Market corrects on profit booking
Losses for IT, metal sector stocks and index heavyweights Reliance Industries and ITC led losses for Indian stocks, with the barometer index, the S&P BSE Sensex, and the 50-unit Nifty 50 index snapping a 4-day winning streak. The Sensex fell 284.56 points or 1.1% to settle at 25,519.22. The Nifty fell 82.40 points or 1.05% to settle at 7,761.95. Weakness in global stocks weighed on sentiment on the domestic bourses.
On the macro front, the government lowered its growth forecast for the year ending 31 March 2016 (FY 2016) to 7-7.5% from 8.1-8.5% estimated in February. The revised forecast is as per the mid-year economic review tabled by the government in parliament today, 18 December 2015. The mid-year economic review reiterated that the government would meet its fiscal deficit target of 3.9% and revenue deficit target of 2.8% for the current fiscal.
According to mid-year economic review, India's macroeconomic stability has improved considerably, cushioning the economy against possible adverse external shocks. Meanwhile, the real economy is showing signs of recovery. The improvement in growth has been uneven, powered only by private consumption and public investment. The report further states that the nominal GDP growth has been declining sharply and the demand outlook going forward is mixed, which runs the risk of intensifying corporate debt burdens and impeding the investment revival that is so urgently needed.
In overseas stock markets, Asian and European shares fell after losses for US stocks overnight. Japanese stocks edge lower amid high volatility. The Nikkei 225 Average lost 1.9%. The Bank of Japan surprised financial markets by announcing additional measures to its three-year old easing program after the conclusion of two-day monetary policy meeting.
The Sensex fell 284.56 points or 1.10% to settle at 25,519.22, its lowest closing level since 16 December 2015. The index fell 322.27 points or 1.25% at the day's low of 25,481.51. The barometer index fell 14.27 points or 0.06% at the day's high of 25,789.51.
The Nifty 50 index fell 82.40 points or 1.05% to settle at 7,761.95, its lowest closing level since 16 December 2015. The index fell 91 points or 1.16% at the day's low of 7,753.35. The index fell 8.20 points or 0.1% at the day's high of 7,836.15.
The BSE Mid-Cap index rose 0.08%, outperforming the Sensex. The BSE Small-Cap index fell 0.24%. The decline in this index was lower than the Sensex's decline in percentage terms.
The market breadth indicating the overall health of the market was negative. On BSE, 1,401 shares fell and 1,302 shares rose. A total of 203 shares were unchanged.
The total turnover on BSE amounted to Rs 2818 crore, lower than turnover of Rs 3149.45 crore registered during the previous trading session.
Among sectoral indices on BSE, the S&P BSE Consumer Durables index (up 1.01%), the S&P BSE Utilities index (up 0.31%), the S&P BSE Power index (up 0.13%), the S&P BSE Realty index (up 0.07%), the S&P BSE Telecom index (up 0.07%), the S&P BSE Industrials index (down 0.27%), the S&P BSE Capital Goods index (down 0.34%), the S&P BSE Consumer Discretionary Goods & Services index (down 0.36%), the S&P BSE FMCG index (down 0.63%), the S&P BSE Auto index (down 0.69%), the S&P BSE Oil & Gas index (down 0.69%), the S&P BSE Healthcare index (down 0.7%), the S&P BSE Finance index (down 0.8%), the S&P BSE Bankex (down 0.88%), the S&P BSE Basic Materials index (down 0.89%), the S&P BSE Metal index (down 0.89%), the S&P BSE Energy index (down 0.92%) and the S&P BSE Teck index (down 1.07%) outperformed the Sensex.
The S&P BSE IT index fell 1.31%, underperforming the Sensex.
Index heavyweight Reliance Industries fell 1.62% at Rs 992.05. The stock hit a high of Rs 1,009 and a low of Rs 990.15 in intraday trade.
Index heavyweight and cigarette major ITC fell 1% at Rs 317.25. The stock hit a high of Rs 323 and a low of Rs 316.70 in intraday trade.
Stocks of public sector banks witnessed a mixed trend and stocks of private sector banks edged lower after the Reserve Bank of India (RBI) issued final guidelines on computing interest rates on advances of commercial banks based on the marginal cost of funds. Among state-run banks, Punjab and Sind Bank (up 2.25%), UCO Bank (up 2.05%), IDBI Bank (up 1.89%), Syndicate Bank (up 1.21%), Allahabad Bank (up 1.01%), Union Bank of India (up 0.91%), Andhra Bank (up 0.71%), Dena Bank (up 0.60%), Bank of Maharashtra (up 0.16%) and Bank of India (up 0.04%), edged higher. Canara Bank (down 0.29%), Corporation Bank (down 0.37%), Punjab National Bank (down 0.53%), United Bank of India (down 0.66%), Bank of Baroda (down 0.69%), Indian Bank (down 0.79%), Vijaya Bank (down 0.88%), Central Bank of India (down 0.93%) and State Bank of India (down 1.88%), edged lower.
