Pharma and cement stocks led losses as key benchmark indices edged lower for the second straight trading session. The barometer index, the S&P BSE Sensex, the 50-unit CNX Nifty, both, hit their lowest closing level in more than a week. The Sensex shed 133.65 points or 0.46% to settle at 28,666.04. The market breadth indicating the overall health of the market was weak. Losses ranged from 2% to about 18% for quite a few stocks which are the constituents of the BSE Small-Cap index.
In overseas markets, European stocks edged lower after global crediting rating agency Standard & Poor's Ratings Services yesterday, 15 April 2015, slashed its credit ratings on Greece's debt deeper into junk territory. Brent crude oil futures edged lower after a sharp surge overnight.
Index heavyweight and cigarette major ITC declined in volatile trade. Index heavyweight and engineering and construction major L&T dropped. Index heavyweight and housing finance major HDFC rose. Bank stocks edged lower. Realty and cement stocks also edged lower.
Benchmark indices witnessed intraday volatility today, 16 April 2015. After languishing in red earlier during the trading session, key indices extended losses in afternoon trade, with the Sensex and Nifty, both, hitting their lowest level in more than a week. Benchmark indices trimmed losses later.
Foreign portfolio investors (FPIs) bought shares worth a net Rs 232.49 crore from the secondary equity market yesterday, 15 April 2015, as per data from Central Depository Services (India). Domestic institutional investors (DIIs) sold shares worth a net Rs 60.18 crore yesterday, 15 April 2015, as per provisional data released by the stock exchanges.
In overseas markets, European stocks edged lower after global crediting rating agency Standard & Poor's Ratings Services yesterday, 15 April 2015, slashed its credit ratings on Greece's debt deeper into junk territory. Asian stocks edged higher after overnight gains for US stocks. US stocks edged higher yesterday, 15 April 2015, as better-than-expected earnings and a jump in oil prices invigorated stock market bulls.
In the foreign exchange market, the rupee edged higher against the dollar.
Brent crude oil futures edged lower after a sharp surge overnight. The recent rise in global crude oil prices will raise concerns pertaining to India's fiscal deficit, current account deficit and fuel price inflation. However, gains in rupee against the dollar will mitigate the negative impact of higher crude oil price. Gains in local currency will reduce the cost of imports. India imports about 80% of its crude oil requirements.
The S&P BSE Sensex fell 133.65 points or 0.46% to settle at 28,666.04, its lowest closing level since 7 April 2015. The index lost 301.99 points at the day's low of 28,497.70 in afternoon trade. The index gained 76.54 points at the day's high of 28,876.23 in opening trade.
The CNX Nifty dropped 43.50 points or 0.5% to settle at 8,706.70, its lowest closing level since 7 April 2015. The index hit a low of 8,645.65 and a high of 8,760 in intraday trade.
The market breadth indicating the overall health of the market was weak. On BSE, 1,707 shares declined and 1,097 shares rose. A total of 112 shares were unchanged.
The BSE Mid-Cap index shed 77.74 points or 0.7% to settle at 10,993.02. The BSE Small-Cap index lost 114.63 points or 0.96% to settle at 11,786.76. The decline in both these indices was higher than the Sensex's decline in percentage terms.
The total turnover on BSE amounted to Rs 3062 crore, lower than Rs 4388.53 crore registered during the previous trading session.
Index heavyweight and cigarette major ITC fell 1.67% to Rs 348.35. The stock hit a high of Rs 356.20 and low of Rs 346.80.
Index heavyweight and engineering and construction major L&T lost 2.14% to Rs 1,750. The stock hit a high of Rs 1,789.95 and low of Rs 1,735.60.
Index heavyweight and housing finance major HDFC rose 0.89% to Rs 1,302.95. The stock hit a high of Rs 1,308 and low of Rs 1,282.50.
Pharma shares declined. Cipla (down 2.18%), Dr Reddy's Laboratories (down 1.97%), Glenmark Pharmaceuticals (down 3%), Wockhardt (down 0.2%) and GlaxoSmithKline Pharmaceuticals (down 0.63%) declined. Cadila Healthcare rose 0.14%.
Sun Pharmaceutical Industries fell 2.57%. Sun Pharmaceutical Industries and the Technion - Israel institute of technology, after market hours yesterday, 15 April 2015, announced that their respective subsidiaries have entered into an exclusive worldwide research and license agreement. This agreement aims at the development of a joint project, based on new findings by Nobel Prize laureate Distinguished Professor Aaron Ciechanover, Dr. Gila Maor and Professor Ofer Binah, that can potentially lead to the development of novel anti-cancer drugs. The pre-clinical research was funded thus far by Dr. Alfred Mann, Sun Pharma said.
