Key benchmark indices registered small gains in a lacklustre trading session. The barometer index, the S&P BSE Sensex, rose 69.73 points or 0.25% to settle at 28,059.94. The Nifty 50 index rose 17.70 points or 0.21% to settle at 8,650.30. The Sensex and the Nifty edged higher for the second day in a row. The small upmove took the Sensex above the psychologically important 28,000 level. The index alternately swung above and below that level in intraday trade. It had settled a tad below that level during the previous trading session.
Maruti Suzuki India edged higher on reports that a foreign brokerage has upgraded its rating on the stock to buy from outperform with target price of Rs 5,850 per share. Aurobindo Pharma surged after the company announced strong Q1 results. Indian Oil Corporation moved higher after the company said that its board of directors will consider issue of bonus shares along with Q1 June 2016 results on 29 August 2016.
Index heavyweight and software major Infosys nudged higher on reports that the company may get about $60 million (Rs 400 crore) in incremental revenue over the third and fourth quarters of the current financial year (FY 2017) as part of the Rs 1380 crore Goods Services and Tax Network (GSTN) project. Idea Cellular edged lower after the company denied reports that it was in merger talks with Vodafone India.
Welspun India tumbled on reports that Wal-Mart Stores Inc. is reviewing Welspun's cotton certification records following Target Corp.'s decision to snap ties with the Indian textile maker over a cotton supply dispute.
In overseas stock markets, bank stocks led gains in European equities. In Germany, the latest data showed that the German economy slowed in the second quarter, as investment dropped after a strong start to the year. Germany's gross domestic product grew at a quarterly rate of 0.4%, or an annualized rate of 1.7%, according to the Federal Statistical Office, Destatis. The economy expanded at a quarterly clip of 0.7% in the first quarter. Asian stocks witnessed a mixed trend ahead of Federal Reserve Chairwoman Janet Yellen's speech later this week, which could provide hints about the timing of the next rate hike from the Fed.
US stocks registered small gains yesterday, 23 August 2016, after upbeat data on US new-home sales. Yellen is due to speak on Friday 26 August 2016, at the Kansas City Fed's annual Monetary Policy Symposium in Jackson Hole, Wyoming. Minutes from the Federal Open Market Committee's (FOMC) July meeting showed officials were split on whether an increase in interest rate was needed soon.
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The Sensex rose 69.73 points or 0.25% to settle at 28,059.94, its highest closing level since 19 August 2016. The index rose 118.18 points or 0.42% at the day's high of 28,108.39. The index fell 30.34 points or 0.11% at the day's low of 27,959.87.
The Nifty 50 index rose 17.70 points or 0.21% to settle at 8,650.30, its highest closing level since 19 August 2016. The index rose 28.45 points or 0.32% at the day's high of 8,661.05. The index fell 11.70 points or 0.13% at the day's low of 8,620.90.
The market breadth indicating the overall health of the market was positive. On BSE, 1,539 shares rose and 1,173 shares declined. A total of 201 shares were unchanged. The BSE Mid-Cap index rose 0.61%. The BSE Small-Cap index rose 0.65%. Both these indices outperformed the Sensex.
The total turnover on BSE amounted to Rs 3007 crore, lower than turnover of Rs 3335.38 crore registered during the previous trading session.
Among the sectoral indices on BSE, the S&P BSE Oil & Gas index (up 1.49%), the S&P BSE Healthcare index (up 1.30%), the S&P BSE Energy index (up 1.15%), the S&P BSE Utilities index (up 0.73%), the S&P BSE Power index (up 0.69%), the S&P BSE Consumer Discretionary Goods & Services index (up 0.47%), the S&P BSE IT index (up 0.43%), the S&P BSE Teck index (up 0.38%) and the S&P BSE Basic Materials index (up 0.27%) outperformed the Sensex. The S&P BSE Industrials index was unchanged. The S&P BSE Finance index (up 0.24%), the S&P BSE Auto index (up 0.18%), the S&P BSE Realty index (up 0.17%), the S&P BSE FMCG index (up 0.09%), the S&P BSE Bankex (up 0.04%), the S&P BSE Consumer Durables index (up 0.04%), the S&P BSE Capital Goods index (down 0.01%), the S&P BSE Metal index (down 0.22%) and the S&P BSE Telecom index (down 0.34%) underperformed the Sensex.
