IT and cement stocks led losses for key benchmark indices. Benchmark indices witnessed intraday volatility. The barometer index, the S&P BSE Sensex, was provisionally off 143.41 points or 0.5% at 28,361.52. The market breadth indicating the overall health of the market was positive.
Shares of public sector oil marketing companies (PSU OMCs) edged higher as global crude oil prices dropped yesterday, 22 July 2015. Lupin tumbled after the company reported weak Q1 results. Bajaj Auto dropped in volatile trade as the company's Q1 June 2015 results fell short of market expectations. Shares of car major Maruti Suzuki India hit record high after the company announced the launch of its new premium sales channel under the brand NEXA.
Key benchmark indices witnessed intraday volatility. The Sensex and 50-unit CNX Nifty, both, hit their highest level in nearly 14 weeks amid initial volatility. After alternately moving between positive and negative zone, key indices drifted lower in mid-morning trade. Benchmark indices extended intraday losses in mid-afternoon trade. Key indices weakened once again soon after erasing a lion's portion of intraday losses in late trade.
Foreign portfolio investors (FPIs) bought shares worth a net Rs 450.32 crore yesterday, 22 July 2015, as per provisional data released by the stock exchanges. Domestic institutional investors (DIIs) sold shares worth a net Rs 351.77 crore yesterday, 22 July 2015, as per provisional data released by the stock exchanges.
In overseas stock markets, European stocks edged higher after Greece's parliament passed a second set of economic overhauls demanded by the nation's international creditors as a precondition for starting talks over a third bailout package. Asian stocks edged higher after Greece's parliament passed a second set of economic overhauls demanded by the nation's international creditors as a precondition for starting talks over a third bailout package. US stocks edged lower yesterday, 22 July 2015, after disappointing earnings from Apple Inc. and Microsoft Corp.
As per provisional figures, the S&P BSE Sensex was down 143.41 points or 0.5% at 28,361.52. The index fell 189.56 points at the day's low of 28,315.37 in mid-afternoon trade. The index gained 73.40 points at the day's high of 28,578.33 in early trade, its highest level since 17 April 2015.
The CNX Nifty was down 47 points or 0.54% at 8,586.50, as per provisional figures. The index hit a low of 8,573.80 in intraday trade. The index hit a high of 8,654.75 in intraday trade, its highest level since 17 April 2015.
The BSE Mid-Cap index was down 18.37 points or 0.16% at 11,216.19. The decline in the index was lower than Sensex's decline in percentage terms. The BSE Small-Cap index was up 59.97 points or 0.51% at 11,736.13, outperforming the Sensex.
The market breadth indicating the overall health of the market was positive. On BSE, 1,524 shares gained and 1,315 shares fell. A total of 129 shares were unchanged.
The total turnover on BSE amounted to Rs 3360 crore, higher than turnover of Rs 2925.66 crore registered during the previous trading session.
Shares of public sector oil marketing companies (PSU OMCs) edged higher as global crude oil prices fell yesterday, 22 July 2015. Indian Oil Corporation (up 1.55%) and HPCL (up 0.31%) edged higher. BPCL (down 0.15%) edged lower.
Decline in crude oil prices will reduce under-recoveries of PSU OMCs on domestic sale of LPG and kerosene at government controlled prices. However, a weakness in rupee against the dollar will restrict the benefit of falling global crude oil prices to that extent. A weak rupee raises the cost of imports. The government has already decontrolled pricing of petrol and diesel.
Lupin tumbled after the company reported weak Q1 results. The stock fell 5.3% at Rs 1,727.35. The stock hit a high of Rs 1,835 and a low of Rs 1,716 in intraday trade. Lupin's consolidated net profit fell 16% to Rs 525 crore on 6.4% decline in net sales to Rs 3074.30 crore in Q1 June 2015 over Q1 June 2014. The result was announced during market hours today, 23 July 2015.
Lupin's operating profit dropped 26.7% to Rs 816.60 crore in Q1 June 2015 over Q1 June 2014. Operating profit margin (OPM) dropped sharply to 26.6% in Q1 June 2015 from 33.9% in Q1 June 2014.
Commenting on the company's Q1 performance, Mr. Nilesh Gupta, Managing Director of Lupin said that the slowdown in approvals in the US dampened growth during the quarter, even as the company continues to improve on gross margins. The company remains focused on evolving its research pipeline, ensuring compliance, operational excellence and acquiring meaningful assets, Gupta said.
Meanwhile, Lupin during market hours today, 23 July 2015, announced that it has entered into a definitive agreement to acquire privately held GAVIS Pharmaceuticals LLC and Novel Laboratories Inc. (GAVIS), subject to certain closing conditions, in a transaction valued at $880 million, cash free and debt free. The transaction has been unanimously approved by the boards of directors of Lupin and GAVIS. The acquisition enhances Lupin's scale in the US generic market and also broadens Lupin's pipeline in dermatology, controlled substance products other high-value and niche generics. GAVIS brings to Lupin a highly skilled US based R&D organization which would complement Lupin's Coral Springs, Florida, inhalation R&D center, Lupin said. GAVIS's New Jersy based manufacturing facility will become Lupin's first manufacturing site in the US, Lupin said in a press release.
