Oil and pharma sector stocks, state-run companies' shares and index heavyweights ITC, HDFC and Infosys led losses for key benchmark indices. The barometer index, the S&P BSE Sensex, lost 391.94 points or 1.5% at 25,729.46, as per the provisional closing data. The losses for Nifty 50 index were higher in percentage terms than those for the Sensex. The Nifty lost 131.85 points or 1.67% at 7,783.35, as per the provisional closing data. The Sensex provisionally settled below the psychological 26,000 level after falling below that mark in early trade. The latest slide on the domestic bourses materialized as disappointing Chinese economic data pulled Asian stocks lower.
High volatility was witnessed during the latter part of the trading session. The Sensex and the Nifty extended losses in late trade. The Sensex declined 412.17 points or 1.57% at the day's low of 25,709.23 in late trade. The index lost 27.31 points or 0.1% at the day's high of 26,094.09 in the opening trade. The Nifty lost 142.35 points or 1.79% at the day's low of 7,772.85 in late trade. The index lost 30.10 points or 0.38% at the day's high of 7,885.10 at the onset of the trading session.
The Sensex and Nifty declined for the fifth straight trading session.
Overseas cues were negative. European stocks reversed initial gains after another round of disappointing data from China. Earlier during the global day, Asian stocks edged lower amid strengthening prospects for higher US interest rates as soon as December and the latest signal of China's weakening economy. The latest data showed that China's consumer price index rose 1.3% in October from a year earlier, slower than a 1.6% rise in September. The reading, on the heels of weak export data over the weekend, is the latest indication of China's slowdown and flagging domestic demand.
Meanwhile, stronger-than-expected US employment report for October 2015 has increased the odds of a Federal Reserve rate increase in December. The Fed-funds futures market is now pricing in 68% probability of an increase in US benchmark interest rate in December 2015. Investors in emerging markets, including India are worried that once the Fed starts raising interest rates, it will drain liquidity from global emerging markets and redirect it to developed economies. The Fed has held its benchmark short-term interest rate near zero since December 2008. The ultra-loose monetary policy in the US has encouraged heavy investment in higher-yielding emerging markets. The next monetary policy review from the Fed is scheduled on 15-16 December 2015.
Closer home, the market breadth indicating the overall health of the market was weak. On BSE, 1,581 shares declined and 1,038 shares rose. A total of 117 shares were unchanged. The BSE Mid-Cap index was provisionally off 1.68%. The decline in this index was higher than the Sensex's decline in percentage terms. The BSE Small-Cap index was provisionally off 0.81%. The decline in this index was lower than Sensex's decline in percentage terms.
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The total turnover on BSE amounted to Rs 2395 crore, lower than turnover of Rs 2903.41 crore registered during the previous trading session.
Telecom stocks edged lower after Britain's Vodafone Group PLC announced that it has begun preparations for a potential initial public offer (IPO) of its Indian unit Vodafone India. Reliance Communications (down 8.93%), Idea Cellular (down 3.79%), Mahanagar Telephone Nigam (down 1.97%), Tata Teleservices (Maharashtra) (down 2.13%) and Bharti Airtel (down 1.03%) declined. Vodafone Group PLC made the announcement at the time of the release of its financial results for six months ended 30 September 2015.
Hindalco Industries edged lower in choppy trade after its US subsidiary Novelis Inc. reported a net loss of $13 million for Q2 September 2015 against net profit of $38 million in Q2 September 2014. The stock shed 0.69% at Rs 79.25. The stock hit a high of Rs 82.80 and a low of Rs 77.20 in intraday trade. Novelis' net sales declined 12.32% to $2482 million in Q2 September 2015 over Q2 September 2014.
Separately, Hindalco Industries' standalone net profit rose 30.37% to Rs 103 crore on 4.33% growth in revenue from operations to Rs 8925 crore in Q2 September 2015 over Q2 September 2014. On year on year basis, net profit was higher in Q2 September 2015 as the previous year's corresponding quarter had certain adverse exceptional items. The result was announced during market hours today, 10 November 2015.
With macro-economic headwinds continuing, the company's focus will be on operational excellence and cash conservation in the coming quarters, Hindalco Industries said in a statement.
HPCL tumbled 7.41% at Rs 735 after the company reported reverse turnaround in Q2. HPCL reported net loss of Rs 320.50 crore in Q2 September 2015 compared with net profit of Rs 850.21 crore in Q2 September 2014. Total income fell 18.43% to Rs 42367.60 crore in Q2 September 2015 over Q2 September 2014. The result was announced after market hours yesterday, 9 November 2015.
During Q2 September 2015, the company accounted for zero subsidy from the Government of India (GOI) on sale of PDS Kerosene and domestic liquified petroleum gas (LPG) compared to subsidy of Rs 366.25 crore received from the GOI during Q2 September 2014. During Q2 September 2015, discount from ONGC amounted to Rs 377.99 crore on purchase of crude oil. During Q2 September 2014, discount amounted to Rs 7359.63 crore from ONGC and GAIL (India) on purchase of kerosene, crude oil and domestic LPG from them. Based on the approval from GOI, the company has accounted for budgetary support of Rs 840.89 crore during Q2 September 2015 towards under-recovery on sale of PDS kerosene. During Q2 September 2014, budgetary support amounted to Rs 3918.95 crore towards under-recoveries on sale of kerosene, LPG and diesel.
Oil India edged lower in volatile trading after announcing second quarter results. The stock fell 1.43% at Rs 393. The stock hit a high of Rs 404 and a low of Rs 388.50 in intraday trade. Oil India's net profit rose 10.92% to Rs 674.80 crore on 12.82% rise in total income to Rs 2956.51 crore in Q2 September 2015 over Q2 September 2014. The result was announced after market hours yesterday, 9 November 2015. Oil India's net revenue was adversely impacted to the tune of Rs 84.50 crore in Q2 September 2015 on account of the sharing of under-recoveries of downstream oil companies. There was an adverse impact of Rs 2238.30 crore on net revenue due to the sharing of under-recoveries of downstream oil companies during the corresponding period of the previous year.
Dr Reddy's Laboratories declined after the company's management reportedly revealed in a conference call yesterday, 9 November 2015, that the US Food and Drug Administration (USFDA) has ordered a third-party audit across the manufacturing network of the company. The stock was off 5.24% at Rs 3,321. The stock hit a high of Rs 3,494.90 and a low of Rs 3,318 in intraday trade. The conference call was held in the wake of a warning from the USFDA on possible violations of manufacturing standards at three pharmaceutical plants of the company. Reacting to this development, shares of Dr Reddy's Laboratories had slumped 17.58% in the preceding two trading sessions to settle at Rs 3,504.60 yesterday, 9 November 2015, from Rs 4,252.60 on 5 November 2015.
Sun Pharmaceutical Industries (Sun Pharma) lost 2.89% at Rs 735, with the stock extending previous trading session's decline triggered by the company reporting weak Q2 September 2015 results. The stock had fallen 5.82% to settle at Rs 756.90 yesterday, 9 November 2015.
The stock exchanges are conducting one hour special Muhurat trading session tomorrow, 11 November 2015, evening for Diwali Laxmi Pujan. Trading would be conducted for an hour from 17:45 IST to 18:45 IST. There is no regular trading due to a holiday on account of Diwali. The stock market also remains closed on Thursday, 12 November 2015, for Diwali Balipratipada holiday.
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