Stocks of public sector banks and index heavyweights HDFC Bank, ITC and Infosys led losses for key benchmark indices on the first trading session of the week. The barometer index, the S&P BSE Sensex, fell 169.65 points or 0.66% to settle at 25,436.97. The decline for the Nifty 50 index was lower than the Sensex's fall in percentage terms. The Nifty fell 43.90 points or 0.56% to settle at 7,805.90. Data showing slowdown in growth in manufacturing sector in April 2016 and weakness in Japanese stocks weighed on the domestic bourses. The Sensex and the Nifty remained in negative zone throughout the trading session after opening with a downward gap. The two key benchmark indices hit their lowest closing level in almost three weeks.
Meanwhile, Minister of State for finance Jayant Sinha said in a written reply to a question in Lok Sabha on 29 April 2016 that the government is committed to implement General Anti Avoidance Rule (GAAR) in the country from 1 April 2017. He further said that the government will constitute a panel as mandated by the law and also provide for the guidelines on practical aspects relating to implementation of GAAR in due course.
Maruti Suzuki India edged higher after the company reported modest growth in sales volumes for the month just gone by. ICICI Bank edged lower on reports that a foreign brokerage has cut its earnings estimates for the private sector bank by 15% to 16% for FY 2017 and FY 2018. Federal Bank reversed intraday losses after an unnamed executive of the Kerala based private sector bank was quoted as saying that he expects addition to bad loans for the bank to be lower in FY 2017 compared with FY 2016. InterGlobe Aviation edged lower after announcing muted growth in Q4 earnings.
In overseas stock markets, Japanese stocks edged lower as the yen surged to 1-1/2-year high against the dollar. The Nikkei 225 Average ended 3.11% lower. The stronger yen makes Japanese exports less competitive and cuts into the value of repatriated earnings. Japanese stocks extended losses registered during the previous trading session triggered by the Bank of Japan's (BOJ) decision to keep its policies unchanged. Speculation was rife that the Japanese central bank would announce a further easing of the monetary policy to stimulate Japan's economy. Japanese markets were closed on Friday, 29 April 2016, for a national holiday. Many other Asian markets were closed today, 2 May 2016, for a holiday. Most European stocks rose as a sharp decline in the previous session prompted investors to look for bargains.
US stocks edged lower during the previous trading session on Friday, 29 April 2016, after weak consumer spending data for March 2016 and after the monthly Chicago Business Barometer index for April showed slowdown in the manufacturing sector. The Chicago Business Barometer decreased 3.2 points to 50.4 in April from 53.6 in March led by a fall in new orders and a sharp drop in order backlogs. It marked a slow start to the second quarter, with most measures down from levels seen a year earlier.
The Sensex fell 169.65 points or 0.66% to settle at 25,436.97, its lowest closing level since 12 April 2016. The index lost 265.48 points or 1.03% at the day's low of 25,341.14. The index lost 41.18 points or 0.16% at the day's high of 25,565.44.
The Nifty 50 index fell 43.90 points or 0.56% to settle at 7,805.90, its lowest closing level since 12 April 2016. The index lost 72.50 points or 0.92% at the day's low of 7,777.30. The index lost 20 points or 0.25% at the day's high of 7,829.80.
The market breadth indicating the overall health of the market was negative. On BSE, 1,327 shares declined and 1,283 shares rose. A total of 118 shares were unchanged. The BSE Mid-Cap index rose 1.1%. The BSE Small-Cap index rose 0.39%. Both these indices outperformed the Sensex.
The total turnover on BSE amounted to Rs 2411 crore, lower than turnover of Rs 2817.96 crore registered during the previous trading session.
