Key indices witness divergent trend
After seeing a rangebound movement in intraday trade, the two key benchmark indices settled near the flat line. The barometer index, the S&P Sensex, lost 11.58 points or 0.05% to settle at 24,673.84. The Nifty 50 index rose 8.75 points or 0.12% to settle at 7,555.20. The minuscule decline pushed the Sensex to its lowest closing level in more than three weeks.
Bank stocks edged higher after the Reserve Bank of India issued guidelines allowing trading of priority sector lending certificates. Shares of state-run power equipment major Bharat Heavy Electricals extended previous trading session's gains triggered by the company announcing a surge in its order inflow for the year ended 31 March 2016. Tata Power rose after the company announced that its wholly owned Singapore subsidiary Tata Power International Pte has signed an agreement with KS Orka Renewables Pte for the sale of its 50% stake in OTP Geothermal Pte.
In overseas stock markets, European stocks edged higher after stronger-than-expected German trade data for February 2016. The Germany economy is the Europe's biggest. Earlier during the global day, Asian stocks ended on a mixed trend. US stocks closed lower yesterday, 7 April 2016, with financials leading decline on profit taking in an overall risk-off environment ahead of earnings season.
The Sensex fell 11.58 points or 0.05% to settle at 24,673.84, its lowest closing level since 15 March 2016. The barometer index lost 76.91 points or 0.31% at the day's low of 24,608.51. The Sensex rose 50.61 points or 0.2% at the day's high of 24,736.03.
The Nifty rose 8.75 points or 0.12% to settle at 7,555.20, its highest closing level since 6 April 2016. The index rose 22.90 points or 0.3% at the day's high of 7,569.35. The index lost 19.75 points or 0.26% at the day's low of 7,526.70.
The BSE Mid-Cap index rose 0.64%. The BSE Small-Cap index rose 0.63%. Both these indices outperformed the Sensex.
The market breadth indicating the overall health of the market was positive. On BSE, 1,481 shares rose and 1,043 shares fell. A total of 165 shares were unchanged.
The total turnover on BSE amounted to Rs 1955.18 crore, lower than turnover of Rs 2956.03 crore registered during the previous trading session.
Among the sectoral indices on BSE, the S&P BSE Basic Materials index (up 0.89%), the BSE Utilities index (up 1.59%), the BSE Capital Goods index (up 0.97%), the BSE Power index (up 1.58%) and the BSE Realty index (up 1.44%) outperformed the Sensex. The S&P BSE IT index (down 0.82%), the BSE Consumer Durables index (down 0.59%) and the BSE Teck index (down 0.66%) underperformed the Sensex.
Bank stocks edged higher after the Reserve Bank of India issued guidelines allowing trading of priority sector lending certificates (PSLCs). Among public sector banks, Andhra Bank (up 1.57%), Punjab National Bank (up 0.8%), Union Bank of India (up 0.64%), State Bank of India (up 0.55%), Oriental Bank of Commerce (up 1.05%), Syndicate Bank (up 0.61%) and Canara Bank (up 0.3%) edged higher. Bank of Baroda (down 0.17%), Indian Bank (down 0.45%) and IDBI Bank (down 0.89%) edged lower.
Among private sector banks, ICICI Bank (up 0.57%), Yes Bank (up 1.74%), HDFC Bank (up 0.3%) and Kotak Mahindra Bank (up 0.28%) edged higher. IndusInd Bank (down 0.21%) and Axis Bank (down 1.16%) edged lower.
Trading in PSLCs will allow market mechanism to drive priority sector lending by leveraging the comparative strength of different banks. The RBI said that all scheduled commercial banks (including regional rural banks), urban co-operative banks, small finance banks (when they become operational) and local area banks are eligible to participate in trading of PSLCs. The certificates will have a standard lot size of 25 lakh and multiples thereof. There will be no transfer of credit risk on the underlying and the settlement of funds will be done through the e-Kuber portal, a platform to enable trading in the certificates through the central bank's core banking solution (CBS).
Telecom stocks edged higher. Bharti Airtel (up 0.78%), Mahanagar Telephone Nigam (up 1.45%) and Tata Teleservices (Maharashtra) (up 0.91%) rose. Idea Cellular (down 0.46%) edged lower.