Among private sector banks, IndusInd Bank (down 1.51%), ICICI Bank (down 1.17%), Axis Bank (down 0.68%), HDFC Bank (down 0.65%), Federal Bank (down 0.63%), City Union Bank (down 0.33%), Yes Bank (down 0.21%) and Kotak Mahindra Bank (down 0.06%), edged lower.
According to the new rules, all rupee loans sanctioned and credit limits renewed from 1 April 2016 will be priced with reference to the Marginal Cost of Funds based Lending Rate (MCLR) which will be the internal benchmark of a bank for such purposes. The MCLR will be a tenor linked internal benchmark. The actual lending rates will be determined by adding the components of spread to the MCLR. Banks will review and publish their MCLR of different maturities every month on a pre-announced date.
Further, banks may specify interest reset dates on their floating rate loans. They will have the option to offer loans with reset dates linked either to the date of sanction of the loan/credit limits or to the date of review of MCLR. The periodicity of reset shall be one year or lower. The MCLR prevailing on the day the loan is sanctioned will be applicable till the next reset date, irrespective of the changes in the benchmark during the interim period.
Existing loans and credit limits linked to the base rate may continue till repayment or renewal, as the case may be. Existing borrowers will also have the option to move to the Marginal Cost of Funds based Lending Rate (MCLR) linked loan at mutually acceptable terms. Banks will continue to review and publish the base rate as hitherto, RBI said.
Metal shares declined. Vedanta (down 3.21%), Bhushan Steel (down 2.44%), Hindustan Zinc (down 2.41%), NMDC (down 2.22%), Hindalco Industries (down 1.66%), Hindustan Copper (down 1.34%), Steel Authority of India (down 1.25%), JSW Steel (down 1.12%), Jindal Steel & Power (down 1.09%) and Tata Steel (down 0.47%), edged lower. However, National Aluminium Company rose 0.72%.
Most pharmaceutical shares edged lower. Lupin (down 2.1%), Sun Pharmaceutical Industries (down 1.51%), Dr Reddy's Laboratories (down 1.45%), Cadila Healthcare (down 0.99%), IPCA Laboratories (down 0.27%), Cipla (down 0.15%), GlaxoSmithKline Pharmaceuticals (down 0.15%), Aurobindo Pharma (down 0.14%) and Wockhardt (down 0.09%), edged lower. Piramal Enterprises (up 0.10%), Strides Shasun (up 0.42%), Divi's Laboratories (up 1.65%) and Glenmark Pharmaceuticals (up 2.05%), edged higher.
IT stocks edged lower after reports suggested that a bill proposing doubling of visa fees on highly skilled foreign workers will come up for vote in the US Congress today, 18 December 2015. Infosys (down 1.9%), HCL Technologies (down 1.3%), Tech Mahindra (down 1.24%), TCS (down 0.98%), MindTree (down 0.69%), Wipro (down 0.29%) and Persistent Systems (down 0.11%), edged lower. Oracle Financial Services Software (up 0.04%), Hexaware Technologies (up 0.17%) and MphasiS (up 0.30%), edged higher.
Index heavyweight and IT major Infosys fell 1.90% at Rs 1,085.95. The stock hit a high of Rs 1102.95 and a low of Rs 1080.10 in intraday trade.
US Congress is set to pass a Bill that will effectively double the fees for H1B and L1 visas to $4,000 and $4,500, according to media reports. Investors are concerned that companies in the US relying on highly skilled foreign workers will have to pay more for their visas.
Shares of Bajaj Auto dropped 1.95% at Rs 2,475.10 after a sharp slide in Argentina's currency peso. The peso tumbled more than 25% yesterday, 17 December 2015, after the new government of President Mauricio Macri reportedly said that it would lift currency controls to attract investors and kick-start the economy. Reports suggest that Argentina is a key export market for two-wheeler major Bajaj Auto. The company gets around 20% of its revenue from exports to Latin America, as per reports.
Key indices snapped a 4-day winning streak. The Sensex had risen 759.35 points or 3.03% in the preceding four trading sessions to settle at 25,803.78 yesterday, 17 December 2015, from its close of 25,044.43 on 11 December 2015. The Sensex has declined 626.45 points or 2.4% in this month so far (till 18 December 2015). The Sensex has fallen 1,980.20 points or 7.2% in this calendar year so far (till 18 December 2015). From a 52-week low of 24,833.54 hit on 8 September 2015, the Sensex has risen 685.68 points or 2.76%. The Sensex is off 4,505.52 points or 15.01% from a record high of 30,024.74 hit on 4 March 2015.
