Banking, auto, IT sector stocks and index heavyweights HDFC and ITC led the rally on the domestic bourses triggered by gains in global stocks. The barometer index, the S&P BSE Sensex, jumped 575.70 points or 2.28% to settle at 25,881.17. The gains for the Nifty 50 index were higher in percentage terms than those for the Sensex. The Nifty jumped 186.05 points or 2.4% to settle at 7,934.90. The two key benchmark indices extended gains in late trade after hovering in positive zone throughout the trading session after opening with upward gap. The Sensex and the Nifty, both, hit four-week closing high. All the 19 sectoral indices on BSE registered gains. World stocks rose after strong US housing data for April 2016.
The rally on the domestic bourses was further aided by a foreign brokerage upgrading the Indian equity market to 'overweight' from 'equalweight'. According to media reports, the brokerage has cited attractive valuations of Indian stocks compared with other emerging markets, the country's strong macroeconomic fundamentals, a recovery in earnings growth, prospects for the passage of the goods and services tax (GST) bill in the Rajya Sabha, expectation of good monsoon this year and likely further easing of interest rates by the Reserve Bank of India (RBI) as reasons for upgrading India's rating.
Stocks of oil exploration and production firms edged higher on rise in crude oil prices. Metal shares edged higher as copper prices rose in global commodities markets. Tech Mahindra surged on reports that a domestic brokerage has raised its price target while retaining its accumulate rating on the stock after the announcement of the company's Q4 March 2016 results. Cipla dropped after announcement of dismal Q4 March 2016 results.
Shares of two-wheeler maker Bajaj Auto surged after the company's strong Q4 March 2016 results. Bharat Heavy Electricals (Bhel) edged higher after the company's announcement that it has successfully commissioned the first 800 megawatts (MW) supercritical thermal unit in Karnataka, which is also the highest rating unit in the state.
In overseas stock markets, European stocks edged higher as eurozone finance ministers and the International Monetary Fund (IMF) reached a deal to unlock more bailout funds for debt-burdened Greece. Greece's Athens General-Composite index was currently up 0.71%. The new payouts will save Greece from defaulting on big debt redemptions to the IMF and European Central Bank in July. Eurozone finance ministers also agreed on a road map on debt relief for Greece. Meanwhile, the outcome of a poll yesterday, 24 May 2016, showed a 13-point lead in support among Britons to stay in the European Union (EU) over their rivals who support UK's exit from the EU. Britons will vote on 23 June 2016 on whether the country should remain a member of the EU.
Asian equities edged higher after encouraging reports on the US housing market saw sharp gains in US stocks overnight. Sales of new homes in the US surged 16.6% in April 2016, the fastest pace of increase in more than eight years, data released yesterday, 24 May 2016, showed.
The Sensex jumped 575.70 points or 2.28% to settle at 25,881.17, its highest closing level since 27 April 2016. The Sensex surged 592.40 points, or 2.34% at the day's high of 25,897.87. The index rose 125.12 points, or 0.49% at the day's low of 25,430.59.
The Nifty jumped 186.05 points or 2.4% to settle at 7,934.90, its highest closing level since 27 April 2016. The Nifty rose 192.35 points, or 2.48% at the day's high of 7,941.20. The index rose 60.45 points, or 0.78% at the day's low of 7,809.30.
The market breadth indicating the overall health of the market was strong. On BSE, 1,579 shares rose and 960 shares fell. A total of 180 shares were unchanged. The BSE Mid-Cap index rose 0.97%. The BSE Small-Cap index rose 0.94%. Both these indices underperformed the Sensex.
The total turnover on BSE amounted to Rs 2310 crore, lower than turnover of Rs 2608 crore registered during the previous trading session.
