The market ended with robust gains on Thursday, backed by rally in banks and auto shares. The buying was supported by hopes of further opening up of the economy and more stimulus measures by the government. The barometer S&P BSE Sensex jumped 595.37 points or 1.88% at 32,200.59. The Nifty 50 index gained 175.15 points or 1.88% at 9,490.10.

The Nifty opened higher at 9,364.95, tracking positive news from global market. The index raced higher to cross the 9,400 mark in morning trade. It further extended gains and crossed 9,450 level in mid-morning session. The index failed to cross the 9,500 mark due to stiff resistance and hovered sideways in afternoon session. The barometer, however, briefly crossed the 9,500 mark in late trade.

The broader market trailed the benchmarks. The BSE Mid-Cap index rose 1.34% and the BSE Small-Cap index gained 1.42%.

The market breadth was strong. On the BSE, 1527 shares rose and 814 shares fell. A total of 160 shares were unchanged.

The media reported that India's GST Council is likely to meet in the second week of June to discuss the impact of the coronavirus pandemic on the economy of states, among other things. Meanwhile, India's Q4 GDP numbers will be announced by the National Statistical Office (NSO) on Friday, 29 May.

COVID-19 update:

Total COVID-19 confirmed cases worldwide stood at 56,97,334 far with 3,55,758 deaths. India reported 86,110 active cases of COVID-19 infection and 4,531 deaths, according to the data from the Ministry of Health and Family Welfare, Government of India.

Numbers to Watch:

The yield on 10-year benchmark federal paper rose to 5.990% as compared with 5.984% at close in the previous trading session.

In the foreign exchange market, the rupee edged lower against the dollar. The partially convertible rupee was hovering at 75.76, compared with its close of 75.7125 during the previous trading session.

In the commodities market, Brent crude for July 2020 settlement fell 41 cents at $34.33 a barrel. The contract fell $1.43, or 3.95% to settle at $34.74 a barrel in the previous trading session.

Foreign Markets:

European markets were trading higher as European Union (EU) planned to open up tourist destinations for the summer despite fears of the ongoing COVID-19 pandemic. Tourism represents 10% of the European economy and creates 27 million jobs directly and indirectly across the region. Investor sentiment was also improved after the European Commission (EC) unveiled plans for a 750 billion euro ($826.5 billion) recovery fund.

Asian markets ended on a mixed note as US-China tension woes competed with the hopes of an economic recovery from the coronavirus crisis.

Hong Kong's Hang Seng index closed 0.72% lower after China's National People's Congress on Thursday voted on a decision that paves the way for sweeping anti-sedition laws to be directly enacted in Hong Kong. China's legislature approved a decision to force a controversial national security law on Hong Kong, in an extraordinary and unprecedented move aimed at bringing the semi-autonomous territory further under Beijing's control.

Meanwhile, Japanese Prime Minister Shinzo Abe's cabinet approved a new $1.1 trillion stimulus package that includes significant direct spending, to stop the coronavirus pandemic pushing the world's third-largest economy deeper into recession.

The US equity market finished sharply higher on Wednesday, 27 May 2020, extending the market's gains into a third day, on optimism that economic activity is gathering steam and authorities may offer more stimulus to bolster the recovery. Hopes for potential COVID-19 vaccines under development have also helped propel stocks.

Buzzing Indian Segments:

The Nifty Auto index gained 3.65% to 6,112.30, extending gains for seventh day. The index has added 12.56% in seven trading sessions.

Hero MotoCorp (up 5.52%), Maruti Suzuki India (up 4.37%), Ashok Leyland (up 2.66%), Tata Motors (up 2.66%), Mahindra & Mahindra (up 1.77%), Escorts (up 1.52%) and Bajaj Auto (up 1.05%) advanced.

Eicher Motors soared 8.33% to Rs 16216.90, extending its winning run to third consecutive trading session. The company's board will consider stock split and Q4 results on 12 June 2020.

TVS Motor Company rose 2.77% ahead of Q4 results today, 28 May.

The Nifty Bank index rose 2.45% to 19,169.80. The index is up 10.94% in three sessions.

IndusInd Bank (up 4.95%), HDFC Bank (up 4.56%), Federal Bank (up 4.27%), ICICI Bank (up 2.49%), Kotak Mahindra Bank (up 0.95%), Axis Bank (up 0.90%), Bandhan Bank (up 0.62%) and Bank of Baroda (up 0.39%) advanced.

Earnings Impact:

Federal Bank rose 4.27%. The bank's net profit dropped 21.04% to Rs 301.23 crore on 19.27% increase in total income to Rs 4,107.95 crore in Q4 March 2020 over Q4 March 2019. Profit before tax (PBT) fell 32.09% to Rs 391.82 crore in Q4 March 2020 over Q4 March 2019. Tax expense fell 53.66% to Rs 90.59 crore during the period under review.

Provisions and contingencies surged 219.25% to Rs 567.50 crore in Q4 March 2020 from Rs 177.76 crore in Q4 March 2019. Provision coverage ratio of the bank was at 72.48% as on 31 March 2020. The result was declared during market hours today, 28 May 2020.

