Fears of a setback to the economic reforms process in the wake of Bharatiya Janata Party's (BJP) drubbing in Bihar assembly elections and prospects of hike in interest rates by the US Federal Reserve at its next monetary policy meeting in December 2015 pulled key benchmark indices lower. The barometer index, the S&P BSE Sensex, lost 166.27 points or 0.63% at 26098.97, as per the provisional closing data. The losses for the Sensex were higher in percentage terms than those for the Nifty 50 index. The Nifty lost 39.10 points or 0.49% at 7,915.20, as per the provisional closing data. The key highlight of the trading session was a strong intraday rebound for the Sensex and the Nifty. After an initial sharp setback triggered by BJP's drubbing in Bihar assembly elections, the Sensex and the Nifty staged a strong intraday rebound later. The intraday recovery gathered steam during the latter part of the trading session. The Sensex provisionally settled above the psychological 26,000 level after falling below that mark in intraday trade.
The market breadth indicating the overall health of the market was positive. On BSE, 1,478 shares rose and 1,136 shares declined. A total of 133 shares were unchanged. The BSE Mid-Cap index was provisionally up 0.42%. The BSE Small-Cap index was provisionally up 0.78%. Both these indices outperformed the Sensex.
The total turnover on BSE amounted to Rs 2891 crore, higher than turnover of Rs 2538.55 crore registered during the previous trading session.
A poor showing of BJP-led National Democratic Alliance (NDA) in the Bihar assembly elections has raised concerns among investor that the opposition parties may disrupt the Centre's economic reform process. The pre-poll alliance between the Janata Dal (United), Rashtriya Janata Dal and Congress scored a stunning win in the Bihar assembly elections for which counting took place yesterday, 8 November 2015, dealing a major blow to the ruling NDA government at the Centre. The NDA won just 58 seats of which the BJP won 53 seats in the Bihar assembly elections. With the opposition, emboldened by the victory in Bihar, unlikely to let Parliament function smoothly in the winter session, the fate of key legislation aimed at furthering the government's reform agenda remains uncertain. The BJP-led NDA has a comfortable majority in Lok Sabha, but lags in numbers in the Rajya Sabha, the upper house, where members are elected by the strength of legislators in the states. The NDA was hoping that a good performance in some of the state assembly elections would help it consolidate its position in the Rajya Sabha, which in turn could help it push through important legislation in the upper house. At present, the Congress is the single largest party in the Rajya Sabha with 67 seats. The BJP has 48 members in the 245-member house and the NDA 60 members.
Tata Motors reversed initial losses triggered by the company reporting a reverse turnaround in Q2 September 2015. The stock surged 4.03% at Rs 412.20. The stock hit a high of Rs 413 and a low of Rs 372 in intraday trade. Tata Motors reported consolidated net loss of Rs 429.76 crore for Q2 September 2015 compared with net profit of Rs 3290.86 crore in Q2 September 2014. Total income rose 1.15% to Rs 61563.45 crore in Q2 September 2015 over Q2 September 2014. The result was announced after market hours on Friday, 6 November 2015.
As per International Financial Reporting Standards, Tata Motors British luxury car unit JLR's revenue stood at GBP 4,831 million for the quarter ended 30 September 2015 as against GBP 4,808 million for the quarter ended 30 September 2014. Operating profit (EBITDA) stood at GBP 589 million for the quarter ended 30 September 2015 as against GBP 933 million for the quarter ended 30 September 2014. An exceptional charge of GBP 245 million has been recognised for about 5,800 vehicles involved in the Tianjin Port explosion. Post the exceptional charge, loss after tax stood at GBP 92 million for the quarter ended 30 September 2015 as against profit after tax of GBP 450 million for the quarter ended 30 September 2014.
Tata Power Company rose 0.67% after the company reported turnaround Q2 September 2015 results. The company reported consolidated net profit of Rs 247.31 crore in Q2 September 2015 compared with net loss of Rs 77.75 crore in Q2 September 2014. Total income declined 10.55% to Rs 8549.15 crore in Q2 September 2015 over Q2 September 2014. The company announced results during market hours today, 9 November 2015.