Among the sectoral indices on BSE, the S&P BSE Bankex (up 3.17%), the S&P BSE Capital Goods index (up 2.96%), the S&P BSE Finance index (up 2.59%) outperformed the Sensex. The S&P BSE IT index (up 2.25%), the S&P BSE Teck index (up 2.21%), the S&P BSE Power index (up 2.04%), the S&P BSE Telecom index (up 2.01%), the S&P BSE Oil & Gas index (up 2.01%), the S&P BSE FMCG index (up 1.88%), the S&P BSE Utilities index (up 1.87%), the S&P BSE Basic Materials index (up 1.85%), the S&P BSE Auto index (up 1.82%), the S&P BSE Industrials index (up 1.73%), the S&P BSE Consumer Discretionary Goods & Services index (up 1.72%), the S&P BSE Realty index (up 1.62%), the S&P BSE Energy index (up 1.35%), the S&P BSE Metal index (up 1.1%), the S&P BSE Healthcare index (up 0.56%) and the S&P BSE Consumer Durables index (up 0.47%) underperformed the Sensex.
Stocks of oil exploration and production firms edged higher on rise in crude oil prices. Cairn India (up 1.02%) and ONGC (up 1.5%) edged higher. Oil India fell 0.23%. Higher crude oil prices will result in higher realization from crude sales for oil exploration firms.
Index heavyweight Reliance Industries (RIL) rose 0.84% to Rs 947.90. The stock hit a high of Rs 951.90 and a low of Rs 941.60 in intraday trade.
The Ministry of Petroleum and Natural Gas today, 25 May 2016, announced the commencement of the process for auction of small oil and gas blocks. The government will auction 46 contract areas consisting of 67 different small fields for exploration and production. These small blocks have 625 million barrels of oil and oil equivalent gas (O+OEG) in-place volumes spread over 1,500 square kilometers in Onland, Shallow water and Deepwater areas. These oil and gas blocks are being auctioned under the new Hydrocarbon Exploration and Licensing Policy (HELP) and a new fiscal model based on revenue sharing contract. Single license for exploring all forms of hydrocarbons, graded system of royalty rates, pricing and marketing freedom for crude oil and natural gas are some of the highlights of HELP.
Shares of public sector oil marketing companies also moved higher. Indian Oil Corporation (up 1.24%), HPCL (up 3.97%) and BPCL (up 2.94%) edged higher.
Crude oil futures edged higher on speculation that a weekly report from the US government will show fall in US crude stockpiles after a US oil industry body announced a reduction in US crude supplies for the week ended 20 May 2016. Brent for July settlement was up currently up 63 cents at $49.24 a barrel. The contract had risen 26 cents or 0.53% to settle at $48.61 a barrel during the previous trading session.
Index heavyweight and cigarette major ITC rose 2.12% to Rs 356. The stock hit a high of Rs 357.60 and a low of Rs 349.90 in intraday trade.
Bank stocks edged higher on renewed buying. Among PSU banks, Canara Bank (up 6.04%), Union Bank of India (up 2.21%), Punjab National Bank (up 2.92%), State Bank of India (up 3.21%), Andhra Bank (up 3.42%), Bank of Baroda (up 2.39%), Allahabad Bank (up 1.1%), Syndicate Bank (up 1.17%), IDBI Bank (up 2.03%), Corporation Bank (up 2.61%), Dena Bank (up 1.24%) and UCO Bank (up 3.94%) edged higher.
Bank of India shrugged off the announcement of a massive net loss from the state-run bank for Q4 March 2016. The stock gained 2.99%. The bank reported a net loss of Rs 3587.09 crore in Q4 March 2016, higher than net loss of Rs 56.14 crore in Q4 March 2015. The bank's total income fell 7.3% to Rs 11384.91 crore in Q4 March 2016 over Q4 March 2015. The bank's gross non-performing assets (NPAs) stood at Rs 49879.13 crore as on 31 March 2016 as against Rs 36519.14 crore as on 31 December 2015 and Rs 22193.24 crore as on 31 March 2015. The ratio of gross NPAs to gross advances stood at 13.07% as on 31 March 2016 as against 9.18% as on 31 December 2015 and 5.39% as on 31 March 2015. The ratio of net NPAs to net advances stood at 7.79% as on 31 March 2016 as against 5.25% as on 31 December 2015 and 3.36% as on 31 March 2015. The bank's provisions and contingencies rose 142.5% to Rs 5470.36 crore in Q4 March 2016 over Q4 March 2015. The result was announced after market hours yesterday, 24 May 2016.