Lupin fell 2.44%. Shares of Aurobindo Pharma gained 3.97%. A foreign brokerage had reportedly said that the generic approval for Lupin's Suprax in the United States would hurt Lupin's earnings as this approval has come earlier than expected. This is the first generic approval for Suprax. It may be recalled that Aurobindo Pharma during market hours yesterday, 15 April 2015, said that it has received final approval from the US Food & Drug Administration (USFDA) to manufacture and market Cefixime, a bioequivalent to Lupin's Suprax for oral suspension USP, 100mg/5mL and 200mg/5mL.
Index heavyweight and cigarette major Reliance Industries (RIL) rose 0.4% to Rs 927.45. The stock hit a high of Rs 937.60 and low of Rs 919.
Infosys dropped 1% to Rs 2,191.10. The stock hit a high of Rs 2,230 and low of Rs 2,156.25.
TCS dropped 1.5%. The company said after market hours today, 16 April 2015, that it will pay employees a special reward or one-time bonus to mark the 10th anniversary of the company's initial public offering in 2004. For the company, the total consideration for this special reward to employees will be Rs 2628 crore.
TCS is set to its Q4 March 2015 and year ended 31 March 2015 results today, 16 April 2015.
Realty stocks declined. Indiabulls Real Estate (down 4.59%), Housing Development and Infrastructure (down 5.22%), Unitech (down 2.57%) Sobha (down 4%), and Godrej Properties (down 1.7%) declined.
DLF lost 2.31%. DLF after market hours yesterday,, 15 April 2015, said that the Securities Appellate Tribunal (SAT) has passed an order taking on record Securities and Exchange Board of India's (Sebi) undertaking that Sebi will not take any action to enforce the payment of penalty amount against the company during the pendency of the appeal and has posted the appeal on 9 July 2015 for hearing. It may be recalled that DLF has filed an appeal before SAT against Sebi's order imposing cumulative penalty of Rs 26 crore against the company.
Bank stocks edged lower. Among private bank stocks, HDFC Bank (down 0.13%), Kotak Mahindra Bank (down 1.93%), and ICICI Bank (down 0.97%) declined. Axis Bank rose 0.08%.
IndusInd Bank fell in volatile trade after the private sector bank reported Q4 March 2015 results. The stock was down 1.57% at Rs 933.10. The stock hit high of Rs 960.80 and low of Rs 927.60. The bank's net profit rose 25.05% to Rs 495.27 crore on 19.81% increase in total income to Rs 3,237.43 crore in Q4 March 2015 over Q4 March 2014. The result was announced during trading hours today, 16 April 2015.
In terms of a Reserve Bank of India (RBI) circular dated 26 February 2014, in respect of assets sold to SC/RCs, during the quarter ended 31 March 2015, the shortfall arrived at by deducting sale consideration and provisions held as on the date of sale from the outstanding amount, is being amortized over two years. Accordingly, the bank has charged an amount of Rs 32.09 crore in Q4 March 2015.
IndusInd Bank's ratio of net non-performing assets (NPAs) to net advances stood at 0.31% as on 31 March 2015, compared with 0.32% as on 31 December 2014 and 0.33% as on 31 March 2014. The bank's ratio of gross NPAs to gross advances stood at 0.81% as on 31 March 2015, compared with 1.05% as on 31 December 2014 and 1.12% as on 31 March 2014.
Among PSU bank stocks, Punjab National Bank (down 2.97%), Bank of Baroda (down 0.53%), Canara Bank (down 0.98%), Bank of India (down 0.64%) and Union Bank of India (down 1.09%) dropped. State Bank of India (SBI) rose 0.5%.
The credit growth for Scheduled commercial banks' (SCBs) shot up to eight-month high of 12.6% to Rs 68309.65 billion as on 3 April 2015, showing sharp acceleration from 9.5% growth recorded a fortnight ago as on 20 March 2015, according to data released by the Reserve Bank of India yesterday, 15 April 2015. Non-food credit, accounting for 99% of the share of the total credit, zoomed at 11-month high pace of 13.2% to Rs 67617.38 billion as on 3 April as against a rise of 9.8% a fortnight ago.
Banks have extended loans worth Rs 2.66 trillion in the fortnight ended 3 April 2015, compared with Rs 7.66 trillion worth of loans extended in last whole year. The strong growth in advances in the fortnight ended 3 April 2015 relates to year-end or quarter end rush from the banks to meet the targets. Generally, these loans are rolled back in the early part of the new financial year or quarter, which leads to normalization of loans growth.
The overall credit-deposit ratio improved to 75.9% as on 3 April from 75.4% a fortnight ago and 75.6% a year ago.
Meanwhile, the Reserve Bank of India (RBI) today, 16 April 2015, issued a notification allowing banks to offer differential interest rates on term deposits based on whether the term deposits are with or without-premature-withdrawal-facility, subject to certain conditions. The RBI said that banks should have a board approved policy with regard to interest rates on deposits, including deposits with differential rates of interest and ensure that the interest rates offered are reasonable, consistent, transparent and available for supervisory review/scrutiny as and when required. Banks should disclose in advance the schedule of interest rates payable on deposits i.e. all deposits mobilized by banks should be strictly in conformity with the published schedule. The RBI also said that all term deposits of individuals (held singly or jointly) of Rs 15 lakh and below must have premature withdrawal facility.
