Daily Market Update APR 19

Untitled 5 Daily Market Update APR 19

Previous Market Closed 

Sensex closed at 48,832.03 up by 28.35 points
Nifty closed at 14,617.85 up by 36.40 points

FPIs pulled Rs.4,615 crore from Indian equities in Apr-21 month-to-date. The negative sentiments among FPIs was triggered by the COVID resurgence and the stringent restrictions imposed by major states. FPIs actually pulled out Rs.4,643 crore from equities but invested a marginal Rs.28 crore in debt. This is in contrast to the net inflow of Rs.17,304, Rs.23,663 and Rs.14,649 crore respectively in previous 3 months. FPIs turned buyers in South Korea and Taiwan. FPI flows will depend on intensity of the second wave.

Glenmark Life Sciences, a subsidiary of listed Glenmark Pharma, has filed with SEBI for an IPO. The offer will consist of a fresh issue of up to Rs.1,160 crore and an offer for sale of up to 73 lakh equity shares. The exact timing of the IPO will be predicated on market conditions. Glenmark Life will use the funds raised through the new offer portion to fund capital expenditure needs. The stock of Glenmark Pharma ended higher at Rs.572, as the listing of its subsidiary would help Glenmark to get better overall value.

With COVID-19 cases rising rapidly, it may pose a major risk to an economic recovery. A number of leading brokerages downgraded India’s GDP growth projections for FY22, on account of clampdowns. Nomura downgraded economic growth for FY22 to 12.6% per cent from 13.5% earlier. JPM and UBS have also downgraded the growth to just about 10%.  RBI has continued to hold the growth in FY22 at a conservative level of 10.5%. Brokers pointed that in the event of lockdowns continuing, GDP impact could be 3-4%.

Gold imports in FY21 rose by a whopping 22.58% to $34.6 billion during 2020-21 due to increased domestic demand, according to the Commerce Ministry. Despite the sharp spike in gold imports, the trade deficit narrowed to $98 billion for the full year. According to the GJEPC, the spike in gold imports was due to a surge in gold demand in the second half of the year. Normally, the gold imports are viewed negatively by the RBI and the Finance Ministry as it means running a trade deficit for an unproductive asset.

Out of the 10 most valuable companies on the NSE by market cap, 7 companies witnessed a combined erosion of Rs.141,628 crore in the previous week, despite being truncated week. TCS alone lost Rs.47,681 crore in market capitalization. Among other big losers, Infosys lost Rs.37,579 crore, Reliance fell Rs,30,841 crore while SBI lost nearly Rs.11,736 crore in market value. There were a handful of gainers too. HDFC gained Rs.10,697 crore, HDFC Bank Rs.3,749 crore and ICICI Bank was also up marginally during the week.

Indian pharmaceutical exports grew 18.7% in FY21 to a record level of $24.44 billion. This was spurred by a strong demand for generic drugs from India giving pharma exports a major boost during the year. North America remained the largest market for Indian pharmaceuticals, accounting for a more than 34% share. Specifically, the exports to the US, Canada and Mexico grew by 12.6%, 30% and 21.4% respectively. Even pharma exports to Africa increased by 13.4%, while growth in exports to Europe was at a healthy 11%.

HDFC Bank reported an 18% growth in standalone net profit for the fourth quarter ended March 2021 at Rs.8,186 crore. While profits were up on a yoy basis, the profits were lower by 6.5% on a sequential basis. More importantly, HDFC Bank witnessed 12.6% growth in net interest income or NII at Rs.17,120 crore. There was a delay in loan origination and even as loan volumes were higher, the yields on loans were lower. Gross NPAs of HDFC Bank as of Mar-21 improved to 1.32% with net NPAs virtually stable at 0.40%.

According to reports, the private equity arm of Goldman Sachs may buy out the minority stake in GVK Biosciences from ChrysCapital. This would be the second pure play pharma infusion for Goldman Sachs PE after its $150 million stake in Biocon Biologicals last year. GVK Biosciences was promoted by the GVK group and former Ranbaxy CEO, D S Brar. Most of the PE fund are looking for a foothold in the highly lucrative and fast-growing CRAMS space. ChrysCapital had bought this stake from Sequoia in 2015.

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%name Daily Market Update APR 19

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