Market spurts on positive global cues
Positive cues from global markets aided gains in Indian stocks last week. The upmove on the domestic bourses was a part of the upmove in Asian stocks triggered by stronger currencies relative to the US dollar on the heels of the US Federal Reserve slashing its projections for rate increases to two in 2016 from an earlier projection of four after keeping rates unchanged at the conclusion of a two-day monetary policy review on Wednesday, 16 March 2016. Fewer US interest rates hikes could support demand for emerging-market assets because investors have less incentive to draw out money from risky assets in their search for higher yields in the US. The S&P BSE Sensex rose in three out of five trading sessions. The 50-unit Nifty 50 index rose in four out of five trading sessions.
The Sensex rose 234.75 points or 0.95% to settle at 24,952.74 in the week ended on Friday, 18 March 2016. The gains for the Nifty were higher in percentage terms than those for the Sensex. The Nifty rose 94.15 points or 1.25% to settle at 7,604.35. The BSE Mid-Cap index rose 0.29%. The BSE Small-Cap index rose 0.30%. Both these indices underperformed the Sensex.
Meanwhile, foreign portfolio investors (FPIs) bought stocks worth a net Rs 3339.21 crore from the secondary equity market in four trading sessions from 14 to 17 March 2016.
Positive cues from global markets aided small upmove for Indian stocks at the onset of the week on Monday, 14 March 2016. The barometer index, the S&P BSE Sensex, rose 86.29 points or 0.35% to settle at 24,804.28.
Pharma stocks and index heavyweights HDFC and ITC led losses as the two key benchmark indices snapped two-day winning streak on Tuesday, 15 March 2016. The barometer index, the S&P BSE Sensex, fell 253.11 points or 1.02% to settle at 24,551.17.
Gains in index heavyweights Infosys and ITC, a strong intraday rebound in another index heavyweight HDFC and recovery in banking and pharma stocks aided a strong intraday rebound for key benchmark indices on Wednesday, 16 March 2016. The barometer index, the S&P BSE Sensex, rose 131.31 points or 0.53% to settle at 24,682.48.
A divergent trend was witnessed between the two key benchmark indices, with the barometer index, the S&P BSE Sensex, registering minuscule losses and the 50-unit Nifty 50 index registering small gains on Thursday, 17 March 2016. The Sensex fell 5.11 points or 0.02% to settle at 24677.37. The Nifty rose 13.80 points or 0.18% to settle at 7,512.55.
After hovering in positive zone throughout the trading session, the two key benchmark indices surged in late trade, with the barometer index, the S&P BSE Sensex and the 50-unit Nifty 50 index, both, hitting more than ten-week closing high on Friday, 18 March 2016. The Sensex rose 275.37 points or 1.12% to settle at 24,952.74. The gains for the Nifty were higher in percentage terms than those for the Sensex. The Nifty gained 91.80 points or 1.22% to settle at 7,604.35.
State-run Bharat Heavy Electricals (Bhel) was the top Sensex gainer last week. The stock rose 9.36% to Rs 113.35. The company announced during trading hours on Friday, 18 March 2016, that it will announce its flash results for the year ending 31 March 2016 on 7 April 2016.
Bank shares rose. State Bank of India (up 5.93%), Axis Bank (up 5.70%) and HDFC Bank (up 0.02%), edged higher.
ICICI Bank rose 7.74%. ICICI Bank said it is evaluating issuance of long term bonds in the nature of debentures on a private placement basis for lending to long term projects in infrastructure and affordable housing. The borrowing proposal will be considered in the meeting of Committee of Executive Directors at any time in next week starting from 21 March 2016, ICICI Bank said. The announcement was made after market hours on Thursday, 17 March 2016.
The S&P BSE Bankex rose 604.08 points or 3.50% to settle at 17,851.58 in the week ended on Friday, 18 March 2016.
State-run GAIL (India) rose 7.17%. The Petroleum and Natural Gas Regulatory Board (PNGRB) raised the tariff on the company's K.G. Basin natural gas pipeline network sharply with effect from 1 April 2016. PNGRB raised the tariff on GAIL's K.G. Basin natural gas pipeline network sharply to Rs 45.32 per mmbtu on Gross Calorific Value (GCV) basis from Rs 5.56 per mmbtu with effect from 1 April 2016. PNGRB in its tariff order set tariff at Rs 5.56 per mmbtu for the K.G. Basin natural gas pipeline for the period from 20 November 2008 to 31 March 2016 and Rs 45.32 per mmbtu for the period from 1 April 2016 to 11 February 2017. The economic life of GAIL's K.G. Basin natural gas pipeline ends on 11 February 2017.
