Benchmark indices managed to close marginally higher on Friday. Sensex closed 28.35 points higher at 48,832 and Nifty rose 36.40 points to 14,617 in choppy trades on Friday. Markets will be shut on April 21st for Ram Navami. Let us look at the events that may drive the market in the truncated week ahead.
The earnings have begun in full swing with many companies coming out with their results this week. ICICI Bank, HCL Technologies, Nestle India, ACC, CRISIL, ICICI Prudential Life Insurance Company, ICICI Securities, Majesco, Cyient, Rallis India, Tata Elxsi and Mahindra & Mahindra Financial Services are among 55 companies that will release their quarterly earnings this week.
Investors will also react to the results of HDFC Bank which was released on Saturday. HDFC Bank reported an 18.2% year-on-year (y-o-y) growth in net profit for the quarter ended March to Rs 8,186.51 crore on the back of a 26% yoy rise in other income to Rs7,594 crore, with net interest income (NII) growing 12.6% yoy to Rs17,120cr. The bank’s provisions rose 24% yoy to Rs4,693.7cr. In a statement, HDFC Bank said the total provisions for the current quarter include approximately Rs1,300 cr in contingent provisions. The bank’s gross non-performing asset (NPA) ratio in Q4 rose 41 basis points (bps) sequentially to 1.32% and the net NPA ratio rose 31 bps to 0.4% as the Supreme Court vacated a stay on recognition of bad loans after August 31, 2020.
FPIs take a flight
Foreign portfolio investors (FPIs) have pulled out a net Rs 4,615cr from Indian markets in April so far amid sharp escalation in COVID-19 cases and state -wide lockdowns, making investors nervous. According to the depositories data, overseas investors pulled out Rs 4,643cr from equities but invested Rs 28cr in the debt segment. This translated into a total net withdrawal of Rs4,615cr during April 1-16. Previously, FPIs invested Rs 17,304cr in March, Rs23,663cr in February and Rs14,649cr in January.
Covid-19 spreads like wildfire
The second wave of Covid19 is baring its fangs, as the number of people infected is growing exponentially. India’s total tally of COVID-19 cases has reached 14,526,609 on April 18, as per Health Ministry data, while the active cases surpassed the 16-lakh mark (1,679,740). The death toll increased to 175,649, data showed. Maharashtra and New Delhi reported the highest single day spike in Covid cases yet again, by recording 68,631 and 25,462 infections respectively while Uttar Pradesh added 30,596 cases –– highest till date –– to its tally which has now become 8,51,620. The state also registered the highest fatality count in a day with 129 patients succumbing to the infection today. The Union Health Ministry Sunday said that the daily positivity rate of Covid-19 in India has doubled from 8% to 16.69% in last 12 days.
Hospital infrastructure is bursting at its seams as the infection spreads fast, leading to a shortage hospital beds and oxygen cylinders. In order to meet the oxygen demand across the country, the Railways will run ‘Oxygen Express’ to transport liquid medical oxygen and oxygen cylinders to different places, the national transporter said Sunday. The Centre on Sunday banned the supply of oxygen for industrial purposes except in nine specified industries in view of shortage of the essential public health commodity in several states amid a spike in COVID-19 infections. The decision will come into effect from April 22.
Macrotech Developers will list its equity shares on Indian stock exchanges on today. Formerly known as Lodha Developers, the real estate major is expected to make a muted debut on the stock market amid lukewarm response to its IPO and volatile market conditions due to the second COVID-19 wave. Macrotech Developers opened its initial public offering (IPO) on April 7 and closed the same on April 9. The shares were allotted on April 16. The IPO was subscribed 1.36 times on the final day of bidding, with investors bidding for 4.95cr equity shares against issue size of 3.64cr equity shares. Macrotech Developers intends to raise Rs2,500cr with the public issue. Of the proceeds, Rs1,500cr is expected to be used to reduce outstanding debt, whereas Rs 375cr will be utilized towards acquiring land and development rights. The rest will be used for general corporate purposes.
The Indian rupee has become Asia’s worst-performing currency from being the best in the previous quarter. On Friday, the local currency weakened to Rs 75.54 against the dollar, slipping past the 75 mark for the first time in 8 months. It’s poised for more losses as a resurgence in coronavirus disease (Covid-19) cases to a record threatens to handicap the economy. The rupee was also under pressure as FIIs turned sellers this weak amid mounting fears of a stricter lockdown, as India overtook Brazil as the second worst-hit nation by the pandemic in the world.
The Dow Jones Industrial Average and S&P 500 inched higher and set fresh records Friday amid strong earnings from blue-chip companies as well as robust economic data that signaled a solid recovery from the pandemic The Dow finished at 34200.67, up 164.68 or 0.48%. The S&P 500 index settled at 4185.47, up 15.05 or 0.36%. The Nasdaq Composite Index closed at 14052.34, up 13.58 or 0.10%.
Housing Starts surged 19.4% to a seasonally adjusted annual rate of 1.739mn units last month, the highest level since June 2006. A report from the University of Michigan on Friday showed its preliminary consumer sentiment index rose to 86.5 from a final reading of 84.9 in March. Economists had forecast the index would rise to 89.6. Finally, the survey’s one-year inflation expectation jumped to 3.7%, the highest level in nearly a decade, from 3.1% in March. Its five-year inflation outlook was unchanged at 2.7%.