Reliance Communications (RCom) rose 0.4% at Rs 50.40. The stock hit a high of Rs 50.60 and a low of Rs 48.75 in intraday trade. Global credit rating agency Moody's Investors Service has cut the outlook on RCom's Ba3 corporate family rating to negative from stable, citing persistent delay in the company's sale of non-core assets. Moody's has affirmed RCom's Ba3 corporate family rating and senior secured rating. The negative outlook reflects Moody's view that ongoing delay in RCom's rollout of its deleveraging plans will keep its financial and credit profile strained over the near term.
Bajaj Auto rose 1.26% at Rs 2,404.75 after the company announced that an agreement has been reached between the company and KTM AG that will see Bajaj Auto extend its distribution network to embrace Indonesia, the biggest motorcycle market in South East Asia. The arrangement involves KTM branded Duke and RC motorcycles up to a displacement of 400 cc, which are developed and assembled by the successful Austrian-Indian joint venture. The motorcycles will be distributed through a chain of KTM dealerships, to be managed by Bajaj Auto in Indonesia. The announcement was made during market hours today, 8 April 2016.
Meanwhile, Bajaj Auto's existing business partnership with Indonesia's P.T. Jaya Selaras Sejahtera will now focus on motorcycles above 400 cc.
Index heavyweight and IT major Infosys fell 1.21% at Rs 1,167.35. The stock hit a high of Rs 1,178 and a low of Rs 1,162.05 in intraday trade. The company will announce its Q4 March 2016 results on 15 April 2016.
TCS dropped 1.71% at Rs 2,428.70. The stock hit a high of Rs 2,466.90 and a low of Rs 2,425.20 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 2.64% at Rs 122.45, with the stock extending previous trading session's gains triggered by the company announcing a surge in its order inflow for the year ended 31 March 2016 (FY 2016). The stock had risen 4.64% to settle at Rs 119.30 yesterday, 7 April 2016. On provisional basis, Bhel's order inflow jumped 41.9% at Rs 43727 crore in FY 2016 over 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.
Tata Power rose 2.57% at Rs 65.75 after the company announced that its wholly owned Singapore subsidiary Tata Power International Pte (TPIPL) has signed an agreement with KS Orka Renewables Pte for the sale of its 50% stake in OTP Geothermal Pte (OTP). The aggregate cash consideration for TPIPL's 50% stake is $30 million. OTP, a 50:50 joint venture with Origin Energy, holds a 95% interest in Indonesia's PT Sorik Marapi Geothermal Power (SMGP). The divestment of the company's interest in OTP is consistent with its strategy to constantly review its businesses and restructure, as required, to deliver long-term value to shareholders, Tata Power said. Tata Power expects to complete the sale in next three months subject to necessary approvals. The announcement was made during market hours today, 8 April 2016.
Separately, Tata Power announced after trading hours yesterday, 7 April 2016, that the Appellate Tribunal for Electricity (APTEL) has decided against providing compensatory tariff to the company's 100% subsidiary Coastal Gujarat Power (CGPL). CGPL operates the 4,000 MW Ultra Mega Power Project (UMPP) at Mundra, Gujarat. APTEL, while pronouncing the order, also remarked that Central Electricity Regulatory Commission (CERC) has no power to grant compensatory tariffs.
However, APTEL has thrown back the case to CERC. It has asked the commission to decide the tariff as per power purchase agreements (PPAs) and under 'force majeure' or 'change in law'. CERC has also been directed to conclude the exercise as expeditiously as possible and within a period of 3 months from 7 April 2016.
In an order dated February 2014, CERC decided a compensatory tariff to be paid by the states procuring power from Tata Power and Adani Power's power generation units at Mundra with effect from the commissioning date of the units. The compensatory tariff was over and above the tariff agreed in the power purchase agreement.
NTPC rose 3.95% at Rs 131.55. The stock hit a high of Rs 132.40 and a low of Rs 126.10 in intraday trade.
Hindustan Unilever (HUL) dropped 1.23% at Rs 850. The stock hit a high of Rs 864.60 and a low of Rs 846.20 in intraday trade. HUL announced after market hours yesterday, 7 April 2016, that it has completed the acquisition of Masons Group flagship hair oil brand Indulekha. It may be recalled that in December 2015, HUL had announced signing an agreement with Masons Group for acquisition of its flagship Indulekha brand.
