Key benchmark indices, which crashed in intraday trade, recovered sharply in mid-afternoon trade. The barometer index, the S&P BSE Sensex, fell 338.61 points or 1.23% to settle at 27,252.53. The Nifty 50 index fell 111.55 points or 1.31% to settle at 8,432. The Sensex ended above the psychologically important 27,000 mark. It had earlier slipped below the 26,000 level at the onset of trading session.The Nifty ended above the psychologically important 8,000 mark after hitting an intraday low just a shade above that mark in morning trade. The Sensex and the Nifty, both, tumbled to settle at 4-month low on government's black money crackdown and outcome of US presidential election.
Concerns about the outcome of the US presidential elections coupled with a major government crackdown on the India's cash economy had triggered widespread selling in early trade. The Sensex had hit its lowest intraday level in more than five months in early trade. The Nifty had also hit its lowest intraday level in 4-1/2 months in early trade. However, the market staged a sharp recovery in second half of the trading session after Republican Donald Trump was declared as the 45th President of the United States.
The Sensex fell 338.61 points or 1.23% to settle at 27,252.53, its lowest closing level since 8 July 2016. The Sensex fell 1,688.69 points, or 6.12% at the day's low of 25,902.45 in early trade. The index fell 193.76 points, or 0.70% at the day's high of 27,397.38 in late trade.
The Nifty 50 index fell 111.55 points or 1.31% to settle at 8,432, its lowest closing level since 8 July 2016. The Nifty fell 541.30 points, or 6.34% at the day's low of 8,002.25 in early trade. The index fell 67.35 points, or 0.79% at the day's high of 8,476.20 in late trade.
The broad market depicted weakness. There were more than three losers against every gainer on BSE. 2,157 shares fell and 610 shares rose. A total of 97 shares were unchanged. The BSE Mid-Cap index fell 1.85%. The BSE Small-Cap index fell 2.66%. The decline in both these indices was higher than the Sensex's decline in percentage terms.
The total turnover on BSE amounted to Rs 5456.21 crore, higher than turnover of Rs 3142.77 crore registered during the previous trading session.
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Among the sectoral indices on BSE, the S&P BSE Power index (down 1.25%), the S&P BSE Industrials index (down 1.64%), the S&P BSE FMCG index (down 2.11%), the S&P BSE Auto index (down 2.52%), the S&P BSE Basic Materials index (down 2.77%), the S&P BSE Teck index (down 2.84%), the S&P BSE Consumer Discretionary Goods & Services index (down 2.96%), the S&P BSE IT index (down 3.28%), the S&P BSE Consumer Durables index (down 4.18%), the S&P BSE Realty index (down 10.23%) underperformed the Sensex. The S&P BSE Healthcare index (up 1.48%), the S&P BSE Bankex (up 0.18%), the S&P BSE Oil & Gas index (up 0.02%), the S&P BSE Energy index (down 0.01%), the S&P BSE Utilities index (down 0.53%), the S&P BSE Metal index (down 1.09%), the S&P BSE Capital Goods index (down 1.2%), the S&P BSE Telecom index (down 1.22%) outperformed the Sensex. The S&P BSE Finance index fell 1.23%, matching the Sensex's fall in percentage terms.
Pharmaceutical shares bounced back from intraday lows. Dr Reddy's Laboratories (up 5.04%), Alkem Laboratories (up 3.88%), Cadila Healthcare (up 2.37%), IPCA Laboratories (up 2.23%), Divi's Laboratories (up 1.88%), Aurobindo Pharma (up 0.16%) and Glenmark Pharmaceuticals (up 0.99%) edged higher. Strides Shasun (down 0.71%), Wockhardt (down 1.67%), Cipla (down 1.52%), GlaxoSmithKline Pharmaceuticals (down 2.3%) and Piramal Enterprises (down 2.75%) edged lower.
Drug major Lupin gained 1.45% after consolidated net profit jumped 57.75% to Rs 662.19 crore on 27.45% rise in total income to Rs 4317.62 crore in Q2 September 2016 over Q2 September 2015. Commenting on the results, Nilesh Gupta, Managing Director, Lupin said that the company continues to invest ahead of the curve be it research or manufacturing. The Q2 September 2016 profit was impacted on account of higher research spend and forex, he added. Investment in research for the quarter was 13.6% of sales at Rs 571.60 crore. The result was announced during market hours today, 9 November 2016.
