Banking, metal stocks and index heavyweight Reliance Industries (RIL) led losses for key benchmark indices. The barometer index, the S&P BSE Sensex lost 205.37 points or 0.74% to settle at 27,710.52. The losses for the Sensex were higher in percentage terms than those for the Nifty 50 index. The Nifty lost 55.75 points or 0.65% to settle at 8,510.10. The Sensex settled at its lowest closing level in more than a week.
The Sensex and the Nifty snapped a two-day winning streak.
Index heavyweight HDFC Bank edged lower in volatile trade after the private sector bank reported increase in sticky loans. Kotak Mahindra Bank (KMBL) edged lower after the private sector bank reported increase in bad loans. HPCL edged higher after the company said that its board of directors approved 2 for 1 bonus issue of shares. Shares of Larsen & Toubro Infotech (L&T Infotech) settled at a slight discount compared with its initial public offer (IPO) price on debut.
In overseas stock markets, European stocks edged lower ahead of the outcome of the monetary policy meeting of the European Central Bank (ECB). The ECB is widely expected to keep monetary policy unchanged after the conclusion of a monetary policy meeting of the ECB governing council today, 21 July 2016. Market participants are looking forward to ECB President Mario Draghi's news conference for hints on future easing moves following the UK's vote last month to leave the European Union. It is the ECB's first policy meeting since the Brexit vote.
Earlier during the global day, Asian stocks ended on a mixed note. Japanese stocks edged higher on expectations that Japan's central bank Bank of Japan may announce stimulus package for the economy after the conclusion of a two-day monetary policy meeting on 28-29 July 2016. The Nikkei 225 Average settled 0.77% higher. Meanwhile, latest media reports suggested that the Japanese government is arranging to compile an economic stimulus worth 20 trillion yen ($187 billion) to vault Japan out of more than a decade of deflation. US stocks closed at record highs yesterday, 20 July 2016, buoyed by a surge in tech stocks after a flurry of corporate earnings beat lowered expectations.
The Sensex lost 205.37 points or 0.74% to settle at 27,710.52, its lowest closing level since 11 July 2016. The index rose 72.87 points, or 0.26% at the day's high of 27,988.76. The index fell 228.35 points, or 0.81% at the day's low of 27,687.54.
The Nifty lost 55.75 points or 0.65% to settle at 8,510.10, its lowest closing level since 18 July 2016. The index rose 19.40 points or 0.23% at the day's high of 8,585.25. The index shed 62.40 points, or 0.72% at the day's low of 8,503.45.
The BSE Mid-Cap index fell 0.19%. The BSE Small-Cap index lost 0.14%. The losses for both these indices were lower than the Sensex's decline in percentage terms.
The market breadth indicating the overall health of the market was negative. On BSE, 1,595 shares declined and 1,089 shares rose. A total of 185 shares were unchanged.
The total turnover on BSE amounted to Rs 3216 crore, higher than turnover of Rs 3196.09 crore registered during the previous trading session.
Among the sectoral indices on BSE, the S&P BSE Finance index (down 1.02%), the BSE Bankex index (down 1.7%), the BSE Capital Goods index (down 1.01%) and the BSE Power index (down 2.1%) underperformed the Sensex. The BSE Telecom index (up 0.17%), the BSE Auto index (down 0.7%) and the BSE Metal index (down 0.63%) outperformed the Sensex.
Bank stocks edged lower. Among public sector banks, Punjab National Bank (down 4.4%), Union Bank of India (down 4.17%), Indian Bank (down 3.95%), Bank of Baroda (down 3.46%), IDBI Bank (down 2.38%), State Bank of India (down 2.3%) and Bank of India (down 2.41%) declined.
Among private sector banks, Axis Bank (down 3.62%), ICICI Bank (down 2.13%) and Yes Bank (down 0.6%) edged lower. IndusInd Bank (up 1.62%) rose.
