After extending losses in mid-morning trade, key benchmark indices came off lows in early afternoon trade. At 12:15 IST, the barometer index, the S&P BSE Sensex was down 140.75 points or 0.55% at 25,465.87. The decline for the Nifty 50 index was lower than the Sensex's fall in percentage terms. The Nifty was currently down 32.85 points or 0.42% at 7,816.95. Data showing slowdown in growth in manufacturing sector in April 2016 and weakness in Asian stocks weighed on the domestic bourses.
The Sensex hit its lowest level in nearly 3 weeks when it lost 265.48 points or 1.03% at the day's low of 25,341.14 in mid-morning trade. The barometer index lost 41.18 points or 0.16% at the day's high of 25,565.44 in early trade. The Nifty, too, hit its lowest level in nearly 3 weeks when it lost 72.50 points or 0.92% at the day's low of 7,777.30 in mid-morning trade. The index lost 20 points or 0.25% at the day's high of 7,829.80 in early afternoon trade.
In overseas stock markets, Japanese stocks led decline in Asian markets as the Japanese yen surged to 1-1/2-year high against the dollar. The Nikkei 225 Average ended 3.11% lower. The stronger yen makes Japanese exports less competitive and cuts into the value of repatriated earnings. Japanese stocks extended losses registered during the previous trading session triggered by the Bank of Japan's (BOJ) decision to keep its policies unchanged. Speculation was rife that the Japanese central bank would announce a further easing of the monetary policy to stimulate Japan's economy. Japanese markets were closed on Friday, 29 April 2016, for a national holiday.
US stocks edged lower during the previous trading session on Friday, 29 April 2016, after weak consumer spending data for March 2016 and after the monthly Chicago Business Barometer index for April showed slowdown in the manufacturing sector. The Chicago Business Barometer decreased 3.2 points to 50.4 in April from 53.6 in March led by a fall in new orders and a sharp drop in order backlogs. It marked a slow start to the second quarter, with most measures down from levels seen a year earlier.
Closer home, the market breadth indicating the overall health of the market was negative. On BSE, 1,153 shares declined and 1,070 shares rose. A total of 116 shares were unchanged. The BSE Mid-Cap index was currently up 0.96%. The BSE Small-Cap index was currently up 0.2%. Both these indices outperformed the Sensex.
Stocks of public sector banks declined. Canara Bank (down 2.48%), Punjab National Bank (down 2.47%), Bank of India (down 2.05%), Bank of Baroda (down 0.85%), Corporation Bank (down 0.91%), State Bank of India (down 0.79%) and IDBI Bank (down 0.72%) edged lower.
Stocks of private sector banks were mixed. Kotak Mahindra Bank (up 0.96%) and IndusInd Bank (up 0.46%) edged higher. HDFC Bank (down 0.79%) and Axis Bank (down 0.05%) edged lower.
Yes Bank rose 0.61% at Rs 949.45 after the Reserve Bank of India (RBI) notified on Friday, 29 April 2016, that foreign institutional investors (FIIs)/registered foreign portfolios investors (RFPIs) can now invest up to 60% of the paid-up capital of the bank from existing 49% under the Portfolio Investment Scheme (PIS). The RBI notified that the total foreign investment from all sources i.e. Global Depository Receipts (GDR)/American Depository Receipts (ADR)/Foreign Direct Investment (FDI)/Foreign Institutional Investors (FII)/ Registered Foreign Portfolios Investors (RFPIs)/Non-Resident Indians (NRI)/Persons of Indian Origin (PIO) in the bank shall not exceed 60%. The central bank stated that Yes Bank has passed resolutions at its Board of Directors' level and a special resolution by the shareholders, agreeing for enhancing the limit for the purchase of its equity shares and convertible debentures by FIIs/RFPIs. The purchases could be made through primary market and stock exchanges.