On the macro front, the government lowered its growth forecast for the year ending 31 March 2016 (FY 2016) to 7-7.5% from 8.1-8.5% estimated in February. The revised forecast is as per the mid-year economic review tabled by the government in parliament today, 18 December 2015. The mid-year economic review reiterated that the government would meet its fiscal deficit target of 3.9% and revenue deficit target of 2.8% for the current fiscal.
According to mid-year economic review, India's macroeconomic stability has improved considerably, cushioning the economy against possible adverse external shocks. Meanwhile, the real economy is showing signs of recovery. The improvement in growth has been uneven, powered only by private consumption and public investment. The report further states that the nominal GDP growth has been declining sharply and the demand outlook going forward is mixed, which runs the risk of intensifying corporate debt burdens and impeding the investment revival that is so urgently needed.
In overseas stock markets, Asian and European shares fell after losses for US stocks overnight. Japanese stocks edge lower amid high volatility. The Nikkei 225 Average lost 1.9%. The Bank of Japan surprised financial markets by announcing additional measures to its three-year old easing program after the conclusion of two-day monetary policy meeting.
The Sensex fell 284.56 points or 1.10% to settle at 25,519.22, its lowest closing level since 16 December 2015. The index fell 322.27 points or 1.25% at the day's low of 25,481.51. The barometer index fell 14.27 points or 0.06% at the day's high of 25,789.51.
The Nifty 50 index fell 82.40 points or 1.05% to settle at 7,761.95, its lowest closing level since 16 December 2015. The index fell 91 points or 1.16% at the day's low of 7,753.35. The index fell 8.20 points or 0.1% at the day's high of 7,836.15.
The BSE Mid-Cap index rose 0.08%, outperforming the Sensex. The BSE Small-Cap index fell 0.24%. The decline in this index was lower than the Sensex's decline in percentage terms.
The market breadth indicating the overall health of the market was negative. On BSE, 1,401 shares fell and 1,302 shares rose. A total of 203 shares were unchanged.
The total turnover on BSE amounted to Rs 2818 crore, lower than turnover of Rs 3149.45 crore registered during the previous trading session.
Among sectoral indices on BSE, the S&P BSE Consumer Durables index (up 1.01%), the S&P BSE Utilities index (up 0.31%), the S&P BSE Power index (up 0.13%), the S&P BSE Realty index (up 0.07%), the S&P BSE Telecom index (up 0.07%), the S&P BSE Industrials index (down 0.27%), the S&P BSE Capital Goods index (down 0.34%), the S&P BSE Consumer Discretionary Goods & Services index (down 0.36%), the S&P BSE FMCG index (down 0.63%), the S&P BSE Auto index (down 0.69%), the S&P BSE Oil & Gas index (down 0.69%), the S&P BSE Healthcare index (down 0.7%), the S&P BSE Finance index (down 0.8%), the S&P BSE Bankex (down 0.88%), the S&P BSE Basic Materials index (down 0.89%), the S&P BSE Metal index (down 0.89%), the S&P BSE Energy index (down 0.92%) and the S&P BSE Teck index (down 1.07%) outperformed the Sensex.
The S&P BSE IT index fell 1.31%, underperforming the Sensex.
Index heavyweight Reliance Industries fell 1.62% at Rs 992.05. The stock hit a high of Rs 1,009 and a low of Rs 990.15 in intraday trade.
Index heavyweight and cigarette major ITC fell 1% at Rs 317.25. The stock hit a high of Rs 323 and a low of Rs 316.70 in intraday trade.
Stocks of public sector banks witnessed a mixed trend and stocks of private sector banks edged lower after the Reserve Bank of India (RBI) issued final guidelines on computing interest rates on advances of commercial banks based on the marginal cost of funds. Among state-run banks, Punjab and Sind Bank (up 2.25%), UCO Bank (up 2.05%), IDBI Bank (up 1.89%), Syndicate Bank (up 1.21%), Allahabad Bank (up 1.01%), Union Bank of India (up 0.91%), Andhra Bank (up 0.71%), Dena Bank (up 0.60%), Bank of Maharashtra (up 0.16%) and Bank of India (up 0.04%), edged higher. Canara Bank (down 0.29%), Corporation Bank (down 0.37%), Punjab National Bank (down 0.53%), United Bank of India (down 0.66%), Bank of Baroda (down 0.69%), Indian Bank (down 0.79%), Vijaya Bank (down 0.88%), Central Bank of India (down 0.93%) and State Bank of India (down 1.88%), edged lower.
