Stocks logged steep losses on last trading day of the week on downbeat global cues. The barometer index, the S&P BSE Sensex, lost 317.74 points or 1.01% at 31,213.59, as per the provisional closing data. The Nifty index lost 109.45 points or 1.11% at 9,710.80, as per the provisional closing data. Domestic stocks extended their four-day slide tracking selling in global stocks as investors continued to pare their riskier positions amid rise in geopolitical tensions between the US and North Korea. Today's market slump was led by Reliance Industries, State Bank of India and L&T.
Sentiment was also affected adversely after the finance ministry said in its mid-year economic survey today, 11 August 2017, that there are downside risks to the Indian government's growth forecast of 6.75-7.5% for the fiscal year to March 2018.
Domestic stocks saw a gap-down opening on weak global cues as geopolitical tensions prompted investors to adopt a risk off approach. Stocks cut losses in morning trade. Stocks languished in the red later during the session. Key indices extended losses since afternoon trade and hit fresh intraday low in late trade.
The S&P BSE Mid-Cap index provisionally fell 0.2%. The S&P BSE Small-Cap index provisionally fell 0.04%. The fall 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 weak. On the BSE, 1,547 shares fell and 987 shares rose. A total of 133 shares were unchanged.
State Bank of India (SBI) lost 5.36% after the bank's net profit fell 20.44% to Rs 2005.53 crore on 28.57% rise in total income to Rs 62911.08 crore in Q1 June 2017 over Q1 June 2016. The first quarter results are not comparable with year ago period due to merger of its subsidiaries with self, SBI said. The announcement was made during market hours today, 11 August 2017.
The bank's gross non-performing assets (NPAs) stood at Rs 188068.49 crore as on 30 June 2017 as against Rs 112342.99 crore as on 31 March 2017 and Rs 101541.18 crore as on 30 June 2016. The ratio of gross NPAs to gross advances stood at 9.97% as on 30 June 2017 as against 6.90% as on 31 March 2017 and 6.94% as on 30 June 2016.
The ratio of net NPAs to net advances stood at 5.97% as on 30 June 2017 as against 3.71% as on 31 March 2017 and 4.05% as on 30 June 2016. The bank's provisions and contingencies rose 20.46% to Rs 8929.48 crore in Q1 June 2017 over Q1 June 2016. Of this, provisions for NPAs rose 91.26% to Rs 12125.26 crore in Q1 June 2017 over Q1 June 2016. Provision coverage ratio of the bank was at 60.79% as on 30 June 2017.
Cipla lost 1.13%. The company's consolidated net profit rose 23.63% to Rs 424.92 crore on 0.03% growth in total income to Rs 3676.43 crore in Q1 June 2017 over Q1 June 2016. The result was announced during market hours today, 11 August 2017.
Bosch slipped 3.72% after net profit fell 20.09% to Rs 302.61 crore on 1.93% growth in total income to Rs 2959.97 crore in Q1 June 2017 over Q1 June 2016. The result was announced during market hours today, 11 August 2017.
Hindalco Industries slumped 7.15% after net profit fell 1.36% to Rs 290 crore on 27.55% growth in revenue from operations to Rs 10407 crore in Q1 June 2017 over Q1 June 2016. The result was announced during market hours today, 11 August 2017.
Hindalco's net profit in Q1 June 2017 factors the exceptional provisioning of Rs 104 crore which is on the basis of recent Supreme Court judgement in a matter relating to mining regulation (to which the company was not a party). Hindalco anticipates that the judgement may have an implication on its existing litigation which is sub-judice. The provision has been made as a matter of abundant caution.
The company's earnings before interest, taxation, depreciation and amortization (EBITDA) rose 3.92% to Rs 1404 crore in Q1 June 2017 over Q1 June 2016, on account of higher aluminium and copper volumes, supportive macros partly offset by higher input cost.
Meanwhile, the finance ministry said in its mid-year economic survey today, 11 August 2017, that there are downside risks to the Indian government's growth forecast of 6.75-7.5% for the fiscal year to March 2018. The survey, authored by Chief Economic Adviser Arvind Subramanian, also said inflation was expected to remain below the central bank's 4% target through to the end of the fiscal year and described scope for monetary easing as "considerable".
Overseas, European and Asian stocks dropped as investors continued to pare their riskier positions following escalating geopolitical tensions between the US and North Korea. Japan's markets were shut for a public holiday. US stocks finished sharply lower yesterday, 10 August 2017 amid a persistent war of words between the US and North Korea and a clutch of disappointing earnings reports.
Geopolitical tension gained momentum yesterday, 10 August 2017 after a North Korean army commander reportedly said that sound dialogue isn't possible with US President Donald Trump and only absolute force can work on him. North Korea also laid out detailed plans of how it would launch a missile strike on US military bases in Guam. Reports in media indicated that China would intervene if there is a first strike against North Korea.
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