Oil sector stocks led the upmove as the two key benchmark indices eked out small gains. The barometer index, the S&P BSE Sensex, rose 66.14 points or 0.24% at 27,812.80, as per the provisional closing data. The Nifty 50 index rose 19.85 points or 0.23% to 8,528.55, as per the provisional closing data. The Sensex and the Nifty alternately swung between positive and negative zone in intraday trade.
The Sensex rose 80.03 points, or 0.29% at the day's high of 27,826.69 in late trade. The barometer index lost 108.68 points, or 0.39% at the day's low of 27,637.98 in afternoon trade, its lowest level since 11 July 2016. The Nifty rose 31.35 points, or 0.37% at the day's high of 8,540.05 in late trade. The index shed 32 points, or 0.38% at the day's low of 8,476.70 in afternoon trade, its lowest level since 11 July 2016.
The market breadth indicating the overall health of the market was negative. On BSE, 1,444 shares fell and 1,224 shares rose. A total of 168 shares were unchanged. The BSE Mid-Cap index provisionally rose 0.18%. The BSE Small-Cap index provisionally fell 0.11%. Both these indices underperformed the Sensex.
The total turnover on BSE amounted to Rs 2806 crore, lower than turnover of Rs 3033.87 crore registered during the previous trading session.
In overseas stock markets, European stocks edged lower as disappointing corporate updates soured investors' sentiment. Earlier during the global day, Asian stocks ended on a mixed note. Stocks in Japan rose for the sixth trading session in a row amid continued expectations that the Bank of Japan will soon roll out stimulus for the economy. The Nikkei 225 Average ended 1.37% higher. US stocks eked out small gains Monday, 18 July 2016, pushing both the Dow Jones Industrial Average and the S&P 500 Index to fresh all-time closing highs and the Nasdaq Composite Index to its highest finish of 2016. Stocks got a boost by a flurry of upbeat earnings reports from financial companies.
Stocks of public sector banks witnessed a mixed trend after the government allocated Rs 22915 crore to 13 public sector banks for their capitalization needs during the current financial year. Canara Bank (up 4.84%), Dena Bank (up 1.88%), Corporation Bank (up 0.95%), Indian Overseas Bank (up 0.90%), Syndicate Bank (up 0.83%), Bank of India (up 0.81%), Allahabad Bank (up 0.79%), State Bank of India (up 0.55%), UCO Bank (up 0.46%) and United Bank of India (up 0.21%), edged higher. Union Bank of India (down 0.51%), Punjab National Bank (down 0.83%) and Central Bank of India (down 1.72%), edged lower.
Allahabad Bank was was allocated Rs 44 crore. Canara Bank was allocated Rs 997 crore. Corporation Bank was allocated Rs 677 crore. Dena Bank was allocated Rs 594 crore. Indian Overseas Bank was allocated Rs 3101 crore. State Bank of India was allocated Rs 7575 crore. Syndicate Bank was allocated Rs 1034 crore. UCO Bank was allocated Rs 1033 crore. Central Bank of India was allocated Rs 1729 crore. Bank of India was allocated Rs 1784 crore. Punjab National Bank was allocated Rs 2816 crore. Union Bank of India was allocated Rs 721 crore. United Bank of India was allocated Rs 810 crore.
Among other state-run banks, Punjab and Sind Bank (up 1.11%) and IDBI Bank (up 0.55%), edged higher. Bank of Maharashtra (down 0.3%), Bank of Baroda (down 0.5%), Andhra Bank (down 0.84%), Vijaya Bank (down 1.85%) and Indian Bank (down 3.27%), edged lower. No allocation of capital was made to these seven state-run banks
Stocks of private sector banks also witnessed a mixed trend. IndusInd Bank (down 2.19%), HDFC Bank (down 0.95%), Axis Bank (down 0.75%) and City Union Bank (down 0.25%), edged lower. Kotak Mahindra Bank (up 0.29%), Federal Bank (up 0.58%) and ICICI Bank (up 2.03%), edged higher.
Yes Bank fell 1.85%. Global credit rating agency Moody's Investor Service, vide its credit opinion dated 18 July 2016, has maintained its long term rating on Yes Bank at 'Baa3/P-3' with stable outlook. Moody's said that Yes Bank's Baa3/Prime-3 foreign currency deposit ratings are underpinned by the bank's standalone credit strength or baseline credit assessment (BCA) of ba1 and one notch of government support. The bank's BCA of ba1 reflects its sound asset quality, consistent profitability, and small but rapidly growing franchise when compared with its Indian banking sector peers.