State-run ONGC rose 4.61%. ONGC said that the company's overseas investment arm, ONGC Videsh (OVL) has signed a memorandum of understanding (MoU) with Rosneft for the acquisition of 11% shares in its wholly owned subsidiary, Vankorneft. The MoU also provides for the parties to explore the possibility to conclude long-term crude oil and feedstock supply agreements whereunder Rosneft (or its affiliates) would supply oil to the refineries of OVL (or its affiliates) located in India, ONGC said. The acquisition is in addition to the 15% shares for which the definitive agreements were signed in September 2015, the comnpany said. Thus, OVL would be acquiring 26% shares in Vankorneft. For the purpose of agreement, the parties shall consider using crude oil produced by Rosneft (including Rosneft's share in Vankorneft) as the main stream with its option to substitute the main stream with alternative grades, it added. Vankorneft is wholly owned subsidiary of Rosneft that operates Vankor Field in Russia and was set-up in 2004. The announcement was made during market hours on Thursday, 17 March 2016.
IT stocks rose. Infosys (up 4.18%) and Wipro (up 1.06%), edged higher.
Shares of IT major TCS rose 2.59%. A foreign brokerage reportedly reiterated its 'outperform' rating on the stock. According to reports, the brokerage retained its outperform rating after the TCS management demonstrated the company's capabilities and investments in the digital services business at an analyst meeting held on Thursday, 17 March 2016. The foreign brokerage is convinced about the management bandwidth to steer the company at a time when technology is fast evolving, reports added.
The S&P BSE IT index rose 348.63 points or 3.22% to settle at 11,177.50 in the week ended on Friday, 18 March 2016.
India's largest commercial vehicles maker Tata Motors rose 3.36% to Rs 365.90. The company has signed a contract to supply 25 Tata Starbus Diesel Series hybrid electric buses with the Mumbai Metropolitan Region Development Authority. The announcement was made after trading hours on Wednesday, 16 March 2016.
Lupin fell 16.08% to Rs 1,558.90. It was the top Sensex loser last week. Media reports suggested that a foreign brokerage has downgraded the stock to underperform from buy in the wake of observations by the United States Food and Drug Administration (USFDA) on the company's Goa facility. The foreign brokerage reportedly said that two out of nine observations by USFDA are critical in nature. The brokerage added that due to the USFDA observations, many pending approvals linked to the company's Goa plant may get delayed.
It may be recalled that Lupin had announced early this week that USFDA recently inspected its Goa facility and cited nine observations. Lupin said that the observations by USFDA were on aspects such as inadequacy and adherence to Standard Operating Procedures (SOPs). Lupin had said that it is in the midst of putting together a response to address the USFDA's observations.
Coal India dropped 6.71% at Rs 297.65. The stock turned ex-dividend on Monday, 14 March 2016, for interim dividend of Rs 27.40 per share for the year ending 31 March 2016. Before turning ex-dividend, the stock offered a dividend yield of 8.58% based on the closing price of Rs 319.05 on BSE on Friday, 11 March 2016.
Index heavyweight and housing finance major HDFC fell 2.68% to Rs 1,127.65. Media reports suggested that a foreign brokerage has downgraded the stock to sell from neutral. The brokerage reportedly said that structural changes may dampen HDFC's profitability and its core business is likely to be pressured. HDFC may now have structurally lower growth and core return on assets (ROAs) will decline further, the foreign brokerage reportedly said.
Asian Paints lost 2.37% to Rs 874.90. A foreign brokerage has downgraded the stock to "neutral" from "buy", citing expensive valuation. The brokerage reckons that there is not much earnings visibility for the company once crude oil price stabilises. The brokerage has reportedly trimmed its revenue growth forecast for the company. The brokerage expects improvement in the company's EBITDA (earnings before interest, taxation, depreciation and amortization) margin from FY 2016. It, however, does not expect a significant expansion in profit margins.
Cipla fell 1.19% to Rs 528.35. Cipla announced that its wholly owned subsidiary Cipla (EU), UK (Cipla UK) has made an additional investment of $3 million in Chase Pharmaceuticals Corporation Inc., US (Chase) towards full settlement of its obligation under the agreed arrangement announced in May 2014 for investment in Chase.
Consequently, Cipla UK's total investment in Chase would aggregate to approximately $5.12 million for a 16.7% stake on a fully diluted basis. Chase is an early stage drug development company developing novel approaches to improve treatments for Alzhemimer's disease. The announcement was made before market hours on Wednesday, 16 March 2016.
On the macro front, the latest data showed that inflation based on the consumer price index (CPI) dipped to four month low of 5.18% in February 2016 from 5.69% in January 2016. The decline was due to easing of food price inflation. The Consumer Food Price index (CFPI) eased sharply to 5.3% in February 2016 from 6.85% in January 2016. The core CPI inflation rose to 4.77% in February 2016 from 4.5% in January 2016.
