After extending slide in the morning trade, key benchmark indices trimmed losses in mid-morning trade. At 11:15 IST, the barometer index, the S&P BSE Sensex, was down 167.81 points or 0.67% at 24,732.82. The losses for the Nifty 50 index were lower in percentage terms than those for the Sensex. The Nifty was currently down 39.55 points or 0.52% at 7,574.80. The Sensex failed to retain the psychologically important 25,000 level which it had crossed at the onset of the trading session.
The Sensex hit three-week low when it lost 252.42 points or 1.01% at the day's low of 24,648.21 in morning trade. The barometer index rose 112.50 points or 0.45% at the day's high of 25,013.13 at the onset of the trading session, its highest level since 5 April 2016. The Nifty hit its lowest level in almost three weeks when it lost 72.20 points or 0.94% at the day's low of 7,542.15 in morning trade. The index rose 16.40 points or 0.21% at the day's high of 7,630.75 at the onset of the trading session.
In overseas stock markets, Asian stocks witnessed a mixed trend. US stocks edged higher yesterday, 6 April 2016, after minutes of the Federal Reserve's March meeting showed that officials favoured more gradual rate hikes.
Closer home, the market breadth indicating the overall health of the market once again turned positive from negative in mid-morning trade. On BSE, 1,065 shares rose and 932 shares fell. A total of 88 shares were unchanged. The BSE Mid-Cap index was currently up 0.04%. The BSE Small-Cap index was currently up 0.12%. Both these indices outperformed the Sensex.
Aviation stocks edged lower as crude oil prices surged. SpiceJet (down 0.85%) and Jet Airways (India) (down 1.2%) declined. InterGlobe Aviation (up 1.15%) rose. 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, crude oil futures surged after the US government reported a surprise drop in weekly crude stockpiles. Brent for June settlement was currently up 37 cents at $40.21 a barrel. The contract had jumped $1.97 a barrel 5.2% to settle at $39.84 a barrel during the previous trading session.
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The world's major crude oil producers led by Russia and Saudi Arabia have convened a meeting on 17 April 2016 in Doha, Qatar to discuss measures to stabilise prices, including a proposal to freeze output. Saudi Arabia on 1 April 2016 said that it would freeze oil production only if Iran follows suit. Iran has ruled out freezing output until its production recovers to pre-sanction levels.
Telecom stocks witnessed a mixed trend. Idea Cellular (down 0.94%) and Bharti Airtel (down 0.84%) edged lower. Reliance Communications (up 1.47%) and Mahanagar Telephone Nigam (up 0.57%) edged higher. Tata Teleservices (Maharashtra) was unchanged at Rs 6.70. The Union Cabinet yesterday, 6 April 2016, approved the modifications in the policy for liberalisation of administratively allotted spectrum where market determined prices are not available. This will facilitate optimal utilisation of spectrum by introducing new technologies and sharing and trading of spectrum. The most recent recommended reserve price will be taken as the provisional price for liberalisation of administratively allocated spectrum where auction determined price is not available. Subsequent to the completion of the ensuing auction and with the availability of auction-determined price, the provisional price already charged will be adjusted with the auction-determined price with effect from the date of liberalisation on pro-rata basis. The announcement of the modifications in the policy for liberalisation of administratively allotted spectrum hit the market after trading hours yesterday, 6 April 2016.
Index heavyweight and housing finance major HDFC was down 2.58% at Rs 1,072.65 after the company after market hours yesterday, 6 April 2016, announced that it proposes to make an additional one-time special provision of Rs 450 crore in Q4 March 2016 on standard assets. The special provision is being done voluntarily and not on account of any regulatory requirement, HDFC said. HDFC said that the company holds adequate security in respect of all its loans. Regulatory provision on standard assets and provision for non-performing loans will continue to be made as per current practice in the quarterly accounts, HDFC said.
HDFC said that the profit on sale of investments for Q4 March 2016 was Rs 1520 crore (net of tax Rs 1220 crore) compared to Rs 225 crore in Q4 March 2015. The current quarter's profit includes the profit on sale of shares in HDFC Standard Life Insurance Company to Standard Life (Mauritius Holdings) 2006 Limited. The capital gains tax on the sale of shares is Rs 300 crore.
Income from dividend for Q4 March 2016 was Rs 192 crore compared to Rs 179 crore in the corresponding quarter of the previous year. Meanwhile, under the loan assignment route, HDFC sold loans amounting to Rs 4799 crore in Q4 March 2016 to HDFC Bank compared to Rs 5000 crore during corresponding quarter of the previous year. Loans sold in the preceding twelve months amounted to Rs 12773 crore. HDFC will announce its Q4 March 2016 results on 2 May 2016.
Maruti Suzuki India (MSIL) dropped 3.07% at Rs 3,462.05 on media reports that a foreign brokerage has cut target price on the stock while retaining its hold rating stating that valuations are still undemanding for the stock. The foreign brokerage reportedly said that yen benefit has started to reverse and is a significant headwind in the near term for Maruti. According to the calculation of the brokerage, every 1% appreciation in yen adversely affects Maruti's operating margin by 15-20 basis points (bps). The yen hit 17-month high against dollar today, 7 April 2016.
Maruti announced after market hours yesterday, 6 April 2016, that it has introduced the automatic transmission option for the Zeta petrol variant of its premium hatchback Baleno. The Baleno Zeta (automatic CVT) petrol variant is priced at Rs 7.47 lakh ex-showroom Delhi. With this automatic transmission options are available on Delta and Zeta trim of Baleno. Maruti said it has sold over 44,000 Baleno cars through its premium retail channel NEXA across India. The model has pending orders for 55,000 units. Baleno is also the first model by Maruti Suzuki to be exported to Japan. Going forward Maruti Suzuki plans to export the model to more than 100 countries from India.
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