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Aviation stocks tumble after sharp rebound in crude oil price

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Last Updated : Feb 05 2016 | 12:02 AM IST

A bout of volatility was witnessed as key benchmark indices pared gains in mid-afternoon trade. At 14:15 IST, the barometer index, the S&P BSE Sensex was up 181.23 points or 0.75% at 24,404.55. The gains for 50-unit Nifty 50 index were higher in percentage terms than those for the Sensex. The Nifty was currently up 62 points or 0.84% at 7,423.80. Gains in global stocks aided the upmove on the domestic bourses.

The Sensex jumped 290.69 points or 1.2% at the day's high of 24,514.01 in afternoon trade, its highest level since 2 February 2016. The barometer index rose 55.89 points or 0.23% at the day's low of 24,279.21 in morning trade. The Nifty rose 95.25 points or 1.29% at the day's high of 7,457.05 in afternoon trade, its highest level since 2 February 2016. The index rose 20.75 points or 0.28% at the day's low of 7,382.55 in morning trade.

In overseas stock markets, Asian and European stocks edged higher as weaker-than-expected US service-sector data pushed the US dollar to its lowest level against a basket of currencies in three months, sparking gains for commodities. US stocks staged a late-day rally yesterday, 3 February 2016, as sharp rebound in oil prices lifted beaten-down energy shares and financials rebounded from initial sharp slide.

Closer home, the market breadth indicating the overall health of the market was positive. On BSE, 1,313 shares rose and 1,173 shares fell. A total of 111 shares were unchanged. The BSE Mid-Cap index was currently up 0.23%. The BSE Small-Cap index was currently down 0.01%. Both these indices underperformed the Sensex.

Shares of power generation and distribution companies were mixed. Reliance Infrastructure (down 4.03%), Torrent Power (down 1.01%), Reliance Power (down 0.55%), CESC (down 0.44%) and NHPC (down 0.25%) edged lower. JSW Energy (up 2.09%), Jaiprakash Power Ventures (up 1.06%) and GMR Infrastructure (up 1.08%) rose. Adani Power was unchanged at Rs 26.10.

Shares of Power Grid Corporation of India were up 0.84% at Rs 144.40. The stock hit a high of Rs 145.90 and a low of Rs 143 so far during the day.

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Tata Power gained 3.5% at Rs 59.10 after the company announced that its equal joint venture with ZESCO, a Zambian power utility company, has commissioned two units of 60 megawatts (MW) each of its 120 MW Itezhi Tezhi hydro power project in Zambia. The synchronization of both the units was completed in January 2016. ZESCO is the sole off-taker of power from the power plant.

NTPC was down 1.9% at Rs 126.30. The stock hit a high of Rs 131 and a low of Rs 124.60 so far during the day. NTPC during market hours today, 4 February 2016, announced that Gurdeep Singh has taken over the charge as Chairman and Managing Director of the company with effect from 4 February 2016 for a period of five years or until further orders, whichever is earlier.

Shares of state-run coal mining giant Coal India were up 0.88% at Rs 320. The stock hit a high of Rs 322.80 and a low of Rs 317.70 so far during the day.

Aviation stocks tumbled after sharp rebound in crude oil prices. Jet Airways (India) (down 4.56%), SpiceJet (down 6.34%) and InterGlobe Aviation (down 5.12%) edged lower. Higher crude oil prices hurt aviation firms as jet fuel prices, which typically constitute about 50% of airlines' operating costs, are directly linked to international crude oil prices.

In the global commodities markets, Brent for April settlement was currently down 4 cents at $35 a barrel. The contract had surged $2.32 a barrel or 7.09% to settle at $35.04 a barrel during previous trading session.

Bajaj Auto edged lower in volatile trade after announcing third quarter results. The stock was currently off 1.14% at Rs 2,321.35. The stock hit a high of Rs 2,392.75 and a low of Rs 2,298.70 so far during the day. Bajaj Auto's net profit rose 4.67% to Rs 901.49 crore on 0.21% growth in total income to Rs 5764.58 crore in Q3 December 2015 over Q3 December 2014. Operating earnings before interest, taxation, depreciation and amortization (EBITDA) rose 2.66% to Rs 1234 crore in Q3 December 2015 over Q3 December 2014. Operating EBITDA margin improved to 22% in Q3 December 2015, from 21.1% in Q3 December 2014. The result was announced during market hours today, 4 February 2016.

ABB India surged 12.4% at Rs 1,129.95 after net profit rose 53.75% to Rs 129.40 crore on 8.11% increase in total income to Rs 2435.89 crore in Q4 December 2015 over Q4 December 2014. Efforts towards increased localization coupled with strong focus on cost savings and project execution helped improve profitability, the company said in a statement. The result was announced during trading hours today, 4 February 2016.

The company said that demand in its major areas of businesses was muted, reflecting ongoing macro uncertainties and challenges. Customers remained cautious but continued to make selective investments in infrastructure and critical power transmission projects. The order inflow stood at Rs 2058 crore in Q4 December 2015 and Rs 8100 crore for the year ended 31 December 2015. The orders from renewables (wind and solar) and railways segment more than doubled as compared to the year ended 31 December 2014 but was offset to a large extent by the silent investment pattern prevalent in the industry. The service business, at nearly Rs 1000 crore for 2015, posted a good double digit growth in orders compared to last year, as customers' focus on quality, safety and maintenance increased and decisions on new investments and large orders were delayed.

An order backlog of Rs 7946 crore, as on 31 December 2015, provides visibility for future revenue, the company added.

Meanwhile, the government today, 4 February 2016, announced the schedule of the Budget session of parliament. The Budget session will begin on 23 February 2016 and will continue till 13 May 2016 with recess from 17 March 2016 to 24 April 2016. The presentation of Railway Budget will be on 25 February 2016, to be followed by the finance ministry's Economic Survey on 26 February 2016. Finance minister Arun Jaitley will present Union Budget 2016-17 in parliament on 29 February 2016.

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First Published: Feb 04 2016 | 2:15 PM IST

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