Domestic equity markets traded within a narrow range on Friday, fluctuating between gains and losses, as a slew of downgrades in the GDP growth forecasts for FY22 along with slowdown in the vaccination programme amid supply crunch kept investors indecisive about the market direction.
India recorded over 343,000 fresh Covid-19 infections on Friday, taking the caseload tally to little over 24 million. According to a government official, two billion doses of Covid-19 vaccines will be made available in the country between August and December, enough to vaccinate the entire population. This comes after Delhi, Maharashtra and Karnataka decided to suspend the vaccination for people in the 18-44 age group amid acute shortage of vaccines.
However, favourable global cues helped the indices to limit losses. In Europe, the pan-European STOXX 600 index rose 0.3 per cent, with banks and retail stocks leading the gains, following a healthy session in Asia.
Barring Singaporean shares, all other Asian stocks strengthened on reassurances from the US Federal Reserve that a spike in inflation was temporary, with China and South Korea shares advancing 1.7 per cent and 1.1 per cent, respectively. Singapore stocks, on the other hand, tumbled more than 3 per cent after the city-state’s imposed strict Covid-19 curbs.
Against this backdrop, the BSE barometer of 30-shares culminated the session at 48,732.5 levels, adding 42 points or 0.09 per cent. During the choppy session, the index hit a high and low of 48,899 and 48,473, respectively.
On the NSE, the broader 50-share index defended the 14,650-mark to settle at 14,678 levels, down 19 points or 0.13 per cent. It traded within a range of 14,592 and 14,750 levels.
Overall, 21 of the 30 shares on the Sensex and 34 of the 50 constituents of the Nifty ended the day in the red. Coal India, Hindalco, Tata Steel, Tata Motors, Grasim, and IndusInd Bank on the Nifty and M&M, SBI, ONGC, Dr Reddy’s Labs, and NTPC on the Sensex ended the day as top laggards. There shares were down between 2 per cent and 4 per cent.
On the upside, Asian Paints, UPL, ITC, Nestle India, L&T, HUL, Britannia, PowerGrid, and Reliance Industries were the combined top gainers of the day, gaining up to 8.5 per cent.
On a weekly basis, both, the Sensex and the Nifty50 indices slipped around 1 per cent each.
Profit-taking in the broader markets was sharper than benchmarks today with the S&P BSE MidCap and SmallCap indices losing 1.2 per cent each.
Sectorally, the Nifty Metal index nursed the steepest loss of around 4 per cent, followed the Nifty Realty index, down 3 per cent and the Nifty PSU Bank and Auto indices, down 2 per cent each. On the upside, only Nifty FMCG index ended in the green, up 2 per cent.
>> Shares of Asian Paints moved higher by 11 per cent to Rs 2,839 on the BSE in intra-day trade on Friday after the company reported a strong 44 per cent year-on-year (YoY) revenue growth at Rs 6,651 crore in the March 2021 quarter, led by a 48 per cent YoY volume growth in the decorative segment. The stock had hit a record high of Rs 2,871 on January 11, 2021. The stock pared gains partially and ended 8.5 per cent higher on the BSE.
>> ITC shares, meanwhile, rose as much as 4.6 per cent to Rs 213 on the BSE in intra-day trade, thus recording its sharpest gain in over three months, on the back of heavy volumes. Earlier, on February 4, 2021, the stock had seen an intra-day rally of 6.8 per cent and had touched a 52-week high of Rs 239.15.
>> Shares of L&T ended 2 per cent higher on the BSE ahead of the announcement of its March quarter results, due later today. While analysts see up to 18 per cent YoY growth in the company’s net profit, its ability to hold on to margins amid higher raw-material prices and restored salarie , order pipeline, and commentary on FY22 guidance amid the Covid-19 second wave uncertainty would be the key monitorables.
>> Moreover, Escorts shares ended flat on the BSE even as it reported over two-fold jump in consolidated net profit at Rs 285.41 crore in the fourth quarter ended March 2021, mainly driven by robust sales. Its consolidated revenue from operations stood at Rs 2,229 crore.
>> Lastly, Dr Reddy’s Labs’ shares slipped 2 per cent after the pharma major’s consolidated net profit declined 28 per cent YoY to Rs 554 crore for Q4FY21.
In other news,
>> S&P Global Platts has cut India’s demand for oil & gas amid the second wave of Covid cases that has triggered lockdowns across key states over the past few weeks. For 2021, it now pegs the oil demand growth at 350,000 barrels per day, down from a forecast of 485,000 b/d made in February. The agency believes brent oil prices will peak in mid-2021 at over $70 per barrel.
>> The ongoing second wave of Covid infections and the ensuing lockdown across key economic hubs will dent corporate earnings in the June 2021 quarter (Q1FY22), but the markets will digest them as a one-time hit and will look forward to growth, believe analysts at CLSA. They expect the second wave in India to peak by June while the economic normalisation is likely to kick-in by August – September 2021.