A range bound movement was witnessed as key benchmark indices hovered in green in mid-morning trade. At 11:15 IST, the barometer index, the S&P BSE Sensex, was up 131.24 points or 0.51% at 25,757.99. The Nifty 50 index was currently up 44.10 points or 0.56% at 7,894.55. The market breadth indicating the overall health of the market was positive. On BSE, 1,262 shares gained and 876 shares declined. A total of 127 shares were unchanged. The BSE Mid-Cap index was currently up 0.88%. The BSE Small-Cap index was currently up 0.95%. Both these indices outperformed the Sensex.
In overseas stock markets, Asian markets dropped after the world's major oil producers at a meeting held in Doha failed to reach an agreement yesterday, 17 April 2016, to freeze production. Japanese stocks edged lower as the yen strengthened against the dollar in the wake of earthquakes in the Kumamoto prefecture since last week, including on Saturday, 16 April 2016. The Nikkei 225 Average was currently off 3.2%. The stronger yen makes Japanese exports less competitive and cuts into the value of repatriated earnings.
Trading in US index futures indicated that the Dow Jones Industrial Average could fall 106 points at the opening bell today, 18 April 2016. US stocks closed modestly lower during the previous trading session on Friday, 15 April 2016, as a retreat in oil prices weighed on energy shares.
Stocks of oil exploration and production (E&P) firms edged lower on decline in crude oil prices. Cairn India (down 3.96%) and Oil India (down 1.51%) edged lower. Lower crude oil prices would result in lower realization from crude sales for oil exploration firms.
ONGC (down 2.54%) edged lower. ONGC after market hours on Wednesday, 13 April 2016, announced that the company has signed an agreement with Reliance Industries (RIL) and BG Group to take over a part of the abandoned assets of the Mid & South Tapti field in Western Offshore of India. The joint venture members signed the Tapti Asset Transfer Agreement on 12 April 2016 with ONGC. ONGC intends to utilize the Tapti facilities (comprising of the processing platforms along with the connected export pipelines) for use in its adjacent Daman Development and C-26 Cluster Development Projects. In December 1994, Government of India awarded the Mid & South Tapti field in Western Offshore of India under the Production Sharing Contract (PSC) regime to a consortium comprising ONGC (with 40% stake), British Gas (with 30% stake) and Reliance Industries (with 30% stake).
ONGC has committed an investment of over Rs 8600 crore towards Daman Development Project and C-26 cluster Development Project to enhance production of natural gas and condensate from its Daman block in Arabian Sea. The production from these two projects is expected to start in Q2 September 2016, with estimated peak production rate of about 11 MMSCMD of gas and over 11,000 barrels of condensate per day, ONGC said.
Reliance Industries (RIL) fell 0.53% after the company announced that the SEZ refinery of the company is planning to shut down one crude distillation unit for routine maintenance and inspection activities from 1 May 2016, for about 3 weeks. The other three crude distillation units including all secondary processing units are expected to operate at normal throughput at Jamnagar refinery complex, RIL said. The company said it does not anticipate any impact on its commercial commitments. The announcement was made before market hours today, 18 April 2016.
Stocks of public sector oil marketing companies (PSU OMCs) edged higher on decline in crude oil prices. BPCL (up 2.08%), HPCL (up 1.24%) and Indian Oil Corporation (up 1.73%) edged higher. Decline in crude oil prices could reduce under-recoveries of PSU OMCs on domestic sale of LPG and kerosene at government controlled prices. The government has already decontrolled pricing of petrol and diesel.
Meanwhile, PSU OMCs announced reduction in prices of both petrol and diesel with effect from the midnight of 15/16 April 2016. Indian Oil Corporation cut the retail-selling price of petrol by 74 paise per litre in Delhi, with corresponding price revision in other states. After the latest price reduction, the price of petrol in Delhi stands at Rs 61.13 a litre. The price of diesel has been cut by Rs 1.30 per litre in Delhi, with corresponding price revision in other states. After the latest price reduction, the price of diesel in Delhi stands at Rs 48.01 a litre.
