Losses in telecom stocks and index heavyweights HDFC and Reliance Industries led losses for key benchmark indices on the last trading session of the week. The barometer index, the S&P BSE Sensex lost 156.76 points or 0.56% to settle at 28,051.86. The decline in the Nifty 50 index was lower than the Sensex's fall in percentage terms. The Nifty shed 27.80 points or 0.32% to settle at 8,638.50. Weakness in Asian stocks weighed on sentiment on the domestic bourses. The Sensex and the Nifty snapped two-day winning streak.
In its monsoon update issued yesterday, 28 July 2016, the India Meteorological Department (IMD) said that for the country as a whole, cumulative rainfall during this year's monsoon as on 27 July 2016, was at 0% above the Long Period Average (LPA).
Stocks of public sector banks declined. Stocks of private sector banks were mixed. ICICI Bank edged lower ahead of its Q1 June 2016 results today, 29 July 2016. Eicher Motors (EML) surged after the company reported strong Q1 earnings. Tata Power Company edged higher after the company's equal joint venture with Exxaro Resources achieved commercial operations for its 134 megawatts wind power project in South Africa.
In overseas stock markets, most European stocks edged higher helped by a rally in bank stocks. Asian stocks edged lower after the Bank of Japan's (BOJ) modest easing action dissapointed investors. In Japan, the Nikkei 225 Average ended 0.56% higher. The Japan's central bank BOJ kept interest rates and government bond buying unchanged after the conclusion of a two-day monetary policy meeting. The Nikkei 225 Average was currently up 0.04%. The Japan's central bank said it would buy 6 trillion worth of exchange-traded funds annually, up from 3.3 trillion previously, in an attempt to stoke inflation and growth by pumping money into the economy. BOJ said it would leave its asset-purchase target at 80 trillion a year. US stocks closed slightly higher yesterday, 28 July 2016 amid declines in oil prices, as major tech stocks gained.
The Sensex lost 156.76 points or 0.56% to settle at 28,051.86, its lowest closing level since 27 July 2016. The index rose 24.85 points or 0.08% at the day's high of 28,233.47. The index lost 170.75 points or 0.6% at the day's low of 28,037.87.
The Nifty shed 27.80 points or 0.32% to settle at 8,638.50, its lowest closing level since 27 July 2016. The index rose 4.05 points or 0.04% at the day's high of 8,670.35. The index lost 35.15 points or 0.4% at the day's low of 8,631.15.
The BSE Mid-Cap index rose 0.7%. The BSE Small-Cap index was up 0.23%. Both these indices outperformed the Sensex.
The market breadth indicating the overall health of the market was negative. On BSE, 1,223 shares rose and 1,458 shares declined. A total of 214 shares were unchanged.
The total turnover on BSE amounted to Rs 3657 crore, lower than turnover of Rs 4042.79 crore registered during the previous trading session.
Among the sectoral indices on BSE, the S&P BSE Telecom index (down 1.64%), the BSE Bankex index (down 0.63%), the BSE Capital Goods index (down 0.73%) and the BSE Metal index (down 0.63%) underperformed the Sensex. The BSE Healthcare index (up 0.72%), the BSE Auto index (up 0.79%) and the BSE Oil & Gas index (up 0.51%) outperformed the Sensex.
Stocks of public sector banks declined. Punjab National Bank (down 4.3%), Canara Bank (down 2.73%), Union Bank of India (down 1.54%), Bank of Baroda (down 1.42%), State Bank of India (down 0.82%) and IDBI Bank (down 0.71%) edged lower. Indian Bank (up 1.96%) and Bank of India (up 0.41%) edged higher.
Stocks of private sector banks were mixed. Kotak Mahindra Bank (up 1.7%), IndusInd Bank (up 0.86%) and Axis Bank (up 0.51%) edged higher. Yes Bank (down 0.27%) edged lower.
Index heavyweight HDFC Bank was down 0.11%.
ICICI Bank was down 3.4%. The bank is scheduled to announce Q1 June 2016 results today, 29 July 2016.
L&T was down 1.2% at Rs 1,558. The company's consolidated net profit rose 46% to Rs 610 crore on 9.1% growth in gross revenue to Rs 21874 crore in Q1 June 2016 over Q1 June 2015. The result was announced after market hours today, 29 July 2016.
L&T's consolidated order book increased by 8% on year-on-year (YoY) basis to Rs 2.57 lakh crore as on 30 June 2016. International order book constituted 29% of the total order book.
On future business outlook, L&T said that on the international front, the company will continue to target select prospects in the space of core infrastructure and oil & gas sector in the Middle East, Africa and other neighboring countries. The company said it has recently finalised its strategic plan for five years with a focus on profitable growth. L&T said it remains well placed to benefit from emerging opportunities with its execution capabilities and leadership position in various sectors.
