A divergent trend was witnessed among the two key benchmark indices, with the barometer index, the S&P BSE Sensex, registering minuscule gains and the 50-unit CNX Nifty ending marginally lower for the day. With small gains for the day, the Sensex attained its highest level in more than a week. The market breadth indicating the overall health of the market was negative. The Sensex garnered 20.55 points or 0.07% to settle at 27,848.99. The Nifty declined 0.25 points to settle at 8,433.40. A divergent trend was witnessed among various index constituents.
Sun Pharmaceutical Industries tumbled after the company reported weak Q4 March 2015 results after market hours on Friday, 29 May 2015. Shares of private sector banks reversed intraday gains. Shares of state-run banks came off the day's high, with some of these stocks moving into the red from green. Mahindra & Mahindra edged lower in volatile trade after reporting weak auto and tractor sales numbers for the month just gone by. Maruti Suzuki India rose after reporting decent growth in vehicle sales in May 2015. L&T edged higher after the company said its construction arm won orders worth Rs 1099 crore across various business segments in May 2015. Bharat Heavy Electricals (Bhel) gained after winning new order from NTPC.
Meanwhile, data released by India's statistics office after trading hours on Friday, 29 May 2015, showed that the Indian economy grew 7.5% in Q4 March 2015, which was much higher than revised GDP growth of 6.6% in Q3 December 2014. Meanwhile, 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.
Meanwhile, the onset of monsoon in Kerala has been delayed.
Foreign portfolio investors bought shares worth a net Rs 2273.13 crore from the secondary equity markets during the previous trading session on Friday, 29 May 2015, as per data from the depositories. 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, European stocks reversed intraday gains as investors closely monitored Greece's bailout negotiations ahead of a key debt repayment later this week. Earlier during the global day, stocks in Shanghai surged after China's official purchasing managers index showed modest gains in May 2015. US stocks edged lower during the previous trading session on Friday, 29 May 2015, after a string of weak economic reports.
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The S&P BSE Sensex rose 20.55 points or 0.07% to settle at 27,848.99, its highest closing level since 22 May 2015. The index jumped 130.99 points at the day's high of 27,959.43 in mid-morning trade. The index fell 90.86 points at the day's low of 27,737.58 at the onset of trading session.
The Nifty declined 0.25 points to settle at 8,433.40, its lowest closing level since 28 May 2015. The index hit a high of 8,467.15 in intraday trade, its highest level since 22 May 2015. The index hit a low of 8,405.40 in intraday trade.
The BSE Mid-Cap index declined 3.66 points or 0.03% to settle at 10,712.43. The BSE Small-Cap index shed 0.79 points or 0.01% to settle at 11,279.78. Both these indices underperformed the Sensex.
The market breadth indicating the overall health of the market was negative. On BSE, 1,528 shares fell and 1,210 shares rose. A total of 116 shares were unchanged.
The total turnover on BSE amounted to Rs 2690 crore, lower than turnover of Rs 3747.51 crore registered during the previous trading session.
Among the sectoral indices on BSE, the S&P BSE FMCG index (up 1.04%), BSE Capital Goods index (up 1.97%), BSE Oil & Gas index (up 0.69%), BSE Power index (up 0.38%) and BSE Realty index (up 1.61%) outperformed the Sensex. The S&P BSE Healthcare index (down 2.81%), BSE IT index (down 0.03%), BSE Auto index (down 0.34%), BSE Bankex index (down 0.55%), BSE Consumer Durables index (down 0.14%), BSE Metal index (down 0.13%) and BSE Teck index (down 0.33%) underperformed the Sensex.
Shares of state-run banks came off the day's high, with some of these stocks moving into the red from green. Indian Overseas Bank (down 1.73%), Central Bank of India (down 0.62%), IDBI Bank (down 0.42%), Corporation Bank (down 0.26%), Bank of India (down 0.28%) and Andhra Bank (down 0.56%) edged lower. United Bank of India (up 1.81%), Bank of Baroda (up 1.66%), Union Bank of India (up 0.92%) and Punjab National Bank (up 0.33%) edged higher.
State Bank of India was unchanged at Rs 278.15.
Shares of private sector banks reversed intraday gains. HDFC Bank (down 1.42%), Axis Bank (down 1.16%), Kotak Mahindra Bank (down 0.49%), Yes Bank (down 0.37%) and ICICI Bank (down 0.3%) edged lower. IndusInd Bank (up 0.92%) edged higher.
