Domestic shares ended with modest losses on Friday, dragged by banks and financials stocks. Strength in index pivotals Reliance Industries and TCS supported the indices. The barometer S&P BSE Sensex lost 143.36 points or 0.39% at 36,594.33. The Nifty 50 index fell 45.40 points or 0.42% at 10,768.05.
The Nifty opened lower at 10,764.10, but bounced back to hit the day's high of 10,819.40. The recovery was short lived as the index reversed gains and hit the day's low of 10,713 in afternoon trade. The Nifty firmed up once again in mid-afternoon trade. After some range bound trading in late trade, it ended with modest losses.
In the broader market, the S&P BSE Mid-Cap index slipped 0.72% while the S&P BSE Small-Cap index shed 0.35%.
The market breadth was weak. On the BSE, 1000 shares rose while 1663 shares fell. A total of 170 shares were unchanged.
India reported 2,76,682 active cases of COVID-19 infection and 21,604 deaths while 4,95,515 patients have been cured, according to the data from the Ministry of Health and Family Welfare, Government of India. Total coronavirus cases worldwide stood at 12,279,131 with 555,166 deaths so far, according to data from Johns Hopkins University.
Numbers to Track:
The yield on 10-year benchmark federal paper fell to 5.76% compared with previous closing of 5.772% in the previous trading session.
In the foreign exchange market, the partially convertible rupee edged lower to 75.205 compared with its previous closing 74.995.
In the commodities market, Brent crude for September 2020 settlement fell 86 cents to $41.49 a barrel.
MCX Gold futures for 5 August 2020 settlement rose 0.54% to Rs 49,140.
European markets advanced while Asian shares declined on Friday. Rising coronavirus cases in the US suppressed hopes of a quicker economic recovery from the pandemic, while investors looked forward to earnings season.
US stocks settled lower on Thursday, 9 July 2020, as investors continued to back away from risk assets after fresh data showed that initial unemployment claims in the US remain elevated, and the number of confirmed new COVID-19 cases in the US hit a new single-day high Wednesday.
Stock investors took safe heaven stance amid concerns about coronavirus infections in the country after more than 60,000 new COVID-19 cases were reported on Wednesday, the biggest increase ever reported by a country in a single day. Florida reported a record increase in hospitalizations. With COVID-19 cases on the rise in 42 states across the United States, investors fear that re-imposition of lockdown measures will significantly weaken recovery chances.
Sentiments were also dampened after a report on weekly jobless claims showed that US first-time claims for unemployment benefits tumbled to 1.314 million in the week ended July 4th, a decrease of 99,000 from the previous week's revised level of 1,413 million, according to a report released by the Labor Department on Thursday.
Buzzing Indian Segment:
Banks and financial stocks tumbled. The Nifty Bank index fell 2.22% to 22,398.45.
HDFC Bank (down 1.81%), Kotak Mahindra Bank (down 1.36%), ICICI Bank (down 2.75%) and Axis Bank (down 3.14%) declined.
Shares of State Bank of India (SBI) fell 1.73% to Rs 195.65 amid profit taking. The stock rose 7.77% in four sessions to end at Rs 199.10 yesterday, from its recent closing low of Rs 184.75 recorded on 3 July 2020.
In an exchange filing made during market hours today, SBI informed that the meeting of the board of directors of the company is scheduled on 15 July 2020 to consider raising Additional Tier 1 (AT 1) and Tier 2 capital by way of issuance of Basel III compliant debt instrument in USD and/or INR during FY21.
Punjab National Bank (PNB) lost 5.53% after the bank reported a loan of Rs 3,688.58 crore granted to Dewan Housing Finance (DHFL) as fraud. In a regulatory filing, the bank said that it has already made provisions amounting to Rs 1,246.58 crore.
Meanwhile, PNB on Thursday said its board has approved a proposal to raise Rs 10,000 crore through a mix of both equity and debt. The board also approved the bank to seek shareholders' nod for raising of equity capital for an amount up to Rs 7,000 crore in the forthcoming annual general meeting.
