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Benchmarks add traction in late afternoon session
Mar-25-2020

Indian equity benchmarks added traction on the street to trade near highest point of the day on late afternoon session with Sensex and Nifty gaining more than 1500 and 450 points, respectively. Mid-caps and Small-caps are also trading with positive bias. There were no losers on sectoral indices on the BSE. Buying in frontline stocks Axis Bank, Reliance Industries, Kotak Mahindra Bank and ICICI Bank helped the market to trade significantly. Local investors also cheered Finance Minister Nirmala Sitharaman’s statement where she extended the deadline for filing tax returns by three months beyond March 31. She also announced a slew of regulatory and compliance measures across sectors to alleviate the hardships being faced by various businesses. Also, allaying fears that the economy may not be financially equipped to deal with the fallout of the global coronavirus pandemic, Sithraman said that there is no economic emergency in India. Traders shrugged off complete lockdown across the country for 21 days to contain the spread of fast-spreading novel coronavirus -- the COVID-19. The nationwide lockdown came into effect on March 24 midnight and will continue until April 14. Prime Minister Narendra Modi said the country will be set back by 21 years if we don't manage these 21 days. Sectorwise, Aviation stocks remained in focus, as airlines have sought help from the government to help them pay employees’ salaries as the coronavirus disease (COVID-19) outbreak has forced the authorities to stop air transport till March 31.

On the global front, European markets were trading higher; continuing Tuesday’s sharp ride higher, on the expectation that U.S. policymakers will finally deliver a massive rescue package to bolster the country’s beleaguered economy. Back home, credit rating agency, India Ratings and Research (Ind-Ra) in its latest report has said that COVID-19 outbreak is likely to impact the revenue growth of construction companies in the near term, as the lockdown imposed by the state governments of some of the large Indian cities would obstruct the execution of infrastructure construction in them.

The BSE Sensex is currently trading at 28238.16, up by 1564.13 points or 5.86% after trading in a range of 26359.91 and 28331.22. There were 26 stocks advancing against 4 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index gained 3.00%, while Small cap index was up by 1.99%.

The top gaining sectoral indices on the BSE were Bankex up by 8.99%, Energy up by 7.63%, Telecom up by 5.05%, Auto up by 4.95% and Consumer Durables was up by 4.84%, while there were no losers on sectoral indices.

The top gainers on the Sensex were Axis Bank up by 14.99%, Reliance Industries up by 10.38%, Kotak Mahindra Bank up by 10.00%, ICICI Bank up by 9.52% and Maruti Suzuki up by 9.28%. On the flip side, ITC down by 1.64%, Larsen & Toubro down by 1.40%, ONGC down by 1.04% and HCL Tech down by 0.18% were the top losers.

Meanwhile, credit rating agency, India Ratings and Research (Ind-Ra) in its latest report has said that COVID-19 outbreak is likely to impact the revenue growth of construction companies in the near term, as the lockdown imposed by the state governments of some of the large Indian cities would obstruct the execution of infrastructure construction in them.

As per the report, typically, Q4 accounts for 30%-35% of the annual revenue of construction companies; of which a month’s lockdown can erode 8%-10%. The agency further noted that construction activities across construction hub cities such as Mumbai Metropolitan Region, Delhi, Pune, and Bangalore are likely to be stalled or progress at a significantly slower-than-anticipated pace for a major portion of March 2020 which may continue in April as well. It also said that companies with ongoing significant construction works in such cities are the ones likely to be the most affected, as they are turning out to be the epicentre of the outbreak.

Besides, Ind-Ra said that a large chunk of construction workers who consequently are heading to their home towns in the interiors of the country are likely to return only after the situation normalises, which can even be a month from now or even later. Consequently, the revenue trajectory is likely to be affected. The report also underlined that continued expenditure in the form of overheads and finance charges is also likely to affect the profitability of construction companies, owing to a lower base for absorption of these overheads.

The CNX Nifty is currently trading at 8253.65, up by 452.60 points or 5.80% after trading in a range of 7714.75 and 8262.90. There were 45 stocks advancing against 5 stocks declining on the index.

The top gainers on Nifty were Axis Bank up by 16.84%, Reliance Industries up by 10.25%, Kotak Mahindra Bank up by 10.00%, ICICI Bank up by 10.00% and Maruti Suzuki up by 9.30%. On the flip side, ITC down by 1.80%, Coal India down by 1.53%, Larsen & Toubro down by 1.53%, ONGC down by 1.36% and GAIL India down by 0.26% were the top losers.

European markets were trading higher; UK’s FTSE 100 increased 81.65 points or 1.5% to 5,527.66, France’s CAC increased 76.78 points or 1.81% to 4,319.48, Germany’s DAX increased 262.19 points or 2.7% to 9,962.76.
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