Key benchmark indices extended losses in mid-afternoon trade as weakness in European shares spoiled investor sentiment. At 14:19 IST, the barometer index, the S&P BSE Sensex, was down 106.70 points or 0.43% at 24,539.78. The losses for the Sensex were higher in percentage terms than those for the 50-unit Nifty 50 index. The Nifty was down 28.70 points or 0.38% at 7,456.65.
The Sensex fell 134.53 points, or 0.55% at the day's low of 24,511.95 in mid-afternoon trade, its lowest level since 3 March 2016. The barometer index rose 147.14 points, or 0.6% at the day's high of 24,793.62 in morning trade, its highest level since 2 February 2016. The Nifty fell 42.15 points, or 0.56% at the day's low of 7,443.20 in mid-afternoon trade, its lowest level since 3 March 2016. The Nifty rose 41.80 points, or 0.56% at the day's high of 7,527.15 in early trade, its highest level since 2 February 2016.
The market breadth indicating the overall health of the market turned negative from positive in mid-afternoon trade. On BSE, 1,351 shares fell and 1,165 shares rose. A total of 137 shares were unchanged. The BSE Mid-Cap index was currently down 0.55%. The decline in this index was higher than the Sensex's decline in percentage terms. The BSE Small-Cap index was currently up 0.1%. The decline in this index was lower than the Sensex's decline in percentage terms.
In overseas stock markets, European stocks fell after disappointing Chinese February trade data. Trading in US index futures indicated that the Dow Jones Industrial Average could fall 108 points at the opening bell today, 8 March 2016. Most Asian stocks fell, stepping back from their recent rally, with weak China trade data weighing on the sentiment. China's February exports fell 25.4% in dollar terms, while imports fell 13.8%. The drop in exports was the largest on-year drop since 2009. US stocks eked out small gains yesterday, 7 March 2016, partly due to a jump in oil prices.
Most IT stocks declined. HCL Technologies (down 2.57%), MindTree (down 2.43%), TCS (down 0.77%), Tech Mahindra (down 0.71%), Hexaware Technologies (down 0.25%) and Persistent Systems (down 0.07%), edged lower. Wipro (up 0.25%), Oracle Financial Services Software (up 0.44%) and MphasiS (up 2.88%), edged higher.
Index heavyweight and IT major Infosys was down 1.24% to Rs 1,156.
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Most capital goods shares edged lower. Suzlon Energy (down 3.6%), Crompton Greaves (down 2.37%), Praj Industries (down 1.77%), Bharat Heavy Electricals (down 1.45%), Bharat Electronics (down 1.39%), BEML (down 1.34%), Punj Lloyd (down 1.25%), Alstom T&D India (down 1.11%), SKF India (down 1.08%), Lakshmi Machine Works (down 0.95%), Thermax (down 0.24%), ABB India (down 0.12%) and Havells India (down 0.11%), edged lower. AIA Engineering (up 0.03%), ALSTOM India (up 1.49%), Jindal Saw (up 2.73%) and Pipavav Defence and Offshore Engineering Company (up 11.39%), edged higher.
L&T was down 0.87% to Rs 1,183.40. The company has completed the transaction for the sale of its casting manufacturing unit located at Coimbatore to Australia's Bradken Limited for total consideration of Rs 163 crore. The business transfer agreement was signed in November 2014. This unit clocked revenue of Rs 122 crore in the year ended 31 March 2015 (FY 2015), which was less than 1% of the total revenue of the company for the year. The sale of the Coimbatore foundry is in line with the company's strategic plan to exit non-core businesses and rationalize its portfolio. The company continues to operate two other foundries in Odisha and Gujarat. L&T made the announcement after trading hours on Friday, 4 March 2016.
Shares of Siemens were down 0.57% to Rs 1,038.20. The company after trading hours on Friday, 4 March 2016, announced that its board of directors has decided to consider the distribution of 50% of the proceeds from the sale of its healthcare undertaking as a special dividend to the company's shareholders. The board will take the decision on special dividend at its first board meeting after the completion of the transaction. The transaction is expected to be completed by 1 July 2016. Siemens has approved the sale and transfer of the healthcare undertaking as a going concern on a slump sale basis to the subsidiary of its parent firm Siemens AG, Germany for total consideration of Rs 3050 crore. The unit clocked revenue of Rs 1424.80 crore in the year ended 30 September 2015 (FY 2015), accounting for 13.55% of the company's revenue for the year. The unit had negative networth of Rs 88.50 crore as on 30 September 2015. The transaction is subject to the approval of the company's shareholders through an ordinary resolution.
Regarding the rationale for the sale of the healthcare unit to the parent firm, Siemens said that it would allow the parent firm increased flexibility, greater entrepreneurial freedom and faster decision making to grow its India healthcare segment independently. The healthcare unit is highly dependent on the parent company and its subsidiaries for products and technical know-how and that significant long-term investments are required for localization of products and solutions of the unit, Siemens said. Siemens further said that currently there are limited synergies between the healthcare business and its other business segments. The sale of the unit will allow Siemens to increase its focus and capital allocation to power generation, transmission and distribution, mobility, industrial automation and Smart Cities segments. The transaction will be margin accretive for Siemens. The company made the announcement on the sale of the healthcare unit after trading hours on Friday, 4 March 2016.
Stocks of most public sector banks (PSU banks) edged lower after Finance Minister Arun Jaitley on Saturday, 5 March 2016, said that an Experts' Group would be constituted immediately to consider a proposal for merger of PSU banks in order to have strong banks. Bank of Baroda (down 4.57%), Vijaya Bank (down 4.14%), State Bank of India (down 3.16%), Syndicate Bank (down 3.07%), Central Bank of India (down 2.17%), Punjab National Bank (down 1.93%), Canara Bank (down 1.85%), Bank of India (down 1.69%), Bank of Maharashtra (down 1.34%), Punjab and Sind Bank (down 1%), Union Bank of India (down 0.56%), Allahabad Bank (down 0.49%) and Andhra Bank (down 0.47%), edged lower. IDBI Bank (up 0.88%), UCO Bank (up 1.13%), Indian Bank (up 1.15%), United Bank of India (up 1.28%) and Corporation Bank (up 2.88%) edged higher.
Speaking to the media at the end of a two-day conference of top management of PSU banks, finance sector regulators and finance ministry officials organized by the finance ministry, Jaitley also said that the Department of Financial Services (DFS) is considering amending the Debt Recovery Tribunal (DRT) Act and SARFESI Act to help banks expedite the process of recovery of bad loans. Jaitley was quoted as saying at the press conference that the government is also considering a proposal to allow PSU banks to institute employee stock option plan for bank employees.
Stocks of private sector banks declined. ICICI Bank (down 2.29%), Kotak Mahindra Bank (down 2.26%), Federal Bank (down 1.3%), Axis Bank (down 1.15%), HDFC Bank (down 0.72%), City Union Bank (down 0.62%) and Yes Bank (down 0.24%) edged lower. IndusInd Bank was up 0.29%.
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