Key equity indices ended with sharp losses on Monday, tracking weak global cues. The Nifty slipped below 15,800 mark but managed to hold above the 15,750 level. Banks and financial shares tumbled. Pharma and realty shares bucked weak market trend.
The S&P BSE Sensex, dropped 586.66 points or 1.10% at 52,553.40. The Nifty 50 index slipped 171 points or 1.07% at 15,752.40.
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HDFC Bank (down 3.34%), HDFC (down 2.15%), Axis Bank (down 2.07%) and Infosys (down 0.85%) were major drags.
Selling was broad based. The BSE Mid-Cap index fell 0.58% and the BSE Small-Cap index lost 0.31%.
The market breadth was positive. On the BSE, 1,757 shares rose and 1,571 shares fell. A total of 164 shares were unchanged.
COVID-19 Update:
Total COVID-19 confirmed cases worldwide stood at 19,04,27,673 with 40,89,053 deaths. India reported 4,21,665 active cases of COVID-19 infection and 4,14,108 deaths while 3,03,08,456 patients have been discharged, according to the data from the Ministry of Health and Family Welfare, Government of India.
India on Monday, 19 July 2021 reported 38,164 new COVID-19 cases and 499 deaths, as per health ministry's updated data. The active cases in the country now stand at 4,21,665.
Economy:
Labour minister Bhupender Yadav on Monday said that India witnessed an unemployment rate of 20.8% in urban India in the April-June quarter 2020, a period which witnessed two months of stringent nationwide lockdown to prevent the spread of the first wave of COVID-19 pandemic.
Meanwhile, retail sales in India declined by 50% in June due to the continued restrictions in the wake of the second wave of the coronavirus pandemic, as compared to the same month in 2019 before the health crisis hit, according to the Retailers Association of India (RAI). The industry body said the highest decline was witnessed in the sports goods category at 66%, while foods and grocery had the least with a dip of just 7% as compared to June 2019.
Chief Economic Advisor Krishnamurthy Subramanian reportedly said on Friday that the country's economy will start witnessing a growth of 6.5% to 7% from fiscal 2023 onwards, helped by various reforms undertaken by the government so far and also as COVID-19 vaccination drive progresses. Subramanian expects the impact of the second wave not to be very significant.
Monsoon Session of Parliament:
Both the Houses of the Parliament were adjourned on Monday following protests by the Opposition parties. The uproar happened when Prime Minister Modi was introducing the new ministers. Raising an objection to this, Defence Minister Rajnath Singh said, "Congress's behaviour in Lok Sabha is sad, unfortunate and unhealthy."
The monsoon session of the Parliament began today (19 July) and it will conclude on 13 August 2021. The government has listed 17 new bills for introduction in the session. Apart from the new bills, the legislations to be introduced in Lok Sabha include three bills to replace existing ordinances.
The government and the opposition are likely to discuss raging issues of the COVID-19 pandemic, farmers' protest, fuel prices hike and vaccination strategy.
The Parliament session comes a day after a global collaborative investigative project has revealed that Israeli company NSO Group's Pegasus spyware targeted over 300 mobile phone numbers in India including that of two serving Ministers in the Narendra Modi government, three Opposition leaders, one constitutional authority, several journalists and business persons.
Numbers to Watch:
The yield on 10-year benchmark federal paper fell to 6.128% as compared with 6.130% at close in the previous trading session.
In the foreign exchange market, the rupee edged lower against the dollar. The partially convertible rupee was hovering at 74.88, compared with its close of 74.5725 during the previous trading session.
MCX Gold futures for 5 August 2021 settlement fell 0.22% to Rs 47,946.
The US Dollar index (DXY), which tracks the greenback's value against a basket of currencies, rose 0.33% to 92.99.
In the commodities market, Brent crude for September 2021 settlement fell $2.04 at $71.55 a barrel. The contract rose 12 cents, or 0.16% to settle at $73.59 a barrel in the previous trading session.
Foreign Markets:
The US Dow Jones futures were down 438 points, indicating a weak opening in the US market today.
Shares in Europe and Asia tumbled on Monday as markets digested the latest OPEC+ announcement regarding oil production, and continued to brood on inflation and rising Covid-19 cases.
OPEC and its allies reached a deal on Sunday to phase out 5.8 million barrels per day of oil production cuts by September 2022. Coordinated increases in oil supply from the group - collectively known as OPEC+ will start in August, OPEC said in a statement. The development came as Brent surged more than 40% so far in 2021, with demand for crude rising as the global economy recovers from the pandemic.
U.S. stocks fell on Friday weighed down by declines in Amazon, Apple and other heavyweight technology stocks, while investors worried about a rise in coronavirus cases tied to the highly contagious Delta variant.
A preliminary reading of the University of Michigan's index of consumer sentiment fell to 80.8 in July from a final reading of 85.5 in June, notching the measure's lowest level since February.
Separately, the US Commerce Department released a report showing retail sales climbed by 0.6% in June after plunging by a revised 1.7% in May. Excluding a steep drop in sales by motor vehicle and parts dealers, retail sales jumped by an even stronger 1.3% in June following a revised 0.9% decrease in May.
