Key benchmark indices saw a gap-down opening on weak Asian stocks. At 9:30 IST, the barometer index, the S&P BSE Sensex was down 225.72 points or 0.85% at 26,410.03. The Nifty 50 index was currently down 63.75 points or 0.78% at 8,106.30. Weak industrial production data for April 2016 released by the government after market hours on Friday, 10 June 2016 also weighed on the sentiment.
In overseas markets, Asian stocks were sharply lower ahead of central bank meetings in the US and Japan this week. In mainland China, the Shanghai Composite index was currently down 0.78%. In Hong Kong, the Hang Seng index was currently down 2.51%. Data released today, 13 June 2016 showed that growth in China's fixed-asset investment and retail sales cooled unexpectedly in May, but factory output growth was steady, doing little to clear up uncertainty over prospects for the world's second-largest economy. In Japan, the Nikkei 225 index was currently down 2.68%. US stocks declined on Friday, 10 June 2016 as nervousness over an impending vote that could see the UK leave the European Union, as well as a drop in oil prices, spurred a global selloff.
Closer home, the market breadth indicating the overall health of the market was weak. On BSE, shares 946 shares declined and 376 shares rose. A total of 60 shares were unchanged. The BSE Mid-Cap index was currently down 0.56%. The BSE Small-Cap index was currently down 0.6%. The fall in both these indices was lower than the Sensex's decline in percentage terms.
ICICI Bank (down 2.41%), Tata Motors (down 1.98%) and State Bank of India (down 1.92%) edged lower from the Sensex pack.
Dr Reddy's Laboratories (DRL) rose 0.42% after the company inked a definitive agreement with Teva Pharmaceutical Industries and an affiliate of Allergan plc to acquire a portfolio of eight Abbreviated New Drug Applications (ANDAs) in the US for $350 million in cash. The acquired portfolio consists of products that are being divested by Teva as a precondition to its completion of the acquisition of Allergan's generics business. The portfolio being acquired is a mix of filed ANDAs pending approval and one approved ANDA. The portfolio comprises of complex generic products across diverse dosage forms. The branded versions of these drugs had aggregate sales of about $3.5 billion in the United States for 12-month period ended April 2016, according to IMS Health data. DRL is acquiring this portfolio of drugs on a cash-free, debt-free basis and expects to finance the transaction using a combination of cash on hand and available borrowings under existing credit facilities. The acquisition of these ANDAs is contingent on the successful completion of the Teva/Allergan generics transaction and approval by the US Federal Trade Commission of DRL as a buyer.
Maruti Suzuki India fell 0.43%. The company announced that it has resumed production today, 13 June 2016 morning at its facilities in Gurgaon and Manesar after the maintenance closure. The maintenance closure had been advanced by three weeks to June 6-11, following a fire at the Manesar facilities of its suppliers, Subros on 29 May 2016, Maruti Suzuki India said. The announcement was made during market hours today, 13 June 2016.
Yes Bank shed 0.68%. The Reserve Bank of India (RBI) raised the ceiling on investment by foreign institutional investors (FIIs) to 74% of the private sector bank's paid up capital from earlier 60%. RBI's nod for higher ceiling on investment by FIIs came after Yes Bank's board of directors and shareholders approved the proposal. The RBI has capped the total foreign shareholding from all sources in Yes Bank at 74% of the bank's equity. Last month, the Cabinet Committee on Economic Affairs cleared Yes Bank's proposal for increase in foreign investment limit in the bank's equity capital to 74% from 41.87% without any sub-limits.
On the macro front, data released after market hours on Friday, 10 June 2016 showed that India's industrial production (IIP) contracted by 0.8% in April 2016. Factory output measured in terms of the IIP had expanded by 3% in April 2015. The electricity generation surged at two-year high pace of 14.6%, while the mining output also moved up 1.4% in April 2016. However, the manufacturing sector production dipped 3.1% contributing to the decline in industrial output in April 2016. The IIP growth in March 2016 has been revised upwards to 0.3% in the first revision compared with 0.05% reported provisionally. Meanwhile, the growth in January 2016 has been revised downwards to -1.6% at the final revision from -1.5% at first revision and reported provisionally.
Meanwhile, the government is scheduled to unveil the consumer price index (CPI) data (rural, urban and combined) for the month of May 2016 at 17:30 IST today, 13 June 2016. The all-India General CPI inflation surged to 5.39% in April 2016 (new base 2012=100) from six months low of 4.8% recorded in March 2016.
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