United Spirits fell 2.45% after the company reported 52.5% decline in consolidated net profit to Rs 58.40 crore on 14.1% fall in net sales to Rs 1990.50 crore in Q4 March 2020 over Q4 March 2019. Consolidated profit before tax (PBT) stood at Rs 183.50 crore in Q4 FY20, up by 5.6% from Rs 173.70 crore in Q4 FY19. Revenue declined primarily due to COVID-19 led disruption in India in March, which exacerbated the impact of the ongoing consumption slowdown. Employee expense declined 36.91% to Rs 109.40 crore during the quarter. On the volume front, the alcoholic beverages manufacturer's prestige & above segment witnessed 19.6% fall in volumes as it stood at 8.4 EUm while the popular segment's volumes contracted by 7.5% to 9.9 EUm in Q4 FY20 over Q4 FY19.

Radico Khaitan rose 1.26%. The liquor maker reported 20.2% fall in consolidated net profit to Rs 32.67 crore on 14.8% rise in net sales to Rs 585.36 crore in Q4 March 2020 over Q4 March 2019. Profit before tax (PBT) stood at Rs 54.05 crore in Q4 FY20, down by 4.6% to Rs 56.65 crore in Q4 FY19. Current tax expense surged 116.69% YoY to Rs 13.89 crore during the quarter. Total volume jumped 13.1% to 5.82 million cases in Q4 March 2020 over Q4 March 2019. Prestige & Above segment grew 11.3% while Regular & Others segment rose 13.8% YoY during the quarter. Prestige & Above segment constituted 26.4% of the total volume during the quarter compared with 26.8% in the corresponding period of the previous year.

Quess Corp rose 4.46% after the company reported a consolidated net loss of Rs 629.92 crore in Q4 March 2020 compared with net profit of Rs 75.50 crore in Q4 March 2019. Consolidated net sales jumped 30.5% to Rs 2,994.59 crore in Q4 March 2020 over Rs 2,294.77 crore in Q4 March 2019. Pre-tax loss stood at Rs 594.36 crore in Q4 March 2020 as compared to a pre-tax profit of Rs 87.59 crore in Q4 March 2019. The company incurred one off non-cash charge of Rs 664 crore on account of goodwill impairment and change in tax regime. Consolidated EBITDA grew 28% to Rs 169 crore in Q4 FY20 over Q4 FY19 due to Covid-19 impact. EBITDA margin stood at 5.63% in Q4 FY20 as against 5.74% in Q4 FY19.

Aditya Birla Fashion and Retail soared 9.53%. The company reported a consolidated net loss of Rs 146.59 crore in Q4 March 2020 as against a net profit of Rs 202.64 crore posted in Q4 March 2019. Earnings were impacted by the COVID-19 pandemic early March leading to movement restrictions and heightened sense of insecurity among people. Aditya Birla Fashion reported sales Loss due to COVID impact at Rs 339 crore leading to a gross margin loss of Rs 200 crore in Q4 March 2020. Lifestyle brands reported a 5% drop in sales in Q4 March 2020 to Rs 1072 crore from Rs 1132 crore posted in the same period last year. The segment witnessed a decline in EBITDA owing to the drop in sales in the month of March due to COVID related disruptions. Fast Fashion segment continued with its focus around improving operating performance

Tata Investment Corporation rose 0.63%. The holding company reported consolidated net loss of Rs 36.75 crore in Q4 March 2020, higher than net loss of Rs 6.02 crore in Q4 March 2019. Total income dropped 17.2% to Rs 21.41 crore in Q4 March 2020 over Rs 25.87 crore in Q4 March 2019. Pre-tax loss stood at Rs 36.62 crore in Q4 March 2020 as against pre-tax loss of Rs 4.42 crore in Q4 March 2019. Current tax expenses jumped 55.7% to Rs 2.71 crore in Q4 March 2020 as against Rs 1.74 crore in Q4 March 2019. The result was announced after market hours yesterday, 27 May 2020.

Stocks in Spotlight:

Vedanta rose 2.39%. India Ratings and Research downgraded rating of the company to IND AA- from previous rating of IND AA with a negative outlook.

Granules India fell 1.27%. The pharmaceutical company said that the US drug regulator did not detect cancer-causing N-Nitrosodimethylamine (NDMA) in the company's API and finished dosage tablets.

Sun Pharmaceutical Industries rose 1.93%. The drug major and Sun Pharma Advanced Research Company (SPARC) today announced a worldwide licensing agreement on the development and commercialization of SCD-044 which is being evaluated as a potential oral treatment for atopic dermatitis, psoriasis and other auto-immune disorders. SCD-044 is entering phase 2 clinical trials. Under terms of the license agreement, Sun Pharma will pay SPARC an upfront payment of $20 million. SPARC will also be eligible to receive up to $125 million as milestone payments contingent upon theachievement of clinical, regulatory and sales milestones, as well as tiered royalties on sales. Sun Pharma will be responsible for the development, regulatory filings, manufacturing and commercialization of the product globally.

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