Index heavyweight HDFC Bank edged lower in volatile trade after the private sector bank reported increase in sticky loans. The stock fell fell 0.3% to Rs 1,228.45. The stock hit a high of Rs 1,239.50 in intraday trade, which is a record high for the stock. HDFC Bank's gross non-performing assets increased to Rs 4920.89 crore as on 30 June 2016 compared with Rs 4392.83 crore as on 31 March 2016 and Rs 3652.23 crore as on 30 June 2015. The ratio of gross non-performing assets (NPAs) to gross advances stood at 1.04% as on 30 June 2016 compared with 0.94% as on 31 March 2016 and 0.95% as on 30 June 2015. The ratio of net NPAs to net advances stood at 0.32% as on 30 June 2016 as against 0.28% as on 31 March 2016 and 0.27% as on 30 June 2015.
The bank's net profit rose 20.2% to Rs 3238.90 crore on 17.1% growth in total income to Rs 19322.60 crore in Q1 June 2016 over Q1 June 2015. The bank's net interest income (NII) rose 21.8% to Rs 7781.40 crore in Q1 June 2016 over Q1 June 2015. The bank's provisions and contingencies rose 19.05% to Rs 866.70 crore in Q1 June 2016 over Q1 June 2015. The result was announced during market hours today, 21 July 2016.
Separately, HDFC Bank announced after market hours yesterday, 20 July 2016 that S&P Global Ratings (S&P) has affirmed its 'BBB-' long-term issue ratings on the senior unsecured bonds issued by the Bahrain branch of the bank. S&P has also removed its ratings on these bonds from CreditWatch. The rating agency had in February 2016 placed its ratings on the bonds on CreditWatch with negative implications consequent to a downgrade in the rating of Bahrain. The latest development comes in the aftermath of HDFC Bank modifying its existing structure of the bonds. Under the revised structure, if any event materializes thereby restraining the bank's ability to service the bonds from Bahrain branch, the bank will service the bonds from any branch in India or from the Hong Kong branch.
Kotak Mahindra Bank (KMBL) edged lower after the private sector bank reported increase in bad loans. The stock fell 2.71% at Rs 760.80. The bank's gross non-performing assets increased to Rs 3058.81 crore as on 30 June 2016 compared with Rs 2838.11 crore as on 31 March 2016 and Rs 2421.77 crore as on 30 June 2015. The ratio of gross non-performing assets (NPAs) to gross advances stood at 2.5% as on 30 June 2016 as against 2.36% as on 31 March 2016 and 2.31% as on 30 June 2015. The ratio of net NPAs to net advances stood at 1.21% as on 30 June 2016 as against 1.06% as on 31 March 2016 and 1.04% as on 30 June 2015.
The bank's net profit rose 290.96% to Rs 741.97 crore on 11.69% growth in total income to Rs 5120.03 crore in Q1 June 2016 over Q1 June 2015. The result was announced during market hours today, 21 July 2016. KMBL's net interest income (NII) rose 20% to Rs 1919 crore in Q1 June 2016 over Q1 June 2015. Net interest margin (NIM) improved to 4.37% in Q1 June 2016 from 4.18% in Q1 June 2015. The bank's provisions and contingencies declined 41.2% to Rs 179.51 crore in Q1 June 2016 over Q1 June 2015.
On consolidated basis, KMBL's net profit rose 106.57% to Rs 1067.10 crore on 23.21% growth in total income to Rs 7866.88 crore in Q1 June 2016 over Q1 June 2015.
Metal and mining stocks edged lower. Jindal Steel & Power (down 3.08%), Steel Authority of India (down 2.51%), Vedanta (down 2.78%), Hindalco Industries (down 1.66%), Tata Steel (down 1.67%), JSW Steel (down 0.73%), Hindustan Copper (down 0.4%) and National Aluminium Company (down 0.21%) declined. NMDC (up 1.64%) edged higher.
Copper prices edged lower in global commodities markets.High Grade Copper for September 2016 delivery was currently down 0.11% at $2.2515 per pound on the COMEX.