Mahindra & Mahindra edged lower in volatile trade after reporting weak auto and tractor sales numbers for the month just gone by. The stock fell 0.37% to Rs 1,255.50. The stock hit a high of Rs 1,268.40 and a low of Rs 1,239.35 in intraday trade. The company's total automobile sales fell 3.07% to 36,706 units in May 2015 over May 2014. Total exports rose 41% to 3,337 units in May 2015 over May 2014. Total domestic sales fell 6% to 33,369 units in May 2015 over May 2014.
The company's total tractor sales fell 20% to 19,257 units in May 2015 over May 2014. Total exports rose 25% to 1,012 units in May 2015 over May 2014. Total domestic sales fell 21% to 18,245 units in May 2015 over May 2014.
M&M announced both auto and tractor sales data during trading hours today, 1 June 2015.
Maruti Suzuki India rose after reporting decent growth in vehicle sales in May 2015. The stock was up 2.24 % at Rs 3,870.20. The stock hit a high of Rs 3,900 and a low of Rs 3,775 in intraday trade. Maruti's total sales rose 13.8% to 1.14 lakh units in May 2015 over May 2014. Domestic sales rose 13% to 1.02 lakh units in May 2015 over May 2014. Total exports rose 20.3% to 12,466 units in May 2015 over May 2014.
Capital goods stocks edged higher on renewed buying. BEML (up 2.15%), Alstom T&D India (up 1.86%), Crompton Greaves (up 1.74%), Thermax (up 1.54%), Bharat Electronics (up 0.69%), Havells India (up 0.2%) and Siemens (up 0.07%) edged higher. Suzlon Energy (down 5.36%), Greaves Cotton (down 0.52%) and ABB (down 0.78%) edged lower. Sadbhav Engineering was unchanged at Rs 268.
L&T edged higher after the company said its construction arm won orders worth Rs 1099 crore across various business segments in May 2015. The stock was up 3.03% at Rs 1,705.50. The stock hit a high of Rs 1,709.80 and a low of Rs 1,642.10 in intraday trade. The announcement was made during market hours today, 1 June 2015.
On a consolidated basis, L&T's net profit fell 27.11% to Rs 2070 crore in Q4 March 2015 on the higher base net profit of Rs 2840 crore in Q4 March 2014, which included a one-time write back. The consolidated gross revenue rose 3.8% to Rs 28275 crore in Q4 March 2015 over Q4 March 2014, registering a modest growth as certain sectoral constraints slowed down the pace of execution. L&T announced its Q4 results on Saturday, 30 May 2015.
On a consolidated basis, L&T's net profit fell 2.79% to Rs 4765 crore in the year ended March 2015 over the year ended March 2014, mainly due to challenges faced during execution of international projects in the hydrocarbon sector. Infrastructure and services businesses of the group, however, recorded healthy increase in bottom line, thereby limiting year decline in overall net profit for the year at 2.8%. Moreover, net profit of the previous year included a one-time write back of Rs 664 crore on account of amortization charge of toll road projects. Neutralizing this high base effect, the net profit for the year ended March 2015 shows an increase, L&T said.
L&T said it was successful in garnering fresh orders worth Rs 155367 crore at consolidated level during the year ended March 2015, recording an impressive y-o-y growth of 22%. The order inflow growth was driven by domestic orders across businesses. The international orders during the year at Rs 39116 crore constituted lower share at 25% of the order inflow, as the company was selective in pursuing international opportunities. The company said that 55% of the total order inflow during the year was secured by the infrastructure segment.
The order intake for Q4 March 2015 was also higher at Rs 47582 crore, recording a y-o-y growth of 39%. International order inflow during the quarter was at Rs 11364 crore and constituted 24% of the order inflow for the quarter.
Consolidated order book of the group stood at Rs 232649 crore as at 31 March 2015, higher by 28% on a y-o-y basis. International order book constituted 26% of the total order book.
With regard to future business outlook, L&T said that the company is well placed to benefit early as sustainable growth opportunities emerge over the next few years. The government's focus on infrastructure development, manufacturing of defence equipment, fast tracking power and mining sector reforms and providing thrust to 'Make in India' programme are positive indicators for the company, L&T said.
