Key benchmark indices registered minuscule losses in a lackluster session of trade. The barometer index, the S&P BSE Sensex, fell 11.59 points or 0.04% to settle at 25,838.71. The 50-unit Nifty 50 index fell 4.90 points or 0.06% to settle at 7,861.05. Stocks of public sector banks (PSU banks) edged lower after the Reserve Bank of India (RBI) criticized the dividend distribution policy of PSU banks in its latest Financial Stability Report (FSR). Vedanta group stocks Cairn India and Vedanta Limited edged higher. Auto stocks rose. Idea Cellular edged higher after announcing the launch of its high speed 4G LTE services across all five states of South India viz. Andhra Pradesh, Karnataka, Kerala, Tamil Nadu and Telangana.
Alkem Laboratories and Dr. Lal PathLabs, both, surged a day after making a strong debut on the secondary equity markets.
Meanwhile, the RBI in its latest FSR flagged concerns about weak corporate sector balance sheets. RBI Governor Raghuram Rajan said in his foreword on the FSR which was released yesterday, 23 December 2015, that corporate sector vulnerabilities and the impact of weak corporate sector balance sheets on the financial system need closer monitoring. With regard to inflation, Rajan said that despite inflation coming down significantly, India should not lose sight of the fact that the climatic conditions have tended to be more erratic and unpredictable. This will have an impact on the volatility of inflation and perhaps its level, Rajan said.
The Sensex fell 11.59 points or 0.04% to settle at 25,838.71, its lowest closing level since 22 December 2015. The Sensex fell 86.90 points or 0.33% at the day's low of 25,763.40. The barometer index rose 72.17 points or 0.27% at the day's high of 25,922.47.
The Nifty fell 4.90 points or 0.06% to settle at 7,861.05, its lowest closing level since 22 December 2015. The Nifty fell 30.45 points or 0.38% at the day's low of 7,835.50. The index gained 22.80 points or 0.28% at the day's high of 7,888.75.
The market breadth indicating the overall health of the market was positive. On BSE, 1,544 shares rose and 1,129 shares fell. A total of 230 shares were unchanged. The BSE Mid-Cap index rose 0.28%. The BSE Small-Cap index rose 0.49%. Both these indices outperformed the Sensex.
The total turnover on BSE amounted to Rs 2716 crore, lower than turnover of Rs 3048.54 crore registered during the previous trading session.
In overseas stock markets, Asian and European stocks witnessed mixed trend. US stocks closed higher for the third straight session yesterday, 23 December 2015, led by outsize gains in the energy and materials sector stocks as crude oil futures rebounded after the weekly crude oil data showed US crude inventories posted an unexpectedly large decline last week.
Shares of oil exploration and production (E&P) companies edged higher as global crude oil prices rebounded off their multiyear lows yesterday, 23 December 2015. Oil India (up 2.3%) and Reliance Industries (up 0.04%) edged higher. ONGC shed 0.7%. Higher crude oil prices will result in higher realizations from crude sales for oil exploration firms.
Vedanta group stocks Cairn India (up 2.22%) and Vedanta Limited (up 3.19%) gained.
Stocks of public sector oil marketing companies (PSU OMCs) also edged higher. BPCL (up 0.31%) and Indian Oil Corporation (up 0.74%) rose. HPCL slipped 0.13%.
Brent for February settlement was currently off 15 cents at $37.21 a barrel. The contract had gained $1.25 a barrel or 3.46% to settle at $37.36 a barrel during the previous trading session.
Shares of public sector banks (PSU banks) edged lower after the Reserve Bank of India (RBI) criticized the dividend distribution policy of PSU banks in its latest Financial Stability Report (FSR). IDBI Bank (down 1.68%), Punjab National Bank (down 0.99%), Bank of Baroda (down 0.38%), Canara Bank (down 0.17%), and Union Bank of India (down 1.31%) dropped. Bank of India rose 0.09%.
The RBI said that PSU banks pay out significant amounts as dividend to the government and other shareholders which have no relevance to their balance sheet strengths and capital planning. In addition to the improvement of governance processes through initiatives like 'Indradhanush', PSU banks may need to review their business models and examine strategic decisions like capital structure and dividend policy, the FSR said. In August 2015, government rolled out a seven pronged plan named Indradhanush aimed at improving the performance of PSU banks. It is imperative that PSU banks approach their dividend decisions as strategic business decisions which are in keeping with their objective of shareholder wealth maximisation, the FSR said.
