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Krishna Institute reported a net profit of Rs. 79 Cr.
Equities - May 18, 2020

Weekly market update (11th May - 15th May)

Weekly market update (11th May – 15th May)

 

Overall performance:

Indian stock market started with on a good note this week but ended at lower note and market saw the most volatile week because of many reasons such as resurgence trade tensions between China and US and Rs 20 lakh package which announced by PM Narendra Modi attracted investors and indices to rise by 2 percent. After the announcement of details of this stimulus package by Finance Minister Nirmala Sitharaman, market witnessed decline in indices.

On 11th May, SENSEX opened at 31,479.74 and closed at 31,561.22 while on Friday market closed at 31,097.73 down by 382.01 points or 1.7 percent compared with opening price on Monday. On the other side, NIFTY opened at 9,226.9 on Monday and closed at 9,136.85 on Friday lower by 90.05 points or 1.2 percent. However, the S&P BSE 500 Index increased by 10-30 percent which includes around 30 stocks. The S&P BSE mid-cap index increased by 0.67 percent and the S&P BSE Small-cap index increased by 0.47 percent.

 

Global indices, currencies and commodities:

Global indices, DAX was trading at 10,818.48, down by 86.00 points or 0.79% on Monday while today it was trading 10,465.17, up by 128.15 points and NASDAQ was trading at 9,121.32 up by 1.58% or 141.66 points while now it is trading at 9,014.56, up by 70.84.
When market closed on Monday, Gold was trading at Rs 45,656 which is now trading at Rs 47,381 and silver was trading at Rs 42,972, and currently trading at Rs 46,718.
On Monday, at the time of closing of Indian indices, USD was trading at Rs 75.74 which is now trading at Rs 75.56. EURO was trading at Rs 81.96, currently trading at Rs 81.98 and GBP was trading at Rs 93.37 which is now trading at Rs 91.89.

 

Sector wise update:

On Friday, NIFTY bank closed at 18,833.95 which was around 19,600 on Monday when market opened, lower by around 766.05 points. While, NIFTY Auto which increased 4.26 percent on Monday, declined by 97.35 points or 0.73% closing at 13,196.35 on Friday.

 

Top 5 gainers:

Share price of jubilant life sciences increased by 21 percent this week closing at 472.40. Vedanta gained 20 percent after they decided to delist at price of Rs 87.50, closing at Rs 92.95 on Friday. Shares of Indian cements jumped by 16 percent this week and on Friday it gained by 13.22 percent, closing at Rs 114.30. MphasiS share price increased by 14 percent this week, closing at Rs 845.30 and share price of Escorts gained 11 percent this week and closed at Rs 823.55.

 

Top 5 losers:

Reliance industries share price fell by 6.56 percent or by 102.40 points and closed at Rs 1,459.40 on Friday. Share price of Dr. Reddys Lab decreased by 6.25 percent or 248.90 points, closing at 3,735.10, then GAIL India fell by 6.08% or 5.55 points, closing at Rs 85.80, IndusInd bank shares declined by 4.92 percent or 21.65 points, closing at Rs 85.80 and share price of tech Mahindra declined by 4.78% or 25.65 points and closed at Rs 510.55 on Friday.

 

Which stocks were in news?

On Friday, various companies were scheduled to announce their March quarter earnings. This includes L&T Finance and technology services, Cipla, Mahindra and Mahindra financial services, Tata chemicals, Nippon life asset management, Crompton greaves consumer and IIFL Securities. Most of these companies posted losses. Many Auto sector stocks were also in news as share prices of auto companies increased in mid-week. Most active stock by volume were Reliance, ICICI bank, HUL and Maruti Suzuki, Tata motors, Axis bank, Yes bank, Biocon, SAIL and BPCL.

Vedanta was in news after they announced to delist from stock market at a price of 87.50, After online bookings for passenger train started, shares of IRCTC locked in 5 percent upper circuit closing at Rs 1,303.55 and up by 62.05 points on Monday. Stocks of aviation sector saw slight increase after announcement of packages by finance minister, Indigo gained around 2 percent, closing at Rs 984 and spice jet increased around 3% and closed at Rs 45.60 on Friday.

 

 

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Goods exports decline in April

Goods exports decline in April

India’s export is reduced by 60.28 percent in the month of April, due to the lock down imposed by the government which is equivalent to $10.36 billion. However, in March country’s export was declined by 34.57 percent. On the other side, the country’s import is also affected. There was a 58.65 percent  decline in imports in April which amounted to $17.12 billion. However, India’s Imports have decreased by 28.72 percent from previous year making it $31.16 billion in March 2020. This is the lowest percent that India has seen since August of 2016. Overall trade deficit in April is $6.76 billion which was $15.33 billion in April 2019. This year’s trade deficit is lowest since May 2016 which was $6.27 billion.

 

Sector and commodities wise:

There is decline in 30 major import sectors such as gold, silver, coal, fertilizer, machinery, transport equipment and machinery. All these sector have reported negative growth in the month of April. Since the first day of the countrywide lock down, oil imports have seen a drop by 15 percent and non-oil purchases dropped to 33.78 percent. Imports of electronic items have dipped down by 29.09 percent. Lastly gold have plunged by 62.64 percent in March. In April, non-oil imports is reduced by 58.5 percent to $12.46 billion and Gold imports stood at $2.83 million which was $4 billion last year. However, other Oil imports was at $4.66 billion, which is 59.03 percent lesser than last year for the same period.

Commodities wise, export of rice declined by 28.28 percent, cereals export saw decline by 33.42%, tea exports fell by 33.74 percent, organic and inorganic material export reduced by 32.88 percent, ready-made garments fell by 34.91 percent and plastic and linoleum declined by 35.67 percent. Imports of commodities is also affected due to lock down, import of precious stone declined by 53.46 percent, electrical and non-electrical machinery fell by 31.72 percent, electric good import fell by 29.09 percent and coal, coke and briquettes declined by 23.54 percent.

However, gems and jewellery shipments fell by 98.74 percent, leather shipments fell by 93.28 percent, and petroleum products declined by 66.22 percent, chemical shipments fell by 42 percent and engineering goods declined by 64.76 percent. Only pharmaceutical and iron ore reported positive growth during last the 2 months.

 

Impact on foreign reserves:

One big reason for this surge in foreign exchange reserves is temporary closure of imports to India as this has blocked the outflow of foreign exchange reserves, keeping it intact. The reserves showed a surge of $113 million to $479.455 billion in mid-April. The forex reserves show an all-time high of $487.23 billion in early March, after it lofted by $5.69 billion. During FY20, the nation’s forex reserves ascended by nearly $62 billion. In the week of April 27, 2020, a significant part of the overall reserves which is the foreign currency assets (FCA), hiked by $1.752 billion to $443.316 billion.

 

Government measures:

Due to the lock down, major industrial units are closed. There is restriction for movement in the goods and various other issues such as job loss, 70-80 percent cancellations in orders and increasing non-performing assets is already been noticed. Therefore, government has announced various measures and packages to cope up this situation. For Agri-infrastructure, the government has allocated Rs 1 lakh crore so that farm gate infrastructure such as cold chain are strengthened and Rs 500 crore for operation greens has implemented, for better price realization for farmers.

Government will amend essential commodities act and allow market force to deregulate price. The government will intervene if any emergency situation arises such as drastic hike in price or any other crisis. These announcements will help government to achieve their target of $100 billion Agri exports.

 

 

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