After a range bound trade in early afternoon trade, key benchmark indices extended gains in afternoon trade. At 13:16 IST, the barometer index, the S&P BSE Sensex, was up 83.81 points or 0.31% at 26,737.41. The gains for the Sensex were higher in percentage terms than those for the Nifty 50 index. The Nifty was currently up 20 points or 0.25% at 8,176.65. The market breadth indicating the overall health of the market turned negative from positive in afternoon trade. On BSE, 1,191 shares rose and 1,197 shares fell. A total of 199 shares were unchanged. The BSE Mid-Cap index was currently up 0.38%. The BSE Small-Cap index was currently up 0.52%. Both these indices outperformed the Sensex.
In overseas stock markets, European stocks were mixed, with the prospect of a US interest rate hike coming sooner rather than later prompting investors to avoid aggressive bets. In Asia, Japanese stocks edged higher as the yen weakened against the dollar. The Nikkei 225 Average closed 1.39% higher. A weaker local currency benefits exporters, as they can sell their goods at more competitive prices overseas. Japanese Prime Minister Shinzo Abe said he would delay a sales tax hike scheduled for April next year by 2-1/2 years, Masahiko Komura, vice president of the ruling Liberal Democratic Party, told reporters today, 30 May 2016.
Chinese stocks edged higher in volatile trade after the Shanghai and Shenzhen stock exchanges on Friday, 27 May 2016, announced rules on share trading suspensions, removing one potential roadblock to inclusion Chinese A shares or yuan-denominated shares in MSCI Inc.'s global benchmark indexes, a move which could direct large amount of capital into China's stock markets. In mainland China, the Shanghai Composite ended 0.05% higher. In Hong Kong, the Hang Seng index was currently up 0.41%. MSCI said in March a decision to include 5 percent of yuan-denominated shares in its index will depend on regulators implementing changes so that widespread halts can't happen again.
US stocks edged higher during the previous trading session on Friday, 27 May 2016, after the latest data showed that the economy's slowdown in the first quarter wasn't as bad as initially thought. US GDP expanded at a 0.8% seasonally adjusted annual rate in the first three months of 2016, up from an initial estimate for 0.5% growth, the Commerce Department said on Friday, 27 May 2016. The faster-than-expected pace of growth, however, still represents a deterioration from the fourth quarter's 1.4% growth.
Federal Reserve Chairwoman Janet Yellen said in a speech on 27 May 2016 that a rate increase would be appropriate in coming months if the economy continues to strengthen. The Fed has kept the benchmark fed funds rate unchanged after raising it for the first time in nearly a decade in December 2015. The Federal Open Market Committee next undertakes monetary policy review on 14-15 June 2016.
Realty shares were mixed. Oberoi Realty (up 2.87%), Godrej Properties (up 1.36%), Housing Development and Infrastructure (HDIL) (up 0.96%), Sunteck Realty (up 0.92%), Sobha (up 0.61%), Anant Raj (up 0.38%), Peninsula Land (up 0.24%) and Phoenix Mills (up 0.02%), edged higher. Mahindra Lifespace Developers (down 0.78%), Indiabulls Real Estate (down 1.31%), Prestige Estates Projects (down 1.84%), D B Realty (down 2.46%) and Unitech (down 2.72%) edged lower.
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Realty major DLF was down 0.93% at Rs 127.80 after consolidated net profit declined 22.86% to Rs 132.39 crore on 19.55% rise in net sales to Rs 2335.56 crore in Q4 March 2016 over Q4 March 2015. The result was announced after market hours on Friday, 27 May 2016. In a post result statement, DLF said that the company believes that the residential real estate sector in India can see a turnaround in the near future. During the last few quarters, DLF has witnessed large number of inquiries signalling early green shoots of recovery for the sector.
With regard to the commercial real estate development business, DLF has started construction of a new office project called Cyber Park at a prime location just opposite Oberoi and Trident Hotels in Gurgaon, with an approximate size of 2.2 msf (including TOD). With regard to the retail mall development business, DLF officially opened its mall Mall of India in Noida with around 90% pre-leasing.
Metal shares were mixed. Vedanta (up 3.11%), Steel Authority of India (up 0.94%), Jindal Steel & Power (up 0.89%), National Aluminium Company (up 0.84%) and Bhushan Steel (up 0.69%), edged higher. JSW Steel (down 0.05%), Hindustan Zinc (down 0.06%), Hindustan Copper (down 0.11%) and NMDC (down 3.24%) edged lower.
Meanwhile, copper price edged lower in the global commodities markets. High Grade Copper for July 2016 delivery was currently down 0.97% at $2.0935 per pound on the COMEX.
Tata Steel fell 1.32% at Rs 324.65. Global credit rating agency Moody's Investors Service on Friday, 27 May 2016, said that the proposed sale of Tata Steel UK's long products Europe business to Greybull Capital and Tata Steel Europe's decision to sell its UK business are credit positive on its ratings on Tata Steel and Tata Steel UK. Moody's said that the divestment of the loss-making operations will reduce the drag on the European business' profitability, which has been under strain for a while. Tata Steel Europe has initiated the process of selling its entire holding in Tata Steel UK due to the deteriorating financial performance of the UK subsidiary. Moody's said that it will watch out for clarity on divestment of liabilities including pensions and erasing the negative EBITDA impact of the UK facilities on Tata Steel UK's credit metrics would be critical for any change in outlook to its rating on Tata Steel UK.
Hindalco Industries surged 12.14% to Rs 103 after net profit jumped 123.36% to Rs 356.33 crore on 7.6% fall in total income to Rs 8871.66 crore in Q4 March 2016 over Q4 March 2015. The result was announced on Saturday, 28 May 2016. The company's revenue from operations dropped 7.51% to Rs 8667.52 crore in Q4 March 2016 over Q4 March 2015. The company attributed the decline in revenue to a sharp decline in both aluminium and copper realizations. In aluminium, the impact was much severe due to a sharp fall in local market premium and a sharp surge in imports of aluminium in the country. The company said its operational performance was strong. A strong increase in aluminium volumes, a thrust on value addition across businesses, lower cost of raw materials and a weaker rupee helped the company partially offset the impact of a sharp fall in realizations. The bottom line was boosted by base effect. The company's bottom line in Q4 March 2015 was adversely impacted by a non-recurring expenditure of Rs 146.48 crore.
With regard to the future business outlook, Hindalco said that the uncertain global macros pose several challenges for the company. The management will continue its un-relented focus on operational excellence, enhanced value addition and cash conservation to tide over these circumstances.
Punj Lloyd lost 5.53% after the company posted net loss of Rs 467.99 crore in Q4 March 2016, compared to net profit of Rs 268.53 crore for Q4 March 2015. The announcement was made after market hours on Friday, 27 May 2016. Punj Lloyd's total income decreased 60.3% to Rs 734.04 crore in Q4 March 2016 over Q4 March 2015. Punj Lloyd group's order backlog stands at Rs 23836 crore, including order backlog of Rs 6845 crore in Libya which is not seeing traction. The order backlog is the value of unexecuted orders as on 31 March 2016 plus new orders received after that date. Atul Punj, Chairman of Punj Lloyd Group said that the company's focus is on improving the quality of balance-sheet, execution of projects, recovery of claims and cash flows.
Muthoot Finance jumped 8.07% after net profit rose 60.55% to Rs 265.22 crore on 31.71% growth in total income to Rs 1451.28 crore in Q4 March 2016 over Q4 March 2015. The result was announced after market hours on Friday, 27 May 2016.
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