After reversing intraday losses in mid-afternoon trade, key benchmark indices once again slipped into the red. The market breadth indicating the overall health of the market was negative. The barometer index, the S&P BSE Sensex, was currently off 20.60 points or 0.07% at 27,816.61.
Auto stocks were mixed. Shares of pharmaceutical companies edged lower.
Foreign portfolio investors bought shares worth a net Rs 123.49 crore yesterday, 20 May 2015, as per provisional data released by the stock exchanges. Domestic institutional investors (DIIs) bought shares worth a net Rs 103.58 crore yesterday, 20 May 2015, as per provisional data released by the stock exchanges.
Meanwhile, the finance ministry yesterday, 20 May 2015, constituted a three-member committee headed Justice A.P. Shah to look into the issue of Minimum Alternate Tax (MAT) on foreign institutional investors (FIIs).
Earlier, the Sensex and the 50-unit CNX Nifty had, both, hit four-week high amid initial volatility.
In the overseas market, European stocks edged lower after the latest data showed that the eurozone economy slowed for the second straight month in May. Asian stocks were mixed. US stocks ended a choppy trading session slightly lower yesterday, 20 May 2015, as modest post-Fed-minutes gains evaporated by the close of the trading day.
At 14:18 IST, the S&P BSE Sensex was down 20.60 points or 0.07% at 27,816.61. The index fell 124.48 points at the day's low of 27,712.73 in early afternoon trade, its lowest level since 19 May 2015. The index rose 74.23 points at the day's high of 27,911.44 in early trade, its highest level since 23 April 2015.
The CNX Nifty was down 11.45 points or 0.14% at 8,411.80. The index hit a low of 8,382.50 in intraday trade, its lowest level since 19 May 2015. The index hit a high of 8,446.35 in intraday trade, its highest level since 23 April 2015.
The BSE Mid-Cap index was down 64.62 points or 0.61% at 10,586.16. The BSE Small-Cap index was down 8.79 points or 0.08% at 11198.06. The decline in both these indices was higher than the Sensex's decline in percentage terms.
The market breadth indicating the overall health of the market was negative. On BSE, 1,473 shares fell and 1,064 shares rose. A total of 127 shares were unchanged.
Auto stocks were mixed. Escorts (down 0.57%), Ashok Leyland (down 0.42%), Eicher Motors (down 0.41%), Maruti Suzuki (India) (down 0.17%) and Hero MotoCorp (up 0.95%) edged lower. Tata Motors (up 1.16%) and TVS Motor Company (up 5%) edged higher.
Bajaj Auto was up 4.58% to Rs 2,249. The stock was volatile. The scrip hit high of Rs 2,260 and low of Rs 2,124 so far during the trading session. The company's net profit fell 18.62% to Rs 621.62 crore on 4.36% decline in total income to Rs 4893.61 crore in Q4 March 2015 over Q4 March 2014. The result was announced during trading hours today, 21 May 2015.
Bajaj Auto's operating EBITDA (earnings before interest, taxation, depreciation and amortization) before mark-to-market (MTM) gain/loss declined 9.02% to Rs 937 crore in Q4 March 2015 over Q4 March 2014. Operating EBITDA margin stood at 19.4% in Q4 March 2015 as against 20.6% in Q4 March 2014. Bajaj Auto said that EBITDA margin declined on year-on-year basis in Q4 March 2015 largely due to one-off expenses. For one, there was an increase in employee costs. There was increase in employee costs due to increase in charge due to actuarial valuation for gratuity to Rs 90 crore from Rs 31 crore. Bajaj Auto also said that the company provided for loss on account of a fire incident at the company's Akurdi unit in January 2015 in Q4 March 2015.
With regard to motorcycles, Bajaj Auto said that the newly launched Pulsar RS 200 and Pulsar AS 200 models would see further gain the company's domestic motorcycle market share. Bajaj Auto also said that the newly launched CT100 model has been well received in the domestic market. With the success of CT100 and the new Pulsar models, April 2015 saw the company increase its share in domestic motorcycle market by over 300 basis points sequentially.
Bajaj Auto said that growth in the company's exports is back on track due to normalcy returning across major geographical markets where it exports its vehicles.
Mahindra & Mahindra (M&M) was down 0.16% to Rs 1249. The company announced during trading hours today, 21 May 2015, that it has entered into a strategic partnership with Japan's Mitsubishi Heavy Industries (MHI) in the agricultural machinery field. Under the definitive agreement, M&M will invest $25 million for acquiring 33% voting stake in MHI subsidiary, Mitsubishi Agricultural Machinery Co. (MAM) through fresh issue of common shares and Class A (non-voting) shares of MAM. The deal is expected to close by 1 October 2015, with the new funding to be used to increase MAM's capital base.
