Sensex jumps 515 pts, Nifty ends above 15,550; metals shine

The domestic equity benchmarks ended with robust gains on Monday. Investors sentiment improved due to a steady decline in daily COVID-19 cases in India. Strength in other Asian stock markets also supported buying.

The barometer index, the S&P BSE Sensex, advanced 514.56 points or 1% to 51,937.44. The Nifty 50 index gained 147.15 points or 0.95% to 15,582.80. The Nifty hit a record high of 15,606.35 in late trade today.

Reliance Industries (up 3.13%), ICICI Bank (up 2.95%) and ITC (up 1.76%) boosted the indices.

In the broader market, the BSE Mid-Cap index rose 0.45% and the BSE Small-Cap index added 0.50%.

The market breadth was positive. On the BSE, 1,744 shares rose and 1,492 shares fell. A total of 191 shares were unchanged.

COVID-19 Update:

Total COVID-19 confirmed cases worldwide stood at 17,03,54,142 with 35,41,800 deaths. India reported 20,26,092 active cases of COVID-19 infection and 3,29,100 deaths while 2,56,92,342 patients have been discharged, according to the data from the Ministry of Health and Family Welfare, Government of India.

India recorded over 1.52 lakh new COVID-19 cases in the 24 hours ending 8 AM on Monday, 31 May 2021 taking the country`s total infections to over 2.80 crore. This is the lowest spike in daily infections since 9 April 2021.

As daily infections see a downward trend, several states announced a few relaxations while many have extended the lockdown measures. Many states, including Kerala, Tamil Nadu, Maharashtra and Goa, have extended the restrictions, while some such as Delhi, Madhya Pradesh and Himachal Pradesh have announced relaxations.

Economy:

India`s statistics ministry will announce the GDP data for the January-March quarter today, 31 May 2021. The RBI`s monetary policy committee will meet this week to review the benchmark interest rates and the decision will be announced on Friday. The central bank will announce its projections regarding GDP and inflation.

India`s Monsoon:

India Meteorological Department (IMD) has said that the onset of monsoon in Kerala is likely to take place by 3 June 2021. Earlier, it had predicted the arrival of monsoon over Kerala by 31 of May 2021.

As per the latest meteorological indications, the south-westerly winds could strengthen further gradually from 1st of June, resulting in likely enhancement in rainfall activity over Kerala. Hence the onset of monsoon over Kerala is likely to take place by 3rd of next month.

Numbers to Watch:

The yield on 10-year benchmark federal paper rose to 6.022% as compared with 6.003% at close in the previous trading session.

In the foreign exchange market, the rupee edged lower against the dollar. The partially convertible rupee was hovering at 72.62, compared with its close of 72.4550 during the previous trading session.

MCX Gold futures for 4 June 2021 settlement rose 0.54% to Rs 48,805.

The US Dollar index (DXY), which tracks the greenback`s value against a basket of currencies, rose 0.04% to 90.07.

In the commodities market, Brent crude for August 2021 settlement rose 73 cents at $69.45 a barrel. The contract fell 48 cents, or 0.69% to settle at $68.72 a barrel in the previous trading session.

Foreign Markets:

Most European shares declined while Asian stocks advanced on Monday, 31 May 2021.

China`s official manufacturing Purchasing Managers` Index for May 2021 came in at 51. The May 2021 figure was slightly lower from the previous month`s reading of 51.1.

Japan`s retail sales rose 12% in April 2021 as compared with a year earlier, according to government data released Monday.

Buzzing Indian Segment:

The Nifty Metal index rose 2.10% to 5,161.80. The index has risen 3.14% in three sessions.

SAIL (up 5.42%), MOIL (up 5.24%), JSW Steel (up 3.25%), Jindal Steel & Power (up 2.98%), Vedanta (up 2.91%), Welspun Corp (up 2.52%), NALCO (up 2.5%), Tata Steel (up 2.13%), NMDC (up 1.81%), Hindalco Industries (up 1.66%) and Hindustan Zinc (up 0.26%) spurted.

