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Indices pare gains; pharma shares decline

Key domestic benchmarks pared gains in morning trade. At 10:24 IST, the barometer index, the S&P BSE Sensex, was up 143.64 points or 0.41% at 35,057.44. The Nifty 50 index added 37.60 points or 0.36% at 10,339.70.

In the broader market, the S&P BSE Mid-Cap index was trading flat while the S&P BSE Small-Cap index gained 0.17%.

The market breadth favored the buyers. On the BSE, 1156 shares rose and 1064 shares fell. A total of 103 shares were unchanged.

Among index movers, HDFC was up 1.66% to Rs 1783.75, HDFC Bank gained 0.83% to Rs 1074.55 while Reliance Industries rose 0.86% to Rs 1718.

Economy:

The output of eight core industries declined at slower pace of 23.4% in May 2020 compared with 37% (provisional) dip in previous month of April 2020. Its cumulative growth during April to May 2020-21 was 30.0%.

"In view of nationwide lockdown during April and May 2020 due to Covid-19 pandemic, various industries viz. coal, cement, steel, natural gas, refinery, crude oil etc. experienced substantial loss of production," the Ministry of Commerce and Industry said in a statement.

Steel production (down 48.4%) declined the most followed by cement production (down 22.2%), petroleum refinery production (down 21.3%) and natural gas production (down 16.8%) in May 2020 over May 2019. Only fertilizers production recorded a 7.5% YoY growth during the month.

India's current account balance recorded a marginal surplus of US$ 0.6 billion (0.1% of GDP) in Q4 of 2019-20 as against a deficit of US$ 4.6 billion (0.7% of GDP) in Q4 of 2018-19 and US$ 2.6 billion (0.4% of GDP) in the preceding quarter, i.e., Q3 of 2019-20.

The surplus in the current account in Q4 of 2019-20 was primarily on account of a lower trade deficit at US$ 35.0 billion and a sharp rise in net invisible receipts at US$ 35.6 billion as compared with the corresponding period of last year.

India's external debt for the quarter ended March 2020 rose to $558.5 billion on account of currency valuation effect, commercial borrowings and non-resident Indian (NRI) deposits, according to the data released by the Reserve Bank of India on Tuesday. The external debt during the March quarter rose by 2.8% or $15.4 billion on a year-on-year (YoY) basis.

Buzzing Index:

The Nifty Pharma index slipped 0.65% to 9,920.20, extending decline for second day. The index has fallen 2.12% in two sessions.

Among the index constituents, Lupin (down 1.68%), Divi's Labs (down 1.36%), Cipla (down 0.86%), Alkem Laboratories (down 0.77%), Torrent Pharma (down 0.66%), Dr. Reddy's Labs (down 0.67%), Cadila Healthcare (down 0.33%), Sun Pharma (down 0.31%) declined while Aurobindo Pharma (up 0.98%) and Biocon (up 0.26%) advanced.

Earnings Impact:

Godfrey Phillips India fell 3.66% to Rs 980.65 after the company reported 19.86% fall in consolidated net profit to Rs 38.69 crore on 3.56% rise in total income to Rs 622.15 crore in Q4 March 2020 over Q4 March 2019.

RITES declined 2.27% to Rs 240.60 after the company posted a 4.29% drop in consolidated net profit to Rs 143.93 crore on a 22.17% drop in revenue to Rs 614.24 crore in Q4 FY20 as compared to Q4 FY19.

Commenting on the outlook, Rajeev Mehrotra, the company's chairman and managing director, said that some uncertainties have emerged in recent times due to Covid-19, which may impact the business operations in FY21 but sufficient order book, diversified business segments and opportunities in infrastructure sector at domestic level as well as abroad are expected to help in quick recovery and future business growth.



Source: Capitalmarket.com