Hindustan Zinc lost 0.44% after net profit fell 46.55% to Rs 1036.86 crore on 25.45% drop in total income to Rs 3140.74 crore in Q1 June 2016 over Q1 June 2015. The result was announced after market hours yesterday, 20 July 2016.
A fall in revenue and rise in cost of production resulted in a 33% decline in earnings before interest, taxes, depreciation and amortization (EBITDA) to Rs 1130 crore in Q1 June 2016 over Q1 June 2015. The smaller investment corpus on account of dividend pay-out in the beginning of the quarter led to lower investment income, which along with higher tax rate and higher depreciation resulted in fall in net profit.
Index heavyweight Reliance Industries (RIL) fell 1.55% to Rs 1,006.70. The stock hit a high of Rs 1,024.55 and a low of Rs 1,005.50 in intraday trade.
Shares of Larsen & Toubro Infotech (L&T Infotech) settled at Rs 697.65 on BSE on its debut, at a slight discount of 1.73% compared with the initial public offer (IPO) price of Rs 710. The stock debuted at Rs 666.60, a discount of 6.11% compared with IPO price. The stock hit a high of Rs 710 and a low of Rs 666 in intraday trade.
L&T Infotech had priced its IPO at Rs 710 per share -- the top end of the Rs 705-710 per share price band for the IPO. The IPO received strong response from investors. The company's promoter and engineering & construction major L&T sold a part of its stake through the IPO of L&T Infotech.
HPCL surged 3.52% after the company said that its board of directors approved 2 for 1 bonus issue. The board has fixed 15 September 2016 record date for the purpose of bonus issue. The announcement was made after market hours yesterday, 20 July 2016.
Separately, HPCL announced after market hours yesterday, 20 July 2016 that its board of directors approved Visakh refinery capacity expansion from 8.33 million metric tonnes per annum (MMTPA) to 15 MMTPA with residue up-gradation facility meeting BS VI fuel specification compliance under Visakh Refinery Modernization Project (VRMP). The project involves an investment of Rs 20928 crore and is expected to be mechanically completed within 48 months from the date of approval.
Ambuja Cements (up 1.47%) and ACC (up 4.13%) edged higher after parent company LafargeHolcim received the approval of the Cabinet Committee on Economic Affairs for the streamlining of its ownership structure in India. ACC and Ambuja Cements are both subsidiaries of LafargeHolcim, the world leader in the building materials industry. Through intragroup restructuring, LafargeHolcim will increase its shareholding in Ambuja to 61.14% and Ambuja in turn will acquire LafargeHolcim's 50.05% stake in ACC. The transaction will be effected through a merger of Holcim India Private Ltd. (HIPL), a wholly owned financial holding subsidiary, with Ambuja. In a two stage deal, Ambuja will first acquire, through a purchase, a 24% stake in HIPL for a cash consideration of Rs 3500 crore, followed by a stock merger between HIPL and Ambuja. As part of the merger, LafargeHolcim will receive 58.4 crore new equity shares of Ambuja resulting in an increase of its ownership in Ambuja from the current 50.28% to 61.14%.
The Sensex and the Nifty snapped a two-day winning streak. The Sensex had gained 169.23 points or 0.6% in two trading sessions to settle at 27,915.89 yesterday, 20 July 2016, from its close of 27,746.66 on 18 July 2016. The Sensex has risen 710.80 points or 2.63% in this month so far (till 21 July 2016). The Sensex has risen 1,592.98 points or 6.09% in calendar year 2016 so far (till 21 July 2016). From a 52-week low of 22,494.61 hit on 29 February 2016, the barometer index has risen 5,215.91 points or 23.18%. The Sensex is off 867.81 points or 3.03% from a 52-week high of 28,578.33 hit on 23 July 2015. The Sensex is off 2,314.22 points or 7.7% from a record high of 30,024.74 hit on 4 March 2015.
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