Trading for the week is likely to begin on a subdued note on negative Asian cues. Trading of Nifty 50 index futures on the Singapore stock exchange indicates that the Nifty could fall 12 points at the opening bell. Among macro data, the inflation based on wholesale price index (WPI) for the month of April 2016 is scheduled to be released by the government today, 16 May 2016.
In overseas markets, Asian stocks dropped on soft Chinese economic data released over the weekend. China's investment, factory output and retail sales all grew more slowly than expected in April, adding to doubts about whether the world's second-largest economy is stabilizing, data released on Saturday showed. Industrial output rose 6% year-over-year in April, compared with 6.8% growth in March, the National Bureau of Statistics said. Fixed-asset investment in urban areas grew by a weaker-than-expected 10.5% year-over-year in the January-to-April period, compared with an annual increase of 10.7% for the first three months of 2016. Retail sales grew by a less-than-expected 10.1% in April compared with a year earlier, slowing from March's 10.5% year-over-year rise. US stocks ended lower during the previous trading session on Friday, 13 May 2016 on a slump in consumer-focused companies.
Closer home, foreign portfolio investors (FPIs) bought shares worth a net Rs 1493.88 crore on Friday, 13 May 2016, as per provisional data released by the stock exchanges. Domestic institutional investors (DIIs) bought shares worth a net Rs 667.03 crore on Friday, 13 May 2016, as per provisional data.
Among macro data, the inflation based on wholesale price index (WPI) for the month of April 2016 is scheduled to be released by the government today, 16 May 2016. WPI stood at negative 0.85% in March 2016 as compared to a reading of negative 0.91% in February 2016.
The latest data showed that India's merchandise exports continued to register year-on-year decline in value terms at the beginning of the new financial year. Merchandise exports fell 6.74% at $20.57 billion in April 2016 over April 2015. Non-petroleum exports fell 3.68% at $18.58 billion in April 2016 over April 2015. The trend of falling exports is in tandem with other major world economies, according to a statement issued by the Ministry of Commerce & Industry. Imports fell 23.1% at $25.41 billion in April 2016 over April 2015. Oil imports fell 24.01% at $5.65 billion. Non-oil imports fell 22.83% at $19.76 billion. The trade deficit fell sharply to $4.84 billion in April 2016 from $10.99 billion in April 2015. The commerce ministry released the trade data for April 2016 after trading hours on Friday, 13 May 2016.
Shares of Bank of Baroda (BOB) may edge lower after the bank reported net loss of Rs 3230.14 crore in Q4 March 2016 comapared with net profit of Rs 598.35 crore in Q4 March 2015. Total income rose 6.06% to Rs 12789.06 crore in Q4 March 2016 over Q4 March 2015. The result was announced after market hours on Friday, 13 May 2016. The bank's gross non-performing assets (NPA) stood at Rs 40521.04 crore as on 31 March 2016 compared with Rs 38934.11 crore as on 31 December 2015 and Rs 16261.45 crore as on 31 March 2015. The ratio of gross NPA to gross advances stood at 9.99% as on 31 March 2016 compared with 9.68% as on 31 December 2015 and 3.72% as on 31 March 2015. The ratio of net NPA to net advances stood at 5.06% as on 31 March 2016 compared with 5.67% as on 31 December 2015 and 1.89% as on 31 March 2015.
BOB's provisions and contingencies jumped 277.31% to Rs 6857.66 crore in Q4 March 2016 over Q4 March 2015.
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BOB's board of directors has not announced dividend for the financial year ended 31 March 2016 (FY 2016) as the bank reported net loss in FY 2016.
BoB said that its asset quality has stabilized and that the management expects the bank to return to black during the current financial year. The state-run bank posted a massive net loss of Rs 5395.55 crore in the year ended 31 March 2016 (FY 2016) as against a net profit of Rs 3398.43 crore in the year ended 31 March 2015 (FY 2015). The reason for the massive net loss was due to additional provisions that the state-run bank made with respect to certain loans in Q3 December 2015 and Q4 March 2016 as a part of an asset quality review (AQR) being carried out by the Reserve Bank of India for the banking sector as a whole. The provision coverage ratio (PCR) of the bank improved to 60.09% as on 31 March 2016 from 52.7% as on 31 December 2015. The total restructured standard assets of the bank dropped to Rs 13735 crore on 31 March 2016 from Rs 17135 crore as on 31 December 2015.
Acceleration in consumer price inflation in April 2016 triggered losses for Indian stocks on Friday, 13 May 2016 as the data triggered speculation that the Reserve Bank of India (RBI) would hold off on cutting rates at its policy review next month. The Sensex shed 300.65 points or 1.17% to settle at 25,489.57, its lowest closing level since 6 May 2016.
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