Losses for oil sector stocks and index heavyweight Reliance Industries (RIL) pulled key benchmark indices lower at the onset of the week. The barometer index, the S&P BSE Sensex, fell 281.88 points or 1.15% at 24,173.16, as per the provisional closing data. The 50-unit Nifty 50 index lost 86.80 points or 1.17% at 7,351, as per the provisional closing data. The Sensex and the Nifty extended losses in late trade in what was a volatile trading session. The broad market depicted weakness. Data showing substantial selling of Indian stocks by foreign portfolio investors (FPIs) hit sentiment on the domestic bourses adversely. Weakness in Asian stocks also hit investor sentiment.
The Sensex hit its lowest level in almost 20 months when it fell 313.05 points or 1.28% at the day's low of 24,141.99 in late trade. The barometer index rose 69.81 points or 0.28% at the day's high of 24,524.85 at onset of trading session. The Nifty hit its lowest level in more than 19 months when it fell 101.40 points or 1.36% at the day's low of 7,336.40 in late trade. The index rose 25.85 points or 0.34% at the day's high of 7,463.65 at onset of trading session.
In overseas stock markets, European stocks edged lower in choppy trade as global crude oil prices struggled. Asian stocks declined amid ongoing worries that China is losing its grip on its economy. US stocks dropped sharply during the previous trading session on Friday, 15 January 2016, as oil prices plunged and investors worried about slowing growth in the US.
Closer home, the broad market depicted weakness. There were more than seven losers against every gainer on BSE. 2,393 shares declined and 332 shares rose. A total of 142 shares were unchanged. The BSE Mid-Cap index was provisionally down 2.72%. The BSE Small-Cap index was provisionally down 4.05%. The fall in both these indices was higher than the Sensex's decline in percentage terms.
The total turnover on BSE amounted to Rs 3181 crore, higher than turnover of Rs 2920.07 crore registered during the previous trading session.
Shares of oil exploration and production firms declined as crude oil prices extended steep losses registered during the previous trading session. Cairn India (down 7.19%), ONGC (down 1.98%) and Oil India (down 2.46%) edged lower. Fall in crude oil prices would result in lower realizations from crude sales for oil exploration firms.
Shares of RIL were off 4.86% at Rs 1,021. The stock hit a high of Rs 1,082.45 and a low of Rs 1,010.10 in intraday trade. RIL announces its Q3 December 2015 results tomorrow, 19 January 2016.
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Reliance Communications (RCom) slipped 2.81% at Rs 71. The stock was volatile. The stock hit a high of Rs 75.40 and a low of Rs 68.85 in intraday trade. RCom and Reliance Jio Infocomm (RJIL), the telecom arm of Reliance Industries, announced the signing of agreements for change in spectrum allotment in 800 MHz band across 9 circles from RCom to RJIL and for sharing of spectrum in 800 MHz band across 17 circles. As part of the enhanced strategic collaboration, both the companies also intend to enter into reciprocal intra circle roaming (ICR) arrangements. The spectrum arrangements between RJIL and RCom will result in network synergies, enhanced network capacity and will optimise spectrum utilisation and capex efficiencies. Both operators anticipate considerable savings in operating costs and future investment in networks. The arrangements are subject to liberalisation of RCom spectrum in the 800 MHz band and obtaining requisite approvals. The announcement was made during market hours today, 18 January 2016.
Shares of public sector oil marketing companies (PSU OMCs) also edged lower. HPCL (down 6.61%), BPCL (down 4.55%) and Indian Oil Corporation (down 2.18%) declined.
Indian Oil Corporation (IOCL) announced a reduction in petrol price by 32 paise per litre and diesel by 85 paise a litre with effect from Saturday, 16 January 2016. Petrol in Delhi now costs Rs 59.03 per litre while diesel costs Rs 44.18 a litre. Meanwhile, the government has increased the basic excise duty on unbranded petrol to Rs 8.48 per litre from Rs 7.73 per litre and the same on unbranded diesel to Rs 9.83 per litre from Rs 7.83 a litre with effect from 16 January 2016.