Cement stocks dropped. ACC (down 3.14%), Shree Cement (down 0.28%), Ambuja Cements (down 3.17%), and UltraTech Cement (down 3.23%) declined.
Grasim Industries declined 2.1%. Grasim has exposure to the cement sector through its subsidiary UltraTech Cement.
Key indices slipped for the second day in a row today, 16 April 2015. From a recent high of 29,044.44 on 13 April 2015, the Sensex has declined 378.40 points or 1.3% in the past two trading sessions. The Sensex has risen 708.55 points or 2.53% in this month so far (till 16 April 2015). The Sensex has risen 1,166.62 points or 4.24% in this calendar year so far (till 16 April 2015). From a 52-week low of 22,247.39 on 16 April 2014, the Sensex has risen 6,418.65 points or 28.85%. The Sensex is off 1,358.70 points or 4.52% from a record high of 30,024.74 hit on 4 March 2015.
In the foreign exchange market, the rupee edged higher against the dollar in choppy trade. The partially convertible rupee was hovering at 62.295, compared with its close of 62.375 during the previous trading session.
Brent crude oil futures edged lower after a sharp surge overnight. Brent for June settlement was off 97 cents at $62.35 a barrel. The contract had surged $3.51 a barrel or 5.86% to settle at $63.32 a barrel during previous trading session. The surge in global crude oil prices yesterday, 15 April 2015, was triggered by a smaller-than-expected increase in weekly US crude stockpiles as well as forecast of higher demand from the International Energy Agency.
Prime Minister Narendra Modi yesterday, 15 April 2015, said during joint press interaction with Prime Minister of Canada Stephen Harper at Ottawa, Canada that India's agreement on procurement of uranium from Canada for India's civilian nuclear power plants launches a new era of bilateral nuclear cooperation between the two countries. Modi sought Canada's cooperation and investment in energy, infrastructure, manufacturing, Smart Cities, and agro-industry and Research and Education in India. Modi is currently on an official visit to Canada.
In overseas markets, European stocks edged lower today, 15 April 2015, after global crediting rating agency Standard & Poor's Ratings Services (S&P) yesterday, 15 April 2015, slashed its credit ratings on Greece's debt deeper into junk territory. Key indices in France, Germany and UK were off 0.37% to 1.48%.
Greece remained in focus after S&P slashed its credit ratings on Greece's debt deeper into junk territory, saying it expects the country's debt and financial commitments to be unsustainable without deep economic reform. 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.
The European Central Bank (ECB) yesterday, 15 April 2015, left official interest rates unchanged after a monetary policy review. The bank's refi rate remains at 0.05%, while the interest rate on its marginal lending facility stands at 0.3% and the deposit rate at minus 0.2%. ECB President Mario Draghi said in a news conference that the bank's stimulus efforts are beginning to take hold in the European economy and batted away concerns in financial markets that the bank may have to end its more than 1 trillion ($1.1 trillion) asset purchase program early.
Asian stocks edged higher today, 16 April 2015, tracking overnight gains in US markets. Key benchmark indices in China, Indonesia, Hong Kong, Taiwan, Japan and South Korea rose by 0.08% to 2.71%. In Singapore, the Straits Times fell 0.24%.
Chinese Premier Li Keqiang was quoted as saying that it will not be easy for China to grow its economy by 7% this year, but he ruled out currency devaluation to promote growth through exports. Chinese economy is still under downward pressure, Li was quoted as saying in an interview to a newspaper.
China attracted $12.4 billion of foreign direct investment in March, up 2.2% from a year earlier, the Ministry of Commerce said in a statement today, 16 April 2015. The figure was up from February's $8.56 billion, which was 0.9% higher than a year earlier. FDI in the January-March period rose 11.3% on year to $34.88 billion.
Trading in US index futures indicated that the Dow could fall 53 points at the opening bell today, 16 April 2015. US stocks edged higher yesterday, 15 April 2015, as better-than-expected earnings and a jump in oil prices invigorated stock market bulls.
In economic news, the Empire State manufacturing index plunged, falling to a negative reading, while, industrial production fell by more than expected in March. Both reports suggested a deceleration in economic growth. Meanwhile, a gauge of confidence among home builders rose in April, according to the National Association of Home Builders/Wells Fargo housing-market index released yesterday, 15 April 2015
St. Louis Fed President James Bullard, speaking at the annual Hyman Minsky conference yesterday, 15 April 2015, made a case for raising interest rates soon, arguing the level needs to be appropriate for the coming "boom" for the US economy.
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