New Listings:
Shares of Clean Science and Technology settled at Rs 1585.20, at a premium of 76.13% compared with the issue price of Rs 900 per share. The scrip was listed at a price of Rs 1784.40 per share, at a premium of 98.27% to the initial public offer (IPO) price. On the BSE, 10.87 lakh shares of the company were traded in the counter. The IPO of Clean Science and Technology received bids for 114.92 crore shares as against 1.23 crore shares on offer. The issue was subscribed 93.41 times. The issue opened for bidding on Wednesday, 7 July 2021, and closed on Friday, 9 July 2021. The price band for the IPO was set at Rs 880-900 per share.
Shares of G R Infraprojects were settled at Rs 1746.80, at a premium of 108.70% compared with the issue price of Rs 837 per share. The scrip was listed at Rs 1700 per share, at a premium of 103.11% to the initial public offer (IPO) price. On the BSE, over 7.68 lakh shares of the company were traded in the counter. The IPO of G R Infraprojects received bids for 83.33 crore shares as against 81.23 lakh shares on offer. The issue was subscribed 102.58 times. The issue opened for bidding on Wednesday, 7 July 2021, and closed on Friday, 9 July 2021. The price band for the IPO was set at Rs 828-837 per share.
Stocks in Spotlight:
ACC rose 1.87%. On a consolidated basis, the cement major reported 110.17% surge in net profit to Rs 569.45 crore on 49.29% increase in revenue from operations to Rs 3884.94 crore in Q2 June 2021 over Q2 June 2020. Profit before tax jumped 88.11% to Rs 758.29 crore during the period under review.
HDFC Life Insurance Company fell 2.77%. The company reported 33% fall in standalone net profit to Rs 302.35 crore on 0.7% rise in total income to Rs 14,604.30 crore in Q1 FY22 over Q1 FY21. Net premium income during the quarter increased by 31.7% YoY to Rs 7,538.48 crore. However, income from investments (net) declined by 20.4% to Rs 6,963.56 crore in the first quarter. Profit before tax in Q1 FY22 stood at Rs 306.73 crore, down 32% over Q1 FY21. The Value of New Business (VNB) increased by 40% to Rs 408 crore in Q1 FY22 as against Rs 291 crore in Q1 FY21.
HDFC Bank slipped 3.34%. The private sector lender reported 16.08% rise in standalone net profit to Rs 7,729.64 crore on 6.73% increase in total income to Rs 36,771.47 crore in Q1 FY22 over Q1 FY21. Net interest income for the quarter ended 30 June 2021 grew to Rs 17,009 crore from Rs 15,665.40 crore for the quarter ended 30 June 2020, driven by advances growth of 14.4%, and a core net interest margin of 4.1%.
Pre-provision Operating Profit (PPOP) at Rs 15,137.0 crore grew by 18% over the corresponding quarter of the previous year. Provisions and contingencies for the quarter ended 30 June 2021 rose by 24.14% to Rs 4,830.8 crore (consisting of specific loan loss provisions of Rs 4,219.7 crore and general and other provisions of Rs 611.1 crore) as against Rs 3,891.5 crore (consisting of specific loan loss provisions of Rs 2,739.8 crore and general and other provisions of Rs 1,151.7 crore) for the quarter ended 30 June 2020. Total provisions for the current quarter included contingent provisions of approximately Rs 600 crore.
Just Dial fell 5.17% to Rs 1017.80 after Reliance Retail Ventures (RRVL) announced an open offer to acquire 26% stake in the company at Rs 1,022.25 per share.
RRVL announced an open offer for acquisition of up to 2,17,36,894 equity shares of Just Dial (representing 26% stake) for a cash consideration of Rs 2,222.05 crore. The shares in the open offer are being acquired at a price of Rs 1,022.25 apiece, at 4.76% discount to the scrip's closing price of Rs 1073.30 on Friday (16 July 2021).
Larsen & Toubro (L&T) fell 0.62%. L&T Construction, the construction arm of Larsen & Toubro (L&T), has won a slew of significant orders in India and abroad for its various businesses. The power transmission & distribution business has won an order to construct a 220kV transmission line associated with system strengthening in the Ladakh region. The design and execution of this system involves traversing avalanche prone, hilly terrains and ice loading of conductors. Another turnkey order has been received for urban power distribution in Ayodhya city under the Integrated Power Development Scheme.
Suryoday Small Finance Bank gained 2.42% after the small finance bank said its gross advances (provisional) grew 16% year-on-year to Rs 4,082 crore in Q1 FY22 as against Rs 3,534 crore in Q1 FY21. On a sequential basis, the gross advances fell 2% last quarter as against Rs 4,186 crore in Q4 FY21. Total deposits grew 16% year-on-year and 2% quarter-on-quarter to Rs 3,317 crore in Q1 FY22. Disbursements surged 2844% to Rs 361 crore in Q1 FY22 compared with Rs 12 crore in Q1 FY21. It, however, declined 66% last quarter from Rs 1,059 crore in Q4 FY21. Meanwhile, the bank's CASA improved to 16.2% in Q1 FY22 from 15.4% in Q4 FY21 and 11.9% in Q1 FY21.
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