Telecom stocks and index heavyweights Infosys and HDFC led gains for the two key benchmark indices as the fourth quarter earnings season began on positive note. The barometer index, the S&P BSE Sensex, rose 190.70 points or 0.7% at 25,817.45, as per the provisional closing data. The gains for the Nifty 50 index were higher in percentage terms than those for the Sensex. The Nifty rose 64.25 points or 0.82% at 7,914.70, as per the provisional closing data. Shares of index heavyweight and IT major Infosys surged after the company forecast strong revenue growth for the year ending 31 March 2017 (FY 2017) at the time of announcement of its Q4 March 2016 results.
The Sensex hit 15-week high when it jumped 243.28 points or 0.94% at the day's high of 25,870.03 at the onset of trading session. The barometer index gained 7.37 points or 0.02% at the day's low of 25,634.12 in early trade. The Nifty, too, hit 15-week high when it rose 70.15 points or 0.89% at the day's high of 7,920.60 in late trade. The index fell 7.70 points or 0.09% at the day's low of 7,842.75 in early trade.
The market breadth indicating the overall health of the market was positive. On BSE, 1,441 shares gained and 1,181 shares declined. A total of 144 shares were unchanged. The BSE Mid-Cap index was provisionally up 1.26%. The BSE Small-Cap index was provisionally up 1.11%. Both these indices outperformed the Sensex.
The total turnover on BSE amounted to Rs 2168 crore, lower than turnover of Rs 2645.40 crore registered during the previous trading session.
In overseas stock markets, resources sector led losses for European markets as crude oil prices fell after the world's major oil producers at a meeting held in Doha, Qatar failed to reach an agreement yesterday, 17 April 2016, to freeze production. Earlier during the global day, Japanese stocks led decline in Asian stocks as the yen strengthened against the dollar in the wake of earthquakes in the Kumamoto prefecture since last week, including on Saturday, 16 April 2016. The Nikkei 225 Average settled 3.4% lower. The stronger yen makes Japanese exports less competitive and cuts into the value of repatriated earnings. US stocks closed modestly lower during the previous trading session on Friday, 15 April 2016, as a retreat in oil prices weighed on energy shares.
Shares of IT major Infosys surged in volatile trade after the company forecast strong revenue growth for the year ending 31 March 2017 (FY 2017) at the time of announcement of its Q4 March 2016 results on Friday, 15 April 2016, when the stock market was closed for a holiday. The stock gained 5.73% to Rs 1,239.15. The stock hit a high of Rs 1,267.70 in intraday trade, which is a record high for the counter. The stock hit a low of Rs 1,233.45 in intraday trade.
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Infosys expects revenue growth of 11.8%-13.8% for FY 2017 in US dollar terms. In constant currency terms, the company has forecast 11.5%-13.5% growth in revenue for FY 2017. Infosys' revenue growth forecast is higher than 10% to 12% growth for the IT outsourcing sector for FY 2017 forecast by IT industry body National Association of Software and Services Companies (Nasscom) in February this year. Infosys has forecast 12.7%-14.7% growth in revenue in rupee terms for FY 2017 based on rupee dollar exchange rate of 66.26 as on 31 March 2016.
Infosys' consolidated net profit rose 3.8% to Rs 3597 crore on 4.1% growth in revenue to Rs 16550 crore in Q4 March 2016 over Q3 December 2015. The results are as per International Financial Reporting Standards (IFRS). Infosys said that the employee attrition reduced further in Q4 March 2016. On annualized basis, the employee attrition rate declined to 17.3% in Q4 March 2016 from 18.1% in Q3 December 2015.
After the strong revenue growth guidance for FY 2017, Infosys' ADR jumped 8.4% to settle at $20 on the New York Stock Exchange on Friday, 15 April 2016.
IT stocks gained after IT major Infosys issued a strong revenue growth guidance for the year ending 31 March 2017 (FY 2017). HCL Technologies (up 1.71%), Oracle Financial Services Software (up 2.55%), Tech Mahindra (up 1.37%), Wipro (up 1.09%), Hexaware Technologies (up 0.82%) and MphasiS (up 3.48%) rose.
IT major TCS slipped in volatile trade ahead of its Q4 March 2016 results today, 18 April 2016. The stock shed 0.12% to Rs 2,520.05. The stock hit high of Rs 2,553.15 and low of Rs 2,449 in intraday trade. Meanwhile, a US court has reportedly slapped nearly $1 billion penalty on the company for allegedly stealing information related to US-based Epic Systems' healthcare software. TCS, however, denied the charges and said it would appeal. In a statement issued on Saturday, 16 April 2016, TCS said that the jury's verdict on liability and damages was unexpected, as the company believes it is unsupported by the evidence presented during the trial. The company added that it did not misuse or derive any benefit from downloaded documents from Epic System's user-web portal. TCS said it plans to defend its position vigorously in appeals to higher courts. The company said it appreciates the trial judge's announcement from the bench that he is almost certain he will reduce the damages award. The jury verdict will not have any impact on the company's Q4 March 2016 and FY 2016 financial results, TCS said.
Pharma major Lupin rose 1.74% after the company announced that its US subsidiary, Lupin Pharmaceuticals Inc. has launched its Fyavolv tablets in the United States. The drug is a generic version of Warner Chilcott's Femhrt tablets. Lupin's Fyavolv tablets (Norethindrone Acetate and Ethinyl Estradiol Tablets USP, 0.5 mg/0.0025 mg and 1 mg/0.005 mg) are the AB rated generic equivalent of Warner Chilcott's Femhrt tablets (Norethindrone Acetate and Ethinyl Estradiol Tablets USP, 0.5 mg/0.0025 mg and 1 mg/0.005 mg). The drug is indicated for the treatment of moderate to severe vasomotor symptoms due to menopause and prevention of postmenopausal osteoporosis, Lupin said. Femhrt had US sales of $39 million (IMS MAT December 2015).
On the macro front, data released by the government today, 18 April 2016, showed that inflation based on the wholesale price index (WPI) remained in negative zone last month. WPI stood at negative 0.85% in March 2016 as compared to a reading of negative 0.91% in February 2016. Build up inflation rate in the financial year so far was minus 0.85% compared to a build up rate of minus 2.33% in the corresponding period of the previous year. Meanwhile, WPI for January 2016 was revised to a reading of negative 1.07% compared with a provisional reading of 0.9% reported on 15 February 2016.
Reserve Bank of India (RBI) Governor Raghuram Rajan said in an interview to a newspaper in Washington on Thursday, 14 April 2016, that if the monsoon is good, if inflation continues on a downward path and if there is continuing progress on food management reforms that reduce costs it will provide room for the RBI to further reduce policy interest rate. Recently, the weather office forecast good rains during the June-September 2016 southwest monsoon season. The RBI cut its benchmark policy rate viz. the repo rate by 25 basis points to 6.5% from 6.75% after a scheduled policy review on 5 April 2016. At that time, Rajan had indicated in his monetary policy statement that the RBI might cut the repo rate further in the coming months if macroeconomic and financial developments provide room for further rate cut. The RBI next undertakes monetary policy review on 7 June 2016.
Meanwhile, the finance ministry has clarified that taxes, cesses or duties such as excise duty, customs duty, Service Tax, State VAT, CST, income tax, wealth tax, stamp duty, taxes on professions, trades, callings or employment, octroi, entertainment tax, luxury tax and property tax are not liable to service tax. The government issued the clarification after the Union Budget 2016-17 slapped service tax on all services provided by the government or a local authority to a business entity with effect from 1 April 2016.
The stock market remains closed tomorrow, 19 April 2016, on account of Mahavir Jayanti.
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