Among private sector banks, ICICI Bank (up 4.37%), Axis Bank (up 2.7%), Federal Bank (up 2.93%), Kotak Mahindra Bank (up 2.13%) gained.
Index heavyweight and banking major HDFC Bank rose 2.92% to Rs 1,174. The stock hit a high of Rs 1,175.50 and a low of Rs 1,141 in intraday trade.
Yes Bank rose 2.06%. The Cabinet Committee on Economic Affairs (CCEA) has cleared the bank's proposal for increase in foreign investment limit in the bank's equity capital to 74% from 41.87% without any sub-limits. The announcement hit the market after trading hours. In late April 2016, the Reserve Bank of India (RBI) had raised the ceiling on investment in the bank's equity capital by foreign institutional investors to 60% from 49% after the bank's board of directors and shareholders approved the proposal. The RBI had at time capped total foreign holding in the bank from all sources at 60%.
IndusInd Bank rose 4.91% after the private sector bank and Lohia Auto Industries signed a Memorandum of Understanding (MoU) whereby Induslnd Bank will be the preferred financier for financing Lohia Auto's diesel three wheelers. Through this partnership Induslnd bank will offer retail finance at an attractive rate of interest for all Lohia 3-wheeler models. The loan facility will be available in almost in every part of the country. The announcement was made during trading hours today, 25 May 2016.
Index heavyweight and housing finance major HDFC rose 2.96% to Rs 1,208. The stock hit a high of Rs 1,212 and a low of Rs 1,183.60 in intraday trade.
Engineering and construction major L&T advanced 3.6% to Rs 1,286.15. The stock hit high of Rs 1,296.90 and low of Rs 1,250.50 in intraday trade. L&T after market hours today, 25 May 2016 reported 18.55% rise in consolidated net profit to Rs 2453.64 crore on 17.88% rise in total income to Rs 33375.26 crore in Q4 March 2016 over Q4 March 2015.
The order inflow during Q4 March 2016 was Rs 43334 crore of which one third constituted international orders, L&T said. The order intake of L&T's infrastructure division rose just 3% at Rs 29103 crore in Q4 March 2016 over Q4 March 2015. The order intake of its hydrocarbon divsion rose sharply to Rs 4963 crore in Q4 March 2016 from Rs 699 crore in Q4 March 2015.
L&T's order book stood at Rs 249949 crore as at 31 March 2016, higher by 7% on year-on-year basis. International order book constituted 28% of the total order book.
Bharat Heavy Electricals (Bhel) gained 4.42% after the company's announcement that it has successfully commissioned the first 800 megawatts (MW) supercritical thermal unit in Karnataka, which is also the highest rating unit in the state. The unit has been commissioned at the Yeramarus Thermal Power Station (TPS) located in Raichur district of Karnataka. The second unit of this project is also in an advanced stage of construction and is expected to be commissioned shortly, Bhel said during trading hours today, 25 May 2016.
Metal shares edged higher as copper prices rose in global commodities markets. Hindalco Industries (up 2.9%), Jindal Steel & Power (up 2.58%), Steel Authority of India (up 2.17%), Vedanta (up 2.27%), NMDC (up 0.67%), Hindustan Copper (up 5.96%), Hindustan Zinc (up 0.06%), Tata Steel (up 1.87%) and National Aluminium Company (up 2.95%) edged higher. JSW Steel fell 1.6%.
High Grade Copper for July 2016 delivery was currently up 0.75% at $2.082 per pound on the COMEX.
Auto stocks rose across the board. Maruti Suzuki (India) (up 3.61%), Tata Motors (up 1.94%), Escorts (up 2.07%), Hero MotoCorp (up 0.92%), Eicher Motors (up 1.78%), Mahindra & Mahindra (up 1.14%) and TVS Motor Company (up 0.22%) edged higher.
