Auto stocks, public sector banks and index heavyweights Reliance Industries, HDFC and ITC led losses for key benchmark indices. The barometer index, the S&P BSE Sensex, fell 117.08 points or 0.45% to 25,721.06, as per the provisional closing data. The losses for the Nifty 50 index were higher than those for the Sensex in percentage terms. The Nifty fell 44.25 points or 0.56% at 7,855.05, as per the provisional closing data. The decline on the domestic bourses materialized as Asian and European stocks dropped on caution ahead of the outcome of central bank meetings in the United States and Japan this week. Reliance Industries (RIL) edged lower after announcing Q4 March 2016 results after trading hours on Friday, 22 April 2016
The Sensex fell 252.21 points, or 0.98% at the day's low of 25,585.93 in mid-afternoon trade, its lowest level since 13 April 2016. The barometer index rose 52.89 points, or 0.2% at the day's high of 25,891.03 in early trade. The Nifty fell 72.30 points, or 0.92% at the day's low of 7,827 in mid-afternoon trade, its lowest level since 13 April 2016. The index rose 11.70 points, or 0.15% at the day's high of 7,911 in early trade.
The market breadth indicating the overall health of the market was negative. On BSE, 1,533 shares fell and 1,081 shares rose. A total of 150 shares were unchanged. The BSE Mid-Cap index provisionally fell 0.1%. The BSE Small-Cap index provisionally fell 0.43%. The decline in both these indices was lower than the Sensex's decline in percentage terms.
The total turnover on BSE amounted to Rs 4403 crore, higher than turnover of Rs 2575.10 crore registered during the previous trading session.
In overseas stock markets, European stocks fell amid declining oil prices and as German business sentiment deteriorated unexpectedly in April. The Ifo's business climate index slipped to 106.6 in April from 106.7 in March, bringing it further below levels seen at the end of last year. The Ifo's measure of the current business situation dropped to 113.2 in April from 113.8 in March, but its gauge of business expectations rose to 100.4 from 100 the previous month. The German economy is the Europe's biggest economy.
Earlier during the global day, Asian shares edged lower as investors awaited central bank meetings in the United States and Japan this week. The Bank of Japan (BOJ) holds a two-day monetary policy meeting on Wednesday, 27 April 2016 and Thursday, 28 April 2016. Market participants are becoming more confident in their expectations of further easing from the Bank of Japan. The BOJ in January decided to begin charging 0.1% interest on some bank reserves parked with the institution, in a bid to kick-start the economy and pull it out of two decades of deflation.
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US stocks finished mixed during the previous trading session on Friday, 22 April 2016, as earnings misses in the previous session from Microsoft and Google parent Alphabet slackened optimism on Wall Street. The US Federal Reserve holds a two-day policy meeting on Tuesday, 26 April 2016 and Wednesday, 27 April 2016. As per market expectations, the Fed is likely to hold rates steady this week. The Fed statement could provide clues on the future path for interest rates.
Index heavyweight Reliance Industries (RIL) edged lower after announcing Q4 March 2016 results after trading hours on Friday, 22 April 2016. The stock fell 2.47% at Rs 1,013.05. The stock hit a high of Rs 1,044.90 and a low of Rs 1,012.75 in intraday trade. RIL's consolidated net profit rose 15.93% to Rs 7398 crore on 10.95% fall in total income to Rs 62010 crore in Q4 March 2016 over Q4 March 2015. Strong operating performance from refining and petrochemicals businesses coupled with favorable exchange rate movement was partially offset by lower contribution from Oil & Gas business. The decline in revenue was led by the 41.4% decline in benchmark oil price which averaged at $30.4 per barrel in Q4 March 2016 as compared to $51.9 per barrel in Q4 March 2015. Based on standalone performance, the gross refining margin (GRM) increased to $10.80 per barrel in Q4 March 2016 from $10.10 per barrel in Q4 March 2015.
RIL did not specify when exactly it would start commercial roll out of telecom services. RIL said that the commercial roll out is expected in coming months. Reliance Jio Infocomm (RJIL) launched full-scale service offerings for the RIL group employees, partners, vendors and associates on a trial basis on 28 December 2015. RIL's telecom business is being carried out through its subsidiary RJIL.
Cairn India fell 4.62% at Rs 144.40 after the company reported a massive net loss for Q4 March 2016 due to an impairment charge. On consolidated basis, Cairn India reported net loss of Rs 10948.22 crore in Q4 March 2016, higher than net loss of Rs 240.82 crore in Q4 March 2015. Net total income from operations declined 35.87% to Rs 1716.83 crore in Q4 March 2016 over Q4 March 2015. The result was announced after market hours on Friday, 22 April 2016. Due to decline in crude oil prices in the international market, the company recorded an impairment on the carrying value of goodwill and some of its non-producing oil and gas assets aggregating to Rs 11389.63 crore and Rs 284.17 crore respectively in Q4 March 2016.
Cairn India said it is committed to the company's merger with Vedanta and continues to work towards its completion. The merger would generate value for the shareholders and de-risks Cairn India by providing access to a portfolio of diversified assets in a volatile market and deliver significant near term growth, the company said in a statement.
With regard to its business outlook for the current financial year (FY 2017), Cairn India said it aims to maintain production from Rajasthan asset broadly at FY 2016 level. With an estimated net capex of $100 million, the company plans to invest 80% in development (primarily RDG Gas and Mangala EOR completion activities) and 20% in exploration. Cairn India said it will continue investing in pre-development activities of its key projects in Core MBA fields, Barmer Hills and Satellite fields, to ensure project readiness for development with rebound in oil prices and grant of extension of Production Sharing Contract (PSC). Cairn India said it maintains the flexibility to raise its capital investment as oil prices improve and aim to generate a healthy cash flow post capex so as to retain the ability to pay dividends.
Bharti Airtel rose 1.74% to Rs 359.25 after the company announced that its board of directors will consider a proposal for buyback of equity shares on 27 April 2016. The announcement was made on on Saturday, 23 April 2016. Bharti Airtel will also announce its Q4 March 2016 results on 27 April 2016.
Car major Maruti Suzuki India dropped 2.18% to Rs 3,734 as Japanese yen strengthened against the dollar on expectations of further easing from the Bank of Japan. A strong yen adversely impacts Maruti's operating profit margin. Maruti pays royalty to its Japanese parent Suzuki Motor Corporation in yen terms for some of its earlier models. As per recent media reports, Maruti will start paying royalty to its Japanese parent in rupee term on all new models from the current financial year, which began on 1 April 2016. Maruti also has an exposure to the yen to the extent it imports raw materials from Japan. Maruti is scheduled to announce its Q4 March 2016 results tomorrow, 26 April 2016.
UltraTech Cement rose 0.59% to Rs 3,290 after consolidated net profit rose 10% to Rs 723 crore on 5.1% growth in net sales to Rs 6850 crore in Q4 March 2016 over Q4 March 2015. The result was announced during market hours today, 25 April 2016. With regard to the company's future business outlook, UltraTech Cement said that cement demand is expected to grow 7-8% in FY 2017 on the back of the government's focus on infrastructure development, housing, smart cities. UltraTech Cement said it is confident of meeting the upsurge in cement demand. UltraTech Cement said that the company's ongoing capex program is on track.
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