Bharat Heavy Electricals (Bhel) gained after winning new order from NTPC. The stock was up 0.93% to Rs 253.95. The stock hit a high of Rs 256.45 and a low of Rs 250 in intraday trade. Bhel announced during trading hours today, 1 June 2015, that the company has won a prestigious contract for the supply and installation of the Power Cycle Piping (PCP) package for Barh Super Thermal Power Project, Stage-I (3x660 MW) of NTPC in Bihar. Valued at Rs 369 crore, Bhel has been awarded this package by NTPC for the revival of the Barh plant and to make it operational, after NTPC terminated the contract of the foreign contractor, who was awarded the contract for the supercritical boiler including Power Cycle Piping in 2005, but which has not yet been completed.
Bhel's scope in the order includes design, engineering, manufacture, supply, erection and commissioning of the complete Power Cycle Piping Package of the project.
Sun Pharmaceutical Industries tumbled after the company reported weak Q4 March 2015 results after market hours on Friday, 29 May 2015. The stock tumbled 8.99% to Rs 878.95. The stock hit a high of Rs 918 and a low of Rs 869.50 in intraday trade. On a consolidated basis, Sun Pharmaceuticals 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. 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.
Dilip Shanghvi, Managing Director of Sun Pharmaceuticals 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, 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 1.81% at Rs 662.20. The stock hit a high of Rs 672.60 and a low of Rs 645 in intraday trade. 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 include 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.
Bharti Airtel was down 2.12% to Rs 416.30. With respect to news titled "Vodafone pares Airtel holding," Bharti Airtel clarified during trading hours today, 1 June 2015, that Vodafone Mauritius, a Vodafone Group company has sold 12.18 lakh equity shares representing 26.74% of paid-up share capital of Bharti Infotel which is equivalent to 4.2% economic interest in Bharti Airtel to Bharti Enterprises (Holding) at a consideration of Rs 1280 crore. The news item gives an impression as if shares of Bharti Airtel were involved, which is not the case, as already explained above. The company further confirmed that it has not released any formal press release in this regard.
The Sensex edged higher for the second day in a row today, 1 June 2015. The Sensex has risen 342.28 points or 1.24% in two trading sessions from a recent low of 27,506.71 on 28 May 2015. The Sensex has gained 349.57 points or 1.27% in this calendar year so far (till 1 June 2015). From a 52-week low of 24,270.20 on 2 June 2014, the Sensex has risen 3,578.79 points or 14.74%. The Sensex is off 2,175.75 points or 7.24% from a record high of 30,024.74 hit on 4 March 2015.
In global commodity markets, Brent crude oil futures edged lower after China's official purchasing managers index showed modest gains in May 2015, damping the demand outlook for one of the world's largest consumers. Brent for July settlement was off 75 cents at $64.81 a barrel. The contract had risen by $2.98 a barrel or 4.76% to settle at $65.56 a barrel during the previous trading session on Friday, 29 May 2015.
Oil cartel OPEC is expected to keep its production target of 30 million barrels of oil per day unchanged at a meeting scheduled in Vienna on Friday, 5 June 2015. The OPEC meeting is being closely watched for clues about the organization's next moves.
Meanwhile, the outcome of a survey showed that the upturn in the Indian manufacturing sector gathered pace in May 2015, with levels of production and new orders rising at the fastest rates since January 2015. The seasonally adjusted HSBC India Purchasing Managers' Index hit a four-month high of 52.6 in May 2015, from 51.3 in April 2015, Markit Economics said today, 1 June 2015. The sharpest rise was reported by consumer goods producers. Solid increases were also seen in capital and intermediate goods production. Underpinning higher output was improved demand from the domestic and foreign markets. Meanwhile, a further increase in input costs was seen and, consequently, charges were raised following a decline seen in the preceding month.
The outlook for the manufacturing sector is, however, clouded by a stagnant jobs market as firms remain uncertain about the sustainability of the upturn, said Pollyanna De Lima, Economist at Markit Economics. Over 99% of panellists reported unchanged staffing levels in May 2015, citing uncertainty about the sustainability of growth, Markit Economics said.
Meanwhile, data released by India's statistics office after trading hours on Friday, 29 May 2015, showed that the Indian economy grew 7.5% in Q4 March 2015, which was much higher than revised GDP growth of 6.6% in Q3 December 2014. The GDP growth for Q3 December 2014 was revised downwards to 6.6% compared with 7.5% growth reported earlier. The Indian economy expanded by 7.3% (provisionally) in the year ended 31 March 2015, higher than expansion of 6.9% in the year ended 31 March 2014.