Sun Pharmaceutical Industries rose 4.86% after the company's US subsidiary Taro Pharmaceutical Industries (Taro Pharma) reported better-than-expected Q2 September 2016 results yesterday, 8 November 2016. Taro Pharma's net profit fell 7.2% to $123.7 million on 7.9% growth in net sales to $228.8 million in Q2 September 2016 over Q2 September 2015. The top line during the quarter was driven by increased volumes in the US generic business. However, the increase in operating profit was offset by the decrease in foreign exchange income and an increase in tax expense thereby pulling down the bottom line in Q2 September 2016.
Sun Pharmaceutical Industries will declare its Q2 September 2016 results tomorrow, 10 November 2016.
Banks stocks tumbled after the government yesterday, 8 November 2016, announced that it is banning use of Rs 500 and Rs 1,000 notes, in its fight against the corruption, fake currency and black money.
Among private sector banks, RBL Bank (down 2.23%), Federal Bank (down 1.3%), Yes Bank (down 0.39%), City Union Bank (down 2.6%), IndusInd Bank (down 0.84%) and Axis Bank (down 0.62%), edged lower. Kotak Mahindra Bank rose 1.59%.
ICICI Bank fell 0.58%. The bank clarified after market hours yesterday, 8 November 2016, on recent media reports regarding cyber-attacks that there was no breach incident within the control of the bank pertinent to this news item which would have required reporting. The incident reported relates only to a small segment of customers of the bank who used the other bank ATM.
HDFC Bank rose 0.19%. The bank clarified after market hours yesterday, 8 November 2016, on recent media reports regarding cyber-attacks that the bank has taken appropriate steps in this regard. There has been no breach of HDFC Bank systems and the incident is an outcome of possible compromise at a third party payment processor. The impact for the bank is limited owing to various steps taken by the bank.
Among state-run banks, Allahabad Bank (down 2.21%), Andhra Bank (down 1.79%), IDBI Bank (down 0.86%), Union Bank of India (down 0.73%), UCO Bank (down 0.6%), Bank of Maharashtra (down 1.39%), Dena Bank (down 2.73%), Punjab & Sind Bank (down 2.06%), edged lower. State Bank of India (up 2.83%), Bank of India (up 0.83%), Punjab National Bank (up 1.32%), Canara Bank (up 1.25%), Bank of Baroda (up 1.44%),
Auto stocks dropped. Maruti Suzuki India (down 4.68%), Mahindra & Mahindra (M&M) (down 3.43%), Eicher Motors (down 3.42%), Bajaj Auto (down 2.4%), Tata Motors (down 1.07%), Hero MotoCorp (down 3.97%) and TVS Motor Company (down 2.56%) and Ashok Leyland (down 0.38%) dropped.
IT shares tumbled. Tech Mahindra (down 4.1%), MindTree (down 1.62%), TCS (down 4.93%), Wipro (down 1.27%), Persistent Systems (down 0.51%), HCL Technologies (down 2.76%), Hexaware Technologies (down 3.71%), MphasiS (down 0.06%), Infosys (down 2.74%) and Oracle Financial Services Software (down 2.52%) edged lower.
Trump is known to be in favour of protectionist measures, such as stricter visa norms to curtail jobs for Indian and other non-US employees. Trump has made outsourcing and liberal immigration laws a major campaign issue in this election in an effort to protect American jobs. IT firms profit margins are expected to come under pressure if Trump tightens immigration laws and take harsh measures to discourage outsourcing. US is the biggest outsourcing market for the Indian IT firms.
Hindalco Industries fell 2.86% on equity dilution concerns after the company announced that board of directors will consider raising of funds by issue of equity related instruments.
Hindalco Industries announced during market hours today, 9 November 2016, that a meeting of the board of directors of the company is scheduled on 12 November 2016 to consider among other items, approval of raising of funds by issue of equity shares, global depository receipts/American depository receipts/, foreign currency convertible bonds/, fully convertible debentures/partly convertible debentures/ preference shares convertible into equity shares, and/or any other financial instruments convertible into equity shares (including warrants, or otherwise, in registered or bearer form) and/or any security convertible into equity shares, combination of any of the aforementioned securities by way of one or more public and/or private offerings, qualified institutions placement and/or on preferential allotment basis or any combination thereof or any other method as may be permitted under applicable law, subject to such approvals as may be required.
