A bout of volatility was witnessed as key benchmark indices alternately swung between positive and negative zone in early afternoon trade. At 12:15 IST, the barometer index, the S&P BSE Sensex, was down 56.93 points or 0.2% at 27,919.59. The Nifty 50 index was currently down 6.75 points or 0.08% at 8,583.90. The Sensex was currently trading below the psychologically important 28,000 level. The Sensex has alternately swung above and below the psychologically important 28,000 level so far during the trading session after surpassing that mark in initial trade.
The Sensex lost 68.75 points or 0.24% at the day's low of 27,907.77 in early afternoon trade, its lowest level since 25 July 2016. The barometer index jumped 234.36 points or 0.83% at the day's high of 28,210.88 in morning trade, its highest level since 10 August 2015. The Nifty lost 17.60 points or 0.2% at the day's low of 8,573.05 in early afternoon trade, its lowest level since 25 July 2016. The index rose 74.35 points or 0.86% at the day's high of 8,665 in morning trade, its highest level since 17 April 2015.
The market breadth indicating the overall health of the market turned negative from positive in early afternoon trade. On BSE, 1,082 shares rose and 1,284 shares declined. A total of 172 shares were unchanged. The BSE Mid-Cap index was currently up 0.06%. The BSE Small-Cap index was currently up 0.21%. Both these indices outperformed the Sensex.
In overseas stock markets, Asian stocks witnessed a mixed trend. Japanese stocks edged higher on expectations of further easing of monetary policy from Bank of Japan later this week. The Nikkei 225 Average ended 1.72% higher. Investors are hoping for further easing of monetary policy from the Bank of Japan (BOJ) after the conclusion of a two-day monetary policy meeting on 28-29 July 2016. Strength in the yen against the dollar post last month's Brexit vote and data showing a slowdown in the Japanese economy have triggered expectations of further easing of monetary policy from the BOJ. A stronger yen hurts the competitiveness of Japanese exporters.
Most US stocks edged higher in a lacklustre trading session yesterday, 26 July 2016. Investors were reluctant to carve out big positions ahead of the monetary policy outcome from the Federal Reserve. The Federal Open Market Committee (FOMC) is widely expected to keep the benchmark fed funds rates unchanged after the conclusion of two-day monetary policy today, 27 July 2016. Market participant will scrutinize the Fed statement for clues on policy direction. The Fed has kept the benchmark fed funds rate unchanged after raising it for the first time in nearly a decade in December 2015.
Auto stocks were mixed. Tata Motors (up 0.96%), Mahindra & Mahindra (up 0.01%), Ashok Leyland (up 0.05%) and Eicher Motors (up 0.12%) edged higher. TVS Motor Company (down 0.51%) and Hero MotoCorp (down 0.04%) edged lower.
Bajaj Auto was down 0.26%. The company is scheduled to announce Q1 June 2016 results today, 27 July 2016.
Passenger car major Maruti Suzuki India (MSIL) rose 1.87% to Rs 4,569.10 as Japanese yen weakened against the dollar on expectations of further easing of monetary policy from the Bank of Japan (BOJ) later this week. A weak yen lifts Maruti's operating profit margin. Maruti pays royalty to its Japanese parent Suzuki Motor Corporation in yen terms for some of its earlier models. Maruti has reportedly started paying royalty to its Japanese parent in rupee terms on all new models from 1 April 2016. Maruti also has an exposure to the yen to the extent it imports raw materials from Japan.
The MSIL stock had fallen 1.43% to settle at Rs 4,485.25 yesterday, 26 July 2016 after the company declared disappointing Q1 June 2016 results. The company's net profit rose 23% to Rs 1486.20 crore on 12.1% growth in net sales to Rs 14654.50 crore in Q1 June 2016 over Q1 June 2015. The growth in bottom line was led by a sharp surge in non-operational income and decline in depreciation charge.
Aviation stocks gained on renewed buying. SpiceJet (up 5.08%), Jet Airways (India) (up 3.17%) and InterGlobe Aviation (up 1.11%) edged higher.
Yes Bank edged lower in volatile trade after the private sector bank reported rise in sticky loans in Q1 June 2016. The stock was off 0.02% at Rs 1,200. The stock hit a high of Rs 1,214 so far during the day, which is a record high for the counter. The stock hit a low of Rs 1,176.25 so far during the day. Yes Bank's gross non-performing assets (NPAs) stood at Rs 844.56 crore as on 30 June 2016 compared with Rs 748.98 crore as on 31 March 2016 and Rs 368.30 crore as on 30 June 2015. The ratio of gross NPA to gross customer assets stood at 0.79% as on 30 June 2016 as against 0.76% as on 31 March 2016 and 0.46% as on 30 June 2015. The ratio of net NPA to net customer assets stood at 0.29% as on 30 June 2016 as against 0.29% as on 31 March 2016 and 0.13% as on 30 June 2015.
The bank's net profit rose 32.76% to Rs 731.80 crore on 25.43% growth in total income to Rs 4762.83 crore in Q1 June 2016 over Q1 June 2015. The result was announced during market hours today, 27 July 2016.
The bank's net interest income (NII) rose 24.2% to Rs 1316.60 crore in Q1 June 2016 over Q1 June 2015. Net interest margin (NIM) expanded to 3.4% in Q1 June 2016 from 3.3% in Q1 June 2015. The bank's provisions and contingencies jumped 110.93% to Rs 206.63 crore in Q1 June 2016 over Q1 June 2015.
Yes Bank said that the bank continues to witness a robust CASA (current and savings account) growth, with the CASA ratio improving to 29.6% as on 30 June 2016 from 23.4% as on 30 June 2015. The private sector bank said that it continues to show resilience on all asset quality parameters. Yes Bank Managing Director & CEO Rana Kapoor said in a statement that given the improving macroeconomic environment along with stable asset quality and accelerating retail franchise, Yes Bank is well poised to capture market share across retail and corporate segments at an enhanced pace. Bank continues to show resilience on all Asset Quality parameters
Separately, Yes Bank announced before market hours today, 27 July 2016, that it has received an in-principle approval from the Securities & Exchange Board of India (Sebi) to sponsor a mutual fund and set up an asset management company (AMC) and a trustee company. The bank said it has already identified senior leadership and technology architecture to establish this business, and will commence operations within 12 months.
Delta Corp rose 2.76% after the company said it has signed a leave and license agreement for premises in the Denzong Regency Hotel, Gangtok, Sikkim, to operate a casino. Delta Corp said that it has also obtained a provisional license from the state government of Sikkim to operate the casino. The company is in the process of refurbishing and getting the premises casino ready, which should be completed in the next three months.
In pursuing its strategy of expanding its gaming imprint, Delta will now have a presence in Sikkim, operating a live gaming casino offering approximately 150 gaming positions, thereby catering to the Eastern region market. The company will thus, in addition to three offshore and one onshore casino in Goa, will strengthen its presence by adding this Casino in Sikkim, making it a dominant and formidable player in the Indian gaming and entertainment space, the company said in a statement. The announcement was made after market hours yesterday, 26 July 2016.
Meanwhile, according to reports, the empowered committee of state finance ministers which met Finance Minister Arun Jaitley yesterday, 26 July 2016, has reached a consensus on key aspects of the constitutional amendment bill on Goods and Services Tax (GST). The committee has decided to keep the main GST rate low, according to reports. The GST bill is likely to be moved in the Rajya Sabha next week. The Rajya Sabha has already allotted five hours for discussion on the GST bill, according to media reports.
The GST bill, which has been approved by the Lok Sabha is pending in the Rajya Sabha because of opposition to the bill in its current form by the Congress party. 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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