The bank's BCA also reflects potential weaknesses in Yes Bank's funding and liquidity profile. While the bank maintained an adequate loans to customer deposit ratio of 95% at end-March 2016, its higher reliance on corporate deposits relative to its peers creates risks in volatile markets. Moody's also said that Yes Bank may encounter operating challenges at a time when it is expanding its retail presence. While the bank's current level of CASA deposits remains below the domestic peer average, it has been building up its deposit base as well as increasing its branch network.
Shares of FMCG major Hindustan Unilever (HUL) edged lower after the company reported a muted 4% growth in volumes in its FMCG business in Q1 June 2016. The stock fell 2.87% to Rs 894. The company's net profit rose 9.79% to Rs 1173.90 crore on 3.36% growth in total income to Rs 8235.77 crore in Q1 June 2016 over Q1 June 2015. The growth in bottom line was aided by a one-time write back of provision for pension benefits arising from plan amendments. Profit after tax before exceptional items grew by 6% to Rs 1128 crore in Q1 June 2016 over Q1 June 2015. HUL expects a muted growth in India's FMCG market in the short term.
HUL proposed to make an investment of about Rs 1000 crore towards the setting up of a new manufacturing unit in the vicinity of its existing factory premises in Doom Dooma, Assam. This investment is subject to receipt of requisite approvals and clearances. The new unit that is envisaged to be commissioned in early 2017 will augment the production capacity of personal care products for HUL.
UltraTech Cement edged higher in volatile trade after reporting strong Q1 June 2016 results. The stock rose 0.44% at Rs 3,515. Consolidated net profit rose 29% to Rs 780 crore on 4% growth in net sales to Rs 6538 crore in Q1 June 2016 over Q1 June 2015. The result was announced during market hours today, 19 July 2016. Operating costs fell on year on year basis in Q1 June 2016 on the back of operational efficiencies and a judicious power and fuel mix.
With regard to future business outlook, UltraTech Cement said that cement demand is expected to grow around 7% in the current financial year (FY 2017), given the governments' focus on infrastructure development, housing sector, smart cities, roads etc. UltraTech is positioned across the country to meet the rise in cement demand and participate in the next phase of growth in the country, the company said in a statement.
MindTree lost 8.36% to Rs 562.50 after consolidated net profit declined 7.2% to Rs 123.50 crore on 0.6% growth in revenue to Rs 1327.60 crore in Q1 June 2016 over Q4 March 2016. The result was announced after market hours yesterday, 18 July 2016. In dollar terms, MindTree's consolidated net profit declined 5.8% to $18.50 million on 2% growth in revenue to $199 million in Q1 June 2016 over Q4 March 2016.
The company's CEO & Managing Director Rostow Ravanan said that while the global environment poses some short term challenges, the management remains confident that the company's investments are on the right track to accelerate growth for its clients and the company.
MindTree's board of directors at its meeting held yesterday, 18 July 2016, approved amalgamation of its wholly owned subsidiary Magnet 360, LLC subject to necessary approvals.
Meanwhile, global credit rating agency Fitch Ratings yesterday, 18 July 2016, affirmed India's Long-Term Foreign- and Local-Currency Issuer Default Ratings at 'BBB-'. The outlook on the rating is stable. The affirmation of India's sovereign ratings balances a strong medium-term growth outlook and favourable external balances against a weak fiscal position and still-difficult business environment. Fitch expects the government's continued structural reform push to support GDP growth in the medium term. On the flip side, India still ranks lowest among sovereigns in the 'BBB' category in the World Bank's Ease of Doing Business index and Fitch does not expect change anytime soon.
According to the rating agency, the review of the Fiscal Responsibility and Budget Management Act leads to short-term uncertainty on the medium-term fiscal framework, but it might also provide an opportunity if it brings the fiscal parameters closer in line with India's peers. Fitch said that the main factors that could lead to positive rating action include fiscal initiatives that would cause the general government debt burden to fall more rapidly than expected in the medium term. Positive rating action could also arise from improved business environment resulting from implemented reforms and persistently contained inflation which would support higher private investment and real GDP growth.
The main factors that could lead to negative rating action include further deviation of the already high public-debt burden from the peer median, which may be caused by stalling fiscal consolidation or greater-than-expected deterioration in the banking sector's asset quality that would prompt large-scale sovereign financial support. Negative rating action could also arise from loose macroeconomic policy settings that cause a return of persistently high inflation levels and a widening current-account deficit which would increase the risk of external funding stress.
Powered by Capital Market - Live News