Among sectoral indices on BSE, the S&P BSE Basic Materials index (up 1.29%), the S&P BSE Consumer Durables index (up 1.07%), the S&P BSE Metal index (up 1.02%), the S&P BSE Energy index (up 0.26%), the S&P BSE Oil & Gas index (up 0.25%), the S&P BSE Consumer Discretionary Goods & Services index (up 0.24%), the S&P BSE Utilities index (up 0.18%), the S&P BSE Auto index (up 0.16%), the S&P BSE Power index (up 0.05%), the S&P BSE FMCG index (up 0.02%), the S&P BSE Capital Goods index (down 0.05%), the S&P BSE Industrials index (down 0.16%), the S&P BSE Healthcare index (down 0.19%), the S&P BSE Finance index (down 0.49%), the S&P BSE Realty index (down 0.59%), the S&P BSE IT index (down 0.65%) and the S&P BSE Teck index (down 0.65%), outperformed the Sensex. The S&P BSE Telecom index (down 0.8%) and the S&P BSE Bankex (down 1.34%), underperformed the Sensex.
Mahindra & Mahindra (M&M) rose 0.3% to Rs 1,335.75 after reporting good auto sales in April 2016. The company's total automobile sales increased 14% to 41,863 units in April 2016 over April 2015. Sales in the domestic market rose 14% to 39,357 units in April 2016 over April 2015. Exports rose 11% to 2,506 units in April 2016 over April 2015.
The company's total tractor sales increased 19% to 21,386 units in April 2016 over April 2015. Sales in the domestic market rose 22% to 20,704 units in April 2016 over April 2015. Exports fell 32% to 682 units in April 2016 over April 2015. The company disclosed the sales volume data during market hours today, 2 May 2016.
Maruti Suzuki India (Maruti) rose 0.91% to Rs 3,829.55 after the company reported 13.3% growth in its total sales at 1.26 lakh units in April 2016 over April 2015. Domestic sales rose 16.2% to 1.17 lakh units in April 2016 over April 2015. Exports declined 13.7% to 9,524 units in April 2016 over April 2015. The company announced the monthly sales volume data during market hours today, 2 May 2016.
Bajaj Auto fell 0.42% to Rs 2,474.20 after the company announced that its total sales declined 2% to 3.30 lakh units in April 2016 over April 2015. Motorcycles sales rose 2% to 2.91 lakh units in April 2016 over April 2015. Sales of commercial vehicles dropped 24% to 38,211 units in April 2016 over April 2015. Exports declined 36% to 1.03 lakh units in April 2016 over April 2015. The company announced the monthly sales volume data during market hours today, 2 May 2016.
Index heavyweight and cigarette major ITC lost 1.2% at Rs 320.90. The stock hit a high of Rs 325.50 and a low of Rs 319.50 in intraday trade.
Index heavyweight and software major Infosys fell 0.84% at Rs 1,200.65. The stock hit a high of Rs 1,214 and a low of Rs 1,196.30 in intraday trade.
Stocks of public sector banks declined. Punjab National Bank (down 3.27%), Bank of India (down 2.54%), Canara Bank (down 2.31%), Allahabad Bank (down 2.23%), Bank of Baroda (down 1.61%), United Bank of India (down 1.53%), Bank of Maharashtra (down 1.34%), Punjab and Sind Bank (down 1.1%), Syndicate Bank (down 1.01%), Union Bank of India (down 0.98%), IDBI Bank (down 0.79%), Corporation Bank (down 0.78%), UCO Bank (down 0.75%), Dena Bank (down 0.67%), Vijaya Bank (down 0.47%), Andhra Bank (down 0.45%), Central Bank of India (down 0.37%) and Indian Bank (down 0.2%), edged lower.
State Bank of India (SBI) fell 1.35% to Rs 186.40. The bank after trading hours today, 2 May 2016, announced reduction in lending rates by 5 basis points (bps) across tenures. SBI's Marginal Cost of Funds based Lending Rate (MCLR) for overnight loans will be 8.90%. MCLR for one-month loans will be 9% and for three-month loans it will be 9.05%. The MCLR on 6-month loans will be 9.10% and for one-year loans the rate would be 9.15%, the bank said. MCLR for two-year loans would be at 9.25% and loans with three-year maturity would carry an MCLR of 9.30%, the bank said.
