 "Nifty ends below 8,650; Axis Bank slumps 8%")
Markets ended lower on Wednesday weighed down by selling pressure in Axis Bank after the private lender reported a sharp decline in net profit during the September quarter while weak global cues also weighed on investor sentiment.
The S&P BSE Sensex ended down 255 points at 27,837 and the Nifty50 settled 76 points lower at 8,615. In the broader market, the BSE Midcap and Smallcap indices ended down 0.7%-0.9% each. Market breadth ended weak with 1586 losers and 1184 gainers on the BSE.
"It was a negative day on the bourses as key benchmark indices languished in negative territory through the day to finally close with losses of nearly 1%. Taking cues from tepid global markets, both the benchmark Sensex and the Nifty traded below their respective psychologically important levels of 28000 and 8600, during the day and hit their lowest level since 18th October, 2016, in intraday trade. In overseas stock markets, US, European and Asia stocks edged lower, tracking a decline in oil prices. All the sectoral indices on the National Stock Exchange (NSE) traded in the red with the banking, metals and healthcare indices losing over 1%, for the day," Shreyash Devalkar, Fund Manager – Equities, BNP Paribas Mutual Fund
Meanwhile, India's ranking in World Bank’s Ease of Doing Business Index, has moved up by only one rank in the Doing Business Report 2017. India remains at the 130th position out of 190 countries globally, it said.
Corporate Buzz
The Vision 2025, launched by former Tata group chairman Cyrus Mistry to become one of the top 25 corporate giants globally in terms of market value by 2025, has been scrapped, Business Standard said in a report citing a top source in the Tata group.
Index Movers
Bharti Airtel ended nearly 2% higher on better-than-expected profit and higher margins. The telecom major posted a 4.9% year-on-year (y-o-y) drop in its consolidated net profit at Rs 1,461 crore for the quarter ended September 30, 2016, mainly on account of higher spectrum amortisation, increase in net interest costs and devaluation of Nigerian currency. The profit figure, however, was much better than Bloomberg consensus estimate of Rs 1,229 crore. Further, the company also said it is exploring stake sale in its mobile tower subsidiary, Bharti Infratel. Meanwhile, the company has launched new 10-day packs for international roaming with unlimited incoming calls.
Idea Cellular ended up 3.8%. The company’s revenue, however, increased 7.2 per cent to Rs 9,300.23 crore in the reported quarter from Rs 8,675.37 crore in the year-ago period. Idea Cellular on Monday reported a 88 per cent year-on-year (y-o-y) drop in its consolidated net profit at Rs 91.46 crore for the September 2016 quarter mainly on account of higher expenses and inflationary pressures even as the company witnessed a decline in voice realisation.
Axis Bank slumped 8% after the private lender reported a 83% drop in net profit to Rs 319 crore in July-September quarter as compared to Rs 1,915.64 crore in the same quarter last year. This sharp drop in profit was led by higher provisioning that increased by over five times as bad loans increased. The provisions and contingencies rose over five times to Rs 3,622 crore, from Rs 707 crore during this period.
ICICI Bank ended down over 3.5% on profit booking at higher levels after recent gains. Hero MotoCorp ended up 2% ahead of its September quarter earnings later today.
Meanwhile, Tata Group shares extended losses after board of Tata Sons on Monday replaced chairman Cyrus Mistry and brought back Ratan Tata as interim chairman for four months. Tata Motors, Tata Motors DVR, Tata Steel, Tata Chemicals and Indian Hotels, Tata Metaliks, Voltas, Rallis India, Tata Elxsi, Tata Global Beverages and Tata Communications ended down between 3%-5% on the BSE.
Kotak Mahindra Bank ended 3.3% higher. The private banking major's consolidated net profit increased by 28% to Rs 1,202.4 crore in the July-September quarter from Rs 941.89 crore a year ago, led by higher net interest income and other income.
ITC ended flat. The FMCG major posted an increase of 10.5% in its net profit at Rs 2500 crore for the quarter ended September 30, 2016 even as the company managed higher profitability from its cigarette business while losses from other FMCG businesses contracted.
HDFC ended with marginal losses. The mortgage lender reported a net profit of Rs 1,827 crore for the quarter ended September 2016 compared with Rs 1,605 crore in the same quarter last fiscal.
Broader Markets
Multi-Commodity Exchange shares ended up 1.6%. Standalone net profit increased 23% to Rs 37.65 crore, year-on-year with net profit margin of 39% for the second quarter of FY17 and earnings before interest, taxes, depreciation and amortisation for the September quarter increased 18% to Rs 55.35 crore from Rs 46.84 crore a year ago.
Cadila Healthcare ended nearly 5% lower after the company reported 29% year on year (YoY) drop in its consolidated net profit at Rs 338 crore for the quarter ended September 30, 2016 (Q2FY17). Analysts on an average had expected profit of Rs 380 crore.
Jubilant FoodWorks ended down 7.5% after the company’s EBITDA (earnings before interest, taxes, depreciation, and amortization) margin declined 62 basis points to 9.7% in September 30, 2016 quarter (Q2FY17) from 10.3% in the same quarter last fiscal.
