Stock market update: Sensex, Nifty hit day's high; breadth remains strong

The benchmark indices extended gains and hit fresh intraday high in afternoon trade. At 13:20 IST, the barometer index, the S&P BSE Sensex, rose 312.08 points or 0.65% at 48,565.59. The Nifty 50 index gained 90.25 points or 0.62% at 14,586.75.

ICICI Bank (up 1.34%), HDFC Bank (up 0.90%) and Kotak Mahindra Bank (up 2.27%) boosted the indices.

In the broader market, the S&P BSE Mid-Cap index added 0.62%. The S&P BSE Small-Cap index rose 0.64%.

Buyers outpaced sellers. On the BSE, 1,738 shares rose and 1,092 shares fell. A total of 165 shares were unchanged.

Foreign portfolio investors (FPIs) sold shares worth Rs 1,772.37 crore, while domestic institutional investors (DIIs), were net buyers to the tune of Rs 987.34 crore in the Indian equity market on 4 May 2021, provisional data showed.

Covid-19 Update:

Total COVID-19 confirmed cases worldwide stood at 15,43,71,149 with 32,27,968 deaths. India reported 34,87,229 active cases of COVID-19 infection and 2,26,188 deaths while 1,69,51,731 patients have been discharged, according to the data from the Ministry of Health and Family Welfare, Government of India.

India records 3,780 fresh fatalities, over 3.80 lakh cases in a single day.

RBI Governor Speech:

The Reserve Bank of India (RBI) Governor Shaktikanta Das in his address to the media said that wide-ranging and swift actions are needed against the spread of the second COVID-19 wave. The central bank is monitoring emerging developments while Das said the global economic outlook is highly uncertain and clouded with downside risks. Das further added that in India’s fight against the second wave of COVID-19, the RBI proposed to take extra measures. The bank will continue to monitor the emerging situation and deploy all instruments at its command, Das said. Disruption in manufacturing units so far is minimal. Consumption demand is holding up, he added.

RBI announced several measures to protect small and medium businesses, individual borrowers from the adverse impact of the intense second wave of COVID-19 across the country. RBI will undertake a purchase of government securities of Rs 35,000 crore in the next two weeks under the newly introduced GSAP-2.0. RBI announced term liquidity facility of Rs 50,000 crore to ease access to emergency health services. The central bank has also decided to conduct special three-year long-term repo operations (SLTRO) of Rs 10,000 crore at repo rate for the small finance banks (SFBs).

Gainers & Losers:

Sun Pharmaceutical Industries (up 5.17%), UPL (up 3.95%), IndusInd Bank (up 2.48%) and Axis Bank (up 2.09%) were major gainers in Nifty 50 index.

Adani Ports & Special Economic Zone (APSEZ) (down 3.44%), Bajaj Finance (down 1.17%), SBI Life Insurance Company (down 0.86%), Hindustan Unilever (HUL) (down 0.74%) and Larsen & Toubro (L&T) (down 0.41%) were major losers in Nifty 50 index.

Nifty Result Today:

Tata Steel (down 0.29%) will announce its quarterly result today.

Earnings Impact:

DCM Shriram fell 2.71%. The company reported 15.1% rise in consolidated net profit to Rs 231.72 crore on 16.7% increase in net sales to Rs 2,174.92 crore in Q4 FY21 over Q4 FY20. Profit before tax in the fourth quarter was at Rs 308.50 crore, up 24.4% from Rs 247.91 crore in the same period last year. Net debt as on 31 March 2021 stood at Rs 180 crore as compared to Rs 1,623 crore as on 31 March 2020. The reduction in debt was led by lower sugar inventory and significantly lower fertilizer subsidy outstanding. Judicious approach to capex and working capital across businesses also led to lower net debt.

Larsen & Toubro Infotech (LTI) rose 1.69% after the company’s consolidated net profit rose 5.1% to Rs 545.70 crore on 3.7% increase in revenue to Rs 3,269.40 crore in Q4 FY21 over Q3 FY20. LTI’s consolidated net profit surged 27.6% and revenue increased 8.8% in Q4 FY21 over Q4 FY20. Consolidated EBITDA margin stood at 21.9% in Q4 FY21 compared with 19.2% in Q4 FY20 and 23.2% in Q3 FY21. Total headcount was at 35,991 in Q4 FY21 as against 31,437 in Q4 FY20 and 33,983 in Q3 FY21. The attrition rate (LTM) stood at 12.3% in Q4 FY21 as against 16.5% in Q4 FY20 and 12.4% in Q3 FY21. In dollar terms, revenue grew 4.6% Q-o-Q and 9.1% Y-o-Y to $447.40 million. The constant currency revenue growth was 4.4% Q-o-Q and 7.1% Y-o-Y.

Stocks in spotlight:

Hikal hit an upper circuit of 10% at Rs 313.65 after the company said it signed a 10-year multi product deal with a leading global pharmaceutical innovator company. The contract entails the development and supply of a portfolio of niche APIs over a period of 10 years. The development will start this year and commercial supplies will commence post successful development and plant commercialisation estimated to be in FY 2024 onwards. With this deal, Hikal is entering into a niche area of chemistry and products thereby bolstering its animal health vertical. Hikal and its customer will be jointly investing at its Panoli, Gujarat site to setup a multipurpose manufacturing asset for manufacturing of these APIs.

Alembic Pharmaceuticals dropped 4.65%. The drug maker received a final approval from the US drug regulator for its Abbreviated New Drug Application (ANDA) for dorzolamide hydrochloride and timolol maleate ophthalmic solution. The approved ANDA is therapeutically equivalent to the reference listed drug product (RLD), Cosopt Ophthalmic Solution, 2% and 0.5% of Akorn Operating Company.

Global Markets:

European shares were trading higher while Asian shares were mixed on Wednesday, 5 May 2021, as sentiment took a knock from a selloff in large cap Wall Street tech stocks.

In US, the Nasdaq fell more than 2% on Tuesday as steep declines in megacap growth stocks pushed Wall Street below record trading levels, with investors seeking shelter in more defensive parts of the market.

U.S. Treasury Secretary Janet Yellen said Tuesday that interest rates may have to rise to keep a lid on the burgeoning growth of the U.S. economy brought on in part by trillions of dollars in government stimulus spending. The former Fed chair later tempered her comments somewhat on the need for higher rates, saying she respects the Federal Reserve’s independence and was not trying to influence decision-making there.

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