The Sensex edged lower for the second day in a row. The Sensex has fallen 226.79 points or 0.91% in two trading sessions from its close of 24,900.63 on 6 April 2016. The Sensex has fallen 668.02 points or 2.63% in this month so far (till 8 April 2016). The Sensex has fallen 1,443.70 points or 5.52% in calendar year 2016 so far (till 8 April 2016). From a 52-week low of 22,494.61 hit on 29 February 2016, the Sensex has risen 2,179.23 points or 9.68%. The Sensex is off 4,420.77 points or 15.19% from a 52-week high of 29,094.61 hit on 15 April 2015. The Sensex is off 5,350.90 points or 17.82% from a record high of 30,024.74 hit on 4 March 2015.
Meanwhile, as per the monthly data released by Association of Mutual Funds In India (AMFI), investors withdrew a net Rs 1370 crore from equity mutual funds in March 2016. This compares with a net inflow of Rs 2522 crore into equity mutual funds in February 2016. There was a net inflow of Rs 78 crore in balanced funds in March 2016, which was lower than inflow of Rs 941 crore in February 2016. Balanced funds invest the money in a combination of equity and debt, with majority of the investment going into equity. The funds' investments range from 65% to 80% in equity and the rest in debt.
Meanwhile, global credit rating agency Moody's Investors Service said in a recent report that the rapid rise in foreign direct investment (FDI) inflows in India mitigates the risks related to a potential widening of the nation's current account deficit from weaker remittances from Gulf countries and is credit positive for the country's sovereign rating. Moody's expects FDI inflows to climb further in response to government measures, such as efforts to liberalize foreign investment limits in several sectors and the 'Make in India' initiative. These trends are credit positive, as they lower India's susceptibility to external shocks at a time when capital flows to emerging markets are volatile and weak economic conditions globally and, in particular, in the Gulf countries, may dampen remittances, according to a statement issued by the rating agency yesterday, 7 April 2016 after the release of the report.
The report says that a lower energy import bill and policy measures to contain gold imports are contributing to keeping the trade deficit at moderate levels. Going forward, the imposition of an excise tax on gold in the Union Budget 2016-17 is likely to dampen overall gold imports. India's current account deficit is now more than covered by its FDI inflows. The rise in FDI points to stronger investor interest in India on the back of robust economic growth, according to the report. The development of industrial corridors, investment and manufacturing zones, and 'smart cities' will further bolster investment inflows. Moody's expects acceleration in FDI inflows into the manufacturing sector as the government seeks to boost the manufacturing sector's share of GDP to 25% by 2022.
Bank stocks edged higher after the Reserve Bank of India issued guidelines allowing trading of priority sector lending certificates. Shares of state-run power equipment major Bharat Heavy Electricals extended previous trading session's gains triggered by the company announcing a surge in its order inflow for the year ended 31 March 2016. Tata Power rose after the company announced that its wholly owned Singapore subsidiary Tata Power International Pte has signed an agreement with KS Orka Renewables Pte for the sale of its 50% stake in OTP Geothermal Pte.
In overseas stock markets, European stocks edged higher after stronger-than-expected German trade data for February 2016. The Germany economy is the Europe's biggest. Earlier during the global day, Asian stocks ended on a mixed trend. US stocks closed lower yesterday, 7 April 2016, with financials leading decline on profit taking in an overall risk-off environment ahead of earnings season.
The Sensex fell 11.58 points or 0.05% to settle at 24,673.84, its lowest closing level since 15 March 2016. The barometer index lost 76.91 points or 0.31% at the day's low of 24,608.51. The Sensex rose 50.61 points or 0.2% at the day's high of 24,736.03.
The Nifty rose 8.75 points or 0.12% to settle at 7,555.20, its highest closing level since 6 April 2016. The index rose 22.90 points or 0.3% at the day's high of 7,569.35. The index lost 19.75 points or 0.26% at the day's low of 7,526.70.
The BSE Mid-Cap index rose 0.64%. The BSE Small-Cap index rose 0.63%. Both these indices outperformed the Sensex.
The market breadth indicating the overall health of the market was positive. On BSE, 1,481 shares rose and 1,043 shares fell. A total of 165 shares were unchanged.
The total turnover on BSE amounted to Rs 1955.18 crore, lower than turnover of Rs 2956.03 crore registered during the previous trading session.
Among the sectoral indices on BSE, the S&P BSE Basic Materials index (up 0.89%), the BSE Utilities index (up 1.59%), the BSE Capital Goods index (up 0.97%), the BSE Power index (up 1.58%) and the BSE Realty index (up 1.44%) outperformed the Sensex. The S&P BSE IT index (down 0.82%), the BSE Consumer Durables index (down 0.59%) and the BSE Teck index (down 0.66%) underperformed the Sensex.