State Bank of India (SBI) shed 0.39% to Rs 229. The stock hit high of Rs 231.15 and low of Rs 227.90 in intraday trade. SBI before market hours today, 24 December 2015, announced that the bank has raised Rs 4000 crore on private placement of Basel III compliant, Tier-II bonds with 10 year tenure, bearing 8.33% per annum coupon and with call option after 5 years. The announcement was made before market hours today, 24 December 2015
Stocks of private sector banks also edged lower. ICICI Bank (down 1.26%), HDFC Bank (down 0.19%), Axis Bank (down 0.2%), Kotak Mahindra Bank (down 0.08%) fell. IndusInd Bank (up 1.18%) and Yes Bank (up 0.27%) rose.
Auto stocks rose. Tata Motors (up 0.95%), Mahindra & Mahindra (M&M) (up 0.22%), Hero MotoCorp (up 0.48%), Bajaj Auto (up 0.66%) and Ashok Leyland (up 0.17%) gained. Maruti Suzuki India (down 0.8%), Eicher Motors (down 0.05%) and TVS Motor Company (down 1.76%) fell.
Telecom stocks were mixed. Bharti Airtel (up 1.99%), Tata Teleservices (Maharashtra) (up 1.5%) rose. MTNL (down 0.46%) and Reliance Communications (down 0.12%) fell.
Idea Cellular rose 0.93% after announcing the launch of its high speed 4G LTE services across all five states of South India viz. Andhra Pradesh, Karnataka, Kerala, Tamil Nadu and Telangana. In the first phase, Idea's high speed 4G network will be available across 75 towns in Southern India, the company said in a statement. Idea will rapidly expand 4G services in all Southern India metros and large towns by March 2016, the company said. Idea Cellular is also gearing to launch 4G LTE services by March 2016 in other key markets namely Madhya Pradesh & Chhattisgarh, Maharashtra & Goa, Punjab, Haryana, North East and Orissa, in a phased manner. By June 2016, Idea's 4G footprint will cover 750 cities across 10 telecom circles, the company said in a statement.
Dr. Lal PathLabs surged a day after making a solid debut on the secondary equity markets. The stock jumped 8.43% to settle at Rs 893.65. The stock attracted almost 50% premium to the initial public offer when it settled at Rs 824.15 on BSE yesterday, 23 December 2015, compared to the initial public offer price of Rs 550 per share. Dr. Lal PathLabs provides diagnostics and related healthcare tests and services.
Alkem Laboratories also witnessed a sharp surge a day after making a strong debut on the secondary equity markets. The stock surged 10.16% to settle at Rs 1,521.75. The stock attracted a premium of 31.56% to the initial public offer when it settled at Rs 1,381.45 on BSE yesterday, 23 December 2015, compared with the initial public offer price of Rs 1,050 per share. Alkem Laboratories is the fifth largest pharmaceutical company in India by domestic sales.
Biocon surged after the company during market hours today, 24 December 2015, announced the introduction of an advanced novel therapy CIMIVIR-L for the treatment of Hepatitis C in India. The stock jumped 5.55% to Rs 509. The stock hit high of Rs 513.20 in intraday, which is a 52-week high for the stock. The stock hit a low of Rs 484 in intraday trade.
Biocon said that CIMIVIR-L is a fixed dose combination of Ledipasvir 90 mg and Sofosbuvir 400 mg, which is an equivalent of the innovator product commercialized by Gilead Sciences in the US. The Drugs Controller General of India (DCGI) recently approved the sale of Sofosbuvir-Ledipasvir combination, which is being manufactured in India under a license from Gilead. CIMIVIR-L will be made available to patients in India at a fraction of the global cost of the innovator brand. The cost of a 12-week course of this combination therapy in the US is $94,500 (about Rs 63 lakh). Hepatitis C is a viral disease that causes liver inflammation leading to diminished liver function or liver failure.
In keeping with its commitment to introduce innovative therapies at an affordable price to patients, Biocon had entered into a licensing agreement last year with US-based Gilead to manufacture and commercialize its chronic Hepatitis-C blockbuster product range, Sofosbuvir and Sofosbuvir-Ledipasvir combination in India and in select emerging markets.
V-Mart Retail surged 19.59% after the Reserve Bank of India (RBI) yesterday, 23 December 2015, notified that foreign institutional investors (FIIs)/registered foreign portfolios investors (RFPIs) can now invest up to 49% of the paid-up capital of the company under the Portfolio Investment Scheme (PIS). The central bank said that the shareholding of FIIs/RFPIs in V-Mart Retail has gone below the revised threshold limit. Therefore, the restrictions placed on the purchase of shares of the company are withdrawn with immediate effect.
Mangalore Chemicals & Fertilizers jumped 17.07% after a large bulk deal of 38.85 lakh shares was executed on the counter at Rs 41.50 per share at 9:47 IST on BSE today, 24 December 2015.
India's stock market remains closed tomorrow, 25 December 2015, on account of Christmas.
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