Telecom stocks edged lower. Bharti Airtel (down 2.7%) and Idea Cellular (down 0.57%) declined. Reliance Communications (up 2.14%) edged higher.
Bharti Infratel was off 0.8%. Bharti Infratel is a telecom tower arm of Bharti Airtel.
Index heavyweight Reliance Industries was down 1.03% at Rs 1,015.50.
Index heavyweight and housing finance major HDFC was down 1.92%. HDFC announced during market hours today, 29 July 2016 that it intends to raise Rs 1500 crore through issue of secured redeemable non-convertible debentures (NCDs) on private placement basis. The debentures have a tenor of 1 year 166 days and carry a coupon rate of 8% per annum. The issue opens and closes on the same day on 2 August 2016. The company intends to utilize the proceeds from the issue for financing/refinancing its housing finance business requirements.
Eicher Motors (EML) surged after the company reported strong Q1 earnings. The stock was up 6.6%. The stock hit a record high of Rs 22,567 in intraday trade. EML's consolidated net profit surged 58.6% to Rs 376 crore on 42% growth in total income from operations to Rs 1556 crore in Q1 June 2016 over Q1 June 2015. The result was announced after market hours yesterday, 28 July 2016.
The company's earnings before interest, taxation, depreciation and amortization (EBITDA) surged 64.6% to Rs 470 crore in Q1 June 2016 over Q1 June 2015. EBITDA margin expanded to 30.2% in Q1 June 2016 from 26.1% in Q1 June 2015.
EML's Managing Director & CEO Siddhartha Lal said that the management's immediate business outlook for Royal Enfield business remains strong and it continues to grow consistently, competitively and profitably towards leading and expanding the mid-sized motorcyle segment globally.
Commenting on VE Commercial Vehicles' (VECV) performance, Siddhartha said that VECV demonstrated an impressive performance in Q1 June 2016 with sales of 16,071 units recording a growth of 32.5% over Q1 June 2015. VECV also increased its overall market share to 15.1% in Q1 June 2016, as compared to 13.2% recorded in Q1 June 2015. VECV continues to do well in the sub 5-ton category with the introduction of Pro 1049 where it is currently selling more than 100 trucks every month since its launch in the last quarter. Eicher Motors' 50:50 joint venture with Polaris Industries, Eicher Polaris Private Ltd., through its product Multix is generating a lot of interest among its target customers. Multix is now present in 50 locations across 8 states and it continues to gain momentum in its target markets, he further added.
Tata Power Company edged higher after the company's equal joint venture with Exxaro Resources achieved commercial operations for its 134 megawatts wind power project in South Africa. The stock was up 1.77%. The wind power project is being implemented by Cennergi (Pty) Ltd. Tata Power further said that Cennergi's second wind power project in South Africa is also expected to go into commercial operations shortly. Cennergi, an equal joint venture between Tata Power Company and Exxaro Resources, is focusing on the development, ownership, operation, maintenance, acquisition and management of electricity generation projects in South Africa, Botswana and Namibia. Cennergi's initial project pipeline focuses on renewable energy projects in South Africa. The company's strategy is to create a balanced portfolio of power generation assets. The announcement was made during market hours today, 29 July 2016.
The Sensex and the Nifty snapped two-day winning streak. The Sensex had risen 232.10 points or 0.83% in the preceding two trading sessions to settle at 28,208.62 yesterday, 28 July 2016, from its close of 27,976.52 on 26 July 2016. The Sensex has risen 1,052.14 points or 3.89% in July 2016. The Sensex has risen 1,934.32 points or 7.4% in calendar year 2016 so far (till 29 July 2016). From a 52-week low of 22,494.61 hit on 29 February 2016, the barometer index has risen 5,557.25 points or 24.7%. The Sensex is off 365.73 points or 1.28% from a 52-week high of 28,417.59 hit on 10 August 2015. The Sensex is off 1,972.88 points or 6.57% from a record high of 30,024.74 hit on 4 March 2015.
According to reports, the government today, 29 July 2016, listed the much-awaited Goods and Services Tax (GST) bill for consideration and passage in Rajya Sabha's agenda for the next week. Minister of state for parliamentary affairs Mukhtar Abbas Naqvi, while making a statement regarding government business for the week starting 1 August in the Upper House, reportedly said that the GST constitutional amendment bill will be taken up for consideration and passage in the Rajya Sabha.
The GST bill, which has been approved by the Lok Sabha is pending in the Rajya Sabha. A constitutional amendment bill requires at least 50% attendance and support of two-third of those present and voting in the house. For the GST bill to become a law, the bill also needs to be approved by half the state assemblies after its passage in the parliament. GST, touted as the single biggest indirect taxation reforms since independence, will simplify and harmonise the indirect tax regime in the country. The GST seeks to create a seamless national market in the country by replacing plethora of state taxes and central taxes by one tax. The month-long monsoon session of the parliament will conclude on 12 August 2016.
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