Stock Market Highlights: Sensex cracks 882 points, Nifty ends below 14,400 dragged by banks, auto stocks

Rupee Close | The Indian rupee ended lower by 52 paise at 74.87 per dollar. The local currency opened 43 paise lower at 74.78 per dollar against the previous close of 74.35 and traded in the range of 74.77-75.04.

Manish Hathiramani, Proprietary Index Trader and Technical Analyst, Deen Dayal Investments

We did not break 14,200-14,250 on a closing basis and hence the onset of a bear market cannot be confirmed. This patch is good support for the Nifty and if we disrespect this, we can drift to 13,800-13,900. Since the upside is capped at 15,000, a view on the long side can be only be taken post that level. Until then the index will remain sideways with a downward bias.

Market At Close

– Market Slips As India Continues To See A Record Increase In COVID Cases

– Frontline Indices Fall 2% Each; 45 Of 50 Nifty Stocks Close Lower

– Nifty Slips 258 Points To 14,359 & Sensex 883 Points To 47,949

– Nifty Bank Falls 769 Points To 31,208 & Midcap Index 504 Pts To 23,256

– Most Sectoral Indices Close In The Red  While Volatility Index Rises 10%

– Adani Ports, Power Grid, ONGC, Hero Moto, IndusInd Bank Top Nifty Losers

– Dr Reddy’s, Cipla, Britannia, Infosys & Wipro Close Higher In A Weak Session

– HDFC Bank Recovers 3% From Lows To Close With Minor Cuts Post Earnings

– Pharma & Hospitals Continue To Move Higher On Rising COVID Cases

– Granules, Panacea, Apollo Hosp, Dr Lal, Pfizer Top Pharma Gainers

– Jubilant Pharma’s Remdesivir Launch Helps The Stock Gain Over 6%

– Bajaj Cons Slips 2% After Earnings; Profit, Revenue & EBITDA Flat QoQ

– Market Breadth Favours Declines; Advance-Decline Ratio At 1:5

Closing Bell | Indian equity indices ended sharply lower Monday dragged by heavy selling across the board on worries over economic fallout of the rising COVID-19 cases and stricter restrictions in various states. The Sensex fell 882.61 points, or 1.81 percent to 47,949.42, while the Nifty ended 258.40 points, or 1.77 percent lower at 14,359.45. Smallcap and midcap indices closed over 2 percent lower each.

Barring Nifty Pharma, all other sectoral indices ended in the red with banking, realty, auto and metal indices dragging the most. Adani Ports & SEZ, PowerGrid Corporation, ONGC, Hero MotoCorp and IndusInd Bank were the top Nifty50 losers, while Dr Reddy’s Laboratories, Cipla, Britannia Industries, Infosys and Wipro led the gains.

Caplin Point Laboratories | The company’s subsidiary Caplin Steriles has been granted final approval from the United States Food and Drug Administration (USFDA) for its Abbreviated New Drug Application (ANDA) Milrinone Lactate Injection USP, 10 mg/10 mL (1 mg/mL), 20 mg/20 mL (1 mg/mL), 50 mg/50 mL (1 mg/mL), Single-dose vial presentation, a generic therapeutic equivalent version of (RLD), PRIMACOR Injection, 1 mg/mL, of Sanofi-Aventis U.S. LLC.

Global Markets: European shares hit highs as markets upbeat about recovery prospects

World shares traded near record highs on Monday, as markets were generally upbeat about the prospects for a global economic recovery from COVID-19, ahead of a busy week for earnings. Europe’s STOXX 600 reached a record high and was up 0.2 percent. Asian shares hit one-month highs overnight. MSCI world equity index, which tracks shares in 49 countries, was flat on the day, having come close to but not surpassed Friday’s record high. MSCI’s main European Index was up 0.1 percent.

Subex | The company will launch the new AI automation platform on Thursday, April 22.

Great Eastern Shipping Company | The company took delivery of a secondhand Midsize Gas Carrier “Jag Vikram” of about 35,188 cbm. The company had contracted to buy the vessel in Q4FY21.