All rupee loans sanctioned and credit limits renewed with effect from 1 April 2016 are priced with reference to the Marginal Cost of Funds based Lending Rate (MCLR) which is the internal benchmark of the concerned bank. Actual lending rates are determined by adding the components of spread to the MCLR.
Stocks of private sector banks were mixed. IndusInd Bank (down 0.49%) and Axis Bank (down 0.07%), edged lower. City Union Bank (up 0.37%) and Kotak Mahindra Bank (up 0.39%) edged higher.
Index heavyweight HDFC Bank fell 1.37% at Rs 1,117.95 . The stock hit a high of Rs 1,130.70 and a low of Rs 1,115 in intraday trade.
Yes Bank rose 0.17% at Rs 945.25 after the Reserve Bank of India (RBI) gave its approval for the increase in investment limit by foreign Investors in the bank to 60% from earlier 49%. The Reserve Bank of India (RBI) made the notification on Friday, 29 April 2016. RBI notified on Friday, 29 April 2016, that foreign institutional investors (FIIs)/registered foreign portfolios investors (RFPIs) can now invest up to 60% of the paid-up capital of the bank from existing 49% under the Portfolio Investment Scheme (PIS). The RBI notified that the total foreign investment from all sources i.e. Global Depository Receipts (GDR)/American Depository Receipts (ADR)/Foreign Direct Investment (FDI)/Foreign Institutional Investors (FII)/ Registered Foreign Portfolios Investors (RFPIs)/Non-Resident Indians (NRI)/Persons of Indian Origin (PIO) in the company shall not exceed 60%. The central bank stated that Yes Bank has passed resolutions at its Board of Directors' level and a special resolution by the shareholders, agreeing for enhancing the limit for the purchase of its equity shares and convertible debentures by FIIs/RFPIs. The purchases could be made through primary market and stock exchanges.
ICICI Bank lost 4.08% at Rs 226.95 on reports that a foreign brokerage has cut its earnings estimates for the private sector bank by 15% to 16% for FY 2017 and FY 2018. The brokerage has reportedly maintained its neutral rating on the stock. Shares of ICICI Bank declined 1.47% to settle at Rs 236.60 during the previous trading session on Friday, 29 April 2016, after the bank reported increase in sticky loans. ICICI Bank's net profit declined 75.97% to Rs 701.89 crore on 14.51% growth in total income to Rs 18590.86 crore in Q4 March 2016 over Q4 March 2015. The result was announced during trading hours on Friday, 29 April 2016.
ICICI Bank has created a collective contingency and related reserve of Rs 3600 crore in Q4 March 2016 over and above provisions made for non-performing and restructured loans. This contingency provision is towards exposure to stress assets in certain sectors, including iron and steel, mining, power, rigs and cement. The weak global economic environment, the sharp downturn in the commodity cycle and the gradual nature of the domestic economic recovery has adversely impacted the borrowers in these sectors. Given the weak operating and recovery environment, it may take some time for resolution of stress on borrowers in these sectors, according to ICICI Bank.
Federal Bank reversed intraday losses after an unnamed executive of the Kerala based private sector bank was quoted as saying that he expects addition to bad loans for the bank to be lower in FY 2017 compared with FY 2016. The stock rose 1.31% at Rs 46.55. The stock hit a high of Rs 47.55 and a low of Rs 43.75 in intraday trade. The bank's net profit slumped 96.34% to Rs 10.26 crore on 1.76% rise in total income to Rs 2253.38 crore in Q4 March 2016 over Q4 March 2015. The result was announced on Saturday, 30 April 2016. Federal Bank's gross non-performing advances stood at Rs 1667.77 crore as on 31 March 2016 compared with Rs 1684.11 crore as on 31 December 2015 and Rs 1057.73 crore as on 31 March 2015. The ratio of gross non-performing advances to gross advances stood at 2.84% as on 31 March 2016 compared with 3.15% as on 31 December 2015 and 2.04% as on 31 March 2015. The ratio of net non-performing advances to net advances stood at 1.64% as on 31 March 2016 as against 1.66% as on 31 December 2015 and 0.73% as on 31 March 2015. The bank's provisions and contingencies fell 2.3% to Rs 388.64 crore in Q4 March 2016 over Q4 March 2015.
