Index heavyweights led losses as key benchmark indices slumped on the first trading session of the week. The barometer index, the S&P BSE Sensex, fell below the psychological 28,000 mark. The Sensex and the 50-unit CNX Nifty, both, hit 3-week low as these two key benchmark indices extended intraday losses in late trade. The Sensex was provisionally off 549.65 pts or 1.93% at 27,892.45.
There was a broad based decline on the bourses today, 20 April 2015. On BSE, there were more than two losers against every gainer. The BSE Mid-Cap index was off 1.97%. The BSE Small-Cap index was off 2.04%. The decline in both these indices was higher than the Sensex's decline in percentage terms. Losses ranged from 2% to about 20% for quite a few stocks which are the constituents of the BSE Small-Cap index.
Capital goods stocks edged lower. Reliance Industries (RIL) edged lower on profit booking after reporting record quarterly net profit in Q4 March 2015. Index heavyweights HDFC, ITC, Infosys and L&T dropped.
In overseas markets, European markets edged higher after China's central bank over the weekend cut the amount of money that banks must hold as reserves. Chinese stocks led decline in Asian stocks after China's securities regulator after on Friday, 17 April 2015, tightened rules on margin lending and the Chinese local stock exchanges eased restrictions on short-selling of stocks. The announcement came after end of the trading session in Asian markets on Friday, 17 April 2015.
Meanwhile, data released by the government after trading hours on Friday, 17 April 2015, showed that India's merchandise exports (including re-exports) dipped 21.06% to $23951.16 million in March 2015 over March 2014
Foreign portfolio investors sold shares worth a net Rs 675.71 crore during the previous trading session on Friday, 17 April 2015, as per provisional data released by the stock exchanges. Domestic institutional investors (DIIs) bought shares worth a net Rs 72.52 crore on Friday, 17 April 2015, as per provisional data released by the stock exchanges.
As per provisional closing, the S&P BSE Sensex was down 549.65 pts or 1.93% at 27,892.45. The index fell 639.73 points at the day's low of 27,802.37 in late trade, its lowest level since 30 March 2015. The index rose 97.36 points at the day's high of 28,539.46 at the onset of trading session.
The CNX Nifty was down 157.90 points or 1.83% at 8,448.10, as per provisional closing. The index hit a low of 8,422.75 in intraday trade, its lowest level since 30 March 2015. The index hit a high of 8,619.95 in intraday trade.
The BSE Mid-Cap index was down 212.16 points or 1.97% at 10,559.61. The BSE Small-Cap index was down 237.43 points or 2.04% at 11,384.80. The decline in both these indices was higher than the Sensex's decline in percentage terms.
The market breadth indicating the overall health of the market was quite weak, with more than two losers against every gainer on BSE. 1,951 shares fell and 891 shares rose. A total of 100 shares were unchanged.
The total turnover on BSE amounted to Rs 4970 crore, higher than turnover of Rs 3456.92 crore registered during the previous trading session.
NMDC tumbled after cutting iron ore prices. The stock was off 5.23%. NMDC on Saturday, 18 April 2015, announced reduction in the prices of lump iron ore and fines with effect from 18 April 2015. The price of lump iron ore was reduced to Rs 3,050/WMT from Rs 3,250/WMT in March 2015. The price of fines was slashed to Rs 1,960/WMT from Rs 2,460/WMT in March 2015.
Reliance Industries (RIL) edged lower on profit booking after reporting record quarterly net profit in Q4 March 2015. The stock was off 4.76% at Rs 882.70. The stock hit a high of Rs 937.95 and a low of Rs 878.75. The company announced the fourth quarter results after trading hours on Friday, 17 April 2015. The stock had surged ahead of its results. From a recent low of Rs 824 on 6 April 2015, the stock had gained 12.55% to Rs 927.45 on 16 April 2015 in seven sessions. The stock had dropped 0.06% to Rs 926.85 on Friday, 17 April 2015.
RIL's consolidated net profit rose 8.5% to Rs 6381 crore on 33.3% drop in turnover to Rs 70863 crore in Q4 March 2015 over Q4 March 2014. RIL's net profit of Rs 6381 crore in Q4 March 2015 was a record quarterly net profit for RIL on consolidated basis. The result was announced after market hours on Friday, 17 April 2015.
RIL attributed the sharp fall in turnover in Q4 March 2015 to a sharp fall in benchmark crude oil price. RIL's gross refining margins (GRM) edged up to $10.1 per barrel in Q4 March 2015, from $9.3 per barrel in Q4 March 2014. On sequential basis, the GRM rose sharply from $7.3 a barrel in Q3 December 2014. RIL's GRM edged up to $8.6 a barrel in the year ended 31 March 2015 (FY 2015) from $8.1 a barrel in the year ended 31 March 2014 (FY 2014).
RIL said in a presentation to investors after the company's Q4 March 2015 results that the company plans to restart its entire network of 1,400 retail fuel pumps during the year ending 31 March 2016 (FY 2016). Over 320 fuel outlets have already become operational, RIL said.
RIL's non-operational income rose 3.57% to Rs 2172 crore in Q4 March 2015 over Q4 March 2014. RIL said the increase in non-operational income was primarily on account of higher profit on sale of investments.
With regard to the company's US shale gas business, RIL said that the challenging market outlook would most likely curtail near-term growth for the shale gas business. Given the current weak commodity price environment, the company is focusing on capital preservation by moderating activity levels, reducing service costs and improving efficiencies in the shale gas business, RIL said. Ensuring profitable development and retaining optionality through high grading acreages and improving netbacks will be the key challenges going forward, RIL said. RIL said that the long term outlook for its US shale gas business remains promising.
