Losses of index heavyweights ITC, Infosys, Reliance Industries outweighed gains for stocks of public sector banks and index heavyweight HDFC with the two key benchmark indices registering small losses. The barometer index, the S&P BSE Sensex, fell 57.64 points or 0.22% to settle at 26,667.96. The Nifty fell 18.40 points or 0.22% to settle at 8,160.10.
Tata Motors surged after reporting strong Q4 March 2016 results. Hindalco Industries edged higher, with the stock extending sharp gains registered during the previous trading session triggered by the company's Q4 March 2016 results. Reliance Communications dropped after reporting weak Q4 March 2016 results.
Sun Pharmaceutical Industries dropped after the company's Managing Director Dilip Shanghvi reportedly said at a post-result conference call that there would be a short-term adverse impact on the company's profitability as it focuses on building specialty business in the US. Aurobindo Pharma surged after reporting strong Q4 March 2016 results.
In overseas stock markets, car makers led losses for European stocks after German car maker Volkswagen reported a higher-than-expected decline in net profit for Q1 March 2016. In Asia, Chinese stocks edged higher on speculation that MSCI Inc., the global index provider, will soon add mainland-traded Chinese stocks, so-called A-shares, in its Emerging Markets Index. In mainland China, the Shanghai Composite index settled 3.34% higher. In Hong Kong, the Hang Seng index settled 0.9% higher. MSCI's inclusion of A-shares into the index will channel billions in passive asset-management money into China. On 27 May 2016, the Shanghai and Shenzhen stock exchanges announced rules on share trading suspensions, removing one potential roadblock for inclusion of Chinese A shares or yuan-denominated shares in MSCI Inc.'s global benchmark indexes. MSCI said in March a decision to include 5 percent of yuan-denominated shares in its index will depend on regulators implementing changes so that widespread halts can't happen again. MSCI will reportedly take a call in mid-June 2016 whether to add Chinese shares to its global benchmark indexes.
Japanese shares edged higher after the latest data showed industrial output in April rose for the second month. The Nikkei 225 Average closed 0.98% higher.
The Sensex fell 57.64 points or 0.22% to settle at 26,667.96, its lowest closing level since 27 May 2016. The index lost 164.02 points or 0.61% at the day's low of 26,561.58. The index rose 111.60 points or 0.41% at the day's high of 26,837.20.
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The Nifty 50 index fell 18.40 points or 0.22% to settle at 8,160.10, its lowest closing level since 27 May 2016. The index lost 44.20 points or 0.54% at the day's low of 8,134.30. The index rose 35.10 points or 0.42% at the day's high of 8,213.60.
The market breadth indicating the overall health of the market was weak. On BSE, 1,000 shares rose and 1,566 shares declined. A total of 167 shares were unchanged. The BSE Mid-Cap index fell 0.18%. The BSE Small-Cap index fell 0.14%. The decline in both these indices was lower than the Sensex's decline in percentage terms.
The total turnover on BSE amounted to Rs 3854 crore, higher than turnover of Rs 2572.88 crore registered during the previous trading session.
Among the sectoral indices on BSE, the S&P BSE Telecom index (down 1.44%), the S&P BSE Healthcare index (down 1.39%), the S&P BSE IT index (down 1.24%), the S&P BSE Teck index (down 1.23%), the S&P BSE FMCG index (down 1.21%), the S&P BSE Utilities index (down 0.97%), the S&P BSE Energy index (down 0.68%), the S&P BSE Oil & Gas index (down 0.68%), the S&P BSE Power index (down 0.68%), the S&P BSE Capital Goods index (down 0.67%) and the S&P BSE Consumer Durables index (down 0.28%), underperformed the Sensex. The S&P BSE Consumer Discretionary Goods & Services index (up 0.09%), the S&P BSE Finance index (up 0.42%), the S&P BSE Basic Materials index (up 0.56%), the S&P BSE Bankex (up 0.67%), the S&P BSE Realty index (up 0.88%), the S&P BSE Metal index (up 1.16%), the S&P BSE Industrials index (up 1.68%) and the S&P BSE Auto index (up 2.34%), outperformed the Sensex.