Meanwhile, 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, in a major push to private sector participation in defence manufacturing, the government has withdrawn excise and customs duty exemptions presently available to goods manufactured and supplied to the Ministry of Defence by Ordinance Factory Board and defence public sector undertakings (PSUs). This will provide a level playing field to domestic private players bidding for the government contracts by taking away the strategic advantage with PSUs for quoting lower rates in open bids, the Ministry of Commerce & Industry said in a statement issued today, 1 June 2015. With this initiative, the government has also fulfilled demand of foreign Original Equipment Manufacturers (OEMs) such as Boeing, Airbus, Lockheed Martin, BAE Systems etc. who are actively exploring the scope of future investments in India, the Ministry of Commerce & Industry said.
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 tomorrow, 2 June 2015. Economists expect rate cut from the central bank in an attempt spur growth. 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.
Meanwhile, the onset of monsoon in Kerala has been delayed. Private weather forecaster Skymet said today, 1 June 2015, that it expects rains to commence in Kerala around 4 June 2015, three days after the scheduled onset date of 1 June.
In overseas markets, European stocks reversed intraday gains today, 1 June 2015, as investors closely monitored Greece's bailout negotiations ahead of a key debt repayment later this week.Key indices in Germany and UK were off 0.14% to 0.17%. In France, the CAC 40 index was up 0.13%.
This week Greece is expected to once again remain in sharp focus ahead of a key debt repayment due to the International Monetary Fund on Friday, 5 June 2015. Greece is still struggling to agree on a reform program with the creditors, which is a prerequisite for receiving the next tranche of bailout money. In an interview with French daily Le Monde on Sunday, 31 May 2015, Greek Prime Minister Alexis Tsipras blamed the creditor institutions for the lack of progress in reaching a reform deal, calling the demands absurd. He also said the lenders displayed a total indifference to the recent democratic choice of the Greek people.
Greece is scheduled to repay a total of euro 1.6 billion ($1.76 billion) to the International Monetary Fund (IMF) over the period between June 5-19.
Manufacturing activity in the eurozone grew more rapidly during May, driven by pickups in Spain and Italy, according to surveys of purchasing managers. Data firm Markit, which surveys more than 3,000 manufacturers across the eurozone, said on Monday that its purchasing managers index rose to 52.2 in May from 52.0 in April. Markit had previously estimated the PMI rose to 52.3. A reading below 50.0 indicates activity is declining, while a reading above that level indicates an increase.
Manufacturing activity in the UK expanded at a slower rate than expected in May, fuelling concerns over the country's economic outlook, industry data showed on Monday. In a report, market research group Markit said that its UK manufacturing PMI inched up to a seasonally adjusted 52 last month from a reading of 51.8 in April. On the index, a reading above 50.0 indicates industry expansion, below indicates contraction.
Stocks in mainland China surged after China's official purchasing managers index showed modest gains in May 2015.The Shanghai Composite index rose 4.72%. In Hong Kong, the Hang Seng index rose 0.63%. In other Asian markets, key indices in Taiwan, South Korea and Indonesia were off 0.05% to 0.78%. In Japan, the Nikkei 225 average rose 0.03%.
China's official manufacturing purchasing managers index rose to 50.2 in May from 50.1 a month ago, the China Federation of Logistics and Purchasing, which issues the data with the National Bureau of Statistics, said in a statement. The subindex measuring new orders climbed to 50.6 from 50.2 in April, while the production subindex improved to 52.9 from 52.6, the statement said.
China's official nonmanufacturing PMI, also released on Monday, fell to 53.2 from 53.4 in April.
Separately, the final HSBC China Manufacturing Purchasing Managers Index for showed a reading of 49.2 for May 2015, beating a preliminary reading of 49.1 and rising from 48.9 in April.
Japanese capital investment rose 5.8% from the previous quarter in the January-March period, the finance ministry said Monday, as Prime Minister Shinzo Abe pushes businesses to do their part in revitalizing the economy. Capital investment was up 7.3% compared with where it stood a year earlier, the finance ministry said, the fastest on-year growth in four quarters.
US stocks edged lower during the previous trading session on Friday, 29 May 2015, after a string of weak economic reports. 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.
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