Cement stocks and index heavyweights ITC, HDFC and Infosys led decline for key benchmark indices on the first trading session of the week. The barometer index, the S&P BSE Sensex, and the 50-unit CNX Nifty, both, hit their lowest level in almost a week. The Sensex and the Nifty lost more than 1% each as per provisional closing. The market breadth indicating the overall health of the market was negative. The Sensex was provisionally off 314.27 points or 1.12% at 27,643.23.
Key benchmark indices in India edged lower today, 25 May 2015, after comments from Federal Reserve Chairwoman Janet Yellen on Friday, 22 May 2015, indicated that the US central bank is on track to raise interest rates this year. Higher US interest rates will reduce the attraction of riskier emerging-markets assets. In overseas markets, European stocks edged lower, weighed by more concerns about the state of Greece's finances.
Index heavyweight and cigarette major ITC dropped after the company reported muted growth in Q4 net profit. Kotak Mahindra Bank declined after the government today, 25 May 2015, deferred the bank's proposal for increasing the aggregate foreign investment in the bank to 55%. IDFC dropped after the government today, 25 May 2015, rejected the proposal from Sharekhan and Human Value developers Pvt Ltd for the transfer of CCDs and CCPs of their companies held by IDFC to Baring Private Equity Asia IV Mauritius.
Foreign portfolio investors bought shares worth a net Rs 211.42 crore during the previous trading session on Friday, 22 May 2015, as per provisional data released by the stock exchanges. Domestic institutional investors (DIIs) bought shares worth a net Rs 237.62 crore on Friday, 22 May 2015, as per provisional data released by the stock exchanges.
Indian stocks may remain volatile this week as traders roll over positions in the futures & options (F&O) segment from the near month May 2015 series to June 2015 series. The near month May 2015 F&O contracts expire on Thursday, 28 May 2015.
In overseas markets, European stocks edged lower, weighed by more concerns about the state of Greece's finances. Chinese stocks rallied for a fifth straight day today, 25 May 2015, leading Asian markets mostly higher. US stocks ended modestly lower during the previous trading session on Friday, 22 May 2015, after Federal Reserve Chairwoman Janet Yellen said she still expected the central bank to raise interest rates sometime this year.
As per provisional closing, the S&P BSE Sensex was down 314.27 points or 1.12% at 27,643.23. The index lost 343.18 points at the day's low of 27,614.32 in late trade, its lowest level since 19 May 2015. The index fell 54.21 points at the day's high of 27,903.29 in early trade.
The CNX Nifty was down 88.70 points or 1.05% at 8,370.25, as per provisional closing. The index hit a low of 8,364.15 in intraday trade, its lowest level since 19 May 2015. The index hit a high of 8,441.95 in intraday trade.
The BSE Mid-Cap index was down 8.70 points or 0.08% at 10,611.11. The BSE Small-Cap index was down 24.28 points or 0.22% at 11,183.38. The decline in both these indices was lower than the Sensex's decline in percentage terms.
The market breadth indicating the overall health of the market was negative. On BSE, 1,517 shares fell and 1,163 shares rose. A total of 114 shares were unchanged.
The total turnover on BSE amounted to Rs 1952 crore, lower than turnover of Rs 3023.93 crore registered during the previous trading session.
Index heavyweight and housing finance major HDFC lost 2.38% at Rs 1,256.90. The stock hit a high of Rs 1,287.50 and a low of Rs 1,250 in intraday trade.
Another index heavyweight and software major Infosys shed 0.97% at Rs 2,022. The stock hit a high of Rs 2,056.90 and a low of Rs 2,007 in intraday trade.
Cement stocks declined. Ambuja Cements (down 3.21%), UltraTech Cement (down 1.68%) and ACC (down 1.29%) edged lower. Shree Cement (up 1.93%) edged higher.
Grasim Industries was off 1.85% at Rs 3,574.55. Grasim Industries before market hours today, 25 May 2015, said that the company has signed a business transfer agreement with Future Consumer Enterprise for the sale of its consumer products division on a slump sale basis. The division is presently engaged in the manufacture of face care wipe, baby wipes and other products in baby/house care segments. This business unit registered net sales of Rs 9.52 crore for the year ended 31 March 2015 (FY 2015). The transaction is expected to be completed in June 2015, Grasim added.
