Thursday, April 07, 2016

THE END SESSION ( 07 / 04 )

Market hits 3-week low


IT, telecom stocks and index heavyweights HDFC and ITC led losses for the two key benchmark indices. The barometer index, the S&P BSE Sensex, fell 215.21 points or 0.86% to settle at 24,685.42. The Nifty fell 67.90 points or 0.89% to settle at 7,546.45. The Sensex failed to retain the psychologically important 25,000 level which it had crossed at the onset of the trading session. After languishing in negative zone almost throughout the trading session, the two key indices extended losses in late trade as European stocks reversed gains. The Sensex and the Nifty, both, hit 3-week closing low.

Shares of Tata Power and Adani Power edged lower in choppy trade after television reports that a tribunal has rejected a CECR order that allows these two power companies to charge higher prices from procurers than agreed upon for electricity produced from their plants at Mundra in Gujarat. Shares of state-run power equipment major Bharat Heavy Electricals (Bhel) surged after the company after the company reported a strong growth in order inflow for the year ended 31 March 2016 (FY 2016).

Index heavyweight and housing finance major HDFC edged lower after the company's announcement that it proposes to make an additional one-time special provision of Rs 450 crore in Q4 March 2016 on standard assets. Maruti Suzuki India edged lower on media reports that a foreign brokerage has cut the target price on the stock while retaining its hold rating on the stock.

In overseas stock markets, European stocks reversed initial gains ahead of the release of the minutes from the European Central Bank's March meeting. Earlier during the global day, Asian stocks witnessed a mixed trend. US stocks edged higher yesterday, 6 April 2016, after the minutes of the Federal Reserve's March meeting showed that officials favoured more gradual rate hikes amid concerns over global economic growth.

The Sensex fell 215.21 points or 0.86% to settle at 24,685.42, its lowest closing level since 17 March 2016. The index lost 253.15 points or 1.01% at the day's low of 24,647.48. The index rose 112.50 points or 0.45% at the day's high of 25,013.13.
The Nifty 50 index fell 67.90 points or 0.89% to settle at 7,546.45, its lowest closing level since 17 March 2016. The index lost 78.50 points or 1.03% at the day's low of 7,535.85. The index rose 16.40 points or 0.21% at the day's high of 7,630.75.

The market breadth indicating the overall health of the market was negative. On BSE, 1,454 shares fell and 1,116 shares rose. A total of 117 shares were unchanged. The BSE Mid-Cap index lost 0.45%. The BSE Small-Cap index fell 0.42%. The losses for both these indices were lower than the Sensex's slide in percentage terms.

The total turnover on BSE amounted to Rs 2956 crore, higher than turnover of Rs 2208.10 crore registered during the previous trading session.

Among sectoral indices on BSE, the S&P BSE Consumer Durables index (down 2.03%), the S&P BSE Capital Goods index (down 1.18%), the S&P BSE IT index (down 1.18%), the S&P BSE Auto index (down 1.17%), the S&P BSE FMCG index (down 1.17%), the S&P BSE Teck index (down 1.13%), the S&P BSE Consumer Discretionary Goods & Services index (down 0.99%), the S&P BSE Finance index (down 0.9%) and the S&P BSE Industrials index (down 0.86%), underperformed the Sensex. The S&P BSE Basic Materials index (down 0.82%), the S&P BSE Telecom index (down 0.79%), the S&P BSE Bankex (down 0.69%), the S&P BSE Realty index (down 0.67%), the S&P BSE Utilities index (down 0.62%), the S&P BSE Metal index (down 0.28%), the S&P BSE Power index (down 0.16%), the S&P BSE Oil & Gas index (up 0.13%), the S&P BSE Energy index (up 0.57%) and the S&P BSE Healthcare index (up 0.57%), outperformed the Sensex.

Bank stocks edged lower. Among public sector banks, Indian Bank (down 2.56%), Andhra Bank (down 2.02%), Syndicate Bank (down 2.01%), Bank of India (down 1.88%), Union Bank of India (down 1.81%), Canara Bank (down 1.44%), Allahabad Bank (down 1.39%), United Bank of India (down 1.25%), Dena Bank (down 1.02%), State Bank of India (down 1.01%), Punjab and Sind Bank (down 0.72%), UCO Bank (down 0.66%), Punjab National Bank (down 0.49%), Vijaya Bank (down 0.32%) and Bank of Baroda (down 0.03%), edged lower. Corporation Bank (up 0.13%), IDBI Bank (up 0.44%), Central Bank of India (up 0.47%) and Bank of Maharashtra (up 0.85%), edged higher.

