Index heavyweights led losses as key benchmark indices slumped on the first trading session of the week amid fresh fears over the impact of retrospective taxation for foreign institutional investors (FIIs). The barometer index, the S&P BSE Sensex, fell below the psychological 28,000 mark. The Sensex and the 50-unit CNX Nifty, both, hit their lowest closing level in more than three weeks. The Sensex shed 555.89 points or 1.95% to settle at 27,886.21. The Sensex had lost 0.78% and the Nifty had seen a higher decline of 1.16% during the previous trading session on Friday, 17 April 2015, after comments from Finance Minister Arun Jaitley had indicated that the government is unlikely to intervene with regard to income tax notices directing payment of Minimum Alternate Taxation (MAT) by FIIs for past years.
Many foreign investors have been receiving notices requesting their MAT calculations for financial year 2011-2012. This has also sparked worries among FIIs that the income tax department will raise MAT demand on FIIs for earlier years. In the Union Budget 2015-16 presented in parliament on 28 February 2015, Jaitley had announced that capital gains on sale of shares by foreign institutional investors (FIIs) will not be subject to the provisions of the minimum alternate tax (MAT) from 1 April 2015. Jaitley on 16 April 2015 reportedly said in speech at a seminar in Washington that with regard to applicability of MAT for previous years, FIIs had gone to a judicial tribunal and lost. He suggested that if they want relief, they should appeal rather than asking for him to step in.
There was a broad based decline on the bourses today, 20 April 2015. On BSE, there were more than two losers against every gainer. The BSE Mid-Cap index shed 2.02%. The BSE Small-Cap index declined 2.17%. The decline in both these indices was higher than the Sensex's decline in percentage terms. Losses ranged from 2% to about 20% for quite a few stocks which are the constituents of the BSE Small-Cap index. All the 12 sectoral indices on BSE declined.
Reliance Industries (RIL) edged lower on profit booking after reporting record quarterly net profit in Q4 March 2015. IT stocks dropped on reports that Indian IT companies are losing market share as IT outsourcing companies clients are increasingly favouring local firms while awarding technology contracts. Shares of public sector banks edged lower. Realty stocks declined. Capital goods stocks also edged lower. Index heavyweights HDFC, ITC, Infosys and L&T dropped.
In overseas markets, European markets edged higher after China's central bank over the weekend cut the amount of money that banks must hold as reserves. Chinese stocks led decline in Asian stocks after China's securities regulator after on Friday, 17 April 2015, tightened rules on margin lending and the Chinese local stock exchanges eased restrictions on short-selling of stocks. The announcement came after end of the trading session in Asian markets on Friday, 17 April 2015.
Meanwhile, data released by the government after trading hours on Friday, 17 April 2015, showed that India's merchandise exports (including re-exports) dipped 21.06% to $23951.16 million in March 2015 over March 2014
In the foreign exchange market, the rupee edged lower against the dollar as Indian stocks dropped and a slump in exports widened the nation's trade deficit to a four-month high.
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Foreign portfolio investors sold shares worth a net Rs 667.81 crore into the secondary equity market during the previous trading session on Friday, 17 April 2015, as per data from Central Depository Services (India). Domestic institutional investors (DIIs) bought shares worth a net Rs 72.52 crore on Friday, 17 April 2015, as per provisional data released by the stock exchanges.
The S&P BSE Sensex shed 555.89 points or 1.95% to settle at 27,886.21, its lowest closing level since 27 March 2015. The index fell 639.73 points at the day's low of 27,802.37 in late trade. The index rose 97.36 points at the day's high of 28,539.46 at the onset of trading session.
The CNX Nifty declined 157.90 points or 1.83% to settle at 8,448.10, its lowest closing level since 27 March 2015. The index hit a low of 8,422.75 in intraday trade. The index hit a high of 8,619.95 in intraday trade.
The BSE Mid-Cap index shed 217.81 points or 2.02% to settle at 10,553.96. The BSE Small-Cap index declined 252.64 points or 2.17% to settle at 11,369.59. The decline in both these indices was higher than the Sensex's decline in percentage terms.
The market breadth indicating the overall health of the market was quite weak, with more than two losers against every gainer on BSE. 1,961 shares fell and 878 shares rose. A total of 103 shares were unchanged.
The total turnover on BSE amounted to Rs 4970 crore, higher than turnover of Rs 3456.92 crore registered during the previous trading session.
