Index heavyweights HDFC, L&T and Reliance Industries (RIL) led modest gains for key benchmark indices on the last trading session of the week today, 22 May 2015. The barometer index, the S&P BSE Sensex, failed to retain the psychological 28,000 mark after moving past that level in intraday trade. The market breadth indicating the overall health of the market was negative. The Sensex was provisionally up 131.88 points or 0.47% to 27,941.23. In overseas markets, Chinese stocks led gains in Asian stocks.
Shares of banking giant State Bank of India (SBI) edged lower in volatile trade after the state-run bank reported Q4 March 2015 result. Pharmaceutical stocks saw mixed trend. Power generation shares edged lower.
Meanwhile, the Southwest Monsoon has reportedly further advanced and arrived over Sri Lanka.
Meanwhile, Finance Minister Arun Jaitley reportedly said at a news conference today, 22 May 2015, to mark the first year of Prime Minister Narendra Modi's government in power that India should bring down its effective tax rate to global levels.
Foreign portfolio investors sold shares worth a net Rs 186.26 crore yesterday, 21 May 2015, as per provisional data released by the stock exchanges. Domestic institutional investors (DIIs) bought shares worth a net Rs 404.01 crore yesterday, 21 May 2015, as per provisional data released by the stock exchanges.
Earlier, the Sensex and the 50-unit CNX Nifty, both, hit their highest level in more than four weeks in afternoon trade as these two key benchmark indices extended intraday gains.
Meanwhile, the government yesterday, 21 May 2015, announced an overhaul of the country's foreign direct investment (FDI) policy rules for overseas Indians.
In the overseas market, European stocks edged lower, with investors keeping a close eye on negotiations between Greece and its lenders as well as the latest confidence data from Germany. Earlier during the global day, Chinese stocks led gains in Asian stocks. US stocks ended slightly higher yesterday, 21 May 2015, sending the S&P 500 to a fresh record.
As per provisional closing, the S&P BSE Sensex was up 131.88 points or 0.47% to 27,941.23. The index jumped 261.81 points at the day's high of 28,071.16 in afternoon trade, its highest level since 23 April 2015. The index gained 19.26 points at the day's low of 27,828.61 in early trade.
The Nifty was up 37.95 points or 0.45% at 8,458.95, as per provisional closing. The index hit a high of 8,489.55 in intraday trade, its highest level since 23 April 2015. The index hit a low of 8,420.60 in intraday trade.
The BSE Mid-Cap index was up 12.89 points or 0.12% at 10,619.81. The BSE Small-Cap index was up 6.80 points or 0.06% at 11,207.66. Both these indices underperformed the Sensex.
The market breadth indicating the overall health of the market was negative. On BSE, 1,511 shares fell and 1,205 shares rose. A total of 118 shares were unchanged.
The total turnover on BSE amounted to Rs 3012 crore, lower than turnover of Rs 3724.66 crore registered during the previous trading session.
Index heavyweight and housing finance major HDFC was up 2.71% to Rs 1,290. The stock hit a high of Rs 1,292.80 and a low of Rs 1,255 in intraday trade.
Another index heavyweight and engineering and construction major L&T was up 1.04% to Rs 1,651. The stock hit a high of Rs 1,657.55 and a low of Rs 1,634.40 in intraday trade.
Index heavyweight Reliance Industries (RIL) was up 0.79% to Rs 904. The stock hit a high of Rs 904.80 and a low of Rs 897 in intraday trade.
Shares of banking giant State Bank of India (SBI) edged lower in volatile trade after the state-run bank reported Q4 March 2015 result. The stock was off 2.57% at Rs 281.90. The stock hit a high of Rs 305 and a low of Rs 280.80 in intraday trade. The stock saw a surge in volumes. On BSE, 95.05 lakh shares changed hands in the counter, compared with average daily volume of 17.07 lakh shares during the past one quarter. SBI's net profit jumped 23.06% to Rs 3742.02 crore on 14.54% increase in total income to Rs 48616.41 crore in Q4 March 2015 over Q4 March 2014. The result hit the market during trading hours today, 22 May 2015.
SBI's ratio of net non-performing assets (NPAs) to net advances stood at 2.12% as on 31 March 2015, compared with 2.8% as on 31 December 2014 and 2.57% as on 31 March 2014. The bank's ratio of gross NPAs to gross advances stood at 4.25% as on 31 March 2015, compared with 4.9% as on 31 December 2014 and 4.95% as on 31 March 2014.
SBI's total provisions and contingencies rose 11.91% to Rs 6592.91 crore in Q4 March 2015 over Q4 March 2014. Provisions for non-performing assets dropped 21.21% to Rs 4635.43 crore in Q4 March 2015 over Q4 March 2014.
SBI's provision coverage ratio stood at 69.13% as on 31 March 2015, which was higher than 62.86% as on 31 March 2014.
The bank's Capital Adequacy Ratio (CAR) as per Basel III norms stood at 12% as on 31 March 2015, compared with 12.03% as on 31 December 2014 and 12.44% as on 31 March 2014.
Pharmaceutical stocks saw mixed trend. IPCA Laboratories (down 1.93%), Glenmark Pharmaceuticals (down 1.48%), Piramal Enterprises (down 1.45%), Aurobindo Pharma (down 0.61%), Divi's Laboratories (down 0.5%), GlaxoSmithKline Pharmaceuticals (down 0.15%) and Cadila Healthcare (down 0.08%), edged lower. Dr Reddy's Laboratories (up 0.47%), Strides Arcolab (up 0.83%), Lupin (up 1.50%) and Sun Pharmaceutical Industries (up 2.57%), edged higher.
