Disappointing second quarter results from cigarette major ITC and engineering and construction major L&T triggered fresh slide on the domestic bourses. The barometer index, the S&P BSE Sensex, lost 181.31 points or 0.68% to settle at 26,656.83. The decline for the Sensex was higher in percentage terms than that for the 50-unit CNX Nifty index. The CNX Nifty lost 45.95 points or 0.57% to settle at 8,065.80. The Sensex and the Nifty edged lower for the 5th straight trading session. Both these key benchmark indices hit their lowest closing level in more than four weeks.
Index heavyweight and cigarette major ITC tumbled after reporting flat bottom line in Q2 September 2015. Another index heavyweight L&T dropped in choppy trade as the company's bottom line in Q2 September 2015 was boosted by exceptional gains. Many other capital goods makers dropped after weak performance of the core engineering and construction business of L&T for the second quarter. Dr Reddy's Laboratories edged higher after reporting strong Q2 results. ICICI Bank edged higher in volatile trade after reporting good Q2 results. Kotak Mahindra Bank surged after reporting stronger-than-expected second quarter results.
The Sensex lost 181.31 points or 0.68% to settle at 26,656.83, its lowest closing level since 1 October 2015. The barometer index lost 252.94 points or 0.94% at the day's low of 26,585.20. The index rose 104.15 points or 0.38% at the day's high of 26,942.29.
The CNX Nifty lost 45.95 points or 0.57% to settle at 8,065.80, its lowest closing level since 1 October 2015. The index fell 67.35 points or 0.83% at the day's low of 8,044.40. The index rose 34.35 points or 0.42% at the day's high of 8,146.10.
The market breadth indicating the overall health of the market was weak. On BSE, 1,615 shares fell and 998 shares rose. A total of 194 shares were unchanged. The BSE Mid-Cap index fell 0.13%. The decline in this index in percentage terms was lower than the Sensex's decline. The BSE Small-Cap index fell 0.78%. The decline in this index in percentage terms was higher than the Sensex's decline.
The total turnover on BSE amounted to Rs 2956 crore, higher than turnover of Rs 2773 crore registered during the previous trading session.
Among the sectoral indices on BSE, the BSE Capital Goods index (down 2.65%), the S&P BSE FMCG index (down 2.34%), the BSE Realty index (down 1.39%), the BSE Auto index (down 1.2%) and the BSE Metal index (down 0.93%) underperformed the Sensex. The BSE Bankex index (up 0.92%), the BSE Power index (up 0.45%), the BSE Consumer Durables index (up 0.42%), the S&P BSE Healthcare index (up 0.37%), the BSE Oil & Gas index (down 0.1%), the BSE IT index (down 0.54%) and the BSE Teck index (down 0.63%) outperformed the Sensex.
Mahindra & Mahindra (down 4.01%), Bharti Airtel (down 2.52%) and Tata Motors (down 1.97%) were among the major losers from the Sensex pack.
Index heavyweight and engineering and construction major L&T edged lower in volatile trade as the company's bottom line in Q2 September 2015 was boosted by exceptional gains. The stock lost 4.27% at Rs 1,408.80. The stock hit high of Rs 1,498 and low of Rs 1,400 in intraday trade. L&T's consolidated net profit rose 16% to Rs 996 crore on 11% rise in gross revenue to Rs 23605 crore in Q2 September 2015 over Q2 September 2014. The company's bottom line in Q2 September 2015 was boosted by exceptional gain of Rs 309.57 crore on divestment of part stake in a subsidiary company and stake-sale in an associate company.
L&T secured fresh orders worth Rs 28620 crore at the group level in Q2 September 2015.
According to the management, it may take further time for a significant pick up in business opportunities for the company in the domestic and international markets. For the time being, the company is focusing on profitable execution of its order book.
Many other capital goods makers dropped after weak performance of the core engineering and construction business of L&T for the second quarter. ABB India (down 3.78%), Bharat Heavy Electricals (Bhel) (down 2.21%), BEML (down 0.93%), Crompton Greaves (down 3.42%), Siemens (down 2.46%) and Thermax (down 0.61%) declined.
