Sensex settles above 28,000 mark

Banking stocks and index heavyweights Reliance Industries (RIL) and HDFC led gains for the two key benchmark indices, with the Sensex reclaiming the psychologically important 28,000 mark. The barometer index, the S&P BSE Sensex, gained 292.80 points or 1.05% to settle at 28,152.40. The gains for the Nifty 50 index were lower in percentage terms than those for the Sensex. The Nifty gained 80 points or 0.93% at 8,672.15. Positive cues from Asian markets aided the upmove on the domestic bourses.

The market breadth indicating the overall health of the market turned negative from positive in late trade. On BSE, 1,392 shares declined and 1,264 shares advanced. A total of 182 shares were unchanged. The BSE Mid-Cap index rose 0.83%. The BSE Small-Cap index rose 0.21%. Both these indices underperformed the Sensex.

 

Bank stocks gained after State Bank of India (SBI) reported smaller-than-expected decline in net profit in Q1 June 2016 and also reported less than expected increase in bad loans. Shares of SBI surged. Shares of Grasim Industries rose while Aditya Birla Nuvo dropped in highly volatile trade after the board of the directors of these two firms announced the merger of Aditya Birla Nuvo with Grasim as part of a composite Scheme of Arrangement.

Shares of oil exploration and production firms gained and those of state-run oil-marketing companies (PSU OMCs) fell as crude oil prices rose overnight. Shares of Mahindra & Mahindra (M&M) and Tata Motors gained after reports indicated that Supreme Court has lifted the ban on registration of diesel cars with over 2000 cc engines in Delhi and NCR region. Shares of S P Apparels (SPAL) made a modest debut.

The Sensex gained 292.80 points or 1.05% to settle at 28,152.40, its highest closing level since 8 August 2016. The Sensex jumped 343.67 points or 1.23% at the day's high of 28,203.27. The barometer index up 41.31 points or 0.15% at the day's low of 27,900.91.

The Nifty gained 80 points or 0.93% at 8,672.15, its highest closing level since 9 August 2016. The Nifty surged 92.15 points or 1.07% at the day's high of 8,684.30. The index rose 12.30 points or 0.14% at the day's low of 8,604.45.

The total turnover on BSE amounted to Rs 3968 crore, higher than turnover of Rs 3406.04 crore registered during the previous trading session.

In overseas stock markets, European stocks traded mixed. Main Asia markets rose after the three main indices in the US attained record closing high overnight. Chinese stocks rose after release of a slew of economic data. In mainland China, the Shanghai Composite index settled 1.6% higher. In Hong Kong, the Hang Seng index settled 0.83% higher. In Japan, the Nikkei 225 Average closed 1.1% higher. Industrial output in China rose 6% in July from a year earlier, slowing from 6.2% in June, data from the National Bureau of Statistics showed. Retail sales grew 10.2% in July from a year earlier, slowing from a 10.6% increase in June. Fixed asset investment from January to July increased by 8.1% from a year earlier, the slowest rate in more than 16 years.

US stocks edged higher yesterday, 11 August 2016, with the Dow Jones Industrial Average, the Nasdaq Composite index and the S&P 500 index closing at record highs, amid sharp gains in crude oil prices and strong quarterly results from retailers.

Index heavyweight and software major Infosys dropped 1.54% to Rs 1,060.50. The stock hit high of Rs 1,078.85 and low of Rs 1,060 in intraday trade.

State Bank of India (SBI) jumped 7.29% after after the bank reported smaller-than-expected decline in net profit in Q1 June 2016 and also reported less than expected increase in bad loans. The bank's net profit fell 31.72% to Rs 2520.96 crore on 9.38% rise in total income to Rs 48928.60 crore in Q1 June 2016 over Q1 June 2015. The result was announced during market hours today, 12 August 2016.

The bank's gross non-performing assets (NPAs) stood at Rs 101541.18 crore as on 30 June 2016 as against Rs 98172.80 crore as on 31 March 2016 and Rs 56420.77 crore as on 30 June 2015. The ratio of gross NPAs to gross advances stood at 6.94% as on 30 June 2016 as against 6.50% as on 31 March 2016 and 4.29% as on 30 June 2015. The ratio of net NPAs to net advances stood at 4.05% as on 30 June 2016 as against 3.81% as on 31 March 2016 and 2.24% as on 30 June 2015.

The bank's provisions and contingencies rose 85.34% to Rs 7413.10 crore in Q1 June 2016 over Q1 June 2015. Provisions for non-performing assets jumped 88.76% to Rs 6339.56 crore in Q1 June 2016 over Q1 June 2015. Provision coverage ratio of the bank was at 61.57% as on 30 June 2016.

On a consolidated basis, SBI's net profit fell 77.81% to Rs 1046 crore on 9.90% rise in total income to Rs 69414.82 crore in Q1 June 2016 over Q1 June 2015.

