Market trades with deep losses; European markets open in green

The benchmark indices contrinued trading with deep losses during mid-afternoon trade, dragged by IT, banks and financial service stocks. Firm crude oil prices and a steep rise in fresh COVID-19 cases in India also dampened investors sentiment.

At 14:30 IST, the barometer index, S&P BSE Sensex slumped 1,186.14 points or 2.03% at 57,152.79. The Nifty 50 index tumbled 304.10 points or 1.74% at 17,171.45.

The S&P BSE Mid-Cap index declined 0.99%. The S&P BSE Small-Cap index fell 0.85%.

The market breadth, indicating the overall health of the market, was weak. On the BSE, 1,382 shares rose while 2,117 shares fell. A total of 140 shares were unchanged.

COVID-19 Update:

India recorded 2,183 new COVID-19 cases and 214 deaths in the 24 hours ending 8 AM on Monday, according to the Union Ministry of Health and Family Welfare. The active cases currently stand at 11,542 and comprise 0.03% of the total infections. The recovery rate remained unchanged at 98.76% and 1,985 recoveries were reported on Sunday.

Delhi is registering an uptick in cases; daily cases breached the 500 mark on Sunday, with the city recording 517 cases in 24 hours. The positivity rate in the national capital has jumped from 0.5% to 5.33% in two weeks. Amid the increase in infections, the Delhi Disaster Management Authority (DDMA) will take stock of the situation and meet on 20 April 2022.

Economy:

India`s inflation based on wholesale price index (WPI) stood at 14.55% in March 2022 compared with 7.89% in March 2021.

"The high rate of inflation in March, 2022 is primarily due to rise in prices of crude petroleum & natural gas, mineral oils, basic metals, etc owing to disruption in global supply chain caused by Russia-Ukraine conflict," the Ministry of Commerce & Industry said in a statement today.

WPI grew 13.11% in February 2021, while the figure for January was 13.68%.

Meanwhile, the poverty in India is 12.3% lower in 2019 compared with 2011. The poverty headcount rate has declined from 22.5% in 2011 to 10.2% in 2019. According to policy research working paper of World Bank, poverty reduction was higher in rural areas as against urban India. Rural poverty dropped by 14.7% while urban poverty declined by 7.9% during 2011 to 2019.

Numbers to Watch:

The yield on the 10-year benchmark federal paper fell to 7.182% from its previous close of 7.215%.

In the foreign exchange market, the rupee edged lower against the dollar. The partially convertible rupee was hovering at 76.29, compared with its close of 76.19 during the previous trading session.

MCX Gold futures for 3 June 2022 settlement gained 0.99% to Rs 53,516.

The US Dollar index (DXY), which tracks the greenback`s value against a basket of currencies, rose 0.39% to 100.71.

In the commodities market, Brent crude for June 2022 settlement fell 61 cents or 0.55% at $111.09 a barrel.

Buzzing Index:

The Nifty Financial Services declined 2.41% to 16,999.50. The index lost 3.25% in two trading sessions.

Among the components of the Nifty Financial Services index, Power Finance Corporation (down 0.3%), ICICI Prudential Life Insurance Company (down 0.37%), Axis Bank (down 0.48%), ICICI Lombard General Insurance Company (down 0.53%) and REC (down 0.57%) were the top losers.

Among the other losers were, HDFC Asset Management Company (down 0.91%), Bajaj Finance (down 1.08%), ICICI Bank (down 1.21%), Cholamandalam Investment & Finance Company (down 1.55%) and Muthoot Finance (down 1.83%).

On the other hand, SBI Life Insurance Company (up 2.04%) and HDFC Life Insurance Company (up 1.67%) advanced.

HDFC Bank dropped 4.57%. The private lender`s net profit rose 22.83% to Rs 10,055.18 crore on 8.07% increase in total income to Rs 41,085.78 crore in Q4 March 2022 over Q4 March 2021. The bank`s profit before tax (PBT) rose 20.35% year-on-year to Rs 13,044.66 crore in Q4 March 2022. The bank`s provisions and contingencies (excluding tax provisions) fell 29.43% to Rs 3,312.35 crore in Q4 March 2022 over Q4 March 2021.