Stocks of public sector banks witnessed a mixed trend. Punjab & Sind Bank (down 2.06%), Central Bank of India (down 0.91%), Bank of Baroda (down 0.67%), Bank of Maharashtra (down 0.48%), United Bank of India (down 0.45%), UCO Bank (down 0.36%), Punjab National Bank (down 0.28%), Syndicate Bank (down 0.2%), IDBI Bank (down 0.14%) and Bank of India (down 0.09%), edged lower. Vijaya Bank (up 0.13%), Indian Bank (up 0.20%), Union Bank of India (up 0.33%), Dena Bank (up 0.67%), Corporation Bank (up 1.09%), Allahabad Bank (up 1.18%) and Canara Bank (up 2.09%), edged higher.
State Bank of India (SBI) rose 0.02% at Rs 254.65 after a committee of directors of the bank approved an enabling resolution to raise upto Rs 11100 crore additional Tier 1 capital by way of issue of Basel III compliant perpetual debt instrument in dollar or rupee terms, at par, through private placement to overseas and/or Indian investors in tranches.
Most private sector banks declined. City Union Bank (down 3.12%), IndusInd Bank (down 0.56%), ICICI Bank (down 0.5%), Yes Bank (down 0.31%) and Kotak Mahindra Bank (down 0.06%), edged lower. Axis Bank (up 0.27%), HDFC Bank (up 0.83%) and Federal Bank (up 0.89%), edged higher.
Oil stocks rose across the board. Among oil exploration and production (E&P) stocks, Oil India (up 4.19%), ONGC (up 1.07%) and Cairn India (up 0.69%) edged higher.
Index heavyweight Reliance Industries was up 1.07% at Rs 1,020.75. The stock hit a high of Rs 1,022.10 and a low of Rs 1,011.10 in intraday trade.
Among the state-run oil marketing companies (PSU OMCs), BPCL (up 0.81%) and HPCL (up 1.85%) edged higher.
Indian Oil Corporation surged 3.96% at Rs 564.55 after the company said that its board of directors will consider issue of bonus shares along with Q1 June 2016 results on 29 August 2016. The announcement was made during market hours today, 24 August 2016.
Crude futures edged lower in the global commodities markets after data showed increase in US stockpiles last week. Brent crude oil futures for October settlement was currently off 51 cents at $49.45 a barrel. The contract had risen 80 cents or 1.62% to settle at $49.96 a barrel during previous trading session.
Maruti Suzuki India rose 2.40% to Rs 4,949.10 on reports that a foreign brokerage has upgraded its rating on the stock to buy from outperform with target price of Rs 5,850 per share. The success of Baleno (a premium small car), Ciaz (a sedan) and Vitara Brezza (an urban SUV) has taken Maruti to leadership position in all segments except rural SUVs, the brokerage reportedly said. The brokerage also added that Maruti has significantly reduced its yen exposure.
Maruti pays royalty to its Japanese parent Suzuki Motor Corporation in yen terms for some of its earlier models. The car major has reportedly started paying royalty to its Japanese parent in rupee terms on all new models from 1 April 2016. Maruti also has an exposure to the yen to the extent it imports raw materials from Japan.
Aurobindo Pharma surged after the company announced strong Q1 results. The stock rose 6.96% at Rs 787.55. The company's consolidated net profit rose 24% to Rs 584.60 crore on 12.9% growth in total operating income to Rs 3725.90 crore in Q1 June 2016 over Q1 June 2015. The result was announced after market hours yesterday, 23 August 2016. The company's earnings before interest, taxation, depreciation, and amortization (EBITDA) before forex rose 22.6% to Rs 889 crore in Q1 June 2016 over Q1 June 2015. EBITDA margin improved to 23.9% in Q1 June 2016 from 22% in Q1 June 2015.
