IGI Logo

Snapping four day gaining streak, Indian equity benchmarks ended the horrendous day of trade with a cut of around two percentage points. Markets started the day on pessimistic note amid persistent rise in Covid cases and hiccups in vaccination drive. Breaking all records, India reported a massive surge of 386,888 cases, Worldometer showed. Besides, Mumbai for instance announced halting vaccination programme for three days due to the non-availability of vaccine stock. Adding more pessimism, the Centre for Monitoring Indian Economy stated that the unemployment rate in India has shot up in the first two weeks of April and the monthly unemployment rate is likely to be close to 8% compared to 6.5% in March with lower absorption of labour in the market. Traders also got cautious amid a private report stating that there has been an over 28 per cent increase in suspected fraudulent digital transaction attempts against businesses originating from India in the pandemic year.

Selling got intensified in second half of trade as traders opted to weekly profit in risky assets ahead of weekend. The street took a note of report that markets regulator Sebi said mutual funds will have to make a disclosure about scheme risk-o-meter, performance and portfolio details to investors only for the particular plans in which they have invested. Traders failed to draw any sense of relief on report that Ministry of Finance, Government of India has decided to provide an additional amount of upto Rs 15,000 crore to States as interest free 50 year loan for spending on capital projects. The Department of Expenditure has issued fresh guidelines in this regard on the ‘Scheme of Financial Assistance to States for Capital Expenditure’ for the financial year 2021-22.

On the global front, European markets were trading higher helped by further evidence that the region is recovering from the pandemic-influenced slump. Asian markets ended lower on Friday, even after China's manufacturing sector grew at the fastest pace in four months in April. The survey results from IHS Markit showed that the Caixin manufacturing Purchasing Managers' Index rose to 51.9 in April from an 11-month low of 50.6 in March. A score above 50 indicates expansion in the sector. Driven by improved market conditions and greater customer demand, total new orders grew for the eleventh straight month in April.

Back home, the Hyderabad-based Bharat Biotech has announced a price of Rs 400 per dose for COVID vaccine supplies to state governments. The company had priced Covaxin at Rs 600 per dose for states and Rs 1,200 per dose for private hospitals. On the sectoral front, non-banking finance companies (NBFCs) stocks remained in focus as Care Ratings in the report said NBFCs are likely to witness higher credit cost during the current financial year due to the disruptions on account of the second wave of COVID-19.

Finally, the BSE Sensex fell 983.58 points or 1.98% to 48,782.36, while the CNX Nifty was down by 263.80 points or 1.77% to 14,631.10. 

The BSE Sensex touched high and low of 49,569.42 and 48,698.08, respectively. There was 4 stock advancing against 26 stocks declining on the index.

The broader indices ended in red; the BSE Mid cap index lost 0.65%, while Small cap index was down by 0.07%.

The top gaining sectoral indices on the BSE were Oil & Gas up by 1.31%, Healthcare up by 0.75%, PSU up by 0.69%, Utilities up by 0.20% and Metal up by 0.07%, while Bankex down by 2.60%, Auto down by 1.42%, Consumer Discretionary Goods & Services down by 1.10%, FMCG down by 1.00% and Industrials down by 0.97% were the top losing indices on BSE.

The few gainers on the Sensex were ONGC up by 4.32%, Sun Pharma up by 1.57%, Dr. Reddys Lab up by 1.23% and Bajaj Auto up by 0.18%. On the flip side, HDFC down by 4.38%, HDFC Bank down by 4.09%, ICICI Bank down by 3.36%, Kotak Mahindra Bank down by 3.24% and Asian Paints down by 2.81% were the top losers.

Meanwhile, Care Ratings in its latest report has said the second wave of COVID-19 to adversely affect asset performance of non-banking finance companies (NBFCs) with credit costs are likely to remain high in FY22. However, it said the impact is expected to be lesser in low-risk retail secured loan book, while more in the high-risk unsecured lending business. The report said asset quality metrics across the sector is expected to remain supported in FY21 by the Reserve Bank of India's restructuring schemes, moratorium announced from March 2020 to August 2020 and economic revival post-September 2020.

For FY22, the agency expects some level of stress, especially in the loan portfolio under restructuring and those which were under moratorium. The agency said its baseline scenario assumes that lockdowns will start easing from end-May. Also, the likelihood of support from the government or regulatory authorities have not been taken into consideration. For housing finance companies (HFCs), credit cost is expected to reduce going forward as the mortgage lenders have already made more than sufficient provisioning in the last couple of years and the business remains resilient. It expects HFC's credit cost to at 0.7 per cent in FY21 and 0.3 per cent in FY22.

As per the report, credit cost for Commercial Vehicle (CV) finance segment will increase marginally to 2.2 per cent in FY22 from the expected 1.9 per cent in FY21. The agency said the microfinance segment will see credit cost moderating to 5 per cent in FY22 compared to an estimate of 6.5 per cent in FY21. Microfinance has proven to be a resilient asset class as demonstrated in the past. Furthermore, a large proportion of the overall portfolio (close to 75 per cent) is in rural areas and catering to essential services. Gold loans have seen minimal COVID-19 impact due to the liquid nature of the collateral. The segment credit cost is likely to be 0.3 per cent in the current year as against an expectation of 0.4 per cent in FY21.

The CNX Nifty traded in a range of 14,601.70 and 14,855.45. There were 12 stocks advancing against 38 stock declining on the index.    

The top gainers on Nifty were ONGC up by 3.94%, Coal India up by 3.90%, Divis Lab up by 3.87%, Grasim Industries up by 3.78% and Indian Oil Corp up by 2.19%. On the flip side, HDFC down by 4.68%, HDFC Bank down by 4.09%, ICICI Bank down by 3.37%, Kotak Mahindra Bank down by 3.11% and Asian Paints down by 2.95% were the top losers.

European markets were trading higher, UK’s FTSE 100 increased 9.42 points or 0.14% to 6,970.90, France’s CAC increased 4.83 points or 0.08% to 6,307.40 and Germany’s DAX was up by 79.55 points or 0.52% to 15,233.75.

Asian markets ended lower on Friday following a softer-than-expected Chinese Purchasing Managers' Index. Data from the National Bureau of Statistics showed that the recovery in China's manufacturing and services sectors had slowed slightly, with manufacturing PMI at 51.1 in April from 51.9 in March, and non-manufacturing PMI at 54.9 in April from 56.3 in March. Besides, fears of a fresh surge in corona-virus infection rates in the countries, particularly India and Japan, too adding pressure on market sentiments. Japanese shares declined on technology firms’ disappointing outlook, while worries about rising new infections in Tokyo and Osaka also hit investor sentiment.