In lacklustre trade, key benchmark indices languished in negative zone in afternoon trade. At 13:16 IST, the barometer index, the S&P BSE Sensex, was down 20.35 points, or 0.07% at 28,351.88. The Nifty 50 index was down 7.65 points, or 0.09% at 8,718.95. The market breadth indicating the overall health of the market was positive. On BSE, 1,350 shares rose and 1,181 shares fell. A total of 168 shares were unchanged. The BSE Mid-Cap index was currently down 0.17%. The fall in this index was higher than Sensex's decline in percentage terms. The BSE Small-Cap index was currently up 0.35%, outperforming the Sensex.
Index heavyweight and software major Infosys lost 1.01% to Rs 1,036.55. The stock hit high of Rs 1,054.80 and low of Rs 1,036.05 so far during the day.
ONGC fell 0.58%. ONGC during market hours today, 15 September 2016 said that ONGC Videsh (and its wholly owned subsidiary ONGC Videsh Vankorneft Pte., Singapore - OVVL) jointly signed definitive agreements with Rosneft, the national oil company of Russia for acquiring additional 11% shares in JSC Vankorneft, a company organized under the law of Russian Federation which is the owner of Vankor Field and North Vankor license. ONGC Videsh is a wholly owned subsidiary of ONGC.
Earlier, ONGC Videsh had successfully closed the acquisition of 15% shareholding interest on 31 May 2016. After the closing of the present transaction, ONGC Videsh will raise its participation share in Vankorneft to 26%. The acquisition is subject to relevant board, Government and Indian and Russian regulatory approvals and is expected to close by end of 2016.
Vankor is Rosneft's (and Russia's) second largest field by production and accounts for 4% of Russian production. The daily production from the field is around 421,000 barrels per day (bpd) of crude oil on an average and together with earlier acquisition of 15%, ONGC Videsh's share of daily oil production from Vankor will be about 110,000 bpd. The acquisition of additional 11% bears significant strategic importance and would add about 30% to the existing ONGC Videsh's production at the current rate and approximately 2.2 MMt of oil and 1.0 BCM of gas annually.
The present transaction provides an opportunity to ONGC Videsh to enhance its presence in Russia and is consistent with its stated strategic objective of adding high quality international assets to its existing E&P portfolio.
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Telecom stocks rose. Bharti Airtel (up 0.83%), Idea Cellular (up 0.18%), MTNL (up 0.73%) and Tata Teleservices (Maharashtra) (up 1.01%) rose.
Shares of Bharti Infratel rose 0.19%. Bharti Infratel is a provider of tower and related infrastructure and is a unit of Bharti Airtel.
Reliance Communications (RCom) gained 0.2% after the company and Maxis Communications Berhad (MCB), promoter of Aircel, a leading pan-India mobile operator signed definitive documents for the merger of their Indian wireless businesses-the largest-ever consolidation in the Indian telecom sector. The RCom-Aircel combination will create a strong operator ranked amongst India's top 4 telecom companies by customer base and revenues, also ranking amongst the top 3 operators by revenues in 12 important circles.
The merged company will have the second-largest spectrum holding amongst all operators, aggregating 448 MHz across the 850, 900, 1800 and 2100 MHz bands, and will enjoy enhanced business continuity through extended validity of spectrum holdings till 2033-35. RCom and MCB will each hold a 50% stake in the merged entity with equal representation on the board of directors and all committees. The company will be managed by an independent professional team under the supervision of the board. RCom's overall debt will reduce by Rs 20000 crore ($3 billion) or over 40% of its total debt, and Aircel's debt will reduce by Rs 4000 crore ($600 million), upon completion of the transaction in 2017.
Separately, RCom's consolidated net profit rose 5.88% to Rs 54 crore on 3.75% decline in total income to Rs 5361 crore in Q1 June 2016 over Q1 June 2015. The result was announced after market hours yesterday, 14 September 2016. The company's earnings before interest, tax, depreciation and amortization (EBITDA) margin dropped to 29.1% in Q1 June 2016 from 34% in Q1 June 2015.
Cement stocks fell. Ambuja Cements (down 1.74%), ACC (down 0.89%), UltraTech Cement (down 0.81%) and Shree Cement (down 1.02%) declined.
Grasim Industries was up 0.62% at Rs 4,741.95. Grasim has exposure to the cement sector through its holding in UltraTech Cement.
MMTC rose 2.61% after the company reported net loss of Rs 7.01 crore in Q1 June 2016 lower than net loss of Rs 30.55 crore in Q1 June 2015. MMTC's total income rose 35.87% to Rs 2806.72 crore in Q1 June 2016 over Q1 June 2015. The result was announced after market hours yesterday, 14 September 2016.
In overseas stock markets, European stocks were trading higher ahead of central bank action. The Bank of England is meeting today, 15 September 2016 but no interest rate changes are expected from the bank. Policy makers have to assess whether the outlook for Britain after its vote to leave the European Union warrants a change in strategy. Most Asian stocks fell as investors grappled with the seemingly diminishing ability of major central banks to stimulate growth, while a tumble in crude oil inflamed already heightened risk aversion. In US, the Dow industrials and the S&P 500 closed in negative territory yesterday, 14 September 2016, in the wake of slumping crude-oil prices, erasing earlier gains for the major benchmarks, while the tech-heavy Nasdaq bucked the losing trend.
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