Bank stocks edged higher after the Reserve Bank of India issued guidelines allowing trading of priority sector lending certificates (PSLCs). Among public sector banks, Andhra Bank (up 1.57%), Punjab National Bank (up 0.8%), Union Bank of India (up 0.64%), State Bank of India (up 0.55%), Oriental Bank of Commerce (up 1.05%), Syndicate Bank (up 0.61%) and Canara Bank (up 0.3%) edged higher. Bank of Baroda (down 0.17%), Indian Bank (down 0.45%) and IDBI Bank (down 0.89%) edged lower.
Among private sector banks, ICICI Bank (up 0.57%), Yes Bank (up 1.74%), HDFC Bank (up 0.3%) and Kotak Mahindra Bank (up 0.28%) edged higher. IndusInd Bank (down 0.21%) and Axis Bank (down 1.16%) edged lower.
Trading in PSLCs will allow market mechanism to drive priority sector lending by leveraging the comparative strength of different banks. The RBI said that all scheduled commercial banks (including regional rural banks), urban co-operative banks, small finance banks (when they become operational) and local area banks are eligible to participate in trading of PSLCs. The certificates will have a standard lot size of 25 lakh and multiples thereof. There will be no transfer of credit risk on the underlying and the settlement of funds will be done through the e-Kuber portal, a platform to enable trading in the certificates through the central bank's core banking solution (CBS).
Telecom stocks edged higher. Bharti Airtel (up 0.78%), Mahanagar Telephone Nigam (up 1.45%) and Tata Teleservices (Maharashtra) (up 0.91%) rose. Idea Cellular (down 0.46%) edged lower.
Reliance Communications (RCom) rose 0.4% at Rs 50.40. The stock hit a high of Rs 50.60 and a low of Rs 48.75 in intraday trade. Global credit rating agency Moody's Investors Service has cut the outlook on RCom's Ba3 corporate family rating to negative from stable, citing persistent delay in the company's sale of non-core assets. Moody's has affirmed RCom's Ba3 corporate family rating and senior secured rating. The negative outlook reflects Moody's view that ongoing delay in RCom's rollout of its deleveraging plans will keep its financial and credit profile strained over the near term.
Bajaj Auto rose 1.26% at Rs 2,404.75 after the company announced that an agreement has been reached between the company and KTM AG that will see Bajaj Auto extend its distribution network to embrace Indonesia, the biggest motorcycle market in South East Asia. The arrangement involves KTM branded Duke and RC motorcycles up to a displacement of 400 cc, which are developed and assembled by the successful Austrian-Indian joint venture. The motorcycles will be distributed through a chain of KTM dealerships, to be managed by Bajaj Auto in Indonesia. The announcement was made during market hours today, 8 April 2016.
Meanwhile, Bajaj Auto's existing business partnership with Indonesia's P.T. Jaya Selaras Sejahtera will now focus on motorcycles above 400 cc.
Index heavyweight and IT major Infosys fell 1.21% at Rs 1,167.35. The stock hit a high of Rs 1,178 and a low of Rs 1,162.05 in intraday trade. The company will announce its Q4 March 2016 results on 15 April 2016.
TCS dropped 1.71% at Rs 2,428.70. The stock hit a high of Rs 2,466.90 and a low of Rs 2,425.20 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 2.64% at Rs 122.45, with the stock extending previous trading session's gains triggered by the company announcing a surge in its order inflow for the year ended 31 March 2016 (FY 2016). The stock had risen 4.64% to settle at Rs 119.30 yesterday, 7 April 2016. On provisional basis, Bhel's order inflow jumped 41.9% at Rs 43727 crore in FY 2016 over 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.
Tata Power rose 2.57% at Rs 65.75 after the company announced that its wholly owned Singapore subsidiary Tata Power International Pte (TPIPL) has signed an agreement with KS Orka Renewables Pte for the sale of its 50% stake in OTP Geothermal Pte (OTP). The aggregate cash consideration for TPIPL's 50% stake is $30 million. OTP, a 50:50 joint venture with Origin Energy, holds a 95% interest in Indonesia's PT Sorik Marapi Geothermal Power (SMGP). The divestment of the company's interest in OTP is consistent with its strategy to constantly review its businesses and restructure, as required, to deliver long-term value to shareholders, Tata Power said. Tata Power expects to complete the sale in next three months subject to necessary approvals. The announcement was made during market hours today, 8 April 2016.