Among private sector banks, Federal Bank (down 2.28%), IndusInd Bank (down 1.65%), City Union Bank (down 1.5%), ICICI Bank (down 1.19%), Kotak Mahindra Bank (down 0.57%) and HDFC Bank (down 0.52%), edged lower. Yes Bank (up 0.03%) and Axis Bank (up 0.38%) edged higher.

Telecom stocks edged lower. Idea Cellular (down 1.66%), Tata Teleservices (Maharashtra) (down 1.49%), Reliance Communications (down 1.47%), MTNL (down 1.43%) and Bharti Airtel (down 0.88%), edged lower. The Union Cabinet yesterday, 6 April 2016, approved modifications in the policy for liberalisation of administratively allotted spectrum where market determined prices are not available. This will facilitate optimal utilisation of spectrum by introducing new technologies and sharing and trading of spectrum. The most recent recommended reserve price will be taken as the provisional price for liberalisation of administratively allocated spectrum where auction determined price is not available. Subsequent to the completion of the ensuing auction and with the availability of auction-determined price, the provisional price already charged will be adjusted with the auction-determined price with effect from the date of liberalisation on pro-rata basis. The announcement of the modifications in the policy for liberalisation of administratively allotted spectrum hit the market after trading hours yesterday, 6 April 2016.

Most pharmaceutical shares edged higher. IPCA Laboratories (up 2.59%), Piramal Enterprises (up 2.10%), Divi's Laboratories (up 1.77%), Alkem Laboratories (up 1.48%), Cadila Healthcare (up 1.41%), Lupin (up 1.41%), Wockhardt (up 1.14%), Dr Reddy's Laboratories (up 1.05%), Aurobindo Pharma (up 0.95%) and Cipla (up 0.32%) edged higher. Strides Shasun (down 0.31%), Glenmark Pharmaceuticals (down 1.16%), GlaxoSmithKline Pharmaceuticals (down 1.64%) and Sun Pharmaceutical Industries (down 0.35%) edged lower.

Shares of Tata Power and Adani Power edged lower in choppy trade after television reports that a tribunal has rejected a CECR order that allows these two power companies to charge higher prices from procurers than agreed upon for electricity produced from their plants at Mundra in Gujarat. Tata Power fell 3.83% to Rs 64.10. Adani Power fell 2.92% to Rs 33.20. Tata Power and Adani Power might go to the Supreme Court against the order, reports suggested.

Maruti Suzuki India (Maruti) edged lower on media reports that a foreign brokerage has cut target price on the stock while retaining its hold rating on the stock. The scrip dropped 2.81% at Rs 3,471.35. The foreign brokerage reportedly said that yen benefit has started to reverse and is a significant headwind in the near term for Maruti. According to the calculation of the brokerage, every 1% appreciation in yen adversely affects Maruti's operating margin by 15-20 basis points (bps). The yen hit 17-month high against dollar today, 7 April 2016. The foreign brokerage reportedly said in its latest report that the valuations of the stock remain attractive.

Maruti announced after market hours yesterday, 6 April 2016, that it has introduced the automatic transmission option for the Zeta petrol variant of its premium hatchback Baleno. The Baleno Zeta (automatic CVT) petrol variant is priced at Rs 7.47 lakh ex-showroom Delhi. With this automatic transmission options are available on Delta and Zeta trim of Baleno. Maruti said it has sold over 44,000 Baleno cars through its premium retail channel NEXA across India. The model has pending orders for 55,000 units. Baleno is also the first model by Maruti Suzuki to be exported to Japan. Going forward Maruti Suzuki plans to export the model to more than 100 countries from India.

Tata Motors fell 0.56% to Rs 375.10. The company's British car unit Jaguar Land Rover (JLR) today, 7 April 2016, announced that its retail sales jumped 29% to 75,303 units in March 2016 over March 2015. Sales of the Land Rover brand rose 22% to 60,128 units in March 2016 over March 2015. Sales of the Jaguar brand jumped 62% to 15,175 units in March 2016 over March 2015. JLR said that customer deliveries of Jaguar F-PACE would begin next month.

Index heavyweight and cigarette major ITC fell 1.99% at Rs 319.60. The stock hit a high of Rs 328.40 and a low of Rs 319 in intraday trade. Early this month, ITC announced temporary closure of manufacturing operations at all its cigarette factories in India with effect from 1 April 2016 as it awaits clarity on the quantum of mandatory pictorial health warning on cigarette packages.