The data announced after market hours on Friday, 11 March 2016, showed that industrial production declined for the third straight month, registering a fall of 1.5% in January 2016 over January 2015. The output of the manufacturing sector declined 2.8% in January 2016, contributing to the decline in industrial production. Meanwhile, the mining sector output improved 1.2%, while the electricity generation also galloped 6.6% in January 2016.
The Sensex rose 234.75 points or 0.95% to settle at 24,952.74 in the week ended on Friday, 18 March 2016. The gains for the Nifty were higher in percentage terms than those for the Sensex. The Nifty rose 94.15 points or 1.25% to settle at 7,604.35. The BSE Mid-Cap index rose 0.29%. The BSE Small-Cap index rose 0.30%. Both these indices underperformed the Sensex.
Meanwhile, foreign portfolio investors (FPIs) bought stocks worth a net Rs 3339.21 crore from the secondary equity market in four trading sessions from 14 to 17 March 2016.
Positive cues from global markets aided small upmove for Indian stocks at the onset of the week on Monday, 14 March 2016. The barometer index, the S&P BSE Sensex, rose 86.29 points or 0.35% to settle at 24,804.28.
Pharma stocks and index heavyweights HDFC and ITC led losses as the two key benchmark indices snapped two-day winning streak on Tuesday, 15 March 2016. The barometer index, the S&P BSE Sensex, fell 253.11 points or 1.02% to settle at 24,551.17.
Gains in index heavyweights Infosys and ITC, a strong intraday rebound in another index heavyweight HDFC and recovery in banking and pharma stocks aided a strong intraday rebound for key benchmark indices on Wednesday, 16 March 2016. The barometer index, the S&P BSE Sensex, rose 131.31 points or 0.53% to settle at 24,682.48.
A divergent trend was witnessed between the two key benchmark indices, with the barometer index, the S&P BSE Sensex, registering minuscule losses and the 50-unit Nifty 50 index registering small gains on Thursday, 17 March 2016. The Sensex fell 5.11 points or 0.02% to settle at 24677.37. The Nifty rose 13.80 points or 0.18% to settle at 7,512.55.
After hovering in positive zone throughout the trading session, the two key benchmark indices surged in late trade, with the barometer index, the S&P BSE Sensex and the 50-unit Nifty 50 index, both, hitting more than ten-week closing high on Friday, 18 March 2016. The Sensex rose 275.37 points or 1.12% to settle at 24,952.74. The gains for the Nifty were higher in percentage terms than those for the Sensex. The Nifty gained 91.80 points or 1.22% to settle at 7,604.35.
State-run Bharat Heavy Electricals (Bhel) was the top Sensex gainer last week. The stock rose 9.36% to Rs 113.35. The company announced during trading hours on Friday, 18 March 2016, that it will announce its flash results for the year ending 31 March 2016 on 7 April 2016.
Bank shares rose. State Bank of India (up 5.93%), Axis Bank (up 5.70%) and HDFC Bank (up 0.02%), edged higher.
ICICI Bank rose 7.74%. ICICI Bank said it is evaluating issuance of long term bonds in the nature of debentures on a private placement basis for lending to long term projects in infrastructure and affordable housing. The borrowing proposal will be considered in the meeting of Committee of Executive Directors at any time in next week starting from 21 March 2016, ICICI Bank said. The announcement was made after market hours on Thursday, 17 March 2016.
The S&P BSE Bankex rose 604.08 points or 3.50% to settle at 17,851.58 in the week ended on Friday, 18 March 2016.
State-run GAIL (India) rose 7.17%. The Petroleum and Natural Gas Regulatory Board (PNGRB) raised the tariff on the company's K.G. Basin natural gas pipeline network sharply with effect from 1 April 2016. PNGRB raised the tariff on GAIL's K.G. Basin natural gas pipeline network sharply to Rs 45.32 per mmbtu on Gross Calorific Value (GCV) basis from Rs 5.56 per mmbtu with effect from 1 April 2016. PNGRB in its tariff order set tariff at Rs 5.56 per mmbtu for the K.G. Basin natural gas pipeline for the period from 20 November 2008 to 31 March 2016 and Rs 45.32 per mmbtu for the period from 1 April 2016 to 11 February 2017. The economic life of GAIL's K.G. Basin natural gas pipeline ends on 11 February 2017.
