Nifty settles at 2-week low

Key benchmark indices tumbled on weak global cues on first trading day of the week. The barometer index, the S&P BSE Sensex, lost 443.71 points or 1.54% to settle at 28,353.54. The losses for the Nifty 50 index were higher in percentage terms than those for the Sensex. The Nifty fell 151.10 points or 1.7% to settle at 8,715.60. The Sensex settled at almost 2-week low. The Nifty settled at 2-week low. India's stock market remains closed tomorrow, 13 September 2016, on account of Bakri Id.

In overseas stock markets, European stocks declined as investor sentiment was rattled by concerns that the US Federal Reserve could be considering an imminent interest rate hike. Asian markets edged lower as investors were spooked by rising bond yields and talk the Federal Reserve might be serious about lifting US interest rates as early as next week.

 

Trading in US stock index futures indicated fall in US stocks at the opening bell today, 12 September 2016. Trading in US index futures indicated that the Dow Jones Industrial Average could slide 151 points at the opening bell. US stocks tumbled on Friday, 9 September 2016, as investor nervousness increased following a nuclear test by North Korea and Federal Reserve officials' comments lifted rate hike bets. North Korea conducted its fifth and biggest nuclear test on Friday, 9 September 2016, and said it had mastered the ability to mount a warhead on a ballistic missile, drawing condemnation from the United States as well as China, North Korea's main ally. Further pressure on the US equity market came after Boston Fed President Eric Rosengren said the US central bank faced increasing risks if it waited too much longer to raise interest rates.

The Sensex lost 443.71 points or 1.54% to settle at 28,353.54, its lowest closing level since 30 August 2016. The Sensex fell 545.94 points, or 1.90% at the day's low of 28,251.31. The index fell 316.14 points, or 1.10% at the day's high of 28,481.11.

The Nifty fell 151.10 points or 1.7% to settle at 8,715.60, its lowest closing level since 29 August 2016. The Nifty fell 167.30 points, or 1.89% at the day's low of 8,699.40. The index fell 119.75 points, or 1.35% at the day's high of 8,746.95.

The broad market depicted weakness. There were almost three losers against every gainer on BSE. 2,031 shares fell and 689 shares rose. A total of 174 shares were unchanged. The BSE Mid-Cap index declined 2.95%. The BSE Small-Cap index declined 2.35%. The decline in both these indices was higher than the Sensex's decline in percentage terms.

Among the sectoral indices on BSE, the S&P BSE Realty index (down 5.23%), the S&P BSE Metal index (down 4.34%), the S&P BSE Basic Materials index (down 3.69%), the S&P BSE Capital Goods index (down 3.25%), the S&P BSE Power index (down 3.14%), the S&P BSE Power index (down 3.14%), the S&P BSE Industrials index (down 3.05%), the S&P BSE Utilities index (down 2.95%), the S&P BSE Auto index (down 2.61%), the S&P BSE Finance index (down 2.39%), the S&P BSE Bankex (down 2.39%), the S&P BSE Consumer Discretionary Goods & Services index (down 2.33%), the S&P BSE Oil & Gas index (down 2.07%), the S&P BSE FMCG index (down 1.9%), the S&P BSE Healthcare index (down 1.78%), the S&P BSE Consumer Durables index (down 1.62%) underperformed the Sensex. The S&P BSE Energy index (down 1.15%), the S&P BSE Teck index (up 0.26%) and the S&P BSE IT index (up 0.87%), outperformed the Sensex. The S&P BSE Telecom index fell 1.54%, matching the Sensex's fall in percentage terms.

Index heavyweight and cigarette major ITC dropped 2.49% to Rs 252.25. The stock hit a high of Rs 257.65 and low of Rs 251.80 in intraday trade.

Banks stocks edged lower. Among PSU banks, Corporation Bank (down 5.98%), Bank of Baroda (down 5.93%), Union Bank of India (down 5.49%), Syndicate Bank (down 4.96%), Allahabad Bank (down 5.68%), Indian Bank (down 5.32%), Bank of India (down 6.08%), Andhra Bank (down 5.77%), Vijaya Bank (down 4.66%), UCO Bank (down 4.33%), Punjab National Bank (down 5.31%), State Bank of India (down 4.28%), Canara Bank (down 4.6%), Dena Bank (down 5.28%), IDBI Bank (down 4.9%) edged lower.

Among private sector banks, Axis Bank (down 3.42%), Yes Bank (down 5.63%), Federal Bank (down 3.21%), IndusInd Bank (down 1.51%), RBL Bank (down 0.82%), ICICI Bank (down 1.97%), HDFC Bank (down 0.38%) and Kotak Mahindra Bank (down 0.67%) edged lower.

Fitch Ratings has said in a report that the progressive increase in minimum capital requirements under Basel III is likely to put nearly half of Indian banks in danger of breaching capital triggers. State-run banks are the most at risk, given their poor existing capital buffers and weak prospects for raising capital through market channels, Fitch said. Fitch estimates that Indian banks will require around $90 billion in new capital by FY 2019 to meet Basel III standards, with the state banks accounting for about 80% of the total. According to Fitch, state-run banks will continue to face difficulties in raising capital from the market, which will keep their Viability Ratings under pressure and will weigh on the sector outlook.

Metal shares edged lower after copper price declined in the global commodities markets. Hindalco Industries (down 8.99%), Steel Authority of India (down 5.63%), NMDC (down 5.51%), National Aluminium Company (down 5.25%), Jindal Steel & Power (down 5%), Vedanta (down 4.75%), JSW Steel (down 4.58%), Hindustan Zinc (down 3.58%), Hindustan Copper (down 3.52%) and Bhushan Steel (down 1.31%), edged lower.