Mitsubishi Agricultural Machinery is a full range agri-machinery company producing and selling tractors, combine harvesters, rice transplanters and other agri-machinery. The company clocked revenue of approximately yen 50 billion ($408 million) in 2014-15.
Shares of pharmaceutical companies edged lower. Piramal Enterprises (down 2.14%), Aurobindo Pharma (down 1.93%), Cipla (down 1.61%), Glenmark Pharmaceuticals (down 1.55%), Lupin (down 0.56%), GlaxoSmithKline Pharmaceuticals (down 0.51%), IPCA Laboratories (down 0.51%) and Dr. Reddy's Laboratories (down 0.33%) edged lower. Wockhardt (up 0.56%), Divi's Laboratories (up 1.13%), Sun Pharmaceutical Industries (up 1.23%) and Strides Arcolab (up 4.76%) edged higher.
Meanwhile, the finance ministry yesterday, 20 May 2015, constituted a three-member committee headed Justice A.P. Shah to look into the issue of Minimum Alternate Tax (MAT) on foreign institutional investors (FIIs). It may be recalled that Finance minister Arun Jaitley had on 7 May 2015 announced the constitution of a committee headed by Chairman of Law Commission of India Justice A.P. Shah to look into the issue of the levy of MAT on FIIs as well as other issues which are referred to it.
To begin with, the committee will examine the matter relating to levy of MAT on FIIs for the period prior to 1 April 2015. The committee will also examine all the related legal provisions, judicial/quasi judicial pronouncements and such other relevant aspects as it may consider appropriate, the finance ministry said in a statement. The committee has been requested to give its recommendations on the issue of levy of MAT on FIIs expeditiously. Since initially the committee would focus on the issue of MAT on FIIs for giving its report expeditiously, other issues to be referred to the committee will be notified in due course, the finance ministry said. The term of the committee will be for one year or such period as may be notified by the government from time to time.
In overseas markets, European stocks edged lower today, 21 May 2015, after the latest data showed that the eurozone economy slowed for the second straight month in May. Key benchmark indices in UK, France and Germany were off 0.05% to 0.24%.
Eurozone composite PMI declined to 3-month low of 53.4 in May 2015. Eurozone flash manufacturing PMI jumped to 13-month high of 52.3, while Eurozone flash services PMI dropped to 4-month low of 53.3.
Manufacturing activity in Germany grew at the slowest pace in three months in May, dampening optimism over the health of the euro zone's largest economy, preliminary data showed today, 21 May 2015. In a report, market research group Markit said that its preliminary German manufacturing purchasing managers' index declined to a seasonally adjusted 51.4 this month from a final reading of 52.1 in April. Separately, the preliminary services purchasing managers' index fell to a seasonally adjusted 52.9 this month from 54 in April.
In France, data compiler Markit said its preliminary composite purchasing managers index, surveying firms across the private sector, rose to 51 in May 2015, from 50.6 in April 2015, moving further above the 50-point threshold between an expansion and contraction.
Asian stocks were mixed today, 21 May 2015. Key benchmark indices in Singapore, Hong Kong, South Korea and Taiwan were off 0.02% to 1.1%. Key benchmark indices in Indonesia, China and Japan were up 0.03% to 1.89%.
The preliminary HSBC China Manufacturing Purchasing Managers Index, a gauge of nationwide manufacturing activity, edged up to 49.1 in May, compared with a final reading of 48.9 in April, HSBC Holdings PLC said today, 21 May 2015. The reading was still below the key 50 mark, which separates expansion from contraction when compared with the previous month, said Markit, which releases the index with HSBC.
The preliminary PMI figure, also called the HSBC Flash China PMI, is based on 85% to 90% of total responses to HSBC's survey each month, and is issued about one week before the final PMI reading.
Meanwhile, China's State Council has unveiled a 10-year plan for upgrading the nation's manufacturing capacity so it can catch up with production powerhouses like Germany and fend off competition from other developing countries. The Ministry of Industry and Telecommunication Technology (MIIT), which led the creation of the Made in China 2025 plan, said the strategy is intended to give China an edge in innovation, green development and quality goods. The MIIT put the focus on 10 sectors, including high-end computerized machinery and robotics, aerospace equipment, renewable-energy cars and biological medicine.
US stocks ended a choppy trading session slightly lower yesterday, 20 May 2015, as modest post-Fed-minutes gains evaporated by the close of the trading day. Officials at the Fed's April policy meeting believed it would be premature to raise interest rates in June and that a bump in inflation was being offset by a weaker labour market and softer data, according to the minutes.
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