Aviation stocks rose after crude oil prices declined in the global commodities market. SpiceJet (up 2.75%), Jet Airways (India) (up 2.8%) and InterGlobe Aviation (up 1.78%) edged higher. Lower crude oil prices benefit aviation firms as jet fuel prices, which typically constitute about 50% of airlines' operating costs, are directly linked to international crude oil prices.
Crude oil prices dropped after the world's major oil producers at a meeting held in Doha failed to reach an agreement yesterday, 17 April 2016, to freeze production aimed at boosting sagging crude prices. Brent for June settlement was currently down $1.75 a barrel at $41.35 a barrel. The key driver behind the breakdown was Saudi Arabia's refusal to participate in the deal without its geopolitical rival Iran pledging to do the same. Since economic sanctions against Iran were lifted in January, the country has vowed to keep ramping up production until output is back up to at least 4 million barrels a day.
Telecom stocks gained after the finance ministry on 14 April 2016 clarified that no service tax is payable by telecom service providers (TSP) for spectrum assigned/auctioned to them before 1 April 2016. Idea Cellular (up 5.8%), Bharti Airtel (up 0.63%), Tata Teleservices (Maharashtra) (up 0.76%) and Reliance Communications (up 1.13%) gained. The finance ministry also clarified that services provided by the central government by way of allowing a telecom service provider to operate as a telecom service provider or use radiofrequency spectrum during the year 2015-16 on payment of licence fee or spectrum user charges, has been specifically exempted from service tax.
Shares of IT major Infosys jumped after the company forecast strong revenue growth for the year ending 31 March 2017 (FY 2017) at the time of announcement of its Q4 March 2016 results on Friday, 15 April 2016, when the stock market was closed for a holiday. The stock was currently up 6.48% to Rs 1,248.05. The stock hit a high of Rs 1,267.70 in intraday trade so far, which is also record high for the counter. The stock hit a low of Rs 1,239.10 so far during the day. Infosys expects revenue growth of 11.8%-13.8% for FY 2017 in US dollar terms. In constant currency terms, the company has forecast 11.5%-13.5% growth in revenue for FY 2017. Infosys' revenue growth forecast is higher than 10% to 12% growth for the IT outsourcing sector for FY 2017 forecast by IT industry body National Association of Software and Services Companies (Nasscom) in February this year. Infosys has forecast 12.7%-14.7% growth in revenue in rupee terms for FY 2017 based on rupee dollar exchange rate of 66.26 as on 31 March 2016.
Infosys' consolidated net profit rose 3.8% to Rs 3597 crore on 4.1% growth in revenue to Rs 16550 crore in Q4 March 2016 over Q3 December 2015. The results are as per International Financial Reporting Standards (IFRS). Infosys said that the employee attrition reduced further in Q4 March 2016. On annualized basis, the employee attrition rate declined to 17.3% in Q4 March 2016 from 18.1% in Q3 December 2015.
After the strong revenue growth guidance for FY 2017, Infosys' ADR jumped 8.4% to settle at $20 on the New York Stock Exchange on Friday, 15 April 2016.
Reserve Bank of India (RBI) Governor Raghuram Rajan said in an interview to a newspaper in Washington on Thursday, 14 April 2016, that if the monsoon is good, if inflation continues on a downward path and if there is continuing progress on food management reforms that reduce costs it will provide room for the RBI to further reduce policy interest rate. Recently, the weather office forecast good rains during the June-September 2016 southwest monsoon season. The RBI cut its benchmark policy rate viz. the repo rate by 25 basis points to 6.5% from 6.75% after a scheduled policy review on 5 April 2016. At that time, Rajan had indicated in his monetary policy statement that the RBI might cut the repo rate further in the coming months if macroeconomic and financial developments provide room for further rate cut. The RBI next undertakes monetary policy review on 7 June 2016.
Meanwhile, the finance ministry has clarified that taxes, cesses or duties such as excise duty, customs duty, Service Tax, State VAT, CST, income tax, wealth tax, stamp duty, taxes on professions, trades, callings or employment, octroi, entertainment tax, luxury tax and property tax are not liable to service tax. The government issued the clarification after the Union Budget 2016-17 slapped service tax on all services provided by the government or a local authority to a business entity with effect from 1 April 2016.
Powered by Capital Market - Live News
