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Shares trade firm; India VIX below 30 mark

Key barometers traded near the day's high in early afternoon trade. At 12:26 IST, the barometer index, the S&P BSE Sensex, was up 422.53 points or 1.25% at 34,248.06. The Nifty 50 index added 128.85 points or 1.29% at 10,107.95.

Global cues were positive as hopes of more stimulus and further easing in social restrictions around the world eclipsed worries over coronavirus. The sentiment was also boosted by Prime Minister Narendra Modi's comment that India's economy would get back on track supported by systematic reforms.

In the broader market, the S&P BSE Mid-Cap index rose 1.22% while the S&P BSE Small-Cap index gained 2.19%.

The market breadth was strong. On the BSE, 1730 shares rose and 553 shares fell. A total of 126 shares were unchanged. In the Nifty 50 index, 40 shares advanced while 10 stocks declined.

Cyclone Nisarg:

Cyclone Nisarg intensified into a severe cyclonic storm Wednesday morning, and is expected to cross the Maharashtra coast this afternoon. The storm is likely to make landfall close to Alibagh in Raigad district, which is just over 100 km south of Mumbai.

India Meteorological Department tweeted: "The cyclone will gradually enter into Mumbai and Thane district during next 3 hrs. Landfall will commence in 1 hr and the process will be completed during next 3 hrs."

Derivatives:

The NSE's India VIX, a gauge of market's expectation of volatility over the near term, shed 0.62% to 29.92. The Nifty June 2020 futures were trading at 10,097, a discount of 10.95 points compared with the spot at 10,107.95.

On the options front, the Nifty option chain for 25 June 2020 expiry showed maximum call open interest (OI) of 17.12 lakh contracts at the 10,000 strike price. Maximum put OI of 31.37 lakh contracts was seen at 9,000 strike price.

Buzzing Index:

The Nifty Metal index rose 1.79% to 1,991.05. The index has gained 16.4% in seven days while the benchmark Nifty 50 index has added 12.1% during the same period.

Vedanta (up 4.34%), Hindalco Industries (up 2.9%), JSW Steel (up 2.7%), Steel Authority of India (up 1.93%), Hindustan Copper (up 1.91%), National Aluminium Company (up 1.45%), NMDC (up 1.29%), Tata Steel (up 1.24%), Jindal Steel & Power (up 1.2%) and Hindustan Zinc (up 0.32%) advanced.

Earnings Impact:

Sun Pharma Advanced Research Company (SPARC) fell 2.57% to Rs 136.70 after the company reported standalone net loss of Rs 99.54 crore in Q4 March 2020, higher than net loss of Rs 9.35 crore in Q4 March 2019. Net sales slumped 73.2% to Rs 22.71 crore in Q4 March 2020 over Q4 March 2019. Standalone pre-tax loss stood at Rs 99.54 crore in Q4 March 2020 as against pre-tax loss of Rs 9.35 crore in Q4 March 2019.

The company has a negative net worth as of 31 March 2020 as current liabilities exceed current assets. The firm said it is evaluating various sources of raising funds for its operations. The company has also received a financial support letter from its parent company which is valid till time the company is able to raise funds from external sources, it said.

Spandana Sphoorty hit an upper circuit of 5% at Rs 535 after the microfinance lender reported a 12.7% rise in net profit to Rs 83.04 crore on 63.8% rise in total income to Rs 439.77 crore in Q4 March 2020 over Q4 March 2019. Consolidated profit before tax stood at Rs 108.47 crore in Q4 March 2020, rising 0.6% from Rs 107.78 crore in Q4 March 2019. Income tax expense declined 28.36% to Rs 24.43 crore in Q4 March 2020 from Rs 34.10 crore in Q4 March 2019.

After assessing the impact of the COVID-19 pandemic on its liquidity and ability to fulfill its obligations, the company made a provision and write offs of Rs 129 crore in Q4 March 2020. Total impairment on financial instruments stood at Rs 188.11 crore in Q4 March 2020, higher than Rs 21.15 crore in Q4 March 2019.

Net interest income stood at Rs 263 crore in Q4 March 2020, jumping 56% from Rs 168 crore in the year ago period. Net interest margin improved to 16.6% in Q4 March 2020 from 15.9% in Q4 March 2019. The firm recorded a 67% jump in disbursement to Rs 2324 crore in Q4 March 2020 from Rs 1390 crore in Q4 March 2019. Total Assets Under Management (AUM) stood at Rs 6,829 crore in March 2020, rising by 74% from Rs 4372 crore in March 2019.



Source: Capitalmarket.com