The headline indices Sensex and Nifty fell significantly from day's high, but managed to end the session in the green on Monday, even as financial and auto stock heavyweights dragged.
The headline indices Sensex and Nifty fell significantly from day’s high, but managed to end the session in the green on Monday, even as financial and auto stock heavyweights dragged. The Sensex closed at 37,402.49 down 315 points from the day’s high of 37,718.88. The Nifty ended 6.10 points, or 0.06% up at 11,053.90. The Nifty hit an intra-day high of 11,146.90 and low of 11,037.85. Notably, the Sensex and Nifty saw a robust start to the session tracking gains in the Asian markets. Across Asian markets, Shanghai Composite Index, Hang Seng, Kospi and Nikkei ended significantly higher on rising hopes of stimulus by global central banks to counter economic slowdown.
However, back home, investor sentiment remained muted even as the street awaits measures from the government to check demand slowdown in various sectors. A viscious sell-off was witnessed in financial heavyweights– IndusInd Bank, Bajaj Finance, HDFC twins, SBI, and Yes Bank shedding up to 4%. Top gainers in the Sensex pack included Sun Pharma, TechM, Axis Bank, L&T, Reliance Industries and ICICI Bank, ending up to 3% higher. Meanwhile, the Indian rupee plunged 30 paise to 71.46 against the US dollar intra-day.
Even as the earnings season comes to an end, Motilal Oswal noted that profits on India Inc were disappointing in that both the Nifty and MOFSL Universe’s performance in 1QFY20 was below expectations. “Like in the previous quarter, 1QFY20 profits were entirely driven by Banks off a low base (accounted for more than 100% of incremental profits). Aggregate sales/ EBITDA were largely in line, while PAT missed our estimates. The performance was dragged disproportionately by Oil & Gas, Metals and Autos,” noted the firm in its latest report.
Another brokerage firm Kotak Securities expect net profits of the Nifty-50 Index to grow 15% in the current financial year FY2020, down as compared to 24% at the beginning of the results season. However, Kotak Securities said that further downgrades to earnings cannot be ruled out in (1) domestic consumption and investment sectors (automobiles, capital goods, construction materials, consumer durables) due to continued subdued demand conditions and (2) global commodity and IT sectors due to global economic slowdown.