Among the sector indices on BSE, the S&P BSE FMCG index (down 2.71%), BSE IT index (down 2.08%), BSE Capital goods index (down 2.17%), BSE Power index (down 2.04%), BSE Realty index (down 2.78%) and BSE Teck index (down 2.02%) underperformed the Sensex. The S&P BSE Healthcare index (down 0.92%), BSE Auto index (down 1.8%), BSE Bankex index (down 1.35%), BSE Consumer Durables index (down 0.07%), BSE Metal index (down 1.78%) and BSE Oil & Gas index (down 1.91%) outperformed the Sensex.
Reliance Industries (RIL) edged lower on profit booking after reporting record quarterly net profit in Q4 March 2015. The stock was off 4.46% at Rs 885.55. The stock hit a high of Rs 937.95 and a low of Rs 878.75. The company announced the fourth quarter results after trading hours on Friday, 17 April 2015. The stock had surged ahead of its results. From a recent low of Rs 824 on 6 April 2015, the stock had gained 12.55% to Rs 927.45 on 16 April 2015 in seven sessions. The stock had dropped 0.06% to Rs 926.85 on Friday, 17 April 2015.
RIL's consolidated net profit rose 8.5% to Rs 6381 crore on 33.3% drop in turnover to Rs 70863 crore in Q4 March 2015 over Q4 March 2014. RIL's net profit of Rs 6381 crore in Q4 March 2015 was a record quarterly net profit for RIL on consolidated basis. The result was announced after market hours on Friday, 17 April 2015.
RIL attributed the sharp fall in turnover in Q4 March 2015 to a sharp fall in benchmark crude oil price. RIL's gross refining margins (GRM) edged up to $10.1 per barrel in Q4 March 2015, from $9.3 per barrel in Q4 March 2014. On sequential basis, the GRM rose sharply from $7.3 a barrel in Q3 December 2014. RIL's GRM edged up to $8.6 a barrel in the year ended 31 March 2015 (FY 2015) from $8.1 a barrel in the year ended 31 March 2014 (FY 2014).
RIL said in a presentation to investors after the company's Q4 March 2015 results that the company plans to restart its entire network of 1,400 retail fuel pumps during the year ending 31 March 2016 (FY 2016). Over 320 fuel outlets have already become operational, RIL said.
RIL's non-operational income rose 3.57% to Rs 2172 crore in Q4 March 2015 over Q4 March 2014. RIL said the increase in non-operational income was primarily on account of higher profit on sale of investments.
With regard to the company's US shale gas business, RIL said that the challenging market outlook would most likely curtail near-term growth for the shale gas business. Given the current weak commodity price environment, the company is focusing on capital preservation by moderating activity levels, reducing service costs and improving efficiencies in the shale gas business, RIL said. Ensuring profitable development and retaining optionality through high grading acreages and improving netbacks will be the key challenges going forward, RIL said. RIL said that the long term outlook for its US shale gas business remains promising.
RIL's total capital expenditure stood at a little over Rs 1 lakh crore in FY 2015, including exchange rate difference capitalization. Capital expenditure was principally on account of ongoing expansions projects in the petrochemicals and refining business at Jamnagar, Dahej and Hazira, Broad band Access and US shale gas projects.
Index heavyweight and cigarette major ITC fell 2.77% at Rs 342.
Another index heavyweight and housing finance major HDFC dropped 2.69% at Rs 1,267.45.
IT stocks dropped on reports that Indian IT companies are losing market share as IT outsourcing companies clients are increasingly favouring local firms while awarding technology contracts. MindTree (down 6.3%), Infosys (down 2.23%), TCS (down 1.84%), Tech Mahindra (down 0.94%), CMC (down 2.13%), HCL Technologies (down 1.69%), Oracle Financial Services Software (down 1.99%) and Wipro (down 1.98%), edged lower. Hexaware Technologies(up 4.32%) and MphasiS (up 0.27%) edged higher.
According to the report, Indian software services exporters won about 8% of total deals awarded by customers during the January-March period, down from about 13% in the April-June period of the fiscal year 2014-15. In terms of total value, this ratio, too, dropped from around 12% down to just 7% over the course of the year.
Realty shares declined. Oberoi Realty (down 4.2%), Anant Raj (down 5.63%), Housing Development and Infrastructure (HDIL) (down 9.26%), Indiabulls Real Estate (down 5.36%), DLF (down 0.65%) and Prestige Estates (down 1.33%), Phoenix Mills (down 0.01%) and Sobha (down 1.1%) edged lower.
