IT stocks and index heavyweights HDFC and Reliance Industries (RIL) led losses for the two key benchmark indices. The barometer index, the S&P BSE Sensex, fell 93.64 points or 0.33% at 28,058.76, as per the provisional closing data. The Nifty 50 index fell 29.60 points or 0.34% to 8,642.55, as per the provisional closing data. The Sensex provisionally ended above the psychologically important 28,000 mark. The barometer index alternately moved above and below that level in intraday trade after falling below that level in early afternoon trade. The Sensex and the Nifty witnessed intraday volatility.
The Sensex fell 209.75 points, or 0.75% at the day's low of 27,942.65 in early afternoon trade. The index rose 46.70 points, or 0.17% at the day's high of 28,199.10 in morning trade. The Nifty fell 71.70 points, or 0.83% at the day's low of 8,600.45 in early afternoon trade, its lowest level since 11 August 2016. The index rose 10.20 points, or 0.12% at the day's high of 8,682.35 in morning trade.
The market breadth indicating the overall health of the market was negative. On BSE, 1,615 shares fell and 1,106 shares rose. A total of 172 shares were unchanged. The BSE Mid-Cap index provisionally rose 0.55%, outperforming the Sensex. The BSE Small-Cap index provisionally fell 0.01%. The decline in this index was lower than the Sensex's decline in percentage terms.
The total turnover on BSE amounted to Rs 3306 crore, lower than turnover of Rs 3996.38 crore registered during the previous trading session.
The small losses on the domestic bourses materialized after data showing increase in inflation based on the consumer price index (CPI) and the wholesale price index (WPI). Inflation based on WPI accelerated to 3.55% in July 2016 from 1.62% in June 2016. The government announced the data during trading hours today, 16 August 2016. Inflation based on CPI accelerated to 6.07% in July 2016 from 5.77% in June 2016. The core CPI inflation moved up to 4.52% in July 2016 from 4.39% in June 2016. The data was released after market hours on Friday, 12 August 2016.
Another data showed that industrial production (IIP) expanded 2.1% in June 2016 from a year earlier. The rise was primarily led by expansion in electricity and mining production. The data was released after market hours on Friday, 12 August 2016.
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In overseas stock markets, European stocks edged lower weighed down by industrial stocks after Swiss firm Schindler cut the top end of its revenue growth outlook for the full year. Earlier during the global day, Asian stocks ended on a mixed note. Japanese stocks fell as the yen strengthened against the dollar. The Nikkei 225 Average ended 1.62% lower. A stronger yen hurts the competitiveness of Japanese exporters. Japan's gross domestic product expanded an annualized 0.2% in the April-June quarter, weaker than a 2% expansion in the first three months of the year, Japan's government said yesterday, 15 August 2016.
All three main indices in the US closed at record high yesterday, 15 August 2016, thanks in part to a sharp uptick in oil prices, which boosted energy and materials shares.
L&T gained 1.13% after the company won a contract from the Maharashtra state government to convert Nagpur into an integrated smart city. The scope of work in phase 1 of the Nagpur smart city project includes laying of 1,200 kilometers of optical fiber network backbone, creating 136 city wifi hotspots at key locations, establishing 100 digital interactive kiosks and developing city surveillance systems with 3,800 IP based cameras. Further, the city has identified a strip of approximately 6 kilometers from Japanese Garden Square to Orange City Hospital Square to be developed as a 'Smart Strip' with state-of-the-art systems powered by smart ICT interventions like smart transport, solid waste management. smart lighting, etc. which can be leveraged in a phased manner to ultimately cover the entire city. The Nagpur smart city project will be executed by L&T's Smart World & Communications business vertical.
Hindalco Industries edged higher with the stock extending previous trading session's gains triggered by the company reporting strong Q1 June 2016 earnings. The stock rose 5.37%. Hindalco Industries' net profit jumped 381.3% to Rs 294.07 crore on 11.9% decline in net sales to Rs 7501.39 crore in Q1 June 2016 over Q1 June 2015. Earnings before interest, taxation, depreciation and amortization (EBITDA) rose 34.45% to Rs 1350.90 crore in Q1 June 2016 over Q1 June 2015. Meanwhile, a foreign brokerage has reportedly maintained its overweight stance on Hindalco stock and has increased target price on the stock in the wake of the company's strong Q1 earnings. The brokerage has also reportedly raised its estimates on Hindalco's EBITDA by 12% for the current financial year (FY 2017) and by 6% for FY 2018.
State Bank of India rose 1.15%, with the stock extending previous session's gains triggered by the state-run bank reporting a smaller-than-expected increase in bad loans in Q1 June 2016. The SBI stock had jumped 7.16% to settle at Rs 243.20 on Friday, 12 August 2016, after the announcement of Q1 results. The stock market was closed yesterday, 15 August 2016, for a holiday. SBI's net profit fell 31.72% to Rs 2520.96 crore on 9.38% rise in total income to Rs 48928.60 crore in Q1 June 2016 over Q1 June 2015.
The bank's gross non-performing assets (NPA) stood at Rs 101541.18 crore as on 30 June 2016 as against Rs 98172.80 crore as on 31 March 2016 and Rs 56420.77 crore as on 30 June 2015. The ratio of gross NPA to gross advances stood at 6.94% as on 30 June 2016 as against 6.50% as on 31 March 2016 and 4.29% as on 30 June 2015. The ratio of net NPA to net advances stood at 4.05% as on 30 June 2016 as against 3.81% as on 31 March 2016 and 2.24% as on 30 June 2015.
Meanwhile, a foreign brokerage has reportedly upgraded its rating on State Bank of India (SBI) stock to 'buy' after the announcement of first quarter results. The brokerage has reportedly stated that SBI scores over PSU peers on asset quality, profitability and capitalisation.
Reliance Industries lost 1.25% on reports the petroleum ministry has slapped a penalty of nearly $250 million on Reliance Industries (RIL) to make good the government's loss of "profit petroleum" owing to the firm's inability to meet the natural gas production targets from the Krishna-Godavari (KG) D6 block. The KG-D6 fields started production in April 2009. The current production of around 8 million metric standard cubic metres per day (mmscmd) is a far cry from the peak of over 69 mmscmd achieved in early 2010, reports suggested. The block was envisaged to produce more than 80 mmscmd of the fuel, reports indicated. Profit petroleum is the main source of revenue for the government from a hydrocarbon block.
Sun Pharmaceutical Industries (Sun Pharma) lost 2.36% on reports that a foreign brokerage has downgraded the stock to neutral from buy, citing increased competition for the company's US subsidiary. The brokerage reportedly said in a research report that Sun Pharmaceutical Industries' (Sun Pharma) US subsidiary Taro Pharmaceutical Industries (Taro) is facing increasing competition and that Taro's growth is likely to moderate from here on.
Index heavyweight and housing finance major HDFC dropped 1.35% to Rs 1,360. The stock hit high of Rs 1,383.75 and low of Rs 1,349.10 in intraday trade.
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