ICICI Bank lost 3.74% at Rs 227.75 on reports that a foreign brokerage has cut its earnings estimates for the private sector bank by 15% to 16% for FY 2017 and FY 2018. The brokerage has reportedly maintained its neutral rating on the stock. Shares of ICICI Bank declined 1.47% to settle at Rs 236.60 during the previous trading session on Friday, 29 April 2016, triggered by the bank reporting increase in sticky loans. ICICI Bank's net profit declined 75.97% to Rs 701.89 crore on 14.51% growth in total income to Rs 18590.86 crore in Q4 March 2016 over Q4 March 2015. The result was announced during trading hours on Friday, 29 April 2016.
ICICI Bank has created a collective contingency and related reserve of Rs 3600 crore in Q4 March 2016 over and above provisions made for non-performing and restructured loans. This contingency provision is towards exposure to stress assets in certain sectors, including iron and steel, mining, power, rigs and cement. The weak global economic environment, the sharp downturn in the commodity cycle and the gradual nature of the domestic economic recovery has adversely impacted the borrowers in these sectors. Given the weak operating and recovery environment, it may take some time for resolution of stress on borrowers in these sectors, according to ICICI Bank.
Federal Bank slipped 2.39% at Rs 44.85 after net profit slumped 96.34% to Rs 10.26 crore on 1.76% rise in total income to Rs 2253.38 crore in Q4 March 2016 over Q4 March 2015. The result was announced on Saturday, 30 April 2016. Federal Bank's gross non-performing advances stood at Rs 1667.77 crore as on 31 March 2016 compared with Rs 1684.11 crore as on 31 December 2015 and Rs 1057.73 crore as on 31 March 2015. The ratio of gross non-performing advances to gross advances stood at 2.84% as on 31 March 2016 compared with 3.15% as on 31 December 2015 and 2.04% as on 31 March 2015. The ratio of net non-performing advances to net advances stood at 1.64% as on 31 March 2016 as against 1.66% as on 31 December 2015 and 0.73% as on 31 March 2015. The bank's provisions and contingencies fell 2.3% to Rs 388.64 crore in Q4 March 2016 over Q4 March 2015.
Realty stocks edged lower. Indiabulls Real Estate (down 2.52%), D B Realty (down 1.97%), Housing Development and Infrastructure (down 1.74%), DLF (down 0.58%) and Sobha (down 0.22%) declined. Prestige Estates Projects (up 3.26%), Unitech (up 0.63%) and Godrej Properties (up 0.47%) edged higher.
Oberoi Realty dropped 3.88% at Rs 268.50 after the company's consolidated net profit fell 37.34% to Rs 64.55 crore on 32.06% fall in total income to Rs 237.35 crore in Q4 March 2016 over Q4 March 2015. The result was announced after market hours on Friday, 29 April 2016.
Oberoi Realty's board of directors at its meeting held on 29 April 2016, approved issue of non-convertible debentures upto an aggregate amount of Rs 1500 crore by way of private placement, in one or more offerings or tranches. The board also approved issue of equity shares and/or any other securities convertible into equity by way of one or more public offers or private placement, or both, for an aggregate amount not exceeding Rs 750 crore, including premium.
TCS was off 0.67% at Rs 2,513.05. The company during market hours today, 2 May 2016 announced that the two largest banks in Myanmar, KBZSC and AYA Trust were able to participate in the historic opening of the Yangon Stock Exchange (YSX) with two parallel deployments of the TCS BaNCS for securities trading and settlement.
Meanwhile, the outcome of a monthly survey showed that growth in India's manufacturing sector eased last month amid broadly stagnant inflows of new work. The seasonally adjusted Nikkei India Manufacturing Purchasing Managers' Index (PMI) fell to 50.5 in April 2016 from 52.4 in March 2016. Indian manufacturers saw incoming new orders broadly stagnate in April, following three consecutive months of growth. New export orders expanded at the slowest pace since last October. Input cost inflation accelerated to the fastest since May 2015. Part of the additional cost burden was passed on to clients as selling prices rose further.
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