A bout of volatility was witnessed in morning trade as key benchmark indices swung between positive and negative terrain. The market breadth indicating the overall health of the market was positive. The barometer index, the S&P BSE Sensex, was currently up 5.70 points or 0.02% at 27,834.14.
Shares of pharmaceutical companies edged lower. FMCG shares declined.
Foreign portfolio investors bought shares worth a net Rs 2284.30 crore on Friday, 29 May 2015, as per provisional data. Domestic institutional investors (DIIs) sold shares worth a net Rs 2267.88 crore on Friday, 29 May 2015, as per provisional data released by the stock exchanges.
In overseas markets, most Asian shares were trading lower today, 1 June 2015. US stocks edged lower on Friday, 29 May 2015, weighed down by fresh worries about Greece and its likelihood to secure a deal with its international creditors and data that showed continued weakness in the US economy.
At 10:16 IST, the S&P BSE Sensex was up 5.70 points or 0.02% at 27,834.14. The index rose 51.71 points at the day's high of 27,880.15 in the morning trade. The index fell 90.86 points at the day's low of 27,737.58 at the onset of trading session.
The CNX Nifty was up 0.60 points or 0.01% at 8,434.25. The index hit a high of 8,449.05 in intraday trade. The index hit a low of 8,405.40 in intraday trade.
The BSE Mid-Cap index was up 22.09 points or 0.21% at 10,738.18. The BSE Small-Cap index was up 11.21 points or 0.10% at 11,291.78. Both these indices outperformed the Sensex.
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The market breadth indicating the overall health of the market was positive. On BSE, 1,073 shares rose and 889 shares fell. A total of 78 shares were unchanged.
Shares of pharmaceutical companies edged lower. IPCA Laboratories (down 4.67%), Glenmark Pharmaceuticals (down 3.15%), Strides Arcolab (down 1.85%), Lupin (down 1.84%), Piramal Enterprises (down 1.81%), Divi's Laboratories (down 0.54%), Aurobindo Pharma (down 0.4%) and Dr. Reddy's Laboratories (down 0.01%), edged lower. Cadila Healthcare (up 0.17%), GlaxoSmithKline Pharmaceuticals (up 0.74%) and Wockhardt (up 2.73%), edged higher.
Sun Pharmaceutical Industries was down 9.50% to Rs 874.05 after the company reported weak Q4 earnngs. The stock hit a high of Rs 918 and a low of Rs 873.50 so far during the day. On a consolidated basis, Sun Pharmaceutical Industries' net profit fell 44% to Rs 888.05 crore on 53.8% surge in total income to Rs 6540.74 crore in Q4 March 2015 over Q4 March 2014. The result was announced after market hours on Friday, 29 May 2015.
Sun Pharmaceutical Industries said that the financials for Q4 March 2015 include the impact of the merger of the erstwhile Ranbaxy Laboratories into the company, and hence are not strictly comparable.
Sun Pharmaceutical Industries' EBITDA stood at Rs 880 crore resulting in EBITDA margin of 14.3% in Q4 March 2015. EBITDA as well as net profit were adversely impacted by a few items, relating to professional charges, harmonization of policies of erstwhile Ranbaxy with the company, etc, Sun Pharmaceutical Industries said. The impact of these items appearing above EBITDA was approximately 10% of net sales and on items appearing below EBITDA was approximately 7% of net sales, the company said.
Sales of branded prescription formulations in India was Rs 1569 crore in Q4 March 2015. Sales in the US were $488 million in Q4 March 2015. Sales in emerging markets were $123 million for Q4 March 2015. Formulation sales in Rest of World (ROW) markets excluding US and Emerging Markets were $84 million in Q4 March 2015.
Dilip Shanghvi, Managing Director of Sun Pharmaceutical Industries' said that post the completion of the merger, the company has commenced the integration of Ranbaxy. The company's performance was impacted due to various one-time charges, mainly on account of the Ranbaxy merger as well as due to price erosion for some products in the US. It also reflected the impact of supply constraints related to the on-going remediation efforts at some of the company's facilities, Dilip Shanghvi said. The company is pledged to being 100% cGMP compliant and is fully responsible towards customers and patients across the world for quality products, he added.
Cipla was up 2.12% at Rs 664.25. The stock hit a high of Rs 672 and a low of Rs 645 so far during the day. On a consolidated basis, Cipla's net profit fell 0.4% to Rs 259.66 crore on 20.8% rise in total income to Rs 3153.89 crore in Q4 March 2015 over Q4 March 2014. Cipla said that the current year figures included the relevant results of the company's subsidiaries from the date they became subsidiary of the company and therefore the corresponding figures for the previous period are not comparable. The result was announced after market hours on Friday, 29 May 2015.
Cipla's earnings before interest, taxation, depreciation and amortization (EBITDA) grew by 24% to Rs 508 crore in Q4 March 2015 over Q4 March 2014.
