Stocks of state-run companies, banking shares and index heavyweights ITC, L&T and Infosys led losses for key benchmark indices, with the barometer index, the S&P BSE Sensex, falling below the psychological 27,000 mark. The Sensex fell 201.62 points or 0.75% to settle at 26,838.14. The 50-unit CNX Nifty fell 59.45 points or 0.73% to settle at 8,111.75. The latest slide for Indian stocks was triggered by increased possibility of an interest-rate hike from the US Federal Reserve at its next policy meeting in December 2015. The Sensex and the Nifty edged lower for the fourth straight trading session. Both these key benchmark indices hit their lowest closing level in more than two weeks.
The Sensex fell 201.62 points or 0.75% to settle at 26,838.14, its lowest closing level since 14 October 2015. The barometer index fell 245.66 points or 0.9% at the day's low of 26,794.10. The index rose 59.35 points or 0.21% at the day's high of 27,099.11.
The Nifty fell 59.45 points or 0.73% to settle at 8,111.75, its lowest closing level since 14 October 2015. The index fell 73.20 points or 0.89% at the day's low of 8,098. The index rose 8.40 points, or 0.1% at the day's high of 8,179.60.
The market breadth indicating the overall health of the market was negative. On BSE, 1,438 shares fell and 1,224 shares rose. A total of 188 shares were unchanged. The BSE Mid-Cap index fell 0.44%. The BSE Small-Cap index fell 0.42%. The decline in both these indices was lower in percentage terms compared with the Sensex's decline.
The total turnover on BSE amounted to Rs 2761.59 crore, higher than turnover of Rs 2701.94 crore registered during the previous trading session.
Among the sectoral indices on BSE, the S&P BSE Power index (down 1.11%), the S&P BSE Bankex (down 1.1%), the S&P BSE Capital Goods index (down 1.09%), the S&P BSE FMCG index (down 0.98%), the S&P BSE Metal index (down 0.85%), the S&P BSE Oil & Gas index (down 0.82%) and the S&P BSE Teck index (down 0.77%) underpeformed the Sensex. The S&P BSE Healthcare index (down 0.57%), the S&P BSE IT index (down 0.57%), the S&P BSE Realty index (down 0.4%), the S&P BSE Auto index (up 0.04%) and the S&P BSE Consumer Durables index (up 0.39%) outperformed the Sensex.
In overseas stock markets, Asian and European stocks edged lower as the Federal Reserve left open the possibility of an interest-rate hike in December at its latest meeting. After a hawkish statement from the Fed, the Fed-funds futures market is now pricing in 43% probability of an increase in US benchmark interest rate in December 2015, compared with a 34% chance before the announcement. The Fed kept its benchmark interest rate unchanged near zero after the conclusion of a two-day monetary policy meeting yesterday, 28 October 2015. The next monetary policy review from the Fed is scheduled on 15-16 December 2015.
Investors in emerging markets, including India are worried that once the Fed starts raising interest rates, it will drain liquidity from global emerging markets and redirect it to developed economies. The Fed has held its benchmark short-term interest rate near zero since December 2008. The ultra-loose monetary policy in the US has encouraged heavy investment in higher-yielding emerging markets.
Cipla fell 0.64% to Rs 691.10. The company has entered into a definitive agreement to sell its entire remaining 25% stake in Biomab Holding Limited, Hong Kong (BHL) to Biomab Brilliant Limited, British Virgin Islands for a total consideration of $25.77 million. BHL is focused on developing Biosimilars for the Chinese market. Cipla said that the decision to divest its entire remaining stake in Hong Kong based BHL was taken with a view to focus on global product development of Biosimilars in the field of cancer, auto-immune diseases, respiratory diseases and diabetes.
Dr Reddy's Laboratories rose 2.59% to Rs 4,214.05. On a consolidated basis, the company's net profit rose 25.74% to Rs 721.89 crore on 11.25% increase in total income to Rs 4020.95 crore in Q2 September 2015 over Q2 September 2014. The result was announced after market hours today, 29 October 2015.
Index heavyweight and engineering and construction major L&T fell 1.33% to Rs 1,471.60. The stock hit a high of Rs 1,498.15 and a low of Rs 1,467 in intraday trade.
Index heavyweight and cigarette major ITC fell 1.41% to Rs 349.75. The stock hit a high of Rs 355 and a low of Rs 347.20 in intraday trade.
IT stocks edged lower. TCS (down 1.13%), Wipro (down 0.72%) and Tech Mahindra (down 0.08%) edged lower. HCL Technologies rose 0.05% to Rs 875.80.
Index heavyweight and IT major Infosys fell 0.75% to Rs 1,142.70. The stock hit a high of Rs 1,155 and a low of Rs 1,136 in intraday trade.
