Key benchmark indices edged lower in early trade tracking weakness in Asian stocks and lackluster trading on Wall Street overnight. At 9:15 IST, the barometer index, the S&P BSE Sensex was down 142.01 points or 0.56% at 25,120.20. The Nifty 50 index was currently down 38.15 points or 0.49% at 7,697.35.
In overseas stock markets, Asian stocks edged lower as investors await closely watched April US non-farm payroll numbers. US stocks closed slightly lower yesterday, 5 May 2016, as oil failed to hold much of its intraday gains and investors awaited the key nonfarm-payrolls data due later in the global day today, 6 May 2016. The nonfarm-payrolls data has implications for the US monetary policy. The US central bank's mandate centers on maximizing employment and keeping inflation at a 2% target level. The Federal Open Market Committee (FOMC) next undertakes monetary policy review at a two-day meeting on 14-15 June 2016.
Closer home, the market breadth indicating the overall health of the market was negative. On BSE, 527 shares declined and 396 shares rose. A total of 40 shares were unchanged. The BSE Mid-Cap index was currently off 0.1%. The BSE Small-Cap index was currently down 0.17%. The losses for both these indices were lower than the Sensex's decline in percentage terms.
Telecom stocks were mixed. Reliance Communications (down1.94%) and Idea Cellular (down 0.53%) edged lower.
Bharti Airtel (Airtel) rose 0.9% after the company said that its subsidiary, Bharti Airtel International (Netherlands) BV, and Helios Towers Africa (HTA), a leading independent telecoms towers company in Africa, announced an agreement for the divestment of approximately 950 telecoms towers in the Democratic Republic of Congo (DRC) from Airtel to HTA. The divestment also includes towers currently under construction in the DRC. The deal will help expand HTA's tower coverage in Africa to over 6,500 owned towers. It will help Airtel deleverage through debt reduction and reduced ongoing capital expenditure. The agreement follows Airtel's and HTA's strategies to drive cost efficiencies throughout the industry, the promotion of passive infrastructure and to mitigate against the proliferation of towers. Post deal, Airtel will have full access to the towers from HTA under a long term lease contract. The agreement will allow Airtel to focus on its core business and customers, while enabling it to deleverage through debt reduction. The deal will significantly reduce Airtel's ongoing capital expenditure on passive infrastructure and also mitigate the proliferation of towers through enhanced sharing.
HTA is solely focused on providing telecoms infrastructure solutions which help its customers to achieve their goals. These goals typically include reducing operating cost, improving network uptime, preserving capital, focusing on their core business, and mitigating the proliferation of towers through infrastructure sharing, as they expand network coverage and capacity to meet the growing demand and improve quality of telecom service. The agreement is subject to statutory and regulatory approvals in the respective countries. The announcement was made after trading hours yesterday, 5 May 2016.
Shares of telecom towers company Bharti Infratel were up 0.24%.
Index heavyweight and cigarette major ITC lost 2.3% at Rs 310.25 after the company announced temporary shutdown of its cigarette factories from 4 May 2016 until the company is in a position to comply with the interim requirements pending hearing in the Karnataka High Court. ITC announced that the Supreme Court on 4 May 2016 passed an order transferring to the Karnataka High Court all writ petitions pending in various courts challenging the rules prescribing 85% pictorial warnings on packages of tobacco products. The Supreme Court observed that all parties should endeavour to follow the rules. In the meantime, ITC has decided to shut its cigarette factories from 4 May 2016 until the company is in a position to comply with the interim requirements pending hearing in the Karnataka High Court. The announcement was made after market hours yesterday, 5 May 2016.
Hero MotoCorp was down 1.2% at Rs 2,859.35. The company's net profit rose 70.85% to Rs 814.16 crore on 10.57% increase in total income to Rs 7614.61 crore in Q4 March 2016 over Q4 March 2015. Earnings before interest, taxation, depreciation and amortization (EBITDA) margin edged higher to 15.65% in Q4 March 2016, from 12.34% in Q4 March 2015. The result was announced after trading hours yesterday, 5 May 2016.
The improved profit margins were the combined result of the highest-ever quarterly sales of 17.21 lakh units and several margin improvement initiatives taken during the period, the company said in a statement.
Hero MotoCorp's board recommended a final dividend of Rs 32 per share for the financial year ended 31 March 2016.
Wipro was down 0.41% at Rs 540.75. The company after trading hours yesterday, 5 May 2016, announced that it has successfully implemented its Software as a Service (SaaS) platform- Managed File Transfer as a Service (MFTaaS) on Amazon Web Services (AWS) for organizations, thereby helping them integrate digitally with their clients, partners and employees. Wipro anticipates that the MFTaaS platform can potentially reduce up to 30% in TCO (Total Cost of Ownership) for its clients vis-a-vis traditional deployments, the company said in a statement.
In a separate announcement, Wipro said that it has won a multi-year contract from Thames Water in the United Kingdom. Wipro will develop new IT systems and processes to help Thames Water improve customer experience and drive operational efficiencies. The announcement was made after trading hours yesterday, 5 May 2016.
NTPC declined 0.68% at Rs 138.40. The company after trading hours yesterday, 5 May 2016, announced that it has raised Rs 1000 crore through private placement of secured non-convertible debentures at a coupon of 8.05% per annum with a 10 year door-to-door maturity. The proceeds of the issue will be utilized to finance capital expenditure/refinancing the debt requirement in on-going projects including recoupment of expenditure already incurred.
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