Tata Motors | Tata Motors is running operations at its Pune plant in strict compliance with the guidelines mentioned in the ‘Break the Chain’ order of the Maharashtra government. A limited number of employees are attending duties adhering to all safety protocols, distancing norms and hygiene standards. We continue to remain vigilant about the safety and wellbeing of our employees. In addition to mandated testing, screening at plant gates is robust and if a symptomatic case is identified, we ensure that the employee is isolated and provided with all support for quarantine and contact tracing thereafter. Our medical teams have also begun vaccination drives in our plants by collaborating with local health authorities, for our eligible employees of age 45 years and above.”

COVID 2nd wave forces UBS to lower India’s GDP forecast; FY22 real GDP seen at 10%

As India battles the second wave of the COVID-19 pandemic, UBS has cut its FY22 India GDP estimates citing additional restrictions which could hit growth recovery in the country. Tanvee Gupta Jain from UBS Securities spoke to CNBC-TV to talk more about the lowered forecast. She said, “What you are seeing in India right now is a second COVID wave has actually if you look in terms of new daily case count they are already thrice versus 2020 peak, and when I say 2020 peak that is September of 2020.” Jain added, “Since February 24th we started seeing mobility restrictions getting announced, if you look at the activity indicators that we monitor closely, for instance, Google foot traffic monitor – for retail and recreation it is almost down 20 percent from the baseline. Economic activity gets impacted when we stop mobility or increases mobility restrictions.” Read more.

Emkay Global on HDFC Bank

Despite stable NIMs and higher fees leading to a beat on PPoP, the bank reported slightly lower PAT at Rs 81.8 bn (up 18% yoy) vs. est. of Rs 83 bn, mainly due to additional contingent provisions of Rs8bn amid raging second Covid wave and Rs5bn for interest-on-interest waiver. Retail credit growth remained subdued at 8% yoy due to the bank’s cautious stance and the RBI’s suspension of new card acquisition. Corporate growth remains very strong, leading to retail share slipping to 47%. As a strategy, the bank would continue to capture market share in corporate loans and has built a strong SME portfolio (20% of the total portfolio). It expects this to be a strong earnings driver, going forward.

Reported NPAs were lower qoq at 1.3% vs. 1.4% (pro forma) in Q3, but the bank sees rising incidence of EMI bounces in the system due to localized lockdowns implemented after Covid-19 second wave. The bank remains confident of its superior portfolio quality but as a matter of prudency, it carries a reasonable contingent buffer (Rs68bn; 0.6% of loans) after consuming Rs36bn in Q4, as NPA recognition has begun.

We maintain Buy on the bank with a TP of Rs 1,850 given its cross-cycle best asset-quality, strong franchisee/capital profile, better growth outlook and superior return profile. However, the RBI’s suspension of new card acquisition due to continued tech outages remains an overhang on the stock.

Should you buy, sell or hold HDFC Bank post Q4 earnings?

HDFC Bank’s March quarter profit missed analysts’ estimates. India’s largest private lender reported a net profit of Rs 8,186.3 crore in Q4, up 18 percent on a YoY basis. However, it remained below the CNBC-TV18 estimate of Rs 8,443 crore. Its net interest income (NII) rose 12 percent YoY to Rs 17,120.2 crores, as compared to Rs 15,204 crore in the year-ago period. Meanwhile, its contingency provisions dropped 32 percent as compared to the previous quarter. They are currently at Rs 5,861 crore. The bank’s board has decided against giving out a dividend for FY21, given the second wave of COVID-19.

Brokerages remained bullish on the lender even as profit missed analysts’ estimates. Brokerage firm CLSA has given a ‘buy’ rating for HDFC Bank. It said the bank has remained almost pandemic proof and the visibility on the RBI ban remains a near-term constraint. CLSA has a price target of Rs 1,825 for the stock. The brokerage firm notes that the bank’s fourth-quarter of the fiscal year 2021 slippage of Rs 4,700 crore (1.7 percent of loans) was a positive surprise. It added that excluding the Rs 4,000 crore increase in contingency provisioning,  HDFC’s credit cost of 110 basis points over the last five quarters highlights the quality of its underwriting. Read more.

