Indian Market Outlook:

The Key benchmark indices fell over 1 % over the week dragged by the financials and an escalation in tensions between the US and China. RBI’s decision to increase the moratorium period on loan repayment worried investors, who now fear a major spike in bad loans once that EMI freeze gets over. HDFC, ICICI Bank, Axis Bank and the Bajaj twins single handedly brought the index down. It was a third straight week of losses for the markets, with the Nifty ending the week 1.07 percent lower at 9,039 points and the Sensex ending the week 1.37 percent lower at 30,672 points. The BSE Midcap index ended 2 percent lower, while the BSE Small cap index lost 1.54 percent, during the course of the week. FIIs were the net sellers for the week, sell equities worth Rs.6920 crore while the DIIs were the net buyers of Rs.3938 crore. The stock exchanges will be closed on Monday, due to Eidh. The firm stance taken by governments across the world against China may lead to further deterioration in economic relations, which would keep markets under pressure in the medium term. Rising number of Covid 19 infections could also dampen sentiment in India. On Marco Front India will announce its Q4 GDP numbers and Infrastructure output on 29th May, 2020. Key Results to watch upcoming week are Bata India, HDFC ltd., Torrent Pharma, Sun Pharma, TVS Motor, Voltas, and Amaraja Batteries.

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Net Inflow (Cr) FII DII
18-May-2020 -2,512.82 -152.42
19-May-2020 -1,328.31 1,659.74
20-May-2020 -1,466.52 2,373.19
21-May-2020 -258.73 401.78
22-May-2020 -1,353.90 -344.16
Total -6,920.28 3938.13

 

Top Gainers Closing Price Prev Close Chg (%)
ITC 186.35 164.65 13.18
Cipla 639.35 570.30 12.11
M & M 426.35 381.30 11.81
Bharti Airtel 593.20 554.10 7.06
TCS 2020.35 1892.20 6.73

 

Top Losers Closing Price Prev Close Chg (%)
Indusind Bank 338.35 418.70 -19.19
Indiabulls Hsg 115.65 133.45 -13.34
Axis Bank 336.95 388.55 -13.28
ICICI Bank 291.05 322.70 -9.81
SBI 150.85 166.40 -9.34

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Economic News:

  • The 40 bps repo rate cut by RBI on Friday, which is the eighth consecutive respite for borrowers, has brought home loan rates to their lowest level in 15 years. Moreover, the extension of moratorium on loans by three months is suited for borrowers hit by the coronavirus lockdown. Borrowers who are now facing income pressure due to the lockdown can defer their repayment of loans for three months. For instance, for a loan of Rs 30 lakh with a remaining maturity of 15 years, the remaining interest would be around Rs 2.34 lakh. Part of this amount may be waived off due to the reduction in interest rates.

 

  • The government on Friday said it has transferred over Rs 19,000 crore to bank accounts of 9.65 crore farmers under the PM-KISAN scheme during the lockdown period. The Centre provides Rs 6,000 per year to around 14 crore farmers in three equal instalments under the PM-KISAN scheme, which was announced last year in February. “Under the Pradhan Mantri Kisan Samman Nidhi (PM-KISAN) Scheme during the lockdown period from March 24 till date, about 9.55 crore farmer families have been benefited and an amount of Rs 19,100.77 crore has been released so far.

 Industry News:

  • The Reserve Bank of India’s decision to extend a moratorium on loan repayments until Aug. 31 may end up bringing more pain for the country’s non-bank lenders. The moratorium, first announced in March, allows term loan and working capital borrowers to defer their repayments. All lenders have been allowed to offer the moratorium to their borrowers as per a board-approved policy. The first phase of the moratorium has seen about a third of private bank and NBFC loan books go under moratorium. While the relief helps banks immediately, for non-bank lenders, the moratorium has proved to be a double-edged sword. Banks have been selective in granting moratorium to NBFCs, complicating liquidity management for the latter.

 

  • The Reserve Bank of India (RBI) on Friday raised the group exposure limit of banks to 30% from 25% for a temporary period till 30 June, 2021. The announcement was made by Governor Shaktikanta Das in a televised address today. The limit will be restored to 25% after the deadline unless the RBI decides otherwise.

 Company News:

  • Canara Bank has announced credit support for all its borrowers who have been affected by the COVID-19. The Canara Credit Support is extended as a quick and hassle-free loan to overcome temporary liquidity mismatches for payment of statutory dues, salary/wages/electricity bill, rent etc., the bank said in a statement. The bank has since sanctioned nearly six lakh loans amounting to Rs 4300 crore under agriculture, SHGs and retail categories, it said.

 

  • UPL Ltd.’s quarterly profit more than doubled in the March quarter, aided by growth in its two biggest markets—Latin America and India. Net profit rose to Rs 617 crore in the quarter ended March from Rs 250 crore a year ago, according to its exchange filing. That compares with the Rs 811-crore consensus forecast of analysts tracked by Bloomberg. The maker of fertilisers and agrochemicals incurred an exceptional loss of Rs 171 crore in the March quarter as part of costs related to litigation, severance and integration costs due to acquisition of Arysta LifeSciences. The company had incurred a similar exceptional item of Rs 299 crore in the quarter ended March 2019.

 

  • JSW Steel Ltd.’s quarterly profit tumbled as demand for the alloy fell amid disruptions caused by the coronavirus pandemic, and overseas subsidiaries continued to suffer losses. Consolidated net profit of the steelmaker fell 85 percent year-on-year to Rs 231 crore in the quarter ended March, according to an exchange filing. Profit fell mainly on account of impairment provisions for its overseas investments. It set aside Rs 852 crore due to increased uncertainty about restarting its mining operations in Chile. Another Rs 80 crore was provisioned for the retirement of certain fixed assets in India.

Global News:

  • Gilead Sciences Inc.’s remdesivir, the first medicine cleared for the treatment of Covid-19, mainly benefited healthier patients who weren’t dependent on ventilators or heart-lung bypass machines, according to published results of the study used to get the medicine on the market

 

  • The Amazon.com Inc’s AMZN.O India unit said it would hire 50,000 temporary workers to meet a surge in online shopping in the country, where customers have been stuck indoors for two months in a lockdown to fight the coronavirus outbreak.                                                                                                

  (Source: Bloomberg Quint, Economic Times, Business Today, Business Standard, Investing, Moneycontrol, livemint)

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