Among other bills, the government is keen about both the Houses of Parliament taking up for consideration the Real Estate (Development & Regulation) Bill during the second part of the Budget session. The second and final part of the ongoing Budget session of Parliament began today, 20 April 2015.
Shares of public sector banks edged lower. Bank of Maharashtra (down 3.05%), Bank of India (down 3.22%), UCO Bank (down 3.16%), United Bank of India (down 1.53%), Andhra Bank (down 3.19%), Vijaya Bank (down 2.02%), Allahabad Bank (down 3.35%), Central Bank of India (down 0.72%), Corporation Bank (down 1.08%) and State Bank of India (down 1.24%), Canara Bank (up 2.78%), Dena Bank (up 1.05%), IDBI Bank (up 2.08%), Syndicate Bank (up 4.1%), Punjab National Bank (up 1.81%), and Union Bank of India (down 3.5%), edged lower. Bank of Baroda (up 1.3%) edged higher.
The Department of Financial Services (DFS), Ministry of Finance yesterday, 19 April 2015, announced that it will hold a meeting with CMDs of Public Sector Banks (PSBs) on 28 April 2015 at the RBI headquarter in Mumbai to understand the problems faced by the project promoters and the banks in retrieving them and to find-out a solution to such problems in the light of the fact the level of non performing assets (NPAs) and the stressed projects of public sector banks (PSBs) have been showing an upward trend in the last four quarters. In this meeting, case by case review of some of the major projects of infrastructure sector such as road, power, steel and shipping would be undertaken by the DFS in the presence of senior officers of the ministries of power, steel, transport, shipping and the senior officers of the Reserve Bank of India (RBI). This meeting would help the department to crystalise the actions required by banks, Ministry of Finance and other concerned Central Ministries as well as support required from RBI, according to a statement from the Finance Ministry.
Among private sector banks, HDFC Bank (down 1.15%), Axis Bank (down 2.94%),Kotak Mahindra Bank (down 1.06%), IndusInd Bank (down 3.72%) and Yes Bank (down 2.78%) edged lower. ICICI Bank (up 0.31%) edged higher.
Auto shares declined. Eicher Motors (down 3.68%), Hero MotoCorp (down 3.96%), Ashok Leyland (down 3.36%), Tata Motors (down 0.36%), Escorts (down 2.61%), Maruti Suzuki (India) (down 0.99%), Bajaj Auto (down 2.28%) and TVS Motor Company (down 4.44%) edged lower.
Mahindra & Mahindra (M&M) was off 2.96% at Rs 1,188.05. With respect to news article titled, "M&M in Final Stages of Talks to Buy Italian Design Firm Pininfarina,"M&M said during trading hours today, 20 April 2015, that there are no agreements which the company has entered into which require disclosure under Clause 36 of the Listing Agreement. As in the past, the company would continue to inform stock exchanges about any price sensitive information before the same is made public, M&M said.
Metal shares declined. Steel Authority of India (down 4.53%), National Aluminum Company (down 2.92%), Sesa Sterlite (down 1.23%) and Hindalco Industries (down 0.79%), Jindal Steel & Power (down 2.77%), and Tata Steel (down 0.43%) edged lower. JSW Steel (up 0.6%) edged higher.
NMDC tumbled after cutting iron ore prices. The stock declined 5.2% at Rs 126.80. NMDC on Saturday, 18 April 2015, announced reduction in the prices of lump iron ore and fines with effect from 18 April 2015. The price of lump iron ore was reduced to Rs 3,050/WMT from Rs 3,250/WMT in March 2015. The price of fines was slashed to Rs 1,960/WMT from Rs 2,460/WMT in March 2015.
Hindustan Zinc fell 0.99% at Rs 170.40. Hindustan Zinc's net profit rose 6.17% to Rs 1997.44 crore on 11.56% growth in total income to Rs 4720.56 crore in Q4 March 2015 over Q4 March 2014. The result was announced after market hours today, 20 April 2015.
Capital goods shares slumped. Suzlon Energy (down 4.7%), Bharat Electronics (down 2.95%), L&T (down 2.51%), ABB India (down 2.45%), BEML (down 2.06%), Alstom T&D India (down 1.27%), Siemens (down 1.56%), Thermax (down 1.87%) and Crompton Greaves (down 0.52%) edged lower.
