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, and the 50-unit CNX Nifty, both, attained five-week closing high. But, the 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 garnered 148.15 points or 0.53% to settle at 27,957.50. 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 175.70 crore into the secondary equity market yesterday, 21 May 2015, as per data released by the depositories. 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.
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.
The S&P BSE Sensex rose 148.15 points or 0.53% to settle at 27,957.50, its highest closing level since 17 April 2015. The index jumped 261.81 points at the day's high of 28,071.16 in afternoon trade. The index gained 19.26 points at the day's low of 27,828.61 in early trade.
The Nifty rose 37.95 points or 0.45% to settle at 8,458.95, its highest closing level since 17 April 2015. The index hit a high of 8,489.55 in intraday trade. The index hit a low of 8,420.60 in intraday trade.
The BSE Mid-Cap index rose 12.89 points or 0.12% to settle at 10,619.81. The BSE Small-Cap index rose 6.80 points or 0.06% to settle at 11,207.66. Both these indices underperformed the Sensex.
The market breadth indicating the overall health of the market was negative. On BSE, 1,518 shares fell and 1,197 shares rose. A total of 119 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.
Among the sectoral indices on BSE, the S&P BSE Consumer Durables index (down 0.68%), the S&P BSE Bankex index (down 0.42%), the S&P BSE Realty index (down 0.25%), the S&P BSE Metal index (down 0.18%), the S&P BSE Power index (up 0.17%), the S&P BSE Auto index (up 0.27%) and the S&P BSE FMCG index (up 0.37%), underperformed the Sensex. The S&P BSE Oil & Gas index (up 0.60%), the S&P BSE Teck index (up 0.60%), the S&P BSE Capital Goods index (up 0.78%), the S&P BSE Healthcare index (up 0.86%) and the S&P BSE IT index (up 0.91%), outperformed the Sensex.
Index heavyweight and cigarette major ITC rose 0.34% to Rs 328.45. The stock hit a high of Rs 333.20 and a low of Rs 325.80 in intraday trade. The company's net profit rose 3.65% to Rs 2361.18 crore on 1.66% increase in total income to Rs 9663.15 crore in Q4 March 2015 over Q4 March 2014. The result was announced after trading hours today, 22 May 2015.
Index heavyweight and housing finance major HDFC rose 2.51% to Rs 1,287.50. 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 rose 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) rose 0.64% to Rs 902.65. The stock hit a high of Rs 904.80 and a low of Rs 897 in intraday trade.
Shares of state-run banks edged lower in volatile trade. Central Bank of India (down 2.15%), Bank of India (down 1.98%), Dena Bank (down 1.23%), Syndicate Bank (down 1.01%), Bank of Baroda (down 0.99%), United Bank of India (down 0.99%), Andhra Bank (down 0.77%), Corporation Bank (down 0.7%), UCO Bank (down 0.67%), Allahabad Bank (down 0.59%), Vijaya Bank (down 0.54%), Union Bank of India (down 0.27%), Punjab and Sind Bank (down 0.21%), Indian Bank (down 0.16%), IDBI Bank (down 0.15%) and Canara Bank (down 0.04%) edged lower. Bank of Maharashtra (up 0.26%) and Punjab National Bank (up 0.77%), edged higher.
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 fell 2.38% to Rs 282.45. 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, 95.41 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.
Shares of private sector banks were mixed. IndusInd Bank (up 0.68%), Yes Bank (up 0.56%), City Union Bank (up 0.20%) and HDFC Bank (up 0.04%), edged higher. Axis Bank (down 0.2%), Kotak Mahindra Bank (down 0.8%) and Federal Bank (down 1.44%) edged lower.
ICICI Bank ended unchanged for the day at Rs 313.40.
Pharmaceutical stocks saw mixed trend. Sun Pharmaceutical Industries (up 2.29%), Lupin (up 1.41%), Wockhardt (up 1.41%), Dr. Reddy's Laboratories (up 0.51%), Strides Arcolab (up 0.49%), Divi's Laboratories (up 0.34%) and Aurobindo Pharma (up 0.06%), edged higher. Cadila Healthcare (down 0.1%), GlaxoSmithKline Pharmaceuticals (down 0.25%), Glenmark Pharmaceuticals (down 1.26%), Piramal Enterprises (down 1.58%) and IPCA Laboratories (down 1.92%), edged lower.
Cipla fell 0.05% to Rs 674.05. 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 31 December 2012, 31 December 2013 and 31 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 4.6%), JSW Energy (down 3.63%), GMR Infrastructure (down 1.71%), Adani Power (down 1.46%), Reliance Power (down 0.93%), Jaiprakash Power Ventures (down 0.82%), Tata Power (down 0.59%), Torrent Power (down 0.46%) and Reliance Infrastructure (down 0.13%), edged higher. NTPC (up 0.37%) and NHPC (up 0.78%), edged higher.
The Sensex has risen 946.19 points or 3.5% in this month so far (till 22 May 2015). The Sensex has gained 458.08 points or 1.67% in this calendar year so far (till 22 May 2015). From a 52-week low of 24,163.62 on 30 May 2014, the Sensex has risen 3,793.88 points or 15.70%. The Sensex is off 2,067.24 points or 6.89% from a record high of 30,024.74 hit on 4 March 2015.
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 0.31% to 0.46%. In UK, the FTSE 100 index was up 0.33%.
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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