State-run ONGC rose 4.61%. ONGC said that the company's overseas investment arm, ONGC Videsh (OVL) has signed a memorandum of understanding (MoU) with Rosneft for the acquisition of 11% shares in its wholly owned subsidiary, Vankorneft. The MoU also provides for the parties to explore the possibility to conclude long-term crude oil and feedstock supply agreements whereunder Rosneft (or its affiliates) would supply oil to the refineries of OVL (or its affiliates) located in India, ONGC said. The acquisition is in addition to the 15% shares for which the definitive agreements were signed in September 2015, the comnpany said. Thus, OVL would be acquiring 26% shares in Vankorneft. For the purpose of agreement, the parties shall consider using crude oil produced by Rosneft (including Rosneft's share in Vankorneft) as the main stream with its option to substitute the main stream with alternative grades, it added. Vankorneft is wholly owned subsidiary of Rosneft that operates Vankor Field in Russia and was set-up in 2004. The announcement was made during market hours on Thursday, 17 March 2016.
IT stocks rose. Infosys (up 4.18%) and Wipro (up 1.06%), edged higher.
Shares of IT major TCS rose 2.59%. A foreign brokerage reportedly reiterated its 'outperform' rating on the stock. According to reports, the brokerage retained its outperform rating after the TCS management demonstrated the company's capabilities and investments in the digital services business at an analyst meeting held on Thursday, 17 March 2016. The foreign brokerage is convinced about the management bandwidth to steer the company at a time when technology is fast evolving, reports added.
The S&P BSE IT index rose 348.63 points or 3.22% to settle at 11,177.50 in the week ended on Friday, 18 March 2016.
India's largest commercial vehicles maker Tata Motors rose 3.36% to Rs 365.90. The company has signed a contract to supply 25 Tata Starbus Diesel Series hybrid electric buses with the Mumbai Metropolitan Region Development Authority. The announcement was made after trading hours on Wednesday, 16 March 2016.
Lupin fell 16.08% to Rs 1,558.90. It was the top Sensex loser last week. Media reports suggested that a foreign brokerage has downgraded the stock to underperform from buy in the wake of observations by the United States Food and Drug Administration (USFDA) on the company's Goa facility. The foreign brokerage reportedly said that two out of nine observations by USFDA are critical in nature. The brokerage added that due to the USFDA observations, many pending approvals linked to the company's Goa plant may get delayed.
It may be recalled that Lupin had announced early this week that USFDA recently inspected its Goa facility and cited nine observations. Lupin said that the observations by USFDA were on aspects such as inadequacy and adherence to Standard Operating Procedures (SOPs). Lupin had said that it is in the midst of putting together a response to address the USFDA's observations.
Coal India dropped 6.71% at Rs 297.65. The stock turned ex-dividend on Monday, 14 March 2016, for interim dividend of Rs 27.40 per share for the year ending 31 March 2016. Before turning ex-dividend, the stock offered a dividend yield of 8.58% based on the closing price of Rs 319.05 on BSE on Friday, 11 March 2016.
Index heavyweight and housing finance major HDFC fell 2.68% to Rs 1,127.65. Media reports suggested that a foreign brokerage has downgraded the stock to sell from neutral. The brokerage reportedly said that structural changes may dampen HDFC's profitability and its core business is likely to be pressured. HDFC may now have structurally lower growth and core return on assets (ROAs) will decline further, the foreign brokerage reportedly said.
Asian Paints lost 2.37% to Rs 874.90. A foreign brokerage has downgraded the stock to "neutral" from "buy", citing expensive valuation. The brokerage reckons that there is not much earnings visibility for the company once crude oil price stabilises. The brokerage has reportedly trimmed its revenue growth forecast for the company. The brokerage expects improvement in the company's EBITDA (earnings before interest, taxation, depreciation and amortization) margin from FY 2016. It, however, does not expect a significant expansion in profit margins.
Cipla fell 1.19% to Rs 528.35. Cipla announced that its wholly owned subsidiary Cipla (EU), UK (Cipla UK) has made an additional investment of $3 million in Chase Pharmaceuticals Corporation Inc., US (Chase) towards full settlement of its obligation under the agreed arrangement announced in May 2014 for investment in Chase.
Consequently, Cipla UK's total investment in Chase would aggregate to approximately $5.12 million for a 16.7% stake on a fully diluted basis. Chase is an early stage drug development company developing novel approaches to improve treatments for Alzhemimer's disease. The announcement was made before market hours on Wednesday, 16 March 2016.
On the macro front, the latest data showed that inflation based on the consumer price index (CPI) dipped to four month low of 5.18% in February 2016 from 5.69% in January 2016. The decline was due to easing of food price inflation. The Consumer Food Price index (CFPI) eased sharply to 5.3% in February 2016 from 6.85% in January 2016. The core CPI inflation rose to 4.77% in February 2016 from 4.5% in January 2016.
The data announced after market hours on Friday, 11 March 2016, showed that industrial production declined for the third straight month, registering a fall of 1.5% in January 2016 over January 2015. The output of the manufacturing sector declined 2.8% in January 2016, contributing to the decline in industrial production. Meanwhile, the mining sector output improved 1.2%, while the electricity generation also galloped 6.6% in January 2016.
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