Market Watch: Ruchit Jain of Angel Broking

– Sell Muthoot Finance with a stop loss above Rs 1,148 and target price of Rs 1,085

– Buy Syngene International with stop loss below Rs 585 and target of Rs 640

Infosys | Fintech innovation cluster Copenhagen Fintech announced a collaboration with Infosys to strengthen connections across the innovation ecosystem and support the development of new and compelling fintech solutions for the global financial services industry.

Nimish Shah, Chief Investment Officer – Listed Investments, Waterfield Advisors

We believe that a correction of up to 10 percent from the Nifty peak of 15,200 would be a good support level – ie. levels of 13,600-13,700. However, now is the time to start stocking up as the downside is not likely to be as deep and long. The growth for FY22 and FY23 looks realistic and encouraging and this current period may not materially derail growth expectations. One needs to be selective on stocks in sectors like auto, large private sector banks, large NBFCs, home improvements / electrical appliances companies, chemical, and pharma. Choose companies with good market share and consistent profitability, even if they are relatively more expensive.

Global brokerages cut India’s GDP growth forecasts for FY22

Global brokerages have downgraded India’s growth forecasts for FY22 following the increasing cases of COVID-19 which has stoked a sense of doubt regarding India’s economic recovery. Nomura has cut India’s GDP growth projection to 12.6 percent from 13.5 percent for the financial year ending in March 2022. Similarly, JP Morgan now forecasts India’s GDP growth rate to be 11 percent as against 13 percent earlier. UBS has also reduced its growth projections from 11.5 percent to 10 percent. Meanwhile, Citibank now predicts India’s GDP growth figure to be 12 percent. Read more.

Heena Naik, Research Analyst – Currency, Angel Broking

According to the RBI data, the Indian foreign exchange reserves surged to $581.21 billion from $576.87 billion in the week ended April 9. FPI’s have pulled out a net Rs 4,615 crore from Indian markets in April so far amid a sharp escalation in covid-19 cases and strict restrictions imposed by various states. Japan’s exports posted their strongest growth in more than three years in Mar’21 led by a surge in China-bound shipments.

US Dollar Index plunged towards 91.48 levels after the US Feds reiterated its view that any spike in inflation was likely to be temporary. Oil prices have fallen on concerns that surging caseloads of coronavirus infections in the world could disrupt economic activities and hit the global demand for crude. Sensex and Nifty opened in the red after another surge in coronavirus infections over the weekend increased the risk of more broad-based lockdowns. Indian Rupee is likely to weaken tracking the bearish sentiments in local equities coupled with opportunistic dollar buying by the importers and banks at lower levels.

Oxygen suppliers’ shares hit life high on bourses as Covid-19 spurs demand

Share price of National Oxygen, Bhagwati Oxygen, Linde India and Gagan Gases rose with only buyers in these stocks on Monday. The sentiment turned sharply positive for the stock as the demand for oxygen cylinders soared amid the outbreak of the second wave of the coronavirus pandemic with many states citing the issue of shortages as well. The stock prices of these companies hit their respective upper circuit limits. The demand situation may continue for a while as the government has also prohibited the supply of oxygen for industrial purposes starting April 22, except in nine specified industries. Read more.

Rupee slumps 52 paise to 74.87 against US dollar in early trade

The Indian rupee slumped 52 paise to 74.87 against the US dollar in opening trade on Monday, amid fears that a rapid resurgence of COVID-19 cases in the country could disrupt the economic recovery. Besides, the heavy selloff in domestic equities also weighed on investor sentiment. At the interbank forex market, the domestic unit opened at 74.80 against the US dollar, then fell further to 74.87, registering a fall of 52 paise over its previous close. On Friday, the rupee had settled at 74.35 against the American currency. Read more.

Market Watch: Pathik Gandotra, Partner, Dron Capital

– IT appears the strongest sector given strong results and growth forecasts

– Outlook for pharma is positive, look at quality companies in the pharma space

– Economy facing stocks with strong growth levers like PLI, China Plus One likely to outperform

– Exporters will also outperform given better outlook abroad & no curbs on production locally

HCL Technologies | The company has signed a multi-million dollar digital transformation and hybrid cloud contract with UD Trucks, a leading Japanese commercial vehicle solutions provider. HCL Technologies will deliver end-to-end IT transformation spanning across digital platforms, agile digital application development, migration, support and maintenance and digital workplace services.