Real estate shares slumped after Prime Minister Narendra Modi announced the eradication of Rs 500 and Rs 1000 banknotes from the system effective 8 November 2016 midnight in a swift move to clamp down on black money in the system and against terror financing. The real estate sector, which is infamous for being the biggest receiver and hoarder of black money in the domestic economy, is likely to take a massive hit.
Sunteck Realty (down 19.96%), DLF (down 17.68%), Indiabulls Real Estate (down 17.52%), Housing Development and Infrastructure (HDIL) (down 16.52%), Anant Raj (down 12.57%), D B Realty (down 12.17%), Peninsula Land (down 12.11%), Oberoi Realty (down 11.24%), Parsvnath Developers (down 8.08%), Unitech (down 6.15%), Sobha (down 4.51%), Mahindra Lifespace Developers (down 3.73%), Godrej Properties (down 2.32%), Omaxe (down 1.48%) and Phoenix Mills (down 0.98%), edged lower. Prestige Estates Projects rose 0.22%.
Bharat Heavy Electricals lost 2.97% to Rs 138.90, with the stock sliding on profit booking after recent gains. Shares of Bharat Heavy Electricals (Bhel) had risen 6.11% in the preceding two trading sessions to settle at Rs 143.15 yesterday, 8 November 2016, from its close of Rs 134.90 on 4 November 2016. Bhel reported net profit of Rs 109 crore in Q2 September 2016 compared with net loss of Rs 180.78 crore in Q2 September 2015. Net sales rose 12.1% to Rs 6550.77 crore in Q2 September 2016 over Q2 September 2015. Order backlog stood at Rs 1.03 lakh crore as on 30 September 2016. The result was announced during trading hours yesterday, 8 November 2016. The stock had settled 2.87% higher at Rs 143.15 on that day.
Tata Communications fell 1.5% after consolidated net profit tanked 64.4% to Rs 39.96 crore on 1.08% decline in total income to Rs 4581.92 crore in Q2 September 2016 over Q2 September 2015. Tata Communications reported Rs 125 crore as an impairment on investment in Neotel in Q2 September 2016. The result was announced after market hours yesterday, 8 November 2016.
Meanwhile, the Sensex has fallen 677.68 points or 2.43% in November 2016 so far (till 9 November 2016). The Sensex has risen 1,134.99 points or 4.35% in calendar year 2016 so far (till 9 November 2016). From a 52-week low of 22,494.61 hit on 29 February 2016, the barometer index has risen 4,757.92 points or 21.15%. From a 52-week high of 29,077.28 hit on 8 September 2016, the barometer index has fallen 1,824.75 points or 6.28%. The Sensex is off 2,772.21 points or 9.23% from a record high of 30,024.74 hit on 4 March 2015.
On the domestic front, in a historical move that will add record strength in the fight against corruption, black money, money laundering, terrorism and financing of terrorists as well as counterfeit notes, the Government of India decided that the five hundred and one thousand rupee notes will no longer be legal tender from midnight of 8 November 2016. The Government accepted the recommendations of the Reserve Bank of India (RBI) to issue two thousand rupee notes and new notes of five hundred rupees will also be placed in circulation. Notes of one hundred, fifty, twenty, ten, five, two and one rupee will remain legal tender and will remain unaffected by the decision. The Prime Minister said the steps taken by the Government would strengthen the hands of the common citizens in the fight against corruption, black money and counterfeit notes. Persons holding old notes of five hundred or one thousand rupees can deposit these notes in bank or post offices from 10 November 2016 onwards till 30 December 2016, the Prime Minister announced yesterday, 8 November 2016, evening.
In overseas stock markets, European and Asian stocks declined after Donald Trump won the US presidential election. In US, stocks finished in positive territory for a second straight day on Tuesday, 8 November 2016, as gains in the consumer goods, utilities and telecoms sectors led shares higher. Trading in US index futures indicated that the Dow Jones Industrial Average could slump 284 points at the opening bell today, 9 November 2016.
Global financial markets recovered after intraday sell-off after Republican Donald Trump pulled off a dramatic win to defeat Democratic contender Hillary Clinton in one of the most bitterly contested US Presidential battles. Donald Trump won 276 votes and Hillary Clinton won 218 votes. Candidates need at least 270 electoral votes to win. Trump will be the 45th President of the United States. The United States presidential elections of 2016 were held yesterday, 8 November 2016.
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