Bharat Electronics rose 1.91% after net profit jumped 40.68% to Rs 206.75 crore on 14.28% growth in total income to Rs 1605.25 crore in Q2 September 2015 over Q2 September 2014. The result was announced after market hours yesterday, 29 October 2015.
ITC tumbled after reporting flat bottom line in Q2 September 2015. The stock was dropped 4.07% at Rs 335.50. The stock hit a high of Rs 351 and a low of Rs 331.40 in intraday trade. The company's net profit rose 0.25% to Rs 2431.25 crore on 1.32% decline in total income from operations (net) to Rs 8904.23 crore in Q2 September 2015 over Q2 September 2014. The result was announced during trading hours today, 30 October 2015.
ITC said that the company's performance in Q2 September 2015 remained subdued due to unprecedented pressure on cigarette industry volumes in the country, lack of trading opportunities for the company in its agri-commodities business and sluggish demand environment in the FMCG industry.
Shares of most private sector banks rose. Axis Bank rose 1.09%. HDFC Bank (down 0.75%), IndusInd Bank (down 0.75%) declined.
ICICI Bank edged higher in volatile trade after reporting good Q2 results. The stock rose 2.1% at Rs 277.15. The stock hit a high of Rs 279.60 and low of Rs 270.50 in intraday trade. ICICI Bank's net profit rose 11.85% to Rs 3030.11 crore on 8.17% growth in total income to Rs 16106.22 crore in Q2 September 2015 over Q2 September 2014. The result was announced during market hours today, 30 October 2015.
The bank's provisions and contingencies rose 10.9% to Rs 942.16 crore in Q2 September 2015 over Q2 September 2014. The bank's provision coverage ratio stood at 57.4% as on 30 September 2015.
ICICI Bank's net non-performing assets (NPA) stood at Rs 6828 crore as on 30 September 2015, higher than Rs 6402 crore as on 30 June 2015. The net NPA ratio stood at 1.47% as on 30 September 2015, higher than 1.4% as on 30 June 2015.
Meanwhile, the board of directors of ICICI Bank, at its meeting held today, 30 October 2015, approved the sale of 9% shareholding in ICICI Lombard General Insurance Company to its joint venture partner Fairfax Financial Holdings. The proposed transaction values ICICI Lombard General Insurance Company at Rs 17225 crore ($2.6 billion). After the latest stake-sale, ICICI Bank will hold 64% stake in ICICI Lombard General Insurance Company and Fairfax will hold 35% stake.
Kotak Mahindra Bank surged after reporting stronger-than-expected second quarter results. The stock gained 3.38% at Rs 686. The stock hit a high of Rs 693.30 and a low of Rs 662.50 in intraday trade. The bank's net profit rose 28.12% to Rs 569.50 crore on 63.94% increase in total income to Rs 4621.38 crore in Q2 September 2015 over Q2 September 2014. The results are not comparable due to the merger of ING Vysya Bank with Kotak Mahindra Bank which became effective from 1 April 2015.
Yes Bank extended gains registered yesterday, 29 October 2015, triggered by the bank's strong Q2 September 2015 results. The stock rose 1.61% at Rs 755.50. The stock had risen 1.95% to settle at Rs 743.50 yesterday, 29 October 2015. The bank's net profit rose 26.49% to Rs 610.41 crore on 19.69% rise in total income to Rs 3995.34 crore in Q2 September 2015 over Q2 September 2014.
Shares of state-run banks declined. IDBI Bank (down 4.38%), Union Bank of India (down 2.16%), Bank of Baroda (down 1.29%), Canara Bank (down 2.05%), Punjab National Bank (down 0.66%) and Bank of India (down 1.68%) edged lower. State Bank of India (SBI) rose 0.15%.
Metal and mining stocks declined in volatile trade. NMDC (down 1.47%), Hindustan Copper (down 1.13%), National Aluminium Company (down 0.64%), JSW Steel (down 1.28%), Tata Steel (down 0.57%), Hindalco Industries (down 0.06%) edged lower. Jindal Steel & Power (up 3.12%), Steel Authority of India (Sail) (up 0.76%), Hindustan Zinc (up 0.96%) edged higher.
