Saudi's Oil Supply Cuts, Tata Motors Q4 Results, and Top Cues in Focus Today

Wed, 17 Jun Pre-Open

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It was indeed a volatile trading day for share markets in India yesterday.

Indian stock markets took cues from global counterparts and surged in early trade yesterday as Federal Reserve's corporate bond-buying programme boosted investor sentiment and calmed earlier worries about the second wave of coronavirus infections.

However, markets reversed gains and slipped into the red in the afternoon session after reports stated that tensions between India and China escalated into violence, leading to the death of three Indian Army personnel.

The Indian Army said an officer and two soldiers were killed in Ladakh's Galwan Valley on Monday night during "violent face-off" with Chinese personnel.

The BSE Sensex fell over 1,000 points from day's high on back of the above news. However, Sensex recovered all losses during the last hour of trading amid positive global cues.

At the closing bell yesterday, the BSE Sensex stood higher by 376 points (up 1.1%).

The NSE Nifty closed higher by 100 points (up 1%).

Gains were largely seen in the finance sector and banking sector.

Telecom stocks on the other hand witnessed selling pressure.

The BSE Mid Cap index ended by 0.3%, while the BSE Small Cap index ended flat.

Speaking of the current stock market scenario, note that the coronavirus impact has shaken markets worldwide.

For the BSE Sensex, FY20 was the second worst year post FY08, the year of the global financial crisis.

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Top Stocks in Focus Today

Axis Bank share price will be in focus today as the lender said that Pralay Mondal will be stepping down from the role of executive director (retail banking) in September to pursue other opportunities.

Last year, Axis Bank was reported to have seen a slew of resignations with the count going up to 15,000, including branch-level executives.

IndusInd Bank share price will also be among the buzzing stocks today. This comes as the country's largest carmaker Maruti Suzuki said it has partnered IndusInd Bank for vehicle financing to help spur sales after resumption of operations following lockdown relaxations.

Market participants will be tracking Reliance Industries share price as Saudi Arabia's wealth fund Public Investment Fund (PIF) is all set to pick up a 2.3% stake in the oil-to-telecom conglomerate for an estimated US$ 1.5 billion.

Tata Motors Q4FY20 Results: Massive Loss Due to Steep Fall in Vehicle Sales

Tata Motors reported a consolidated net loss of Rs 98.9 billion for the March quarter (Q4FY20) on the back of a steep fall in vehicle sales.

It had posted net profit of Rs 11.2 billion in the year-ago period.

The company said it has made a provision for impairment of passenger vehicle (PV) business as an exceptional item of Rs 14.2 billion in its financial statement, which drove the losses in the March quarter.

The company's consolidated revenue from operations for Q4FY20 came in at Rs 624.9 billion, down 28% year-on-year (YoY) from Rs 864.2 billion in the same period last year.

Revenue from its British luxury car subsidiary, Jaguar Land Rover (JLR), was at Rs 505.6 billion, down 22% YoY.

The company's total wholesales for the March quarter were at 101,069 units, down 47% YoY from 192,339 units a year-ago.

The India business for the March quarter saw commercial vehicles (CV) sales drop 50% to 69,069 units and PV sales fall 40% YoY to 32,000 units.

To ride out the turmoil caused by Covid-19 disruptions in its Indian as well as UK subsidiary Jaguar Land Rover Automotive, the firm said it would review its business to save Rs 150 billion for the consolidated entity in FY20-21.

The company also said it was looking for a strategic partner and was in talks with automakers for the same.

To know more, you can read Tata Motors' Q4FY20 results on our website.

Saudi Aramco Cuts July Crude Oil Supply to Asian Buyers

In news from the oil & gas space, Saudi Arabia's oil giant Aramco has cut the crude oil shipments loading in July to at least five of its customers in Asia.

The move from OPEC's top producer and the world's largest oil exporter comes after Saudi Arabia hiked its official selling prices (OSPs) for July by the most in at least 20 years.

Last week, after the OPEC+ group had agreed to extend its record collective cut of 9.7 million bpd by one month to the end of July, Saudi Aramco sharply raised its prices for all grades to all regions.

The pricing of Saudi crude, typically released around the fifth of each month, generally sets the trend for the pricing for Asia of other Gulf oil producers such as Kuwait, Iraq, and Iran.

The pricing of Saudi Aramco, the Kingdom's oil giant, affects as much as 12 million barrels per day (bpd) of Middle Eastern crude grades going to Asia.

Although an increase in Saudi Arabia's prices didn't come as a surprise, the steep rise for July really surprised refiners, especially those in Asia, who had enjoyed three months of very cheap supply from Saudi Arabia, when the Kingdom was keeping its prices low to boost market share while demand was crashing in the coronavirus pandemic.

Note that crude oil witnessed selling during the start of the year due to oversupply concerns amid subdued demand.

Prices crashed further in March in what was the worst price dip since the 1991 Gulf War with Brent prices plunging to US$ 31 per barrel.

In April, crude oil futures crashed and briefly went to negative prices, implying that investors would need to pay buyers to take delivery of crude oil amid dwindling storage space.

What effects 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.

It will be interesting to see the implications of the recent developments. We will keep you updated on all the news from this space.

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

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