Cipla's domestic sales grew by 20.7% to Rs 1086 crore in Q4 March 2015 over Q4 March 2014 largely on account of growth in Respiratory, Anti-infectives, Cardiac and Gastro Intestinal therapies.
Cipla's exports of formulations increased by 29.7% to Rs 1690 crore in Q4 March 2015 over Q4 March 2014. Exports of Active Pharmaceutical Ingredients (APIs) declined 14.58% to Rs 205 crore in Q4 March 2015 over Q4 March 2014.
FMCG shares declined. Nestle India (down 3.22%), Jyothy Laboratories (down 1.93%), Britannia Industries (down 1.22%), Marico (down 0.97%), Tata Global Beverages (down 0.75%), Dabur India (down 0.65%), Colgate Palmolive (India) (down 0.28%) and Bajaj Corp (down 0.08%), edged lower. Hindustan Unilever (up 0.74%), Procter & Gamble Hygiene & Health Care (up 0.82%), GlaxoSmithKline Consumer Healthcare (up 1.73%) and Godrej Consumer Products (up 2.66%), edged higher.
On the macro front, the data released by India's statistics office on Friday, 29 May 2015, showed that the Indian economy grew 7.5% in the fourth quarter of last fiscal ended 31 March 2015 over the year ago period, making it the fastest growing large economy in the world. Chinese economy had grown 7% in the same period. The growth last quarter was better than revised estimate of 6.6% rise in GDP in the third quarter ended 31 December 2014. Meanwhile, it moderated its GDP growth estimate for the full year (2014-15) from previous projection of 7.4% to 7.3%.
The Union Cabinet on Saturday, 30 May 2015, gave its approval to amend the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement (Amendment) Ordinance, 2015. Changes in the provisions of the 2013 land acquisition Act will facilitate farmers to get better compensation and rehabilitation and resettlement benefits in lieu of land compulsorily acquired by the appropriate Government, according to a government statement. The government first issued the Ordinance in December which was re-promulgated in April. It was observed that some provisions of the 2013 land acquisition Act were making the implementation of the Act difficult and this made it necessary to bring changes in the Act, while safeguarding the interest of farmers and affected families in cases of land acquisition, according to the government statement. In addition, procedural difficulties in the acquisition of lands required for important national projects required to be mitigated. In order to remove them, certain amendments were made in the Act while further strengthening the provisions to protect the interests of the 'affected families'. In view of the urgency, these were brought about by an Ordinance on 31 December 2014. Subsequently, on 10 March 2015, the Lok Sabha passed the Amendment Bill to replace the Ordinance. The Amendment Bill passed by the Lok Sabha includes some further changes to the Ordinance. However, the Bill could not be taken up for consideration in the Rajya Sabha as the Rajya Sabha was adjourned on 20 March 2015.
Meanwhile, economists expect the Reserve Bank of India (RBI) to cut its benchmark lending rate viz. the repo rate by 25 basis points to 7.25% after a monetary policy review this week. Economists expect rate cut from the central bank in an attempt to kick-start the economy which has been showing signs of decelerating. The RBI is scheduled to announce the outcome of its second bi-monthly monetary policy review for the year 2015-16 at 11:00 IST tomorrow, 2 June 2015.
Most Asian shares were trading lower today, 1 June 2015. Key indices in Taiwan, South Korea, Indonesia and Japan were down by 0.39% to 0.72%. Key indices in China and Hong Kong were up 0.66% to 2.77%.
US stocks edged lower on Friday, 29 May 2015, weighed down by fresh worries about Greece and its likelihood to secure a deal with its international creditors and data that showed continued weakness in the US economy. The government reported on Friday that the economy contracted 0.7% in the first quarter. That was worse than its initial estimate of growth of 0.2%.
Also weighing on stocks was a decline in the Chicago Business Barometer, commonly known as the Chicago PMI, a survey of Chicago-area purchasing managers that provides insight into companies' business plans. The Chicago PMI shrank to 46.2 this month from 52.3 in the prior one. By moving below the 50-point threshold, the indicator signals that the economy shrank for the region..
Separately Friday, a reading on consumer sentiment showed US consumer optimism in May was higher than expected but still down sharply from the end-of-April reading. The University of Michigan final May sentiment index came in at 90.7, up from the unexpectedly weak preliminary reading of 88.6. Both May numbers are down sharply from the end-April reading of 95.9. The index reached an 11-year high of 98.1 in January.
Meanwhile in Europe, Greece is scheduled to repay euro 1.6 billion ($1.76 billion) to the International Monetary Fund (IMF) between June 5-19.
International Monetary Fund Managing Director Christine Lagarde reportedly said in an interview to German newspaper that she considers a Greek exit from the eurozone a possibility, but such a step probably wouldn't mean the end of the euro. Ms. Lagarde also contradicted recent statements out of Greece indicating the country and its creditors are close to an agreement on funding.
Greece, which is feared to be running out of cash, needs to cut a deal to unlock its next round of bailout funds.
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