Ambuja Cements edged lower in choppy trade after announcing weak Q3 results. The stock fell 0.84% at Rs 207. The stock hit a high of Rs 210.45 and a low of Rs 202.45 in intraday trade. Ambuja Cements' net profit fell 35.6% to Rs 154 crore on 4.3% decline in net sales to Rs 2095 crore in Q3 September 2015 over Q3 September 2014. The result was announced after market hours yesterday, 28 October 2015. The company's operating EBITDA (earnings before interest, taxation, depreciation and amortization) fell 21.1% to Rs 310 crore in Q3 September 2015 over Q3 September 2014. Ambuja Cements attributed the decline in bottom line during the quarter to lower operating EBITDA and due to additional depreciation charge of Rs 28 crore on implementation of Schedule II of the Companies Act, 2013. The bottom line in Q3 September 2015 was also affected adversely by the company making a provision of Rs 40 crore in the profit and loss account towards contribution to District Mineral Foundation and National Mineral Exploration Trust as per the Mines and Mineral (Development and Regulation) Amendment Act, 2015. This includes Rs 27 crore up to previous quarters.
On future business outlook, Ambuja Cements said that the long term outlook for cement demand remains positive considering the government's focus on housing, concrete roads, smart cities and infrastructure development. Ambuja Cements said it will continue to focus on improving operational efficiencies.
Shares of private sector banks edged lower. Federal Bank (down 2.13%), IndusInd Bank (down 1.48%), Kotak Mahindra Bank (down 1.12%), HDFC Bank (down 0.91%), City Union Bank (down 0.52%) and ICICI Bank (down 0.02%), edged lower.
Axis Bank extended steep losses registered yesterday, 28 October 2015, triggered by concerns regarding the private sector bank's slippages in Q2 September 2015. The stock fell 2.81% at Rs 469.40. The stock hit a high of Rs 486 and a low of Rs 467 in intraday trade. The stock had dropped 7.36% to settle at Rs 482.95 yesterday, 28 October 2015. The stock had ended almost unchanged after seeing intraday volatility on Tuesday, 27 October 2015, in the wake of the announcement of the bank's second quarter results. According to a post earnings research report of a domestic brokerage, Axis Bank sold loans aggregating about Rs 1820 crore to asset reconstruction companies (ARCs) for net consideration of about Rs 650 crore in Q2 September 2015. Axis Bank's gross slippages were Rs 589 crore or 1% of loans in Q2 September 2015 which was lower than gross slippages of Rs 1190 crore or 2.1% of loans in Q1 June 2015. However, adjusted for Rs 1820-crore sale to ARCs, gross slippages were about Rs 2400 crore or 4% of loans in Q2 September 2015, according to the brokerage.
Yes Bank edged higher in choppy trade after reporting strong Q2 September 2015 results. The stock rose 1.95% at Rs 743.50. The stock hit a high of Rs 747.40 and a low of Rs 708.65 in intraday trade. The bank's net profit rose 26.49% to Rs 610.41 crore on 19.69% rise in total income to Rs 3995.34 crore in Q2 September 2015 over Q2 September 2014.
Most PSU banks edged lower. Union Bank of India (down 2.56%), State Bank of India (down 2.02%), Indian Bank (down 1.42%), Punjab National Bank (down 1.15%), Canara Bank (down 1.14%), Bank of Baroda (down 1.1%), Syndicate Bank (down 1.05%), Allahabad Bank (down 0.99%), Bank of India (down 0.85%), Corporation Bank (down 0.79%), Dena Bank (down 0.59%), Punjab and Sind Bank (down 0.4%) and Central Bank of India (down 0.35%), edged lower. Andhra Bank (up 0.15%), Bank of Maharashtra (up 0.74%), United Bank of India (up 1.13%), Vijaya Bank (up 1.79%), IDBI Bank (up 3.31%) and UCO Bank (up 3.74%), edged higher.
Shares of state-run companies declined. Power Finance Corporation (down 2.73%), Power Grid Corporation of India (down 2.14%), Container Corporation of India (down 2%), Coal India (down 2.30%), Gail (India) (down 1.37%), Rural Electrification Corporation (down 2.77%), and ONGC (down 0.16%) edged lower.
NTPC fell in volatile trade after reporting Q2 September 2015 results. The stock lost 1.35% at Rs 127.80. The stock hit a high of Rs 131.25 and a low of Rs 127.30 in intraday trade. The company's net profit rose 39.9% to Rs 2898.28 crore on 5.25% rise in total income to Rs 18173.90 crore in Q2 September 2015 over Q2 September 2014.
Shares of public sector oil marketing companies edged lower after global crude oil prices surged yesterday, 28 October 2015. BPCL (down 3.18%), Indian Oil Corporation (down 1.43%) and HPCL (down 1.36%), edged lower. Higher crude oil prices will increase under-recoveries of PSU OMCs on domestic sale of LPG and kerosene at government controlled prices. The government has already freed pricing of petrol and diesel.
In the global commodities markets, Brent for December settlement was currently off 63 cents at $48.42 a barrel. The contract had surged $2.24 a barrel or 4.78% to settle at $49.05 a barrel during the previous trading session.
Key benchmark indices edged lower for the fourth consecutive trading session. The Sensex has declined 632.67 points or 2.3% in the preceding four trading sessions from its close of 27,470.81 on 23 October 2015. The Sensex has risen 683.31 points or 2.61% in this month so far (till 29 October 2015). The Sensex has fallen 661.28 points or 2.4% in this calendar year so far (till 29 October 2015). From a 52-week low of 24,833.54 hit on 8 September 2015, the Sensex has risen 2,004.60 points or 8.07%. The Sensex is off 3,186.60 points or 10.61% from a record high of 30,024.74 hit on 4 March 2015.
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