Index heavyweight and housing finance major HDFC rose 0.36% to Rs 1,092.75 after net profit rose 39.98% to Rs 2607.05 crore on 23.72% growth in total income to Rs 9225.72 crore in Q4 March 2016 over Q4 March 2015. The result was announced during market hours today, 2 May 2016.
HDFC's provisions for contingencies jumped 990% to Rs 545 crore in Q4 March 2016 over Q4 March 2015. The sharp surge in provisions is due to an additional provision of Rs 450 crore in Q4 March 2016 towards standard assets and other contingencies.
HDFC's loan book increased to Rs 2.59 lakh crore as on 31 March 2016, from Rs 2.28 lakh crore as on 31 March 2015. This is after considering the loans sold during the preceding 12 months amounting to Rs 12773 crore.
On consolidated basis, HDFC's net profit rose 30.76% to Rs 3460.46 crore on 15.52% growth in total income to Rs 17012 crore in Q4 March 2016 over Q4 March 2015. HDFC said that the company has sold 17.95 crore shares of HDFC Standard Life Insurance Company to Standard Life Mauritius Holdings 2006, in Q4 March 2016, resulting in a gain of Rs 1422.20 crore. The sale consideration has been received subsequent to the balance sheet date, HDFC said. The profit on sale has been accounted as excess of sale value over proportionate share in the net assets of the group.
InterGlobe Aviation edged lower after announcing muted growth in Q4 earnings. The stock lost 4.51% at Rs 1,023.80. The company's net profit rose 0.3% to Rs 579.31 crore on 7% growth in income from operations to Rs 4090.67 crore in Q4 March 2016 over Q4 March 2015. Earnings before interest, taxes, depreciation, amortization and aircraft and engine rentals (EBITDAR) rose 9.84% to Rs 1548.01 crore in Q4 March 2016 over Q4 March 2015. EBITDAR margin edged higher to 37.8% in Q4 March 2016, from 36.9% in Q4 March 2015. The result was announced after market hours on Friday, 29 April 2016.
The company achieved load factor of 85.1% in Q4 March 2016, up 230 basis points from the corresponding previous year quarter. The company has started getting deliveries of the A320neo aircrafts. InterGlobe Aviation's President and Whole-time Director Aditya Ghosh said that the A320neo powered by Pratt and Whitney's fuel-efficient geared turbo fan engines will enable the company to structurally reduce fuel costs, which are the single largest element of cost structure for the company.
Meanwhile, the outcome of a monthly survey showed that growth in India's manufacturing sector eased last month amid broadly stagnant inflows of new work. The seasonally adjusted Nikkei India Manufacturing Purchasing Managers' Index (PMI) fell to 50.5 in April 2016 from 52.4 in March 2016. Indian manufacturers saw incoming new orders broadly stagnate in April, following three consecutive months of growth. New export orders expanded at the slowest pace since last October. Input cost inflation accelerated to the fastest since May 2015. Part of the additional cost burden was passed on to clients as selling prices rose further.
The Sensex has fallen 676.57 points or 2.59% in calendar year 2016 so far (till 2 May 2016). From a 52-week low of 22,494.61 hit on 29 February 2016, the barometer index has risen 2,944.36 points or 13.09%. The Sensex is off 3,140.36 points or 10.99% from a 52-week high of 28578.33 hit on 23 July 2015. The Sensex is off 4,587.77 points or 15.28% from a record high of 30,024.74 hit on 4 March 2015.
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