IT stocks edged lower. Hexaware Technologies (down 2.05%), Tech Mahindra (down 2.05%), Persistent Systems (down 1.64%), Wipro (down 1.59%), HCL Technologies (down 1.37%) and Oracle Financial Services Software (down 0.17%), edged lower. MindTree (up 0.63%) and MphasiS (up 0.94%), edged higher.

Index heavyweight and IT major Infosys fell 1.62% at Rs 1,181.65 after a block deal of 55.20 lakh shares was executed on the counter at Rs 1,176.80 per share at 9:46 IST on BSE. The company will announce its Q4 March 2016 results on 15 April 2016.
TCS fell 0.32% at Rs 2,470.95. The stock hit a high of Rs 2,483.40 and a low of Rs 2,458.90 in intraday trade. The company will announce its Q4 March 2016 results on 18 April 2016.

Shares of state-run power equipment major Bharat Heavy Electricals (Bhel) rose 4.65% at Rs 119.30 after the company said that on provisional basis its order inflow jumped 41.9% at Rs 43727 crore in the year ended 31 March 2016 (FY 2016) over the year ended 31 March 2015 (FY 2015). Based on tentative financial performance, Bhel reported net loss of Rs 877 crore in FY 2016 as against net profit of Rs 1419 crore in FY 2015. Turnover declined 13.71% to Rs 26702 crore in FY 2016 over FY 2015. The company announced the flash results for FY 2016 during market hours today, 7 April 2016.

Bhel said that it has achieved the highest-ever commissioning of projects in its history and the highest order booking in the last five years in FY 2016. Enhanced focus on project execution has resulted in Bhel creating history by way of commissioning/synchronizing an all-time high 15,059 megawatts (MW) of power generating equipment during the year, the company said in a statement. Bhel said it has achieved 94% of the capacity addition target for the twelfth plan in first four years itself. The company's order book stood at over Rs 1.10 lakh crore as on 31 March 2016. The company's continued focus on cash realization during the year has resulted in a cash surplus situation, it said. The rising trend of debtors has also been arrested, the company said.

Bhel said it considers 'Make in India' as an inflexion point to significantly scale up and diversify its business mix. New opportunities are emerging in defence, railways, solar and also in the conventional power sector, with a focus on enhancing technology depth. The company is building new capabilities and exploring new business models to take advantage of emerging big-ticket opportunities and is confident of regaining the growth momentum in the near future.

Index heavyweight and housing finance major HDFC fell 2.58% at Rs 1,072.65 after the company after market hours yesterday, 6 April 2016, announced that it proposes to make an additional one-time special provision of Rs 450 crore in Q4 March 2016 on standard assets. The special provision is being done voluntarily and not on account of any regulatory requirement, HDFC said. HDFC said that the company holds adequate security in respect of all its loans. Regulatory provision on standard assets and provision for non-performing loans will continue to be made as per current practice in the quarterly accounts, HDFC said.

HDFC said that the profit on sale of investments for Q4 March 2016 was Rs 1520 crore (net of tax Rs 1220 crore) compared to Rs 225 crore in Q4 March 2015. The current quarter's profit includes the profit on sale of shares in HDFC Standard Life Insurance Company to Standard Life (Mauritius Holdings) 2006 Limited. The capital gains tax on the sale of shares is Rs 300 crore.

Income from dividend for Q4 March 2016 was Rs 192 crore compared to Rs 179 crore in the corresponding quarter of the previous year. Meanwhile, under the loan assignment route, HDFC sold loans amounting to Rs 4799 crore in Q4 March 2016 to HDFC Bank compared to Rs 5000 crore during corresponding quarter of the previous year. Loans sold in the preceding twelve months amounted to Rs 12773 crore. HDFC will announce its Q4 March 2016 results on 2 May 2016.

The Sensex has fallen 656.44 points or 2.59% in this month so far (till 7 April 2016). The Sensex has fallen 1,428.12 points or 5.47% in calendar year 2016 so far (till 7 April 2016). From a 52-week low of 22,494.61 hit on 29 February 2016, the Sensex has risen 2,192.81 points or 9.75%. The Sensex is off 4,408.19 points or 15.15% from a 52-week high of 29,094.61 hit on 15 April 2015. The Sensex is off 5,339.32 points or 17.78% from a record high of 30,024.74 hit on 4 March 2015.

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