Aurobindo Pharma's Managing Director N. Govindarajan said that the quarter witnessed a double digit growth on the back of overall business performance. With focus on execution and capability enhancements, Aurobindo continues to progress on specialty generics for a sustained long term growth, he said.
Lupin fell 2.16% at Rs 1,521.10. The company during market hours today, 24 August 2016, announced that its US subsidiary, Gavis Pharmaceuticals LLC, USA has received final approval to market a generic equivalent of Pharmacia & Upjohn Company's Zyvox Tablets, 600 mg. The drug is indicated in adults and children for the treatment of certain infections caused by susceptible Gram-positive bacteria. Zyvox Tablets had annual US sales of $273.6 million, as per IMS MAT June 2016 data.
Idea Cellular lost 2.58% at Rs 98.20 after the company after market hours yesterday, 23 August 2016, denied reports that it was in merger talks with Vodafone India. The stock had surged 6.72% to settle at Rs 100.80 yesterday, 23 August 2016, after a news report suggested that the two companies had initiated exploratory talks for a possible merger.
Index heavyweight and software major Infosys rose 1.76% at Rs 1,057.55 on reports that the company may get about $60 million (Rs 400 crore) in incremental revenue over the third and fourth quarters of the current financial year (FY 2017) as part of the Rs 1380 crore Goods Services and Tax Network (GSTN) project. Under the ongoing GSTN project, Infosys has started importing hardware, including servers and network equipment devices, payment for which will be made by GSTN starting October this year, reports suggested.
Tata Power Company rose 2.27% at Rs 76.45 after the company announced during market hours today, 24 August 2016, that the company's generation capacity increased by close to 9% in Q1 June 2016 over Q1 June 2015. Standalone generation stood at 3,163 million units (MUs) in Q1 June 2016. Total consolidated generation stood at 11,122 MUs in Q1 June 2016. The company has a significant presence in the clean energy space with a gross installed capacity of 1,996 MW.
Shares of Tata Power Company fell 3.24% to settle at Rs 74.75 yesterday, 23 August 2016, after the company reported a sharp fall in bottom line in Q1 June 2016.
Welspun India was locked at 10% lower circuit at Rs 59.30 on reports that Wal-Mart Stores Inc. is reviewing Welspun's cotton certification records following Target Corp.'s decision to snap ties with the Indian textile maker over a cotton supply dispute. Walmart is Welspun's third-largest customer, behind Target. Target Corporation, one of Welspun's biggest clients, severed business ties with it earlier this week on charges that Welspun used cheaper quality cotton while supplying bed sheets between August 2014 and July 2016 without Target having any knowledge of this substitution. Target had pulled sheets and pillowcases off its shelves after discovering they were mislabeled as Egyptian cotton after a probe was initiated by it. Shares of Welspun India had hit 20% lower circuit in last two sessions following Target's announcement on Friday, 19 August 2016 of snapping ties with the company after violation of Target's code of conduct and standards of vendor engagement.
Reports also suggest that US apparel and home furnishings retailer J. C. Penney Company, Inc. is investigating Welspun's products in the wake of the issue.
Key benchmark indices edged higher for the second day in a row. The Sensex has risen 74.40 points or 0.27% in two trading sessions from its close of 27,985.54 on 22 August 2016. The Sensex has risen 8.08 points or 0.03% in this month so far (till 24 August 2016). The Sensex has risen 1,942.40 points or 7.44% in calendar year 2016 so far (till 24 August 2016). From a 52-week low of 22,494.61 hit on 29 February 2016, the barometer index has 5,565.33 points or 24.74%. The Sensex is off 230.02 points or 0.81% from a 52-week high of 28,289.96 hit on 9 August 2016. The Sensex is off 1,964.80 points or 6.54% from a record high of 30,024.74 hit on 4 March 2015. The current PE multiple for the Sensex is 20.51, as per BSE data.
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