Separately, Tata Power announced after trading hours yesterday, 7 April 2016, that the Appellate Tribunal for Electricity (APTEL) has decided against providing compensatory tariff to the company's 100% subsidiary Coastal Gujarat Power (CGPL). CGPL operates the 4,000 MW Ultra Mega Power Project (UMPP) at Mundra, Gujarat. APTEL, while pronouncing the order, also remarked that Central Electricity Regulatory Commission (CERC) has no power to grant compensatory tariffs.
However, APTEL has thrown back the case to CERC. It has asked the commission to decide the tariff as per power purchase agreements (PPAs) and under 'force majeure' or 'change in law'. CERC has also been directed to conclude the exercise as expeditiously as possible and within a period of 3 months from 7 April 2016.
In an order dated February 2014, CERC decided a compensatory tariff to be paid by the states procuring power from Tata Power and Adani Power's power generation units at Mundra with effect from the commissioning date of the units. The compensatory tariff was over and above the tariff agreed in the power purchase agreement.
NTPC rose 3.95% at Rs 131.55. The stock hit a high of Rs 132.40 and a low of Rs 126.10 in intraday trade.
Hindustan Unilever (HUL) dropped 1.23% at Rs 850. The stock hit a high of Rs 864.60 and a low of Rs 846.20 in intraday trade. HUL announced after market hours yesterday, 7 April 2016, that it has completed the acquisition of Masons Group flagship hair oil brand Indulekha. It may be recalled that in December 2015, HUL had announced signing an agreement with Masons Group for acquisition of its flagship Indulekha brand.
The Sensex edged lower for the second day in a row. The Sensex has fallen 226.79 points or 0.91% in two trading sessions from its close of 24,900.63 on 6 April 2016. The Sensex has fallen 668.02 points or 2.63% in this month so far (till 8 April 2016). The Sensex has fallen 1,443.70 points or 5.52% in calendar year 2016 so far (till 8 April 2016). From a 52-week low of 22,494.61 hit on 29 February 2016, the Sensex has risen 2,179.23 points or 9.68%. The Sensex is off 4,420.77 points or 15.19% from a 52-week high of 29,094.61 hit on 15 April 2015. The Sensex is off 5,350.90 points or 17.82% from a record high of 30,024.74 hit on 4 March 2015.
Meanwhile, as per the monthly data released by Association of Mutual Funds In India (AMFI), investors withdrew a net Rs 1370 crore from equity mutual funds in March 2016. This compares with a net inflow of Rs 2522 crore into equity mutual funds in February 2016. There was a net inflow of Rs 78 crore in balanced funds in March 2016, which was lower than inflow of Rs 941 crore in February 2016. Balanced funds invest the money in a combination of equity and debt, with majority of the investment going into equity. The funds' investments range from 65% to 80% in equity and the rest in debt.
Meanwhile, global credit rating agency Moody's Investors Service said in a recent report that the rapid rise in foreign direct investment (FDI) inflows in India mitigates the risks related to a potential widening of the nation's current account deficit from weaker remittances from Gulf countries and is credit positive for the country's sovereign rating. Moody's expects FDI inflows to climb further in response to government measures, such as efforts to liberalize foreign investment limits in several sectors and the 'Make in India' initiative. These trends are credit positive, as they lower India's susceptibility to external shocks at a time when capital flows to emerging markets are volatile and weak economic conditions globally and, in particular, in the Gulf countries, may dampen remittances, according to a statement issued by the rating agency yesterday, 7 April 2016 after the release of the report.
The report says that a lower energy import bill and policy measures to contain gold imports are contributing to keeping the trade deficit at moderate levels. Going forward, the imposition of an excise tax on gold in the Union Budget 2016-17 is likely to dampen overall gold imports. India's current account deficit is now more than covered by its FDI inflows. The rise in FDI points to stronger investor interest in India on the back of robust economic growth, according to the report. The development of industrial corridors, investment and manufacturing zones, and 'smart cities' will further bolster investment inflows. Moody's expects acceleration in FDI inflows into the manufacturing sector as the government seeks to boost the manufacturing sector's share of GDP to 25% by 2022.
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