Sensex Ends 242 Points Lower; Power and Consumer Durable Stocks Witness Selling

Thu, 7 May Closing

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Indian share markets witnessed negative trading activity throughout the day and ended their trading session lower.

Benchmark indices edged lower today, tracking weak global cues as investors fretted over weak economic data and rising COVID-19 cases.

Barring energy stocks, all sectoral indices ended on a negative note with stocks in the power sector, telecom sector and consumer durables sector witnessing most of the selling pressure.

At the closing bell, the BSE Sensex stood lower by 242 points and the NSE Nifty closed down by 72 points.

SGX Nifty was trading at 9,200, down by 53 points, at the time of writing.

The BSE Mid Cap index and the BSE Small Cap index ended their day down by 0.5% and 0.1%, respectively.

Asian stock markets finished on a mixed note. The Hang Seng was down 0.5%, while the Nikkei was up 0.3%. The Shanghai Composite stood lower by 0.2%.

Gold prices are currently trading up by 0.2% at Rs 45,480.

Indian currency market remained shut today on account of Buddha Purnima.

On Wednesday, the rupee ended 13 paise lower at 75.76 against the US$.

Speaking of the current stock market scenario, Indian stock markets have seen a stunning recovery over the last 5 weeks.

From its all-time high levels of 42,274 touched on January 20 this year, the Sensex crashed 39% to a multi-year low at 25,639 on March 23. Later, the index made a rapid recovery till April 30 as it added 4,250 points.

Thereafter, in just two sessions of this month, Sensex lost 7%.

Excluding this week's 7% fall, of all the rebounds after a 35%-40% fall in the market, the current one has been the biggest by a distance.

This is evident from the chart below:

Sensex: From Bear to Bull in 30 Days

While the Sensex has rebounded sharply, there are still many stocks out there that are trading at attractive valuations.

Co-head of research at Equitymaster, Rahul Shah, believes this is a good time to get into stocks, even if you missed the rally because the market is fairly valued.

History has shown that after years like the one we had just now, the next 3 years are good for the markets. In fact, these corrections are the rare times when you find businesses with solid fundamentals at reasonable valuations.

If you can find good businesses that can survive the current crisis, you will do well in the long run.

Moving on, market participants were tracking RBL Bank share price, Cyient share price and Gillette share price as these companies announced their March quarter results (Q4FY20) today.

You can read our recently released Q4FY20 results of other companies here: Ambuja Cement, IndusInd Bank, Axis Bank, Tech Mahindra, HUL, Reliance Industries, Marico, Kansai Nerolac, NIIT Technologies, Persistent Systems.

In news from the IT sector, HCL Technologies share price witnessed buying interest today.

Shares of the company gained 4% intraday today after the company reported a 22.8% year-on-year (YoY) rise in consolidated net profit at Rs 31.5 billion compared with Rs 25.7 billion in the same quarter last year.

Revenue for the quarter rose 16.3% YoY to Rs 185.9 billion from Rs 159.9 billion reported in the year-ago quarter.

EBITDA margin for the quarter expanded 180 basis points to 20.9% from 19.1%, YoY. Sequentially, the margin expanded 70 basis points.

In dollar terms, revenue rose 11.7% YoY to US$ 2,543.40 million from US$ 2,277.80 million. On a sequential basis, dollar sales were flat. Sales growth in constant currency terms rose 13.5% YoY to US$ 2,584.60 million.

The company said it signed 14 transformational deals in the fourth quarter. These deals were mainly secured in verticals such as telecom, hi-tech, retail & CPG, manufacturing and financial services.

The company also declared a dividend of Rs 2 per share.

To know more about the company, you can read HCL Technologies' Q4FY20 result analysis on our website.

Moving on to news from the metal sector, Vedanta share price was in focus today. As per reports, the company's plans to sell a minority stake in its Indian oil unit have stalled after a collapse in crude oil prices.

Vedanta was seeking to raise more than US$ 1 billion by selling at least 20% of its Cairn Oil & Gas business. However, the crash in energy prices and the Covid-19 pandemic have made it difficult for potential investors to gauge Cairn's business outlook.

Reports also state that Vedanta is exploring other fundraising options to reduce its debt.

Note that, crude oil prices across the globe are in downtrend on higher supply pressure on swelling inventories while crude oil demand is at multiyear lows due to stalled world economy.

Yesterday, crude oil prices dropped 4% to below US$ 30 a barrel as US crude stockpiles ticked up and diesel inventories swelled, offsetting OPEC-led cuts in production and hopes for a recovery in demand as some countries ease coronavirus lockdowns.

Brent settled down US$ 1.25 at US$ 29.72 a barrel, the first loss after six consecutive sessions of gains. West Texas Intermediate (WTI) crude fell 57 cents a barrel to US$ 23.99.

However, prices edged higher today on a surprising rise in China's April exports, US output cuts and the slow return of some activity in Europe.

Brent crude has almost doubled since hitting a 21-year low on April 22. But the market was cautiously eyeing a deal led by the Organization of the Petroleum Exporting Countries to cut output by a record 9.7 million barrels per day from May 1, equivalent to about 10% of world demand before the coronavirus crisis led to a slide in consumption and prices.

What effects falling crude oil prices have on Indian stocks markets and the Indian economy remains to be seen. Meanwhile we will keep you updated on the latest developments from this space.

To know what's moving the Indian stock markets today, check out the most recent share market updates here.

For information on how to pick stocks that have the potential to deliver big returns, download our special report now!

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