Key benchmark indices declined in lackluster trading session. The barometer index, the S&P BSE Sensex, fell 46.44 points or 0.17% to settle at 28,077. The losses for the Sensex were higher in percentage terms than those for the Nifty 50 index. The Nifty 50 index fell 6.35 points or 0.07% to settle at 8,666.90. The market sentiment was weak as European stocks drifted lower.
State Bank of India (SBI) edged higher after the state-run bank announced the merger of 5 associate banks with itself. Coal India extended losses registered during the previous trading session triggered by reports that the government proposes to divest 5-10% stake in the company in Q4 March 2017.
Vedanta and Cairn India edged higher after Vedanta's Chief Executive Officer (CEO) Tom Albanese was quoted as saying that the company received a constructive feedback from minority shareholders of Cairn India to the revised merger deal of Cairn India with Vedanta.
In overseas stock markets, European stocks edged lower amid uncertainty over the trajectory of US monetary policy. Asian stocks witnessed a mixed trend after some Federal Reserve officials reiterated the case for raising US interest rates in coming months. US stocks eked out gains yesterday, 18 August 2016, following upbeat earnings and forecast from Wal-Mart and as higher oil lifted energy shares.
The Sensex fell 46.44 points or 0.17% to settle at 28,077, its lowest closing level since 17 August 2016. The Sensex lost 97.32 points, or 0.35% at the day's low of 28,026.12. The index rose 88.86 points, or 0.32% at the day's high of 28,212.30.
The Nifty 50 index fell 6.35 points or 0.07% to settle at 8,666.90, its lowest closing level since 17 August 2016. The index rose 23.35 points, or 0.27% at the day's high of 8,696.60. The index fell 26.15 points, or 0.3% at the day's low of 8,647.10.
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The market breadth indicating the overall health of the market was positive. On BSE, 1,471 shares rose and 1,238 shares fell. A total of 181 shares were unchanged. The BSE Mid-Cap index rose 0.52%. The BSE Small-Cap index rose 0.45%. Both these indices outperformed the Sensex.
The total turnover on BSE amounted to Rs 3184 crore.
Among the sectoral indices on BSE, the S&P BSE Basic Materials index (up 1.10%), the S&P BSE Metal index (up 1%), the S&P BSE Consumer Durables index (up 0.94%), the S&P BSE Oil & Gas index (up 0.68%), the S&P BSE Bankex (up 0.45%), the S&P BSE Capital Goods index (up 0.38%), the S&P BSE Energy index (up 0.30%), the S&P BSE Industrials index (up 0.27%), the S&P BSE Finance index (up 0.21%), the S&P BSE Power index (up 0.18%), the S&P BSE Utilities index (up 0.13%), the S&P BSE Healthcare index (down 0.01%) and the S&P BSE Consumer Discretionary Goods & Services index (down 0.05%), outperformed the Sensex. The S&P BSE FMCG index ended on a flat note. The S&P BSE Auto index (down 0.5%), the S&P BSE IT index (down 0.5%), the S&P BSE Teck index (down 0.51%), the S&P BSE Telecom index (down 0.52%) and the S&P BSE Realty index (down 0.7%), underperformed the Sensex.
PSU banks were in demand. Bank of Baroda (up 4.56%), Allahabad Bank (up 3.33%), Punjab & Sind Bank (up 3.28%), IDBI Bank (up 2.97%), Vijaya Bank (up 2.84%), Syndicate Bank (up 2.79%), Andhra Bank (up 1.89%), Union Bank of India (up 1.80%), Punjab National Bank (up 1.26%), United Bank of India (up 1.15%), Corporation Bank (up 1.09%), Dena Bank (up 0.81%), UCO Bank (up 0.73%), Bank of India (up 0.58%), Canara Bank (up 0.55%), Central Bank of India (up 0.50%) and Bank of Maharashtra (up 0.48%), edged higher. Indian Bank fell 0.11%.