Cipla was up 0.42%. The company after market hours yesterday, 21 May 2015, announced that its wholly-owned subsidiary in UK viz. Cipla (EU), U.K., has entered into a definitive agreement to acquire a 51% stake in Quality Chemicals, Uganda (QCL) from the existing shareholders of QCL. As per the agreement, the cash consideration for 51% stake is payable in tranches with about $8 million payable upfront on completion and 5 equal installments of $4.41 million payable at annual intervals thereafter. The transaction is expected to be completed by end of July 2015, subject to completion of certain conditions precedent.
QCL was incorporated in the year 1997 and is engaged in the business of import and distribution of pharmaceutical and consumer products. This acquisition will further strengthen the company's overall presence in the African market, Cipla said. QCL also holds a 22.05% stake in Cipla's subsidiary in Uganda, Cipla Quality Chemical Industries (CQCIL).
The turnover of QCL for the financial year ended December 2012, December 2013 and December 2014 was Ugandan Shilling 15.76 billion, Ugandan Shilling 17.02 billion and Ugandan Shilling 14.85 billion respectively.
Power generation shares declined. CESC (down 5.08%), JSW Energy (down 3.71%), GMR Infrastructure (down 1.65%), Adani Power (down 1.46%), Reliance Power (down 1.12%), Jaiprakash Power Ventures (down 1.1%), Torrent Power (down 0.59%), Tata Power (down 0.39%) and Reliance Infrastructure (down 0.18%) edged lower. NTPC (up 0.30%) and NHPC (up 1.04%), edged higher.
Meanwhile, the government yesterday, 21 May 2015, announced an overhaul of the country's foreign direct investment (FDI) policy rules for overseas Indians. Investment by NRIs under Schedule 4 of FEMA (Transfer or Issue of Security by Persons Resident Outside India) Regulations will now be deemed to be domestic investment at par with the investment made by residents. This decision is meant to provide clarity in the FDI policy as such investment is not included in the category of foreign investment, a government statement said. The measure is expected to result in increased investments across sectors and greater inflow of foreign exchange remittance leading to economic growth of the country, the statement said.
Meanwhile, Finance Minister Arun Jaitley reportedly said at a news conference today, 22 May 2015, to mark the first year of Prime Minister Narendra Modi's government in power that India should bring down its effective tax rate to global levels. Jaitley said that India must remove discretion, phase out exemptions and bring the effective corporate tax rate down to global levels.
It may be recalled that Jaitley had announced in his speech on the Union Budget 2015-16 presented in parliament on 28 February 2015 that the rate of corporate tax will be cut to 25% from 30% over a period of next four years.
Meanwhile, the Southwest Monsoon has reportedly further advanced and arrived over Sri Lanka. According to private weather forecaster Skymet, the monsoon has covered entire Andaman Sea, some more parts of southeast, southwest and eastcentral Bay of Bengal. Weather conditions are looking favourable for the advancement of the Southwest Monsoon indicating its timely onset over Kerala, Skymet said yesterday, 21 May 2015 on its website.
In overseas markets, European stocks edged lower today, 22 May 2015, with investors keeping a close eye on negotiations between Greece and its lenders as well as the latest confidence data from Germany. Key benchmark indices in Germany and France were off 0.27% each. In UK, the FTSE 100 index was up 0.45%.
Greece remained in the headlines, as European leaders met for a second day in Riga. Greece is at risk of running out of cash in coming weeks unless it receives the much-needed bailout funds, which are being withheld until the government and international lenders agree on a range of economic overhauls.
Meanwhile, in Germany, the Ifo measure of German business confidence weakened for the first time in seven months in May, albeit only slightly, as companies scaled back their business expectations, another sign that growth in Europe's largest economy is losing momentum. The Ifo business climate index slipped to 108.5 in May 2015 from 108.6 in April 2015, its first drop since October 2014.
Confidence in France's manufacturing sector rose in May to the highest level in nearly four years as business leaders revised up their assessment of recent output. Confidence in the manufacturing sector rose further above the long-term average of 100 to reach 103 in May, the highest level since August 2011, statistics agency Insee said today, 22 May 2015. The figure for April was revised to 102 from 101 previously.
Chinese stocks led gains in Asian stocks today, 22 May 2015. In mainland China, the Shanghai Composite index was up 2.83%. In Hong Kong, the Hang Seng index was up 1.70%. In other Asian markets, key benchmark indices in Singapore, Indonesia, South Korea and Taiwan were up 0.13% to 1.1%.
In Japan, the Nikkei 225 was up 0.3%. The Bank of Japan today, 22 May 2015, kept its policy on hold, saying the country's economy is improving moderately. The BOJ's nine-member policy board voted 8-1 to leave its policy framework unchanged, keeping the bank's annual asset purchases at 80 trillion Yen ($660 billion). The BOJ last expanded its easing measures in October.
US stocks ended slightly higher yesterday, 21 May 2015, sending the S&P 500 to a fresh record. The main indexes continued to trade in narrow ranges in the absence of a major catalyst to move prices either direction. Investors mostly brushed off a flurry of weaker-than-expected economic data a day after minutes from Federal Reserve's last meeting signaled a June interest-rate hike was unlikely.
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