Most PSU bank stocks rose after better-than-expected Q1 results from SBI. Indian Bank (up 6.35%), UCO Bank (up 2.01%), Syndicate Bank (up 2.76%), Punjab National Bank (up 5.63%), Corporation Bank (up 1.5%), Allahabad Bank (up 3.28%), Bank of Baroda (up 2.33%), Union Bank of India (up 4.4%), Canara Bank (up 3.58%), and United Bank of India (up 1.62%) edged higher.

Bank of India shrugged off weak Q1 results. The stock jumped 10.25%. The bank reported a net loss of Rs 741.36 crore in Q1 June 2016 compared with net profit of Rs 129.72 crore in Q1 June 2015. Bank of India's total income fell 8.53% to Rs 10664.36 crore in Q1 June 2016 over Q1 June 2015. The result was announced during trading hours today, 12 August 2016.

Central Bank of India fell 1.77% after the bank reported a net loss of Rs 599.81 crore in Q1 June 2016 compared with net profit of Rs 203.60 crore in Q1 June 2015. The result was announced during trading hours today, 12 August 2016. Central Bank of India's total income fell 6.15% to Rs 6662.68 crore in Q1 June 2016 over Q1 June 2015.

The bank's gross non-performing assets (NPAs) stood at Rs 25107.47 crore as on 30 June 2016 as against Rs 22720.88 crore as on 31 March 2016 and Rs 12931.31 crore as on 30 June 2015. The ratio of gross NPA to gross advances stood at 13.52% as on 30 June 2016 as against 11.95% as on 31 March 2016 and 6.7% as on 30 June 2015. The ratio of net NPA to net advances stood at 8.17% as on 30 June 2016 as against 7.36% as on 31 March 2016 and 4% as on 30 June 2015. The bank's provisions and contingencies surged 165.8% to Rs 1543.66 crore in Q1 June 2016 over Q1 June 2015. Provision coverage ratio of the bank stood at 52.14% as on 30 June 2016.

Among private sector banks, Axis Bank (up 3.99%), ICICI Bank (up 1.49%), Kotak Mahindra Bank (down 0.24%), and Federal Bank (up 1.11%) gained. HDFC Bank ended almost unchanged at Rs 1,228.35

Yes Bank gained on reports that the stock's weightage on the MSCI Global Standard Indexes was raised to 1.7% from 0.46% earlier. The stock rose 3.06% to Rs 1,291. The stock hit a high of Rs 1,294 in intraday trade, which is a record high for the counter. The stock hit a low of Rs 1,254.30 in intraday trade.

IndusInd Bank rose 0.04% after the bank said that it has opened a new branch in Moga district, Punjab. The announcement was made during market hours today, 12 August 2016.

Shares of Grasim Industries rose while Aditya Birla Nuvo dropped in highly volatile trade after the board of the directors of these two firms announced the merger of Aditya Birla Nuvo with Grasim as part of a composite Scheme of Arrangement. Grasim rose 0.57% at Rs 4,565. The stock hit a high of Rs 4,617.10 and a low of Rs 4,160 in intraday trade. Shares of Aditya Birla Nuvo (ABNL) slumped 17.6% to Rs 1,290.15. The stock hit a high of Rs 1,409.15 and a low of Rs 1,180 in intraday trade.

After the completion of the merger of Aditya Birla Nuvo (ABNL) with Grasim, the financial services business of ABNL carried under Aditya Birla Financial Services (ABFSL) will be demerged into a separate company. ABFSL will be separately listed on the bourses in due course. For merger of ABNL with Grasim, each shareholder of ABNL will get 3 equity shares of Grasim for every 10 equity shares held in ABNL. For demerger of financial services business into ABFSL, each shareholder of Grasim (post-merger) will receive 7 equity shares in ABFSL for every 1 equity share held in Grasim. After the completion of the two-stage transaction, Grasim will hold 57% stake and Grasim shareholders will own the remaining stake in ABFSL. The transaction is expected to be completed by Q4 March 2017 or Q1 June 2017.

Both Grasim and ABNL also announced Q1 results after trading hours yesterday, 11 August 2016. Grasim's consolidated net profit surged 64% to Rs 830 crore on 9% growth in net revenue to Rs 9089 crore in Q1 June 2016 over Q1 June 2015. Earnings before interest, taxation, depreciation and amortization (EBITDA) rose 36% to Rs 2214 crore in Q1 June 2016 over Q1 June 2015. The result was announced after market hours yesterday, 11 August 2016.

ABNL's consolidated reported net profit declined 56.79% to Rs 305 crore on 0.18% growth in revenue to Rs 3194 crore in Q1 June 2016 over Q1 June 2015. The result was announced after market hours yesterday, 11 August 2016.

ABNL's net profit on like-to-like basis declined 13.1% to Rs 305 crore in Q1 June 2016 over Q1 June 2015 due to reduction of ABNL's share in Idea Cellular's net profit by Rs 148 crore.

Hindalco Industries gained 2.5% after net profit jumped 381.29% to Rs 294.07 crore on 10.96% decline in total income to Rs 7716.53 crore in Q1 June 2016 over Q1 June 2015. The result was announced during market hours today, 12 August 2016. Earnings before interest, taxation, depreciation and amortization (EBITDA) rose 34.45% to Rs 1350.90 crore in Q1 June 2016 over Q1 June 2015.