Earnings Impact:

Divi`s Laboratories added 1.87%. On a consolidated basis, the company posted a 29.3% rise in net profit to Rs 502.02 crore in Q4 FY21 compared with Rs 388.23 crore in Q4 FY20. Net sales increased 28.7% YoY to Rs 1,788.19 crore in Q4 FY21.

REC fell 0.10%. The company`s consolidated net profit soared 338.37% to Rs 2,077.84 crore on 19.27% increase in total revenue from operations to Rs 9,211.46 crore in Q4 March 2021 over Q4 March 2020.

Aurobindo Pharma fell 2.36%. On a consolidated basis, the company posted 7.18% decline in net profit to Rs 801.1 crore on 1.18% decline in net sales to Rs 5,991.68 crore in Q4 FY21 over Q4 FY20.

Glenmark Pharmaceuticals declined 2.39%. On a consolidated basis, the drug maker`s net profit rose 6.2% to Rs 233.87 crore on 4.4% increase in net sales to Rs 2,829.89 crore in Q4 March 2021 over Q4 March 2020.

Bank of Baroda skid 3.76%. The public sector bank reported a net loss of Rs 1,046.50 crore in Q4 FY21 as against a net profit of Rs 506.59 crore in Q4 FY20. The bank`s total income remained stable at Rs 21,532.91 crore in Q4 FY21 over Q4 FY20.

The bank`s total provisions for Q4 FY21 stood at Rs 3,586 crore, declining 46% from Rs 6,645 crore in Q4 FY20. On the asset quality side, the gross NPA ratio stood at 8.87% as on 31 March 2021, compared to 8.48% on 31 December 2020 and 9.4% as of 31 March 2020. The net NPA ratio stood at 3.09% as on 31 March 2021 from 2.39% as on 31 December 2020 and 3.13% as on 31 March 2020.

Advanced Enzyme Technologies fell 6.59%. On a consolidated basis, the company posted 3.4% rise in net profit to Rs 33.8 crore on 20.8% rise in net sales to Rs 133.22 crore in Q4 FY21 over Q4 FY20. Profit before tax increased 10.6% to Rs 47.77 crore in Q4 FY21 compared with Rs 43.20 crore in Q4 FY20. EBITDA grew by 13% year on year to Rs 54.9 crore in Q4 FY21 compared with Rs 48.7 crore in Q4 FY20. EBITDA margin fell to 41% in Q4 FY21 from 44% in Q4 FY20.

Stocks in Spotlight:

PNB Housing Finance hit an upper circuit of 20% at Rs 525.20 after the company announced that its Board has approved a capital raise of up to Rs 4,000 crore, led by entities affiliated to The Carlyle Group Inc. The housing financier will raise Rs 3200 crore through preferential equity shares and Rs 800 crore through warrants. The issue price of equity shares and warrants is fixed at Rs 390 each.

The proposed transaction has triggered a mandatory open offer by Pluto Investments, an affiliated entity of the Carlyle Group, for the purchase of up to 26% equity shares of PNB Housing Finance from public shareholders. The open offer is being made at a price of Rs 403.22.

As part of this transaction, Salisbury Investments, the family investment vehicle of Aditya Puri, Senior Advisor for Carlyle in Asia and the former CEO & managing director of HDFC Bank, will also invest in the capital raise. Aditya Puri is expected to be nominated to the PNB Housing Finance board as a Carlyle nominee director in due course.

PNB Housing said that the key objective of raising capital is to augment capital adequacy, reduce gearing and accelerate growth with a focus on retail housing including self-employed and affordable housing loans such as the Unnati segment.

J Kumar Infraprojects advanced 3.65%. The construction company has received a `letter of acceptance` from Mumbai Metropolitan Region Development Authority for Mumbai metro rail project. The scope of project is part design and construction of balance works of package elevated viaduct and ten elevated stations. The contract value of the project is Rs 1,307.88 crore.

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