Shares of two-wheeler maker Bajaj Auto jumped 4.26% to Rs 2,486 after the company's net profit rose 29% to Rs 803 crore on 13% growth in turnover to Rs 5536 crore in Q4 March 2016 over Q4 March 2015. Operating EBITDA (earnings before interest, taxes, depreciation and amortization) before mark-to-market gains/losses on foreign currency transactions jumped 34% to Rs 1259 crore in Q4 March 2016 over Q4 March 2015. The operating EBITDA margin surged to 23.1% in Q4 March 2016 from 19.4% in Q4 March 2015. The result was announced during market hours today, 25 May 2016.
Ashok Leyland lost 4.52% after net profit dropped 66.5% to Rs 77.02 crore on 31.79% rise in total income to Rs 5987.23 crore in Q4 March 2016 over Q4 March 2015. The announcement was made during market hours today, 25 May 2016. Ashok Leyland said that the board of directors of the company at its meeting held today, 25 May 2016, approved raising of funds by issue of 13.5 crore equity shares to eligible investors including qualified institutional buyers, foreign institutions, foreign investors, nonresidents, corporate bodies, mutual funds, banks, insurance companies, pension funds or other eligible investors. The board also approved raising of funds by issue of secured/unsecured redeemable non-convertible debentures in one or more series/tranches on private placement basis for an amount upto Rs 700 crore at an interest rate that will be determined by the prevailing money market conditions at the time of borrowing subject to the approval of the shareholders.
IT stocks were in demand. TCS (up 2.21%), Hexaware Technologies (up 0.14%), Wipro (up 1.65%), Oracle Financial Services Software (up 2.42%), HCL Technologies (up 1.28%), Persistent Systems (up 0.42%) and MindTree (up 0.47%) edged higher.
Index heavyweight and IT major Infosys rose 1.64% to Rs 1,207.70. The stock hit a high of Rs 1,212.85 and a low of Rs 1,196 in intraday trade.
Tech Mahindra jumped 10.33% on reports that a domestic brokerage has raised its price target while retaining its accumulate rating on the stock after the announcement of the company's Q4 March 2016 results. The domestic brokerage reportedly said that Tech Mahindra remains its top pick among Tier I offshore IT services firms, with the company's Q4 results providing early evidence of improvement in operational/financial performance. Tech Mahindra's consolidated net profit rose 18.15% to Rs 897 crore on 2.72% rise in revenue from services to Rs 6883.70 crore in Q4 March 2016 over Q3 December 2015. Earnings before interest, taxation, depreciation and amortization (EBITDA) rose 2.2% to Rs 1161.30 crore in Q4 March 2016 over Q3 December 2015. The EBITDA margin dropped to 16.87% in Q4 March 2016 from 16.95% in Q3 December 2015. The result was announced after market hours yesterday, 24 May 2016.
Meanwhile, the company has dropped its plan to set up a payments bank. The company had received in-principle approval from the Reserve Bank of India in August 2015 for setting up a payments bank.
Cipla lost 4.63% at Rs 472 after consolidated net profit fell 68.9% to Rs 81 crore on 5.6% growth in income from operations to Rs 3267 crore in Q4 March 2016 over Q4 March 2015. The company's earnings before interest, taxation, depreciation and amortization (EBITDA) declined 56.9% to Rs 219 crore in Q4 March 2016 over Q4 March 2015. The result was announced after market hours yesterday, 24 May 2016.
The Sensex and the Nifty edged higher for the second day in a row. The Sensex has gained 650.81 points or 2.57% in the two trading sessions from its close of 25230.36 on 23 May 2016. The Sensex has gained 274.55 points or 1.07% in this month so far (till 25 May 2016). The Sensex has fallen 236.37 points or 0.9% in calendar year 2016 so far (till 25 May 2016). From a 52-week low of 22,494.61 hit on 29 February 2016, the barometer index has risen 3,386.56 points or 15.05%. The Sensex is off 2,697.16 points or 9.43% from a 52-week high of 28,578.33 hit on 23 July 2015. The Sensex is off 4,143.57 points or 13.8% from a record high of 30,024.74 hit on 4 March 2015.
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