Vedanta dropped 6.6% to Rs 99.80. The stock turned ex-dividend today, 30 October 2015, for interim dividend of Rs 3.50 per share for the year ending 31 March 2016. Ahead of turning ex-dividend, the stock offered dividend yield of 3.27% based on the scrip's closing price of Rs 106.85 on BSE yesterday, 29 October 2015.
Dr Reddy's Laboratories rose 1.57% after reporting strong Q2 results. The company's consolidated net profit rose 26% to Rs 721.90 crore on 11% growth in revenue to Rs 3989 crore in Q2 September 2015 over Q2 September 2014. The result was announced after market hours yesterday, 29 October 2015. In constant currency terms, Dr Reddy's Laboratories' revenue grew 14% in Q2 September 2015 over Q2 September 2014.
Cipla slipped 0.32%. Cipla after market hours yesterday, 29 October 2015, announced that it has entered into a definitive agreement to sell its entire remaining 25% stake in Biomab Holding, Hong Kong (BHL) to Biomab Brilliant, British Virgin Islands for a total consideration of $25.77 million. BHL is focused on developing Biosimilars for the Chinese market. Cipla said that the decision to divest its entire remaining stake in Hong Kong based BHL was taken with a view to focus on global product development of Biosimilars in the field of cancer, auto-immune diseases, respiratory diseases and diabetes.
Glenmark Pharmaceuticals gained 4.91%. The company's consolidated net profit rose 19.81% to Rs 197.78 crore on 13.60% increase in revenue to Rs 1909.36 crore in Q2 September 2015 over Q2 September 2014. Consolidated EBITDA (earnings before interest, taxation, depreciation and amortization) rose 19.85% to Rs 401.77 crore in Q2 September 2015 over Q2 September 2014. The figures are as per International Financial Reporting Standards (IFRS). The result was announced after market hours yesterday, 29 October 2015.
Power generation stocks rose on renewed buying. Reliance Infrastructure (up 4.4%), Torrent Power (up 2.15%), Reliance Power (up 2.55%), NHPC (up 0.28%), Jaiprakash Power Ventures (up 0.58%), Adani Power (up 1.45%) and JSW Energy (up 3.5%) edged higher. Tata Power Company (down 1.36%) and CESC (down 0.74%) declined.
NTPC jumped 3.52%. The stock had dropped 2.19% to settle at Rs 129.55 in volatile trade yesterday, 29 October 2015, after the company announced strong Q2 September 2015 results. The company's net profit rose 39.9% to Rs 2898.28 crore on 5.25% rise in total income to Rs 18173.90 crore in Q2 September 2015 over Q2 September 2014.
Nestle India lost 1.63% after net profit fell 60.1% to Rs 124.20 crore on 32.1% decline in net sales to Rs 1736.20 crore in Q3 September 2015 over Q3 September 2014. The result was announced after market hours yesterday, 29 October 2015. Nestle India said that the Maggi noodles issue disrupted its business in Q3 September 2015. In addition to loss of sales from the business disruption, net sales worth Rs 15.32 crore have been reversed during the quarter in relation to Maggi noodles stock being withdrawn from trade partners and market, Nestle India said.
Airline stocks rallied after a strong response was received from investors to the initial public offer (IPO) of InterGlobe Aviation, the promoter of low-cost carrier, IndiGo. Jet Airways (India) (up 11.15%) and SpiceJet (up 9.98%) edged higher. The IPO of InterGlobe Aviation was subscribed 6.15 times. The bidding for the IPO ended yesterday, 29 October 2015.
Meanwhile, Minister of Civil Aviation P. Ashok Gajapathi Raju released the Revised Draft National Civil Aviation Policy (NCAP 2015) in New Delhi today, 30 October 2015, which among other things aims to boost regional aviation connectivity. The policy has recommended a 2% levy on all domestic and international tickets on all routes except on regional connectivity routes.
In overseas stock markets, European stocks edged lower in choppy trade. Asian stocks edged lower after Japan's central bank Bank of Japan refrained from introducing further easing, keeping its annual asset purchase target at 80 trillion yen ($660 billion), despite building expectations of stimulus amid disappointing economic data. US stocks finished slightly lower yesterday, 29 October 2015, succumbing to weaker-than-expected readings on gross domestic product and pending home sales a day after the Federal Reserve signaled a December rate increase remains possible.
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