Global crude oil prices fell after Western sanctions on Iran were lifted over the weekend, paving the way for the Middle Eastern nation's full re-entry into the global oil market. Brent for March settlement was currently off 37 cents at $28.57 a barrel. The contract had dropped $1.94 a barrel or 6.28% to settle at $28.94 a barrel during the previous trading session.
Kotak Mahindra Bank (KMBL) lost 1.32% at Rs 667. The stock was volatile. The stock hit high of Rs 686.40 and low of Rs 664.20 in intraday trade. The bank's net profit jumped 36.63% to Rs 634.72 crore on 61.77% rise in total income to Rs 4843.86 crore in Q3 December 2015 over Q3 December 2014. The results are not comparable due to merger of ING Vysya Bank with Kotak Mahindra Bank which took effect from 1 April 2015. The result was announced during market hours today, 18 January 2016.
On absolute basis, KMBL's gross non-performing assets (NPAs) stood at Rs 2690.34 crore as on 31 December 2015 as against Rs 2655.38 crore as on 30 September 2015 and Rs 1219.86 crore as on 31 December 2014. The ratio of gross NPAs to gross advances stood at 2.3% as on 31 December 2015 as against 2.35% as on 30 September 2015 and 1.87% as on 31 December 2014. The ratio of net NPAs to net advances stood at 0.96% as on 31 December 2015 as against 1.05% as on 30 September 2015 and 0.97% as on 31 December 2014.
The bank's provisions and contingencies surged 686.26% to Rs 235.25 crore in Q3 December 2015 over Q3 December 2014.
KMBL said that the integration process of ING Vysya Bank with KMBL is broadly on schedule and based on the current progress, the bank expects complete integration by April/May 2016. KMBL said that merger benefits in terms of revenue synergies as well as cost efficiencies have started showing traction. Some of the areas where the bank is seeing revenue synergies flowing are savings accounts growth, insurance cross sell, growth in credit cards, trinity accounts (incl. brokerage accounts) etc. Cost benefits are seen in employee and operating costs and in areas like utilisation of ING Vysya Bank's currency chests, space rationalization and rental savings, etc., KMBL said.
Wipro rose 0.29% at Rs 545 after consolidated net profit rose 2% to Rs 2230 crore on 7% growth in gross revenue to Rs 12860 crore in Q3 December 2015 over Q3 December 2014. The stock was volatile. The stock hit a high of Rs 550.20 and a low of Rs 531 in intraday trade. The result was as per International Financial Reporting Standards. The company announced the results before market hours today, 18 January 2016.
Wipro's revenue from IT services business rose 0.3% to $1,838.30 million in Q3 December 2015 over Q2 September 2015. IT services segment Non-GAAP constant currency revenue in dollar terms grew 1.4% sequentially. Wipro expects revenue from its IT services business to be in the range of $1,875 million to $1,912 million in Q4 March 2016.
Jatin Dalal, Chief Financial Officer of Wipro said that the impact on revenues from the Chennai floods were minimized significantly by strong execution of the company's robust business continuity plans (BCP). The additional expenses incurred in deploying BCP impacted operating margins for the quarter, Dalal said.
Data showing substantial selling of Indian stocks by foreign portfolio investors (FPIs) hit sentiment on the domestic bourses adversely. FPIs sold shares worth a net Rs 1123.79 crore during the previous trading session on Friday, 15 January 2016, as per provisional data released by the stock exchanges. This was second day of substantial selling from FPIs which offloaded stocks worth a net Rs 1152.74 crore on 14 January 2016.
Meanwhile, the latest data showed that India's merchandise exports declined for the thirteenth straight month in December 2015. Exports fell 14.7% to $22.30 billion in December 2015 over a year ago, data released by the government today, 18 January 2016 showed. The trend of falling exports is in tandem with other major world economies, according to a government statement. Imports fell 3.9% to $33.96 billion. The trade deficit widened 27.1% to $11.7 billion in December 2015 from $9.18 billion in December 2014.
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