The bank`s gross non-performing assets (NPAs) stood at Rs 16,140.96 crore as on 31 March 2021 as against Rs 15,086 crore as on 31 December 2021 and Rs 16,013.55 crore as on 31 March 2020. The ratio of gross NPAs to gross advances stood at 1.17% as on 31 March 2021 as against 1.32% as on 31 December 2021 and 1.26% as on 31 March 2020. The ratio of net NPAs to net advances stood at 0.32% as on 31 March 2021 as against 0.40% as on 31 December 2021 and 0.37% as on 31 March 2020.

ICICI Prudential Life Insurance Company lost 0.37%. The company recorded a net profit of Rs 184.67 crore in Q4 FY22, which is higher 189.5% as compared with the same period last year. The company had reported a net profit of Rs 63.78 crore in Q4 FY21. Net premium income declined by 4.4% to Rs 11,358.91 crore in Q4 FY22 from Rs 11,879.28 crore in Q4 FY21.

The life insurer reported 21.5% fall in net profit to Rs 754.13 crore despite a 3.9% rise in net premium income to Rs 36,321.27 crore in FY22 over FY21. The life insurer`s claims and benefit payouts increased by 29.7% to Rs 29,359 crore in FY22 from Rs 22,641 crore in FY21 primarily on account of increase in surrenders and withdrawals and death claims. The company had COVID-19 claims (net of reinsurance) of Rs 1,017 crore.

Stocks in Spotlight:

Tata Power Company skid 5.31%. The company, along with BlackRock Real Assets-led consortium, including Mubadala Investment Company, have entered into a binding agreement to invest in Tata Power Renewable Energy, the company`s renewable energy subsidiary. BlackRock Real Assets, together with Mubadala, shall invest Rs 4,000 crore (approximately $525 million) by way of equity / compulsorily convertible instruments for a 10.53% stake in Tata Power Renewables, translating to a base equity valuation of Rs 34,000 crore. The final shareholding will range from 9.76% to 11.43% on final conversion.

The newly created platform will consist of five distinct businesses delivering long-term, customer oriented solutions. It will house all renewable energy businesses of Tata Power including those in utility scale solar, wind & hybrid generation assets; solar cell & module manufacturing; engineering, procurement and construction (EPC) contracting; rooftop solar infrastructure; solar pumps and electric vehicle charging infrastructure. The broad-based portfolio of assets ensures diversified yet stable revenue sources including 25-year fixed-price PPAs for grid connected utility scale projects.

Lupin slipped 0.17%. Lupin on Monday announced that it has received tentative approval from the United States Food and Drug Administration (FDA) for its Abbreviated New Drug Application (ANDA), tenofovir alafenamide tablets. Tenofovir alafenamide tablets are used to treat chronic hepatitis B virus (HBV) infection in adults with compensated liver disease. The tablets are generic equivalent of Vemlidy tablets of Gilead Sciences, Inc. (Gilead). According to IQVIA, Tenofovir Alafenamide tablets, had estimated annual sales of $484.2 million for the month of December 2021 in the United States. Lupin said that the product will be manufactured at its Nagpur facility in India.

Global Markets:

Asian stocks settled on a mixed note on Monday, with investors reacting to the release of Chinese economic data, including first-quarter gross domestic product figures. China has reported gross domestic product of 4.8% in the first quarter of 2022, as against 4% in the fourth quarter. Markets in Australia and Hong Kong were closed on Monday for a holiday.

In Europe, the European Central Bank (ECB) kept its monetary policy unchanged last Thursday but confirmed it will end its bond buying in the third quarter. Once the bond buying program is completed, the ECB is expected to begin hiking interest rates, following the same path as the Bank of England and the U.S. Federal Reserve.

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