The company said that it has delivered a robust operational performance in adverse macroeconomic conditions. Its operational performance was also supported by deflationary energy prices, the company said. Hindalco said that the high level of imports continue to impact domestic sales volumes. The company continues to focus on operational excellence, higher value addition, customer centricity and cash conversation to tide over these issues, Hindalco said in a statement.

Sun Pharmaceutical Industries edged lower after announcing Q1 results. The stock fell 0.88%. The company's consolidated net profit surged 265.84% to Rs 2033.71 crore on 21.29% growth in total income to Rs 8400.09 crore in Q1 June 2016 over Q1 June 2015. The strong growth in bottom line in Q1 June 2016 was due to base effect. The company's bottom line in Q1 June 2015 was adversely impacted by exceptional expense of Rs 685.17 crore.

Cipla fell 1.26%. The company reported 43.74% fall in consolidated net profit to Rs 365.24 crore on 6.94% fall in total income to Rs 3618.92 crore in Q1 June 2016 over Q1 June 2015. The result was announced after market hours today, 12 August 2016. Earnings before interest, taxation, depreciation and amortization (EBITDA) fell 42% to Rs 611 crore in Q1 June 2016 over Q1 June 2015.

Cipla said that the growth momentum in key markets - India, South Africa and the US with focused cost containment measures has resulted in enhanced profitability in the base business. The recent acquisitions of InvaGen Pharmaceuticals Inc. and Exelan Pharmaceuticals Inc. are EBITDA margin-accretive at a consolidated level with the integration plans progressing smoothly. The company is preparing itself for the future with focused investments in R&D as well as portfolio build-up through strategic inorganic moves. The quarter also saw an improvement in cash flows on account of operational efficiencies, Cipla said.

Glenmark Pharmaceuticals rose 1.28% after consolidated net profit rose 23.96% to Rs 226.78 crore on 22.13% increase in total income to Rs 2018.97 crore in Q1 June 2016 over Q1 June 2015. Earnings before interest, taxes, depreciation and amortization (EBITDA) rose 24.75% at Rs 454.98 crore in Q1 June 2016 over Q1 June 2015. The result was announced during trading hours today, 12 August 2016.

Shares of oil production and exploration firms rose as crude oil prices gained sharply yesterday, 11 August 2016. Cairn India (up 2.85%), Oil India (up 1.18%) and ONGC (up 0.87%) gained. Higher crude oil prices would result in increase in realizations from crude sales for oil exploration firms.

Index heavyweight Reliance Industries (RIL) gained 2.02% to Rs 1,032.95. The stock hit a high of Rs 1,041.75 and low of Rs 1,014.90 in intraday trade.

Shares state-run oil-marketing companies (PSU OMCs) fell as crude oil prices yesterday, 11 August 2016. Indian Oil Corporation (IOC) (down 1.19%), BPCL (down 2.58%) and HPCL (down 1.27%) declined. Higher crude oil prices could increase under-recoveries of PSU OMCs on domestic sale of LPG and kerosene at controlled prices. The government has already freed pricing of petrol and diesel.

In the global commodities markets, Brent for October settlement was currently down 9 cents at $45.95 a barrel. The contract had gained $1.99 a barrel or 4.51% to settle at $ 46.04 a barrel during the previous trading session.

Shares of Mahindra & Mahindra (M&M) and Tata Motors gained after reports indicated that Supreme Court has lifted the ban on registration of diesel cars with over 2000 cc engines in Delhi and NCR region. M&M rose 2.12%. Tata Motors gained 2.58%. While lifting the ban, the court has slapped 1% cess on big diesel cars with over 2000 cc engines in Delhi and NCR region. It may be recalled that the Supreme Court had in December 2015 issued a ban on registration of new diesel cars in the capital city and NCR region to curb dangerously high levels of pollution.

Shares of S P Apparels (SPAL) made a modest debut. The stock settled at Rs 295 on BSE, a premium of 10.07% over the initial public offer price (IPO) of Rs 268. The stock debuted at Rs 305, a premium of 13.81% over the IPO price. The stock hit a high of Rs 305 and low of Rs 289.75 in iontraday trade. On BSE, 6.20 lakh shares changed hands in the counter. SPAL is a leading manufacturer and exporter of knitted garments for infants and children.

ITI lost 5.5% after net profit declined 72.4% to Rs 11.24 crore on 159.59% growth in total income from operations to Rs 325.90 crore in Q1 June 2016 over Q1 June 2015. The result was announced after market hours yesterday, 11 August 2016.

Meanwhile, the India Meteorological Department (IMD) in its weekly monsoon update issued yesterday, 11 August 2016, said that for the country as a whole, cumulative rainfall during this year's monsoon season was 3% above the long period average (LPA) until 10 August.

Meanwhile, there is extended weekend for traders in the stock market. The market remains closed on Monday, 15 August 2016, for Independence Day holiday.

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