New Jersey based GAVIS is a privately held company specializing in formulation development, manufacturing, packaging, sales, marketing and distribution of pharmaceuticals products. GAVIS recorded sales of $96 million in FY 2014 and has over 250 New Jersey based employees. Commenting on the acquisition, Ms. Vinita Gupta, Chief Executive Officer of Lupin said that the acquisition is expected to be accretive to Lupin's earnings from the first full year of operations.
Bajaj Auto dropped in volatile trade as the company's Q1 June 2015 results fell short of market expectations. The stock fell 5.01% at Rs 2,488. The stock hit a high of Rs 2,655 and a low of Rs 2,478.90 in intraday trade. Bajaj Auto's net profit jumped 37.13% to Rs 1014.80 crore on 10.57% increase in total income to Rs 6050.30 crore in Q1 June 2015 over Q1 June 2014. The result was announced during market hours today, 23 July 2015.
Bajaj Auto's earnings before interest, taxation, depreciation and amortization (EBITDA) before marked-to-market gain/loss rose 14% to Rs 1190 crore in Q1 June 2015 over Q1 June 2014. EBITDA margin improved to 21.1% in Q1 June 2015 from 19.7% in Q1 June 2014. Bajaj Auto said that its strategy for growth in markets across the globe and increase of share in the domestic motorcycle market has yielded desired results in Q1 June 2015. Growth has been achieved without any compromise on margins, the company said.
The company's exports rose 17% to Rs 2634 crore in Q1 June 2015 over Q1 June 2014. Bajaj Auto's marketshare in domestic motorcycle market expanded 300 basis points to 18% in Q1 June 2015 from 15% in Q4 March 2015.
Shares of car major Maruti Suzuki India hit record high after the company announced the launch of its new premium sales channel under the brand NEXA. The stock rose 0.95% at Rs 4,228.95. The stock hit record high of Rs 4,243.90 in intraday trade. The stock hit a low of Rs 4,190 in intraday trade. The announcement was made during market hours today, 23 July 2015. NEXA marks the first initiative by an automobile company to go beyond selling cars and create a new format of retail experience for the customer. Nearly 100 NEXA showrooms will come up across India over the next 6-8 months, Maruti said in a press release.
To attain its medium term goal of two million annual sales by 2020, the company is taking new initiatives in all areas of business. NEXA is one of the major initiatives. The company is reaching out to new segments of customers emerging in a changing India, Maruti said.
Maruti's S-Cross premium crossover that debuts in August 2015 will be the first car to be sold under NEXA. Several new models will be added to both channels as part of the company's medium term goal of 2 million annual sales by 2020, Maruti said.
Meanwhile, in the global commodities markets, Brent crude oil futures edged lower in volatile trade. Brent for September settlement was currently off 7 cents at $56.06 a barrel. The contract had fallen 91 cents or 1.59% to settle at $56.13 a barrel during previous trading session after data released by the US government showed a surprise increase in US crude inventories last week.
India imports about 80% of its crude requirements and a decline in crude eases concerns on fiscal deficit, inflation and gives more room for the government to boost growth through spending on infrastructure. However, a weakness in rupee against the dollar will restrict the benefit of falling global crude oil prices to that extent. A weak rupee raises the cost of imports.
In the foreign exchange market, the rupee edged lower against the dollar. The partially convertible rupee was currently hovering at 63.735, compared with its close of 63.58 during the previous trading session.
Meanwhile, India's weather office, the India Meteorological Department (IMD), said in its daily monsoon update issued yesterday, 22 July 2015, that the Southwest Monsoon was active over Gujarat State and Konkan & Goa during past 24 hours ending until 8:30 IST.
For the country as a whole, cumulative rainfall during this year's monsoon season was 7% below the Long Period Average (LPA) until 22 July 2015. Region wise, the rainfall was 13% below the LPA in Central India, 12% below the LPA in South Peninsula, 6% below the LPA in East & Northeast India and 6% above the LPA in Northwest India until 22 July 2015.
The quantum of and the spatial distribution of rainfall this month holds key; July accounts for about 33% of precipitation during the June-September monsoon season and is critical for crops. The June-September southwest monsoon is critical for the country's agriculture because a considerable part of the country's farmland is dependent on the rains for irrigation.
In overseas stock markets, European stocks edged higher today, 23 July 2015, after Greece's parliament passed a second set of economic overhauls demanded by the nation's international creditors as a precondition for starting talks over a third bailout package. Key indices in France, Germany and UK were up 0.11% to 0.22%.
Greece's parliament today, 23 July 2015, passed a second set of economic overhauls demanded by the nation's international creditors as a precondition for starting talks over a third bailout package. The measures were supported by a majority of lawmakers, with backing from opposition parties.
Asian stocks edged higher today, 23 July 2015, after Greece's parliament passed a second set of economic overhauls demanded by the nation's international creditors as a precondition for starting talks over a third bailout package. Key indices in Japan, China, Hong Kong, South Korea and Singapore were up 0.02% to 2.44%. Key indices in Taiwan and Indonesia were off 0.08% to 1.43%.
US stocks edged lower yesterday, 22 July 2015, after disappointing earnings from Apple Inc. and Microsoft Corp. US home resales rose in June to their highest level in nearly 8-1/2 years. The National Association of Realtors said yesterday, 22 July 2015, existing home sales increased 3.2% to an annual rate of 5.49 million units.
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