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Sensex, Nifty trade with small losses

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Domestic equity benchmarks were trading with minor losses in afternoon trade. Weakness in financial stocks negated gains in metal stocks. At 13:24 IST, the barometer index, the S&P BSE Sensex, was down 147.37 points or 0.39% at 37,981.53. The Nifty 50 index lost 51 points or 0.46% at 11,143.15.

The broader market was under pressure. The S&P BSE Mid-Cap index fell 0.85% while the S&P BSE Small-Cap index declined 0.65%.

The market breadth was weak. On the BSE, 826 shares rose and 1708 shares fell. A total of 156 shares were unchanged.

COVID-19 Update:

Total COVID-19 confirmed cases worldwide stood at 16,261,995 with 648,937 deaths. India reported 4,85,114 active cases of COVID-19 infection and 32,771 deaths, according to the data from the Ministry of Health and Family Welfare, Government of India.

Ministry of Health and Family Welfare noted in latest update that on 25th July, India recorded the highest ever COVID-19 recoveries in a single day. 36,145 COVID-19 patients were cured and discharged in the last 24 hours. This has taken the total number of recovered cases to 8,85,576. The recovery rate has achieved another high of fast approaching 64%. It stands at 63.92% today. This means more patients are recovering thus maintaining the steadily widening difference between recovered and active COVID-19 patients. This gap has crossed 4 lakh and currently stands at 4,17,694. Recovered cases are 1.89 times the active cases (4,67,882).

RBI's Financial Stability Report:

The Reserve Bank of India (RBI) released its 21st Financial Stability Report on Friday, which reflects the collective assessment of the Sub-Committee of the Financial Stability and Development Council (FSDC) on risks to financial stability.

RBI said that the capital to risk-weighted assets ratio (CRAR) of Scheduled Commercial Banks (SCBs) edged down to 14.8% in March 2020 from 15% in September 2019 while their gross non-performing asset (GNPA) ratio declined to 8.5% from 9.3% and the provision coverage ratio (PCR) improved to 65.4% from 61.6% over this period.

Macro stress tests for credit risk indicate that the GNPA ratio of all SCBs may increase from 8.5% in March 2020 to 12.5% by March 2021 under the baseline scenario; the ratio may escalate to 14.7% under a very severely stressed scenario.

Buzzing Index:

The Nifty Metal index rose 0.49% to 2,097.75. The index had fallen 2.06% on Friday.

Jindal Steel & Power (up 5.72%), Hindustan Zinc (up 3.40%), APL Apollo Tubes (up 3.07%), Tata Steel (up 1.36%), Hindalco Industries (up 1.18%) and JSW Steel (up 0.85%) advanced.

NMDC (down 1.59%), Hindustan Copper (down 1.52%), Vedanta (down 1.43%), Coal India (down 0.99%), Ratnamani Metals Tubes (down 0.97%), National Aluminum Co. (down 0.9%), MOIL (down 0.68%) and Welspun Corp (down 0.25%) declined.

Stocks in Spotlight:

Asian Paints (up 2.86%), HCL Technologies (up 2.21%), TCS (up 1.88%), Tech Mahindra (up 1.74%) and Infosys (up 1.65%) were top gainers.

Axis Bank (down 3.34%), IndusInd Bank (down 2.68%), State Bank of India (down 2.50%), Bajaj Finance (down 2.65%) and Sun Pharmaceutical Industries (down 2.33%) were major losers.

ICICI Bank slumped 5.04% to Rs 362.60, extending losses for second day. The stock has lost 7.56% in two sessions.

The private sector lender posted reported a 36.2% rise in net profit to Rs 2599.15 crore on a 21.8% jump in total income to Rs 26069.95 crore in Q1 June 2020 over Q1 June 2019.

Profit before tax was at Rs 3182.50 crore in Q1 June 2020, rising 14% year on year from Rs 2792.73 crore in Q1 June 2019. Total tax expense tumbled 34% year on year to Rs 583.35 crore in Q1 June 2020.