Hindalco Industries rose 2.19% to Rs 105.15, with the stock extending strong gains registered during the previous trading session triggered by the company's strong Q4 March 2016 results. The stock had surged 12.03% to settle at Rs 102.90 yesterday, 30 May 2016. Hindalco Industries' net profit jumped 123.36% to Rs 356.33 crore on 7.6% fall in total income to Rs 8871.66 crore in Q4 March 2016 over Q4 March 2015.
Index heavyweight Reliance Industries (RIL) fell 1.08% to Rs 958.95. Reliance Exploration & Production DMCC (REPDMCC), an indirect wholly owned subsidiary of RIL, and French oil major Total S.A. have executed agreements on 30 May 2016 for the sale of the entire 76% interest held by REPDMCC in Gulf Africa Petroleum Corporation (GAPCO). GAPCO is a holding company with operating subsidiaries in Tanzania, Kenya and Uganda which are primarily engaged in petroleum product import, and trading, storage, distribution, marketing, supply and transportation of oil products in East Africa. GAPCO currently operates 108 retail outlets and owns 260 TKL of storage capacity in East Africa.
REPDMCC's agreement to sell its interest in GAPCO is part of a joint transaction, wherein both REPDMCC and a minority shareholder in the company have agreed to sell their entire respective holdings for cash. The net proceeds for the sale will be finalized on completion of the transaction, which is expected to be within the coming months.
Reliance Communications (RCom) declined 3.98% to Rs 47.05 after consolidated net profit fell 22.36% to Rs 177 crore on 3.78% rise in total income to Rs 5919 crore in Q4 March 2016 over Q4 March 2015. The result was announced after market hours yesterday, 30 May 2016. The company reported increase in average revenue per user on a sequential basis. The company's average revenue per user (ARPU) rose 10.6% to Rs 157 in Q4 March 2016 over Q3 December 2015. Revenue per minute (RPM) rose 5.5% to 47.7 paisa in Q4 March 2016 over Q3 December 2015.
Bank stocks edged higher in volatile trade. Among public sector banks, Canara Bank (up 6.59%), State Bank of India (up 3.12%), Bank of Baroda (up 3.07%), Andhra Bank (up 3.06%), Punjab National Bank (up 2.46%), Union Bank of India (up 2.16%), UCO Bank (up 1.88%), Syndicate Bank (up 1.45%), Allahabad Bank (up 0.95%), IDBI Bank (up 0.89%), Bank of Maharashtra (up 0.53%), Bank of India (up 0.29%), Corporation Bank (up 0.28%) and Vijaya Bank (up 0.16%), edged higher. Dena Bank (down 0.17%), Punjab and Sind Bank (down 0.25%), Central Bank of India (down 0.43%), United Bank of India (down 0.57%) and Indian Bank (down 1.61%), edged lower.
Among private sector banks, Yes Bank (up 0.63%), Kotak Mahindra Bank (up 0.50%), Axis Bank (up 0.45%), IndusInd Bank (up 0.34%), ICICI Bank (up 0.20%) and HDFC Bank (up 0.04%), edged higher. Federal Bank (down 0.38%) and City Union Bank (down 1.54%), edged lower.
Minister of State for Finance Jayant Sinha was quoted as saying today, 31 May 2016, that it was prudent for the Reserve Bank of India to continue with an asset quality review of the banks. Lenders have reported a surge in their bad loans in the six months to March after an asset quality review (AQR) ordered by the central bank. The exercise is aimed at cleaning bank balance sheets.
Index heavyweight and housing finance major HDFC gained 1.3% to settle at Rs 1,246.50
Index heavyweight and cigarette major ITC declined 1.4% at Rs 351.60. The stock hit a high of Rs 359.40 and a low of Rs 350 in intraday trade.
IT stocks declined. TCS (down 2.29%), HCL Technologies (down 1.28%), MindTree (down 1.24%), Tech Mahindra (down 1.02%), Hexaware Technologies (down 0.87%), Wipro (down 0.76%), Oracle Financial Services Software (down 0.22%) and Persistent Systems (down 0.22%), edged lower. MphasiS rose 3.46%.
Index heavyweight and software major Infosys fell 1.08% at Rs 1,249.85. The stock hit a high of Rs 1,268 and a low of Rs 1,239 in intraday trade.
