Sensex Ends 414 Points Lower; Telecom and Banking Stocks Witness Selling

Tue, 9 Jun Closing

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Indian share markets witnessed most of the selling pressure during closing hours today and ended deep in the red.

After opening the day on a flat note, Indian stock markets extended gains as the session progressed and rose over 1%. However, benchmark indices saw a sharp fall during the last hour of trading amid panic selling as coronavirus fears mounted and weakness in European markets.

Sectoral indices ended on a mixed note with stocks in the telecom sector and banking sector witnessing most of the selling pressure.

On the other hand, healthcare stocks witnessed buying interest.

At the closing bell, the BSE Sensex stood lower by 414 points, down 1.2%.

Meanwhile, the NSE Nifty closed down by 121 points.

SGX Nifty erased all the gains and was trading at 10,022, down by 143 points, at the time of writing.

The BSE Mid Cap index ended the day down by 0.2%, while the BSE Small Cap index ended down by 1%.

Asian stock markets rallied for the ninth straight day today as the lifting of coronavirus lockdowns in many countries fed investor hopes of a relatively quick global economic recovery.

As of the most recent closing prices, the Hang Seng ended up by 1.1% while the Shanghai Composite stood higher by 0.6%.

Global stock markets have been particularly encouraged by a US jobs report last week that showed a surprise fall in the unemployment rate, sending Wall Street indices surging with the Nasdaq hitting a record close on Monday.

Gold prices are trading up by 0.6% at Rs 46,380 per 10 grams.

The rupee is trading at 75.61 against the US$.

Speaking of the current stock market scenario, note that the coronavirus impact has shaken markets worldwide. After all, 2020 has already seen one of the worst market crashes in history.

Will the 2020 Market Crash Be Worse than 2009?

Naturally, there is an atmosphere of fear all round.

Is it time to sell stocks now? Will the correction get worse?

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 Hero MotoCorp share price and Bombay Dyeing share price as these companies announced their March quarter results today.

In news from the media sector, shares of multiplex operators, PVR and Inox Leisure slipped up to 11% today after reporting weak earnings for the quarter ended March 2020 (Q4FY20), impacted by the outbreak of Covid-19 in the last month of the quarter.

Shares of Inox Leisure slipped over 11% today after the company reported a consolidated net loss of Rs 82.2 million in Q4FY20, against a net profit of Rs 48.1 million in the previous year quarter.

Operational revenues declined 22% year-on-year (YoY) to Rs 3,716 million from Rs 4,788 million in the corresponding quarter of the previous fiscal.

For fiscal year 2019-20, the company's net profit declined 88.75% to Rs 150.1 million. It stood at Rs 1,334.9 million in 2018-19.

The company, which operates 626 screens in 147 multiplexes across 68 cities, said it has assessed the impact of Covid-19 pandemic on its business operations, the carrying amount of its assets and revenue recognition.

To know more, you can read Inox Leisure's Q4FY20 result analysis on our website.

Meanwhile, PVR reported a consolidated net loss of Rs 750 million in the quarter under review, against a net profit of Rs 470 million in the year-ago quarter.

The company's consolidated revenues were down 22% YoY at Rs 6.6 billion as compared to Rs 8.5 billion during the corresponding period of last year.

The company's management said beginning March 11, 2020, PVR started closing its screens in accordance with the order passed by various regulatory authorities and within a few days, most of its cinemas across the country were shut down.

The management further added that since Cinema Exhibition is the only business segment, PVR is currently not generating any significant operating revenue or cash flow from operations.

The board of directors of PVR also approved the fundraising of up to Rs 3 billion through a rights issue.

PVR share price ended the day down by 7%.

Moving on to news from the mutual funds space, equity flows continued to decline in the month of May.

Moreover, the contribution through systematic investment plans (SIPs) also remained on a downward trajectory amid market volatility.

According to the data from Association of Mutual Funds in India (AMFI), equity schemes garnered net flows of Rs 52.6 billion, 15% lower than the previous month.

The monthly contribution through SIPs saw another dip of 3%. In May, these flows stood at Rs 81,230.3 million, compared to Rs 83,760 million in April.

Barring large and midcap fund, all equity categories saw a slowdown in flows. For the large and midcap category, the flows more than doubled to Rs 7 billion in May.

On the debt side, credit-risk funds continued to see net outflows of Rs 51.7 billion. However, the figure was considerably lower than the previous month, which saw Rs 190 billion of net outflows in light of Franklin Templeton MF's move to wind-up six of its yield-oriented schemes.

Corporate-bond funds saw inflows worth Rs 38.3 billion, while banking & PSU debt fund received flows worth Rs 88.7 billion last month.

Medium-duration funds saw net outflows of Rs 15.2 billion.

Meanwhile, shorter-duration categories saw positive flows in May after seeing outflows in the previous month.

We will keep you updated on the latest developments from this space. Stay tuned.

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

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