Stock Markets Live: Sensex, Nifty Extend Drop As Banks Drag; Godrej Consumer Surges 20% On Q4 Earnings

The Indian rupee is poised to decline by the most in almost a month amid lingering concerns over the deadly impact of coronavirus that threatens to weigh on the nation’s economy.

• USD/INR up 0.2%, set for the biggest rise since April 19, at 73.4575
• The second, deadlier wave of virus infections is likely to cause rupee weakness till Sept., according to Bloomberg Economics’ forecasting model
  • Latest flareup is expected to drive capital outflows, weaken growth, raise inflation and economic uncertainty
  • Trade patterns will also add adverse seasonal pressures on currency till Sept.
  • Expects rupee to drop to 77/USD by Sept.
• Rupee came off day’s lows as foreign banks sold with stock inflows expected from MSCI Index rebalancing, says Amit Pabari, managing director at CR Forex
• Sovereign bonds are steady ahead of a report that’s likely to show consumer-price inflation eased last month
• CPI probably rose 4.10% y/y in April, compared with a 5.52% gain in March, according to a Bloomberg survey
• 10-year yields little changed at 6.01%; FX and bond markets are shut Thursday for a holiday

Shares of Godrej Consumer Ltd. jumped as much as 20% after the appointment of a new CEO.

Sudhir Sitapati, ED (Foods) at HUL is set to take charge as the MD & CEO of GCPL from October.

While there are a lot of unknowns, Jefferies said, the history of CEO changes at Britannia, Jubliant FoodWorks, HUL, Dabur suggests that a new leader could bring about a paradigm shift, driving significant shareholder value.

GCPL has underperformed most of its peers in past few years, which may change as the new leader brings-in a new strategy that may entail some hard decisions, according to Jefferies.

NLC India Ltd. rose gained for a fifth straight session with trading volume was 74 times the average for this time of day. The stock was the best performer among its peers.

• Trading volume was 30.6 million shares, 74 times the 20-day average of 414,767 shares for this time of day.
• The relative strength index on the stock was above 70, indicating it may be overbought.

Indian equity benchmarks fell, tracking peers across Asia, on concerns that higher inflation in the U.S. may push up interest rates, which could slow dollar flows into emerging markets.

The S&P BSE Sensex dropped 0.7% to 48,826.57, while The NSE Nifty 50 Index declined 0.6% to 14,760.50. Housing Development Finance Corp. contributed the most to the index decline and had the largest move, decreasing 1.9%.

Fourteen of the 19 sector sub-indices compiled by BSE Ltd. declined, led by a gauge of lenders. The S&P BSE Power was the best performer, up 1.75%.

“Domestic equities do not look to be good as of now on weak global cues,” said Binod Modi, a strategist with Reliance Securities Ltd. U.S inflation data due Wednesday will be crucial for the market, he added.

The Sensex has surged about 90% from its March 2020 low, boosted by foreign inflows of $23.3 billion last year and optimism that stimulus measures will help engineer a strong economic revival.

The market “is completely ignoring the present situation,” said Samir Rachh, who oversees Rs 13,000 crore ($1.8 billion) of assets at Nippon India Mutual Fund in Mumbai. Recent gains have been “driven by a huge amount of liquidity,” he said. [Reads more on it here]