Sensex, Nifty Register Longest Streak Of Weekly Decline In 11 Months

India’s benchmark equity fluctuated all day to finally ending lower to log their third consecutive week of decline, as a deadly wave of coronavirus infections raises concerns over business recovery due to lockdown-like curbs.

The S&P BSE Sensex declined 0.4% to 47,878.45, extending its weekly drop to 1.9%. The gauge had risen as much as 0.4% earlier in the day. The NSE Nifty 50 Index also declined by similar magnitudes before reversing to gain 0.4%. Both measures logged their longest run of weekly losses since May 22.

The Sensex has retreated more than 7% from its recent peak on Feb. 15, nearing losses read as a technical correction. India added a record 332,730 cases in the last 24 hours, taking the total number of cases to 16.26 million, the second-highest in the world.

Fourteen of the 19 sector sub-indexes compiled by BSE Ltd. declined, led by a gauge of telecom stocks. On the flip side, the S&P BSE Power Index jumped 2.35%, the most in nearly four weeks.

Sentiment among global investors is souring as India’s tally of daily infections climbs to successive records. Global funds have turned net sellers of local stocks in April after a six-month buying spree, helping make the Sensex this month’s biggest loser in Asia. Foreign investors have sold $716 million of local shares through April 19.

Shares of the drugmaker rose as much as 3.7% after it received an emergency use approval from DCGI for using Pegylated Interferon alpha-2b, ‘Virafin’ to treat moderate Covid-19 infection in adults.

A single dose subcutaneous regimen of the antiviral, Virafin, will help patients recover faster and avoid complications when administered early, Cadila said.

In a trial conducted in 20-25 centres across India, Virafin had shown lesser need for supplemental oxygen, indicating that it was able to control respiratory distress and failure.

Stock Insight

• Trading volume was 63% above the 20-day average for this time of day.
• The relative strength index on the stock was 79, indicating it may be overbought.
• Cadila Health trades at 29 times its estimated earnings per share for the coming year.
• Analyst consensus price target is 12.1% below the current market price.
• Scrip is up over 19% year-to-date vs 0.2% for the Sensex

Alok Industries Ltd. rose 7.1%, more than any full-day gain since March 3. Trading volume was double the average for this time of day. The stock was the best performer among its peers.

• Trading volume was 13.6 million shares, double the 20-day average of 5.86 million shares for this time of day.
• Stock advanced 216% in the past 52 weeks, compared with a 99% increase for the company's Bloomberg peers

• SBI Life options volume 3.6x the 20-day average, with 13,410 calls changing hands vs 4,405 puts
  • Stock up 1.7%, volume 1.6x the 20-day average for this time of day
• Power Grid options volume 3.1x the average, with 11,904 calls vs 3,048 puts
  • Stock up 4.2%, volume 1.2x the average
• Bajaj Finserv options volume 2.1x the average, with 8,434 calls vs 3,653 puts
  • Stock up 1.7%, volume 0.9x the average

Source: Bloomberg

Shares of Nazara Technologies Ltd. gained after the Indian gaming and diversified sports platform reported a surge in revenue and operating income in the fiscal ended March.

The recently-listed company, with businesses across gamified learning, e-sports, Freemium and telco subscription, saw its revenue rise 84% over the preceding fiscal to Rs 454.2 crore in FY21, it said in a quarterly business update released on the stock exchanges.

The Rakesh Jhunjhunwala-backed firm’s earnings before interest, tax, depreciation and amortisation jumped close to six-fold over FY20.

Read the full report here

Sovereign bonds in India are slightly lower after Finance Minister Nirmala Sitharaman indicated a possible frontloading of borrowings if needed and the absence of any bond-purchase announcement by the RBI for next week so far.

• Bond losses come despite dovish RBI minutes which saw the rate-setting panel members prioritising growth over inflation concerns.
• The yield on benchmark 10-year debt up 1 basis points at 6.06%; 6.64% 2035 bond yield up 2 basis points to 6.71%.
• Traders were also hoping RBI will likely announce an Operation Twist after it indirectly bought 182-day T-bills at Tuesday’s sale.

Source: Bloomberg

Shares of the Tata group company rose nearly 9.6% after reporting a net profit has increased 40.3% jump in fourth-quarter net profit.

Its revenue from operations rose 18.1% to Rs 518.39 crore for the said quarter from Rs 438.88 crore in the corresponding period last fiscal, it added.

The company continued to execute strongly on its growth aspirations with over 9% quarter-on-quarter revenue growth in constant currency, Tata Elxsi CEO and MD Manoj Raghavan said in a statement.

Lupin's stock declined for a second straight session on high volume after broking firm Jefferies highlighted a potential negative for the drugmaker.

Read the full Jefferies note here

Indian equity benchmarks opened lower, in line with their global peers, after rising first time Thursday this week.

The S&P BSE Sensex dropped as much as 0.6% with a similar cut on the NSE Nifty 50 Index. The market was shut on Wednesday for a local holiday. Still, the Sensex has lost about 8% from its recent peak on Feb. 15, nearing losses read as a technical correction.

Ten of the 19 sector sub-indices compiled by BSE Ltd. declined, led by a gauge of banks. ICICI Bank Ltd. and HDFC twins were the biggest losers on the Sensex.

The outlook for Indian assets has turned bearish as a spike in infections prompt cities from the financial hub Mumbai to the national capital New Delhi to bring in stringent restrictions on the movement of people. India, which has the world’s second-largest outbreak, reported 3,32,730 new cases Friday.

Indian sovereign bond traders will assess the minutes of the central bank’s April meeting which focused on growth recovery and demand at a Rs 32,000-crore ($4.3billion) bond auction later on Friday.

An absence of any announcement so far on RBI’s bond purchases for the next week may weigh on sentiment.

• India’s monetary policymakers are willing to discount inflation worries for now and focus on supporting growth as a resurgent Covid-19 outbreak threatens a nascent economic recovery, minutes of their latest meeting showed Thursday after close of markets
• India's long-term foreign-currency debt rating was affirmed by Fitch at BBB-, the lowest investment-grade score. Long-Term Issuer Default Rating was affirmed by Fitch at BBB-, the lowest investment-grade score. Long-Term Local-Currency Issuer Default Rating was affirmed by Fitch at BBB-, the lowest investment-grade score

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India’s SGX Nifty 50 Index futures for April delivery fell 0.5% to 14,336.50, while MSCI Asia Pacific Index little changed. The NSE Nifty 50 Index added 0.8% Thursday to 14,406.15.

Indus Towers, Cyient, Rallis India, Tata Elxsi may react as the companies reported quarterly results after the market closed Thursday. HCL Technologies, M&M Financial and Indiabulls Real are the companies scheduled to report earnings Friday. Foreign investors sold net of Rs 728 crore of stocks on April 20, according to the NSDL website.

Asian stocks weakened in early Friday trade following broad-based declines in U.S. benchmarks as investors mulled a proposal for higher taxes on the wealthy to help pay for U.S. President Joe Biden’s social plan.

Markets were little moved overnight by a further assurance from European Central Bank President Christine Lagarde that the institution isn’t discussing any pullback in its emergency bond-buying program even as economic data improve.

Oil pared a weekly loss as traders considered signs of recovering demand in the U.S. and setbacks in key markets where spikes in virus cases are further constraining activity.

Treasury yields and the dollar were little changed.