Sun Pharmaceutical Industries (Sun Pharma) tumbled 5.7% at Rs 757.90 after consolidated net profit fell 46.02% to Rs 1106.66 crore on 12.23% decline in total income to Rs 7028.93 crore in Q2 September 2015 over Q2 September 2014. The result was announced on Saturday, 7 November 2015. Sun Pharma's results during the quarter were impacted due to base effect. The company had benefitted significantly in Q2 September 2014 from the 180-day exclusivity on Valsartan tablets in the US. The company's EBITDA (earnings before interest, taxation, depreciation and amortization) margin declined sharply to 28% in Q2 September 2015 compared with 38% in Q2 September 2014.
Dilip Shanghvi, Managing Director of Sun Pharma said that the company's performance in Q2 September 2015 and first half of the current financial year was impacted by lower sales growth, volatile currency movements and supply constraints. Integration of Ranbaxy is progressing well and while some of the costs have been incurred, the benefits will be visible going forward, Shanghvi said.
Dr Reddy's Laboratories edged lower, with the stock extending previous trading session's sharp decline triggered by warning from the US drug watchdog over three of its plants. The stock was off 3.29% at Rs 3,510. The stock had slumped 14.65% to settle at Rs 3,629.55 on Friday, 6 November 2015.
ONGC lost 1.31% to Rs 248.60 after net profit declined 11.07% to Rs 4842.02 crore on 0.03% increase in total income to Rs 21817.26 crore in Q2 September 2015 over Q2 September 2014. The result was announced after market hours on Friday, 6 November 2015. ONGC said that there was an adverse impact to the tune of Rs 596 crore on its gross revenue on account of the subsidy sharing burden in Q2 September 2015. During the corresponding period of the previous year, ONGC's gross revenue was negatively impacted to the tune of Rs 13641 crore on account of the subsidy-sharing burden.
BPCL rose 0.65% at Rs 901.75 after the company reported a sharp surge in bottom line in Q2 September 2015. The stock was volatile. The stock hit a high of Rs 910 and a low of Rs 879.45 in intraday trade. The company's net profit jumped 119.31% to Rs 1018.04 crore on 24.27% decline in total income to Rs 47160.05 crore in Q2 September 2015 over Q2 September 2014. BPCL's bottom line during the quarter was boosted by surge in non-operational income (other income). The company's other income jumped 172.36% to Rs 686.50 crore in Q2 September 2015 over Q2 September 2014. The result was announced during market hours today, 9 November 2015.
BPCL during market hours today, 9 November 2015, announced that a consortium of the company and GAIL Gas, a 100% subsidiary of GAIL (India) has been authorised by the Petroleum and Natural Gas Regulatory Board, for laying, building, operating & expanding of a city gas distribution network (CGD Network) in the geographical area (GA) of Haridwar District. The authorization provides for a physical exclusivity for laying gas pipelines and related infrastructure in the GA over the next 25 years and a marketing exclusivity for 5 years.
Bharat Heavy Electricals (Bhel) lost 4.41% at Rs 183.35, with the stock extending previous trading session's decline triggered by the company reporting poor Q2 earnings. The stock had fallen 1.24% to settle at Rs 191.80 on Friday, 6 November 2015, in the wake of the company's announcement of the poor Q2 earnings. Bhel reported net loss of Rs 204.90 crore in Q2 September 2015 compared with net profit of Rs 124.84 crore in Q2 September 2014. Total income declined 0.45% to Rs 6311.23 crore in Q2 September 2015 over Q2 September 2014.
Meanwhile, Bhel after market hours on Friday, 6 November 2015 said it has secured prestigious orders, cumulatively valued at Rs 4614 crore for setting up two supercritical thermal power projects in Andhra Pradesh.
Meanwhile, the finance ministry announced the imposition of a Swachh Bharat Cess at the rate of 0.5% on all services presently liable to service tax. The Swachh Bharat or Clean India Cess will be applicable from 15 November 2015. The proceeds from this levy will be exclusively used for Swachh Bharat initiatives.
In overseas stock markets, key benchmark indices in emerging Asia were mostly in red after robust US jobs data for October 2015 bolstered expectations of the US Federal Reserve hiking interest rates at its next momentary policy review in December 2015. Investors in emerging markets, including India are worried that once the Fed starts raising interest rates, it will drain liquidity from global emerging markets and redirect it to developed economies. The Fed has held its benchmark short-term interest rate near zero since December 2008. The ultra-loose monetary policy in the US has encouraged heavy investment in higher-yielding emerging markets. The next monetary policy review from the Fed is scheduled on 15-16 December 2015. The Fed-funds futures market is now pricing in 70% probability of an increase in US benchmark interest rate in December 2015.
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