Yes Bank fell 4.32% to Rs 25.50. The private sector bank said its capital raising committee at its meeting today (10 July) approved the floor price of its Rs 15,000 crore FPO at Rs 12 per equity share and a cap of Rs 13 per share. A discount of Re 1 per equity share will be given to the eligible employees of the bank bidding in employee reservation portion, Yes Bank said in a statement during trading hours today (10 July). In the FPO, shares can be bid in lots of 1,000 equity shares.
The bank filed a red herring prospectus on 7 July 2020 for the FPO to raise up to Rs 15,000 crore via a fresh issue of equity shares. The FPO will remain open between 15 and 17 July 2020. The bank has set 14 July as anchor investor bidding date.
Housing finance major HDFC fell 2.87%. People's Bank of China (PBoC) has sold a part or all of its stake in Housing Development Finance Corporation (HDFC) in the April-June quarter. According to the latest data disclosed by the lender to the stock exchanges, PBoC was not among key shareholders of the company as of 30 June 2020. PBOC held 1.01% stake in HDFC as on 31 March 2020. As a result, the holding of foreign portfolio investors declined to 70.17% as on 30 June 2020 against 70.88% in the preceding quarter ended 31 March 2020.
PNB Housing Finance declined 3.83%. The housing finance company on 9 July announced that the outbreak of the Covid-19 pandemic required a change in the strategy for the organisations. As a result, PNB Housing also reworked on its FY2020-21 business plan and presented to its board, which approved the business plan for FY21.
The company said that the pandemic and the resultant lockdown impacted the disbursements in Q4 March 2020 and Q1 June 2020. However, the numbers are visibly improving month-on-month but on the overall basis the disbursements are expected to degrow during the year. The focus will be on the mass housing lower risk weighted retail segment.
Stocks in Spotlight:
Index bellwether Reliance Industries (RIL) rose 2.95% to Rs 1878.50. It hit a record high of Rs 1884.40 in the late trade.
RIL and BP on Thursday (9 July) announced the start of their new Indian fuels and mobility joint venture, Reliance BP Mobility (RBML). BP has paid RIL $1 billion for a 49% stake in the JV, with RIL holding 51%. RBML aims to expand from its current fuel retailing network of over 1,400 retail sites to up to 5,500 over the next five years. The joint venture also aims to increase its presence from 30 to 45 airports in the coming years.
IT pivotal TCS rose 0.78%. The company reported a 13% decline in consolidated net profit to Rs 7,049 crore on a 4% fall in revenue to Rs 38,322 crore in Q1 June 2020 (Q1FY21) over Q4 March 2020 (Q4FY20). Operating margin stood at 23.6% in Q1 FY21 from 25.1% in Q4 FY20. The deal wins stood at $6.9 billion in Q1 FY21, against $8.9 billion in Q4 FY20.
Commenting on the Q1 result, Rajesh Gopinathan, the chief executive officer (CEO) and managing director (MD) of TCS, has said that: "The revenue impact of the pandemic played out broadly along the lines we had anticipated at the start of the quarter. We believe it has bottomed out, and we should now start tracing our path to growth."
Tata Motors rose 0.51%. Tata Motors group global wholesales tumbled 64% to 91,594 units in Q1 June 2020 over Q1 June 2019.
Tata Motors on Thursday said that its subsidiary JLR's retail sales for the three-month period to 30 June 2020 were significantly impacted by Covid-19 in line with the unprecedented market conditions, but improved month-on-month through the quarter. Strict lockdowns and social distancing measures for Covid-19 resulted in temporary shutdowns of most retailers and the company's manufacturing plants in April and much of May.
Container Corporation of India (CONCOR) rose 0.49%. said that the company's total throughput volumes declined 20.95% to 7,32,711 twenty foot equivalent units (TEUs) (provisional) in Q1FY21 from 9,26,923 TEUs in Q1FY20.
FirstSource Solutions soared 7.43% after well-known investor Rakesh Jhunjhunwala increased stake in the company to 2.88% during Q1 June 2020 from 2.06% held earlier.