Net profit was aided after the bank sold equity shares representing 3.96% in ICICI Lombard General Insurance Company and 1.50% in ICICI Prudential Life Insurance Company for a total consideration of Rs 3,092.93 crore. The sale resulted in net gain (after sale related expenses) of Rs 3,036.29 crore in standalone financial results which aided net profit.

The bank's provisions and contingencies soared 117% to Rs 7593.95 crore in Q1 June 2020 over Rs 3495.73 crore in Q1 June 2019. The bank made additional COVID-19 related provisions of Rs 5,550 crore made on a prudent basis in Q1 June 2020 with the objective of completely cushioning the balance sheet from the impact of COVID-19. Gross non-performing assets (NPAs) stood at Rs 40,386.24 crore as on 30 June 2020 as against Rs 41,409.16 crore as on 31 March 2020 and Rs 45,763.08 crore as on 30 June 2019.

ITC fell 1.5% to Rs 196.7 after the FMCG major reported a 26.19% decline in net profit to Rs 2342.76 crore on a 17.4% fall in net sales to Rs 9501.75 crore in Q1 June 2020 over Q1 June 2019. Profit before tax (PBT) tumbled 34.98% to Rs 3128.43 crore during the quarter. Total tax expense slumped 52% to Rs 785.67 crore in Q1 FY21 over Q1 FY20.

Revenue from sale of cigarettes stood at Rs 3,853.79 crore (down 29.07% YoY) while total FMCG revenue, including cigarettes, was at Rs 7,228.36 crore (down 14.89% YoY).

ITC said its hotels segment was severely impacted with operations coming to a standstill due to restrictions on travel and hotel operations. Negative operating leverage weighed on segment profits but aggressive reduction in controllable fixed costs partly mitigated the impact.

On a consolidated basis, ITC's net profit declined 25.3% to Rs 2567.07 crore on 17.22% decline in net sales to Rs 10478.46 crore in Q1 FY21 over Q1 FY20.

HDFC Bank fell 3.51% to Rs 1079.50 after the bank's managing director Aditya Puri sold 95% of his shareholding in the bank valued at Rs 843 crore. According to insider trading data published by the stock exchanges on Saturday, Aditya Puri has sold 74,20,033 shares of the bank between 21 and 24 July. Before this transaction, Puri held 77.96 lakh shares or 0.14% of banks equity capital.

Zee Entertainment Enterprises (ZEEL) slipped 3.20% to Rs 146.80 on recording a consolidated net loss of Rs 765.82 crore in Q4 March 2020 compared with net profit of Rs 292.53 crore in Q4 March 2019.

Consolidated net sales fell 3.4% to Rs 1,951.08 crore in Q4 March 2020 compared with Rs 2,019.27 crore in Q4 March 2019. Consolidated EBITDA for the quarter stood at Rs -283.90 crore as against Rs 568.30 crore in Q4 March 2019.

Global Markets:

European markets declined while most Asian markets edged higher on Monday as investors continued to monitor the development on the US-China front.

On the economic data front, China's industrial profits for June soared 11.5% year-on-year, according to the country's National Bureau of Statistics.

The Bank of Japan's Summary of Opinions for its mid-July meeting, released Monday, said the country's economy is expected to "pick up moderately" from the second half of 2020. The central bank warned, however, that the economy is "unlikely to return to the level reached before the outbreak of COVID-19" even in fiscal 2022.

Investor practices caution as diplomatic relations between the U.S. and China continued to detriorate, following the shutdown of the U.S. consulate in Chengdu on Monday in compliance with a retaliatory measure from Beijing, after Washington ordered the closure of the Chinese consulate in Houston.

In US, Wall Street retreated on Friday as shares of major tech companies struggled and US-China tensions rose. Investor attention was likely be on lawmakers stateside as they attempt to push forward on another coronavirus stimulus package.

U.S. Treasury Secretary Steven Mnuchin reportedly said Sunday that Republicans have finalized a bill worth about $1 trillion in coronavirus relief funds.

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

First Published: Mon, July 27 2020. 13:25 IST