RIL's total capital expenditure stood at a little over Rs 1 lakh crore in FY 2015, including exchange rate difference capitalization. Capital expenditure was principally on account of ongoing expansions projects in the petrochemicals and refining business at Jamnagar, Dahej and Hazira, Broad band Access and US shale gas projects.
Capital goods shares slumped. Suzlon Energy (down 4.34%), Praj Industries (down 3.23%), Jindal Saw (down 3.1%), Bharat Electronics (down 2.82%), Lakshmi Machine Works (down 2.65%), L&T (down 2.26%), ABB India (down 2.17%), Punj Lloyd (down 2.06%), BEML (down 1.85%), Alstom T&D India (down 1.46%), Pipavav Defence and Offshore Engineering Company (down 1.39%), Siemens (down 1.12%), Thermax (down 1.03%), Crompton Greaves (down 0.37%) and SKF India (down 0.32%), edged lower. Havells India (up 1%), ALSTOM India (up 1.41%) and AIA Engineering (up 1.86%), edged higher.
Bharat Heavy Electricals was down 2.24%. Bhel during market hours today, 20 April 2015, said that the company has successfully commissioned a 250 megawatts (MW) coal-based thermal power plant in Gujarat. The unit has been commissioned at Gujarat State Electricity Corporation (GSECL) Sikka Thermal Power Station (TPS) by Bhel on engineering, procurement, and construction (EPC) basis.
Realty shares dropped. Housing Development and Infrastructure (HDIL) (down 8.49%), D B Realty (down 5.44%), Sunteck Realty (down 5.35%), Indiabulls Real Estate (down 5.2%), Anant Raj (down 5.16%), Oberoi Realty (down 4.63%), Peninsula Land (down 3.71%), Unitech (down 2.37%), Godrej Properties (down 1.17%), Sobha (down 0.99%), Prestige Estates (down 0.87%), Parsvnath Developers (down 0.86%), DLF (down 0.65%) and Phoenix Mills (down 0.01%), edged lower.
Among other bills, the government is keen about both the Houses of Parliament taking up for consideration the Real Estate (Development & Regulation) Bill during the second part of the Budget session. The second and final part of the ongoing Budget session of Parliament began today, 20 April 2015.
Meanwhile, data released by the government after trading hours on Friday, 17 April 2015, showed that India's merchandise exports (including re-exports) dipped 21.06% to $23951.16 million in March 2015 over March 2014. Imports fell 13.44% to $35744.68 million in March 2015 over March 2014. Oil imports declined 52.68% to $7413.30 million in March 2015 over March 2014. Non-oil imports rose 10.55% to $28331.38 million in March 2015 over March 2014. The trade deficit for fiscal year 2014-15 was estimated at $137014.46 million, which was higher than trade deficit of $135797.90 million for fiscal year 2013-14.
Proceedings in the parliament during the second half of the Budget session which began today, 20 April 2015, are being closely watched as the government hopes to pass the Constitution Amendment Bill for the introduction of a nationwide Goods and Services Tax (GST) in the country. The government had tabled the Constitution Amendment Bill for GST in the Lok Sabha during the winter session of parliament. GST, touted as the single biggest indirect taxation reforms since independence, will simplify and harmonise the indirect tax regime in the country. Central taxes like Central Excise Duty, Additional Excise Duties, Service Tax, Additional Customs Duty (CVD) and Special Additional Duty of Customs (SAD), etc. will be subsumed in GST. At the state level, taxes like VAT/Sales Tax, Central Sales Tax, Entertainment Tax, Octroi and Entry Tax, Purchase Tax and Luxury Tax, etc. would be subsumed in GST.
In overseas markets, European markets edged higher after China's central bank over the weekend cut the amount of money that banks must hold as reserves. Chinese stocks led decline in Asian stocks after China's securities regulator after on Friday, 17 April 2015, tightened rules on margin lending and the Chinese local stock exchanges eased restrictions on short-selling of stocks. The announcement came after end of the trading session in Asian markets on Friday, 17 April 2015. Hong Kong's Hang Seng index was off 2.06%. In mainland China, the Shanghai Composite index was off 1.61%.
The People's Bank of China (PBOC) yesterday, 19 April 2015, announced reduction in reserve requirement ratio (RRR) for all banks by 100 basis points to 18.5% to be effective from 20 April 2015. Meanwhile, China Securities Regulatory Commission (CSRC) on Saturday, 18 April 2015, stressed that there was no desire to suppress the hot stock market after unveiling a raft of measures on Friday, 17 April 2015, to curb margin trading. Meanwhile, the Shanghai and Shenzhen stock exchanges on Friday, 17 April 2015, issued rules that would make it easier for investors to short, or bet against, stocks. To short a stock, an investor borrows shares and sells them, hoping the price will fall and so allow them to repay with cheaper shares. It has been difficult to short stocks in China even as valuations soared because it has been virtually impossible to borrow shares.
Meanwhile, global markets are closely monitoring developments with regard to Greece. Eurozone finance ministers are scheduled to hold a meeting on Friday, 24 April 2015, to discuss the state of negotiations between Greece and its international creditors. The country's Syriza-led government has been locked in negotiations with its international creditors since coming to power in late January, with progress slow. Greece needs to strike a deal within the next few months to secure billions of euros in bailout aid to avoid defaulting on its debts and potentially exiting the euro.
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