Index heavyweight and cigarette major ITC dropped after the company reported muted growth in Q4 net profit. The stock shed 3.3% at Rs 317.60. ITC's net profit rose 3.65% to Rs 2361.18 crore on 1.66% increase in total income to Rs 9663.15 crore in Q4 March 2015 over Q4 March 2014. The result was announced after trading hours on Friday, 22 May 2015.
ITC said that its performance in Q4 March 2015 was adversely impacted by steep increase in excise duty and VAT on cigarettes and weak demand environment. In a press release, ITC said that the muted growth in revenue and profits in Q4 March 2015 reflects, inter alia, the continuing impact of the steep hike in taxation on cigarettes, sluggish demand conditions in the FMCG industry, start-up costs of the juices category, lack of trading opportunities in agri-commodities and costs relating to rationalisation of safety matches manufacturing operations. Financials for the quarter include Rs 58 crore towards costs associated with rationalisation of safety matches manufacturing operations.
Excluding expenditure on Corporate Social Responsibility/Social Investment programmes, profit before tax for the quarter grew by 6.4% and net profit for the quarter grew by 7.8% on a comparable basis, ITC said.
ITC said that the legal cigarette industry in India continues to be impacted adversely by a punitive taxation and discriminatory regulatory regime. The operating environment for the legal cigarette industry in India was rendered even more challenging in 2014-15 with two rounds of sharp increase in excise duty -- in July 2014 and February 2015. This includes a cumulative increase of 115% on filter cigarettes of 'length not exceeding 65 mm', which has widened the price differential between legal and illegal cigarettes and made it extremely difficult for the legal cigarette industry to counter the unabated growth of illegal cigarettes in the country, ITC said. Notwithstanding the challenging regulatory and taxation environment, the company strengthened its product portfolio across segments to reinforce its leadership position in the industry during 2014-15, ITC said.
Kotak Mahindra Bank declined after the government today, 25 May 2015, deferred the bank's proposal for increasing the aggregate foreign investment in the bank to 55%. The stock shed 1.25% at Rs 1,370.
IDFC dropped after the government today, 25 May 2015, rejected the proposal from Sharekhan and Human Value developers Pvt Ltd for the transfer of CCDs and CCPs of their companies held by IDFC to Baring Private Equity Asia IV Mauritius. The stock shed 0.71% at Rs 153.60. The stock hit a high of Rs 155.60 and a low of Rs 153.50 in intraday trade.
In overseas markets, European stocks edged lower, weighed by more concerns about the state of Greece's finances. France's CAC 40 index was off 0.75%. Stock markets in UK and Germany were closed for holidays.
Over the weekend Greece raised doubts that it would have the money it is due to repay to the International Monetary Fund (IMF) next month. This news comes despite months of negotiations between Greece's leftist-led government and creditorsthe European Union and the IMF. Greece is scheduled to repay euro 1.6 billion ($1.76 billion) to the IMF between June 5-19.
Stocks in Spain edged lower after regional and municipal elections held yesterday, 24 May 2015, showed voters punishing the governing Popular Party by giving weighty support to two upstart parties. The IBEX-35 was off 2.18%.
Chinese stocks rallied for a fifth straight day today, 25 May 2015, leading Asian markets mostly higher. Key indices in Japan, Singapore and Taiwan were up 0.07% to 0.74%. In Indonesia, Jakarta Composite index was off 0.5%. Korean and Hong Kong markets were closed for the Buddha's Birthday holiday.
In mainland China, the Shanghai Composite index was up 3.35%. China's Ministry of Finance today, 25 May 2015, announced that it would cut import duties on cosmetics, shoes and clothes by 50% on average, as part of a plan to boost domestic consumption and sustain economic growth.
US stocks ended modestly lower during the previous trading session on Friday, 22 May 2015, after Federal Reserve Chairwoman Janet Yellen said she still expected the central bank to raise interest rates sometime this year. Yellen said in a speech delivered in Providence, R.I., discussing the US economic outlook on Friday, 22 May 2015, that the central bank is on track to raise interest rates this year but will likely proceed cautiously because the job market hasn't fully healed, inflation is low and growth has again disappointed.
The US stock market remains closed today, 25 May 2015, for the Memorial Day Holiday.
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