A bout of volatility was witnessed as key benchmark indices extended losses in mid-afternoon trade. At 14:16 IST, the barometer index, the S&P BSE Sensex, was down 127.11 points or 0.48% at 26,598.49. The decline in the Nifty 50 index was lower than the Sensex's fall in percentage terms. The Nifty was currently down 32.25 points or 0.39% at 8,146.25.
The Sensex lost 135.93 points or 0.5% at the day's low of 26,589.67 in mid-afternoon trade, its lowest level since 27 May 2016. The barometer index rose 111.60 points or 0.41% at the day's high of 26,837.20 in early trade, its highest level since 30 October 2015. The Nifty lost 33.70 points or 0.41% at the day's low of 8,144.80 in mid-afternoon trade, its lowest level since 27 May 2016. The index rose 35.10 points or 0.42% at the day's high of 8,213.60 in early trade, its highest level since 27 October 2015.
In overseas stock markets, carmakers led losses for European stocks after German car maker Volkswagen reported a higher-than-expected decline in net profit in 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.
Closer home, the market breadth indicating the overall health of the market was weak. On BSE, 880 shares rose and 1,563 shares declined. A total of 158 shares were unchanged. The BSE Mid-Cap index was currently down 0.21%. The BSE Small-Cap index was currently down 0.37%. The losses for both these indices were lower than the Sensex's decline in percentage terms.
Stocks of public sector banks declined. Bank of India (down 2.78%), Syndicate Bank (down 2.44%), Indian Bank (down 2.3%), IDBI Bank (down 1.41%), Punjab National Bank (down 0.91%), Union Bank of India (down 0.82%), Central Bank of India (down 0.3%) and State Bank of India (down 0.15%) edged lower. Canara Bank (up 0.57%), Bank of Baroda (up 0.36%) and Corporation Bank (up 0.56%) edged higher.
Stocks of private sector banks witnessed a mixed trend. ICICI Bank (down 0.33%), HDFC Bank (down 0.05%) and Axis Bank (down 0.02%) edged lower. IndusInd Bank (up 0.09%), Yes Bank (up 0.83%) and Kotak Mahindra Bank (up 0.22%) edged higher.
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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.
Auto stocks witnessed a mixed trend. Ashok Leyland (up 0.99%), Maruti Suzuki India (up 1.31%), Bajaj Auto (up 0.66%) and Hero MotoCorp (up 0.71%) rose. TVS Motor Company (down 0.95%), Mahindra & Mahindra (down 0.66%) and Eicher Motors (down 0.65%) edged lower.
Tata Motors jumped 7.59% at Rs 452.60 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.
Steel Authority of India (Sail) fell 0.23% at Rs 42.85 after the company posted net loss of Rs 1230.93 crore in Q4 March 2016 compared with net profit of Rs 334.22 crore in Q4 March 2015. Total income declined 2.9% at Rs 11545.07 crore in Q4 March 2016 over Q4 March 2015. The result was announced after market hours yesterday, 30 May 2016.
Sail Chairman P.K. Singh said that the challenging conditions faced by domestic industry received some respite after the introduction of the conducive policy measures by government in the form of safeguard duty and minimum import price (MIP). The company is targeting to complete the balance modernization and expansion with a focus on energy saving methods, enriching product mix and introducing customer centric processes to meet the expected surge in demand of steel on account of government's emphasis on infrastructure development, Singh said.
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