State Bank of India (SBI) edged higher after the state-run bank after trading hours yesterday, 18 August 2016, announced the merger of 5 associate banks with itself. The stock rose 4.15%. State Bank of Bikaner and Jaipur (SBBJ), State Bank of Mysore (SBM), State Bank of Travancore (SBT), State Bank of Hyderabad and State Bank of Patiala will be merged with SBI. Shares of SBT rose 6.17% and SBBJ gained rose 1.47%. Stock price of SBM slumped 12.09%. As per the swap ratio for the merger, 28 equity shares of SBI will be issued for every 10 shares held in SBBJ. For both SBM and SBT, the swap ratio for merger is 22 shares of SBI for every 10 shares held in SBM and SBT.
State Bank of Hyderabad and State Bank of Patiala are both not listed on the bourses. SBI also announced the merger of unlisted Bharatiya Mahila Bank (BMBL) with itself. SBI had announced in May 2016 that it was considering the merger of 5 associate banks and BMBL with itself.
Stocks of private sector banks witnessed a mixed trend. Federal Bank (up 2.39%), Yes Bank (up 1.22%), City Union Bank (up 0.86%) and ICICI Bank (up 0.45%), edged higher. IndusInd Bank (down 0.44%), HDFC Bank (down 0.5%), Axis Bank (down 0.67%) and Kotak Mahindra Bank (down 0.76%), edged lower.
Coal India extended losses registered during the previous trading session triggered by reports that the government proposes to divest 5-10% stake in the company in Q4 March 2017. The stock fell 1.36% at Rs 334.20. The stock had declined 2.59% to settle at Rs 338.80 yesterday, 18 August 2016. GoI currently holds 79.65% in Coal India (as on 30 June 2016).
Most metal shares edged higher. Hindustan Copper (up 7.93%), Steel Authority of India (up 3.22%), Bhushan Steel (up 3.09%), Jindal Steel & Power (up 2.75%), NMDC (up 2.06%), Tata Steel (up 1.32%), National Aluminium Company (up 0.32%), JSW Steel (up 0.28%) and Hindustan Zinc (up 0.09%), edged higher.
Hindalco Industries rose 2.72% to Rs 158.45. The stock hit a high of Rs 159.25 in intraday trade, which is a 52-week high for the counter.
Meanwhile, copper price edged lower in the global commodities markets. High Grade Copper for September 2016 delivery was currently down 0.18% at $2.1635 per pound on the COMEX.
Vedanta (up 3.68%) and Cairn India (up 4.28%) edged higher after Vedanta's Chief Executive Officer (CEO) Tom Albanese was quoted as saying that the company received a constructive feedback from minority shareholders of Cairn India to the revised merger deal of Cairn India with Vedanta. He said that the Vedanta management held constructive discussions with minority shareholders of Cairn India. The Jurisdictional High Courts have convened the shareholder meetings for Vedanta and Cairn India on 8 September 2016 and 12 September 2016 respectively for shareholders' approval for the merger.
As per the revised terms of the merger deal announced on 22 July 2016, the public shareholders of Cairn India will receive one equity share of Vedanta for each share held in the company. Additionally, the public shareholders of Cairn India will get four 7.5% redeemable preference shares (RPS) of Vedanta of the face value of Rs 10 each with tenure of 18 months for each share held in Cairn India.
Indian Hotels Company (IHCL) (up 2.42%) and TajGVK Hotels & Resorts (up 20%), edged higher on reports that IHCL is in talks to merge TajGVK Hotels & Resorts with itself. However, IHCL during market hours today, 19 August 2016, said in a clarification to the stock exchanges that the news item is an absolutely unfounded one. There are no plans for merger of TajGVK Hotels & Resorts with IHCL, the company said. TajGVK Hotels & Resorts is a joint venture between IHCL and Hyderabad-based GVK Group. IHCL held 25.52% stake in TajGVK Hotels & Resorts as on 30 June 2016.
The Sensex has gained 25.14 points or 0.09% in this month so far (till 19 August 2016). The Sensex has risen 1,959.46 points or 7.5% in calendar year 2016 so far (till 19 August 2016). From a 52-week low of 22,494.61 hit on 29 February 2016, the barometer index has risen 5,582.39 points or 24.82%. The Sensex is off 212.96 points or 0.75% from a 52-week high of 28,289.96 hit on 9 August 2016. The Sensex is off 1,947.74 points or 6.49% from a record high of 30,024.74 hit on 4 March 2015.
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