High Grade Copper for December 2016 delivery was currently down 0.84% at $2.075 per pound on the COMEX.

Tata Steel lost 5.51%. On a consolidated basis, Tata Steel reported net loss of Rs 3183.07 crore in Q1 June 2016, higher than net loss of Rs 316.91 crore in Q1 June 2015. Total income fell 5.5% to Rs 26542.83 crore in Q1 June 2016 over Q1 June 2015. The result was announced after market hours today, 12 September 2016.

Tata Steel's consolidated earnings before interest, taxation, depreciation and amortization (EBITDA) rose 21% to Rs 3270 crore in Q1 June 2016 over Q1 June 2015 due to improved operating performance across India, Europe, and South East Asia. EBITDA margin expanded to 12.4% in Q1 June 2016 from 9.6% in Q1 June 2015. Tata Steel said that the company recognised loss of Rs 3296 crore in Q1 June 2016 on account of divestment of Long Steel UK Limited.

Power generation stocks edged lower. Reliance Infrastructure (down 6.84%), GMR Infrastructure (down 5.7%), Adani Power (down 5.03%), Jaiprakash Power Ventures (down 3.82%), Reliance Power (down 3.74%), Tata Power (down 3.57%), NTPC (down 3.43%), JSW Energy (down 3.24%), NHPC (down 2.48%), Torrent Power (down 1.92%) and CESC (down 1.18%), edged lower.

State-run Power Grid Corporation of India was down 1.88% to Rs 180.20.

State-run Coal India was down 0.53% to Rs 330.40. The company will announce Q1 June 2016 results tomorrow, 13 September 2016.

Mahindra & Mahindra (M&M) dropped 3.06%. The company today, 12 September 2016, unveiled - the New Bolero with the mHawk D70 engine. This has been christened The New Bolero Power+. The New Bolero Power+ with the mHawk D70 engine will be available in 3 variants SLE, SLX & ZLX across Mahindra dealerships pan India starting today, 12 September 2016, at an aggressive price of Rs 6.59 lakh (ex-showroom Navi Mumbai for SLE BS4 variant).

Cement stocks fell. Ambuja Cements (down 4.37%), ACC (down 4.28%), UltraTech Cement (down 2.61%) and Shree Cement (down 2.6%) fell.

Grasim Industries fell 1.71%. Grasim Industries said that board of directors on Saturday, 10 September 2016, approved the proposal to increase the limit for investment in the equity share capital of the company by registered foreign portfolio investors from 24% to 30% of the company's paid-up equity share capital of the company. The announcement was made on Saturday, 10 September 2016.

Realty stocks declined sharply. DLF (down 8.08%), Indiabulls Real Estate (down 7.08%), D B Realty (down 6.06%), Unitech (down 5.29%), Sobha (down 1.82%), Godrej Properties (down 2.59%), Prestige Estates Projects (down 1.65%), Oberoi Realty (down 2.1%) declined.

Housing Development and Infrastructure (HDIL) fell 10.85% after consolidated net profit fell 30% to Rs 40.89 crore on 2.7% decline in total income to Rs 265.21 crore in Q1 June 2016 over Q1 June 2015. The result was announced on Saturday, 10 September 2016. HDIL said that it follows project completion method and accordingly results on quarter to quarter basis may not be comparable.

Reliance Defence & Engineering dropped 13.51% after the company reported net loss of Rs 134.50 crore in Q1 June 2016 compared with net loss of Rs 167.27 crore in Q1 June 2015. Total income dropped 34.21% to Rs 74.18 crore in Q1 June 2016 over Q1 June 2015. The result was announced on Saturday, 10 September 2016.

Lanco Infratech shed 6.43% after the company reported consolidated net loss of Rs 448.88 crore in Q1 June 2016 higher than net loss of Rs 316.27 crore in Q1 June 2015. Net total income from operations rose 10.1% to Rs 1727.99 crore in Q1 June 2016 over Q1 June 2015. The result was announced during market hours today, 12 September 2016.

Gujarat State Petronet lost 4.57% after net profit rose 7.5% to Rs 121.26 crore on 0.8% growth in net sales to Rs 257.85 crore in Q1 June 2016 over Q1 June 2015. The result was announced after market hours on Friday, 9 September 2016.

The Sensex has declined 98.63 points or 0.35% in this month so far (till 12 September 2016). The Sensex has risen 2,236 points or 8.56% in calendar year 2016 so far (till 12 September 2016). From a 52-week low of 22,494.61 hit on 29 February 2016, the barometer index has risen 5,858.93 points or 26.05%. The Sensex is off 1671.20 points or 5.57% from a record high of 30,024.74 hit on 4 March 2015.

Meanwhile, the Union Cabinet today, 12 September 2016, gave its nod for the creation of the goods and services tax (GST) Council. The GST Council will make recommendations to the Centre and the states on important issues related to GST, like the goods and services that may be subjected or exempted from GST, model GST Laws, principles that govern Place of Supply, threshold limits, GST rates including the floor rates with bands, special rates for raising additional resources during natural calamities/disasters, special provisions for certain states, etc. The GST Council is a joint forum of the Centre and the states. The Union Finance Minister is the Chairperson of the GST Council. Union Minister of State in-charge of Revenue of finance will be a member of the GST Council. From the state governments, the Minister In-charge of finance or taxation or any other minister nominated by each state government will be a member of the GST Council.

The Constitution (One Hundred and Twenty-second Amendment) Bill, 2016, for introduction of Goods and Services tax in the country was accorded assent by the President on 8 September, 2016 and was notified as the Constitution (One Hundred and First Amendment) Act, 2016.

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