Sun Pharmaceutical Industries (Sun Pharma) slumped 6.13% to Rs 762.70 after the company's Managing Director Dilip Shanghvi reportedly said at a post-result conference call that there would be a short-term adverse impact on the company's profitability as it focuses on building specialty business in the US. Another trigger for the fall in the counter was the company's guidance of a lower-than-expected 8-10% growth in sales for the current financial year (FY 2017). Shanghvi said that the annual revenue growth guidance takes into account continued impact of remediation measures at Halol plant and gains from sale of anti leukemia drug Gleevec for which the company has 180-day exclusivity. Sun Pharma expects its newly acquired branded drug business in Japan to contribute to revenue from second half of FY 2017.
Sun Pharma's consolidated net profit rose 92.71% to Rs 1713.69 crore on 16.82% growth in total income to Rs 7599.21 crore in Q4 March 2016 over Q4 March 2015. The result was announced after market hours yesterday, 30 May 2016.
Sun Pharma's board of directors has convened a meeting on 23 June 2016 to evaluate a proposal for buyback of equity shares of the company.
Aurobindo Pharma rose 4.12% at Rs 785.55 after consolidated net profit rose 39.4% to Rs 563 crore on 18.5% growth in total operating income to Rs 3747 crore in Q4 March 2016 over Q4 March 2015. The result was announced after market hours yesterday, 30 May 2016. The company's earnings before interest, taxation, depreciation and amortization (EBITDA) before forex rose 34.5% to Rs 882 crore in Q4 March 2016 over Q4 March 2015. EBITDA margin edged higher to 23.5% in Q4 March 2016, from 20.7% in Q4 March 2015.
Aurobindo Pharma's Managing Director N. Govindarajan said that the company continues its growth journey with higher number of ANDA approvals, new launches and better integration of acquired businesses. With growth coming from all business verticals, focus remains on new launches in US and improved cost efficiencies in EU, he said. In addition, Aurobindo continues to work on new businesses and differentiated technology platforms which will drive its future growth, he added.
Tata Motors jumped 8.95% at Rs 458.20 after consolidated net profit jumped 201.6% to Rs 5177.06 crore on 18.97% growth in total income to Rs 80933.04 crore in Q4 March 2016 over Q4 March 2015. The result was announced after market hours yesterday, 30 May 2016. Tata Motors said that the revenue growth in Q4 March 2016 reflects strong sales in all the regions for Jaguar Land Rover business namely in UK, Europe, North America, China and other overseas markets. The revenue also rose on account of continued robust volume growth in medium & heavy commercial vehicles (M&HCV) segment and start of volume growth in the light commercial vehicles (LCV) segment in standalone business.
Tata Motors said that consolidated profit before tax (before exceptional item) jumped 103.17% to Rs 5957 crore in Q4 March 2016 over Q4 March 2015 due to stronger operating performance in both standalone as well as Jaguar Land Rover business and lower net finance expenses partly offset by higher depreciation and amortization expenses, adverse revaluation of Euro payables and one time reserves and charges of Rs 1580 crore (166 million) for the industry-wide recall in the United States of potentially faulty airbags supplied by Takata, doubtful debts and previously capitalized investment in the Jaguar Land Rover business.
Further, exceptional items for Q4 March 2016 includes further insurance and other recoveries of Rs 555 crore on account of the vehicles damaged at Tianjin Port explosion in Jaguar Land Rover business.
The Sensex and the Nifty snapped a 5-day winning streak. The Sensex had risen 1,495.24 points or 5.93% in the preceding five trading sessions to settle at 26,725.60 yesterday, 30 May 2016, from its close of 25,230.36 on 23 May 2016. The Sensex clocked gains of 1,061.34 points or 4.14% in May 2016. The Sensex has risen 550.42 points or 2.11% in calendar year 2016 so far (till 31 May 2016). From a 52-week low of 22,494.61 hit on 29 February 2016, the barometer index has risen 4,173.35 points or 18.55%. The Sensex is off 1,910.37 points or 6.68% from a 52-week high of 28,578.33 hit on 23 July 2015. The Sensex is off 3,356.78 points or 11.18% from a record high of 30,024.74 hit on 4 March 2015.
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