestic sale of LPG and kerosene at controlled prices. The government has already freed pricing of petrol and diesel.
Shares of aviation companies fell as Brent crude prices firmed up in international market. SpiceJet (down 8.15%), Jet Airways (India) (down 5.67%) and InterGlobe Aviation (down 4.22%) dropped. ATF constitutes majority of an airline's operating costs. Prices of jet fuel are directly linked to crude oil prices.
Yes Bank (down 6.62%), IndusInd Bank (down 4.11%), ICICI Bank (down 2.54%), HDFC (down 2.44%), Axis Bank (down 2.05%) and Hero MotoCorp (down 2.03%), were the major Sensex losers.
TCS (up 0.88%), Infosys (up 0.59%), NTPC (up 0.26%) and Power Grid Corporation of India (up 0.08%), were the Sensex gainers.
Reliance Industries (RIL) dropped 2.76%. RIL's consolidated net profit rose 9.79% to Rs 10362 crore on 18.60% rise in net sales to Rs 138659 crore in Q4 March 2019 over Q4 March 2018. The result was announced after market hours on Thursday, 18 April 2019.
RIL's gross refining margin (GRM) came in at $8.2 per barrel in Q4 March 2019. The figure was $8.8 and $11 per barrel in Q3 December 2018 and Q4 March 2018, respectively.
Commenting on the results, Mukesh D. Ambani, chairman and managing director, Reliance Industries (RIL) said that during FY 2018-19, RIL achieved several milestones and made significant strides in building Reliance of the future. Reliance Retail crossed Rs 100,000 crore revenue milestone, Jio now serves over 300 million consumers and petrochemicals business delivered its highest ever earnings.
Meanwhile, RIL clarified on 20 April 2019, that press stories suggesting that Reliance is involved in an arrangement that leads to cash payment for oil supplies to PDVSA via third parties are false and reckless.
HDFC Bank fell 0.96%. The bank's net profit rose 22.63% to Rs 5,885.12 crore on 22.13% rise in total income to Rs 31,204.46 crore in Q4 March 2019 over Q4 March 2018. The result was announced on Saturday, 20 April 2019.
The bank's gross non-performing assets (NPAs) stood at Rs 11,224.16 crore as on 31 March 2019 as against Rs 10,902.86 crore as on 31 December 2018 and Rs 8,606.97 crore as on 31 March 2018. The bank's provisions and contingencies rose 22.59% to Rs 1,889.22 crore in Q4 March 2019 over Q4 March 2018.
The ratio of gross NPAs to gross advances stood at 1.36% as on 31 March 2019 as against 1.38% as on 31 December 2018 and 1.30% as on 31 March 2018. The ratio of net NPAs to net advances stood at 0.39% as on 31 March 2019 as against 0.42% as on 31 December 2018 and 0.40% as on 31 March 2018..
HDFC Bank said that its board of directors has approved the issue of perpetual debt instruments (part of Additional Tier I capital), Tier II capital bonds and long term bonds (financing of infrastructure and affordable housing) up to a total amount of up to a total amount of Rs 50,000 crore in the period of next twelve months through private placement mode, subject to the approval of the shareholders at the ensuing annual general meeting of the bank and any other regulatory approvals as applicable.
Bharti Airtel rose 0.89%. Bharti Airtel announced on Friday, 19 April 2019, that its proposed rights issue is scheduled to open on 3 May 2019 and will close on 17 May 2019.
Wipro rose 1.21%. Wipro clarified on Friday, 19 April 2019, that it became aware of a potentially abnormal activity within its network about 10 days ago in respect of few of its employee accounts, which were subjected to an advanced phishing campaign. The company promptly kicked off its standard operating procedure for addressing such incidents. The company has used its industry leading cyber security practices and partner ecosystem for remedial steps and has shared this intelligence with its partners to develop the antivirus signatures. The incident did not impact the company's ongoing critical business operations.
Maruti Suzuki India declined 1.82%. Maruti Suzuki India said that the company is all set to launch new 1.2 litre DUALJET, DUAL VVT BS VI engine with next generation Smart Hybrid technology in Baleno. The new BS VI compliant Baleno (Petrol) with Smart Hybrid will soon be available at NEXA showrooms across the country. Existing 1.2L VVT petrol engine variants will also be BS VI compliant and available in all variants including CVT. The announcement was made during market hours today, 22 April 2019.
Reliance Capital fell 10.71% to Rs 135.50 after CARE Ratings and Brickwork Ratings downgraded credit rating of long-term debt program of the company.
Reliance Capital announced on Friday, 19 April 2019, that CARE Ratings (CARE) has revised its rating to A (credit watch with developing implications) for long-term debt programme, market linked debentures and subordinated debt of the company. CARE has stated this action is primarily due to extension of timeline for progress of planned divestments in various companies. Moreover, the Brickwork Ratings (Brickwork) has revised rating to A+ (credit watch with negative implications) for long-term debt program, market linked debentures and subordinated debt of the company. Brickwork has stated this action is primarily due to extension of timeline for progress of planned disinvestments in various companies.
Reliance Capital said it considers the above rating action completely unjustified and inappropriate. There has not been any adverse change in the company's operational parameters from the time of the last rating action.
In the foreign exchange market, the rupee edged lower against the dollar. The partially convertible rupee was hovering at 69.575, compared with its close of 69.35 during the previous trading session.
In the global commodities markets, Brent for June 2019 settlement was up by $1.89 at $73.86 a barrel. The contract rose 35 cents, or 0.49% to settle at $71.97 a barrel during the previous trading session.
Overseas, most Asian stocks drifted lower as crude oil prices rose on a report over Iranian oil waivers while the Easter holiday weekend continued in many countries.
Major US exchanges were closed on Good Friday. The most-watched European markets were closed on Good Friday and will also remain closed on Easter Monday.
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