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Markets turn volatile in late morning deals

24 Jun 2020 Evaluate

Indian equity benchmarks erased all of their gains in late morning deals to trade volatile, despite firm cues from other Asian markets. Heavy selling at telecom and banking counters, impacted the trade on the Dalal Street, while the broader indices traded mixed in late morning session. Traders got cautious, as ratings agency S&P Global Ratings said companies in India face further potential rating downside if the recovery in corporate earnings is prolonged beyond 18 months. About 35 per cent of credit ratings on Indian corporates have either a negative outlook or are on 'CreditWatch' with negative implications.

On the global front, Asian markets were trading in green, after Malaysia's consumer prices declined more-than-expected in May. The figures from the Department of Statistics revealed that the consumer price index declined 2.9 percent year-on-year in May, same as seen in April. Among the main components, prices for transport declined 20.8 percent annually in May and those of housing, water, electricity, gas and other fuels decreased by 2.6 percent.

The BSE Sensex is currently trading at 35401.40, down by 29.03 points or 0.08% after trading in a range of 35337.74 and 35706.55. There were 12 stocks advancing against 18 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index rose 0.23%, while Small cap index was down by 0.41%.

The top gaining sectoral indices on the BSE were Consumer Discretionary up by 0.97%, FMCG up by 0.96%, Auto up by 0.70%, IT up by 0.36% and Consumer Durables up by 0.20%, while Telecom down by 1.41%, Bankex down by 1.33%, Power down by 1.08%, Healthcare down by 1.08% and Utilities down by 0.79% were the top losing indices on BSE.

The top gainers on the Sensex were Asian Paints up by 6.32%, ITC up by 3.68%, Bajaj Auto up by 1.85%, Nestle up by 1.23% and HDFC up by 1.17%. On the flip side, Indusind Bank down by 3.14%, Power Grid down by 2.74%, ICICI Bank down by 2.21%, Axis Bank down by 2.03% and HCL Tech down by 1.64% were the top losers.

Meanwhile, ratings agency ICRA has said that the temporary suspension of H1-B and L-1 visas (inter-company transfer) till December 2020 in view of the impact of COVID-19 pandemic by the United States (US) is a ‘mildly negative’ development for the Indian Information and Technology (IT) companies as their dependence on permits has gone down lately. Indian IT companies have reduced their dependence on the visas because of the tightening of visa issuances like allowing only the highly trained and a preference for US-educated individuals while granting H-1Bs.

The Donald Trump administration's order for temporary suspension was driven by the COVID-19 pandemic impact on the US economy, which has skyrocketed unemployment rates in an election year. The agency said the top seven India-based companies had only 6,855 H1-B petitions for initial employment approved in FY19, a decline of 63% as compared with FY15, attributing the same to inability by the sponsor employer to establish that the position is a specialty occupation, inability to substantiate a valid employer-employee relationship and lack of evidence of specific assignment at third party sites for the entire visa durations requested. As a result, it said companies are relying less on such visas and building up domestic workforce in the US and added that adding that technological advancements including cloud computing, digital services and automation are being used to reduce the reliance on manpower.

It further said that the decision will hamper execution of projects in the pipeline and new projects, and also dent margins because of higher local hiring activity. It also said that Indian IT companies will focus on increasing the offshore component to manage disruptions caused by temporary suspension coupled with higher usage of automation, artificial intelligence in the medium term to manage higher onsite hiring costs. It estimated that the onshore hiring - or hiring at customer locations - costs up to 30% higher than the cost of sending a domestic worker on a H1-B visa and hence, impacts the margins for such companies. From a ratings perspective, it said the credit profile of the companies is unlikely to be impacted.

The CNX Nifty is currently trading at 10450.10, down by 20.90 points or 0.20% after trading in a range of 10440.15 and 10553.15. There were 16 stocks advancing against 33 stocks declining, while 1 stock remain unchanged on the index.

The top gainers on Nifty were Asian Paints up by 6.23%, Hero MotoCorp up by 4.10%, ITC up by 3.55%, Tata Motors up by 3.50% and Bajaj Auto up by 1.32%. On the flip side, Indusind Bank down by 4.06%, Power Grid down by 2.72%, ICICI Bank down by 2.42%, Axis Bank down by 2.42% and Cipla down by 2.06% were the top losers.

All Asian markets were trading higher; Hang Seng increased 13.94 points or 0.06% to 24,921.28, Nikkei 225 surged 26.77 points or 0.12% to 22,575.82, Taiwan Weighted strengthened 41.32 points or 0.36% to 11,653.68, KOSPI rose 40.20 points or 1.89% to 2,171.44, Straits Times advanced 2.39 points or 0.09% to 2,637.31, Shanghai Composite gained 4.55 points or 0.15% to 2,975.17 and Jakarta Composite soared 88.25 points or 1.81% to 4,967.38.

SEBI Registered: Investment Adviser - INA000013323

Name of the IA registered with SEBI:	The Alchemists Ark Pvt. Ltd.
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Trade/Brand Name of IA:	MoneyWorks4Me Investment Advisers
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SEBI Registration Number:	INA000013323 Validity - May 16, 2019 - Perpetual
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BSE Enlistment No:	1187
Address:	B-101, Signet Corner Building, Balewadi Phata, Baner, Pune, Maharashtra 411045
Compliance officer Details:	Name: Shrikant Jagtap Email: shrikant.jagtap@moneyworks4me.com Telephone: +919860359463 Address: Same as IA
Grievance Officer Details:	Name: Mukta Vaze Email: mukta.vaze@moneyworks4me.com Telephone: +91 98609 19463 Address: Same as IA
Principal Officer Details:	Name: Atharva Bhide Email: atharva.bhide@moneyworks4me.com Telephone: +91 91758 99463 Address: Same as IA
Standard Warning:	Investment in securities market are subject to market risks. Read all the related documents carefully before investing.
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Warning: Investment in securities market are subject to market risks. Read all the related documents carefully before investing.

Disclaimer: Registration granted by SEBI, membership of BASL (in case of IAs) and certification from NISM in no way guarantee performance of the intermediary or provides any assurance of returns to investors.

Compliance Officer:

Name: Shrikant Jagtap

Email: shrikant.jagtap@moneyworks4me.com

Mobile No: +91 97638 00745

Grievance Officer:

Name: Mukta Vaze

Email: mukta.vaze@moneyworks4me.com

Mobile No:+91 98609 19463

Principal Officer:

Name: Atharva Bhide

Email: atharva.bhide@moneyworks4me.com

Mobile No:+91 91758 99463

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Plot No. C 4-A , G Block, Near Bank of India, Bandra Kurla Complex, Bandra East, Mumbai, Maharashtra 400051

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The Alchemists Ark Pvt. Ltd., B-101, Signet Corner Building, Balewadi Phata, Baner, Pune, Maharashtra 411045

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