Among private sector banks, IndusInd Bank (down 1.51%), ICICI Bank (down 1.17%), Axis Bank (down 0.68%), HDFC Bank (down 0.65%), Federal Bank (down 0.63%), City Union Bank (down 0.33%), Yes Bank (down 0.21%) and Kotak Mahindra Bank (down 0.06%), edged lower.
According to the new rules, all rupee loans sanctioned and credit limits renewed from 1 April 2016 will be priced with reference to the Marginal Cost of Funds based Lending Rate (MCLR) which will be the internal benchmark of a bank for such purposes. The MCLR will be a tenor linked internal benchmark. The actual lending rates will be determined by adding the components of spread to the MCLR. Banks will review and publish their MCLR of different maturities every month on a pre-announced date.
Further, banks may specify interest reset dates on their floating rate loans. They will have the option to offer loans with reset dates linked either to the date of sanction of the loan/credit limits or to the date of review of MCLR. The periodicity of reset shall be one year or lower. The MCLR prevailing on the day the loan is sanctioned will be applicable till the next reset date, irrespective of the changes in the benchmark during the interim period.
Existing loans and credit limits linked to the base rate may continue till repayment or renewal, as the case may be. Existing borrowers will also have the option to move to the Marginal Cost of Funds based Lending Rate (MCLR) linked loan at mutually acceptable terms. Banks will continue to review and publish the base rate as hitherto, RBI said.
Metal shares declined. Vedanta (down 3.21%), Bhushan Steel (down 2.44%), Hindustan Zinc (down 2.41%), NMDC (down 2.22%), Hindalco Industries (down 1.66%), Hindustan Copper (down 1.34%), Steel Authority of India (down 1.25%), JSW Steel (down 1.12%), Jindal Steel & Power (down 1.09%) and Tata Steel (down 0.47%), edged lower. However, National Aluminium Company rose 0.72%.
Most pharmaceutical shares edged lower. Lupin (down 2.1%), Sun Pharmaceutical Industries (down 1.51%), Dr Reddy's Laboratories (down 1.45%), Cadila Healthcare (down 0.99%), IPCA Laboratories (down 0.27%), Cipla (down 0.15%), GlaxoSmithKline Pharmaceuticals (down 0.15%), Aurobindo Pharma (down 0.14%) and Wockhardt (down 0.09%), edged lower. Piramal Enterprises (up 0.10%), Strides Shasun (up 0.42%), Divi's Laboratories (up 1.65%) and Glenmark Pharmaceuticals (up 2.05%), edged higher.
IT stocks edged lower after reports suggested that a bill proposing doubling of visa fees on highly skilled foreign workers will come up for vote in the US Congress today, 18 December 2015. Infosys (down 1.9%), HCL Technologies (down 1.3%), Tech Mahindra (down 1.24%), TCS (down 0.98%), MindTree (down 0.69%), Wipro (down 0.29%) and Persistent Systems (down 0.11%), edged lower. Oracle Financial Services Software (up 0.04%), Hexaware Technologies (up 0.17%) and MphasiS (up 0.30%), edged higher.
Index heavyweight and IT major Infosys fell 1.90% at Rs 1,085.95. The stock hit a high of Rs 1102.95 and a low of Rs 1080.10 in intraday trade.
US Congress is set to pass a Bill that will effectively double the fees for H1B and L1 visas to $4,000 and $4,500, according to media reports. Investors are concerned that companies in the US relying on highly skilled foreign workers will have to pay more for their visas.
Shares of Bajaj Auto dropped 1.95% at Rs 2,475.10 after a sharp slide in Argentina's currency peso. The peso tumbled more than 25% yesterday, 17 December 2015, after the new government of President Mauricio Macri reportedly said that it would lift currency controls to attract investors and kick-start the economy. Reports suggest that Argentina is a key export market for two-wheeler major Bajaj Auto. The company gets around 20% of its revenue from exports to Latin America, as per reports.
Key indices snapped a 4-day winning streak. The Sensex had risen 759.35 points or 3.03% in the preceding four trading sessions to settle at 25,803.78 yesterday, 17 December 2015, from its close of 25,044.43 on 11 December 2015. The Sensex has declined 626.45 points or 2.4% in this month so far (till 18 December 2015). The Sensex has fallen 1,980.20 points or 7.2% in this calendar year so far (till 18 December 2015). From a 52-week low of 24,833.54 hit on 8 September 2015, the Sensex has risen 685.68 points or 2.76%. The Sensex is off 4,505.52 points or 15.01% from a record high of 30,024.74 hit on 4 March 2015.
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