Bharat Heavy Electricals (Bhel) fell 2.21% at Rs 229.65. The stock hit a high of Rs 235.90 and a low of Rs 225.30 in intraday trade. Bhel during market hours today, 20 April 2015, said that the company has successfully commissioned a 250 megawatts (MW) coal-based thermal power plant in Gujarat. The unit has been commissioned at Gujarat State Electricity Corporation (GSECL) Sikka Thermal Power Station (TPS) by Bhel on engineering, procurement, and construction (EPC) basis.
Key benchmark indices edged lower for fourth day in a row today, 20 April 2015. The Sensex has lost 1,158.23 points or 3.98% in four trading session from a recent high of 29,044.44 on 13 April 2015. The Sensex has fallen 71.28 points or 0.25% in this month so far (till 20 April 2015). The Sensex has risen 386.79 points or 1.4% in this calendar year so far (till 20 April 2015). From a 52-week low of 22,277.04 on 8 May 2014, the Sensex has risen 5,609.17 points or 25.17%. The Sensex is off 2,138.53 points or 7.12% from a record high of 30,024.74 hit on 4 March 2015.
Meanwhile, data released by the government after trading hours on Friday, 17 April 2015, showed that India's merchandise exports (including re-exports) dipped 21.06% to $23951.16 million in March 2015 over March 2014. Imports fell 13.44% to $35744.68 million in March 2015 over March 2014. Oil imports declined 52.68% to $7413.30 million in March 2015 over March 2014. Non-oil imports rose 10.55% to $28331.38 million in March 2015 over March 2014. The trade deficit for fiscal year 2014-15 was estimated at $137014.46 million, which was higher than trade deficit of $135797.90 million for fiscal year 2013-14.
Proceedings in the parliament during the second and final part of the ongoing Budget session which began today, 20 April 2015, are being closely watched as the government hopes to pass the Constitution Amendment Bill for the introduction of a nationwide Goods and Services Tax (GST) in the country. The government had tabled the Constitution Amendment Bill for GST in the Lok Sabha during the winter session of parliament. GST, touted as the single biggest indirect taxation reforms since independence, will simplify and harmonise the indirect tax regime in the country. Central taxes like Central Excise Duty, Additional Excise Duties, Service Tax, Additional Customs Duty (CVD) and Special Additional Duty of Customs (SAD), etc. will be subsumed in GST. At the state level, taxes like VAT/Sales Tax, Central Sales Tax, Entertainment Tax, Octroi and Entry Tax, Purchase Tax and Luxury Tax, etc. would be subsumed in GST.
In overseas markets, European markets edged higher after China's central bank over the weekend cut the amount of money that banks must hold as reserves. Chinese stocks led decline in Asian stocks after China's securities regulator after on Friday, 17 April 2015, tightened rules on margin lending and the Chinese local stock exchanges eased restrictions on short-selling of stocks. The announcement came after end of the trading session in Asian markets on Friday, 17 April 2015. Hong Kong's Hang Seng index was off 2.02%. In mainland China, the Shanghai Composite index was off 1.61%.
The People's Bank of China (PBOC) yesterday, 19 April 2015, announced reduction in reserve requirement ratio (RRR) for all banks by 100 basis points to 18.5% to be effective from 20 April 2015. Meanwhile, China Securities Regulatory Commission (CSRC) on Saturday, 18 April 2015, stressed that there was no desire to suppress the hot stock market after unveiling a raft of measures on Friday, 17 April 2015, to curb margin trading. Meanwhile, the Shanghai and Shenzhen stock exchanges on Friday, 17 April 2015, issued rules that would make it easier for investors to short, or bet against, stocks. To short a stock, an investor borrows shares and sells them, hoping the price will fall and so allow them to repay with cheaper shares. It has been difficult to short stocks in China even as valuations soared because it has been virtually impossible to borrow shares.
Meanwhile, global markets are closely monitoring developments with regard to Greece. Eurozone finance ministers are scheduled to hold a meeting on Friday, 24 April 2015, to discuss the state of negotiations between Greece and its international creditors. The country's Syriza-led government has been locked in negotiations with its international creditors since coming to power in late January, with progress slow. Greece needs to strike a deal within the next few months to secure billions of euros in bailout aid to avoid defaulting on its debts and potentially exiting the euro.
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