Key indices end on a flat note
Key benchmark indices registered marginal to small losses in the week ended Friday, 1 April 2016. After sliding in first half of the week on fears of an early interest-rate increase in the United States, Key indices staged a recovery after US Federal Reserve chairwoman Janet Yellen reiterated a need to proceed cautiously in lifting interest rates. Key indices edged lower in three out of five trading sessions during the week.
In the week ended Friday, 1 April 2016, the 30-share S&P BSE Sensex fell 67.92 points or 0.27% to settle at 25,269.64, its lowest closing level since 29 March 2016. The losses for the Nifty 50 index were lower in percentage terms than those for the Sensex. The Nifty slipped 3.45 points or 0.04% to settle at 7,713.05, its lowest closing level since 29 March 2016.
The BSE Mid-Cap index advanced 117.85 points or 1.12% to settle at 10,642.32. The BSE Small-Cap index advanced 138.04 points or 1.31% to settle at 10,639.84. Both these indices outperformed the Sensex.
Trading for the week started on a weak note. Fears of an early interest-rate increase in the United States pulled Indian stocks lower on Monday, 28 March 2016 with the barometer index, the S&P BSE Sensex, falling below the psychologically important 25,000 mark. The Sensex lost 371.16 points or 1.46% to settle at 24,966.40, its lowest closing level since 18 March 2016.
Losses for stocks of pharma and IT companies and index heavyweight HDFC outweighed gains for stocks of telecom firms, private sector banks and index heavyweight Reliance Industries (RIL), with the two key benchmark indices registering small losses on Tuesday, 29 March 2016. The Sensex fell 65.94 points or 0.26% to settle at 24,900.46, its lowest closing level since 17 March 2016.
Metal, banking and capital goods stocks led a rally on the domestic bourses on Wednesday, 30 March 2016 triggered by expectations that US interest rates will not be raised quickly, with the barometer index, the S&P BSE Sensex, surpassing the psychologically important 25,000 mark. The Sensex rose 438.12 points or 1.76% to settle at 25,338.58, its highest closing level since 6 January 2016.
Amid a divergent trend among various index constituents, the two key benchmark indices ended near the flat line on Thursday, 31 March 2016 on the last trading day of the financial year. The Sensex rose 3.28 points or 0.01% to settle at 25,341.86, its highest closing level since 6 January 2016.
Losses in IT, telecom stocks and index heavyweight Reliance Industries (RIL) outweighed gains in stocks of public sector banks and index heavyweights ITC and HDFC, with the two key benchmark indices registering small losses on Friday, 1 April 2016. The Sensex fell 72.22 points or 0.28% to settle at 25,269.64, its lowest closing level since 29 March 2016.
Among the 30-share Sensex pack, 16 stocks declined and the rest of them rose in the week ended Friday, 1 April 2016.
Coal India (down 3.29%), ONGC (down 2.7%) and GAIL (India) (down 2.37%) edged lower from the Sensex pack.
Hero MotoCorp (up 2.95%), Bajaj Auto (up 2.66%) and Asian Paints (up 2.45%) edged higher from the Sensex pack.
Index heavyweight and cigarette major ITC rose 3.58% to Rs 336. It was the top gainer from the Sensex pack during the week.
Telecom major Bharti Airtel lost 6.5% to Rs 335.25. It was the top loser from the Sensex pack during the week. .
Index heavyweight and housing finance major HDFC lost 4.43% to Rs 1,111.55. The company before market hours on Friday, 1 April 2016, announced that it has completed the sale of a 9% stake in HDFC Standard Life Insurance Company (HDFC Life), a subsidiary of the company, to Standard Life (Mauritius Holdings) 2006 Limited.
Bank stocks edged higher after the Reserve Bank of India (RBI) after market hours on Tuesday, 29 March 2016, clarified some of the provisions relating to the Marginal Cost of Funds based Lending Rate (MCLR) system, which came into effect from 1 April 2016. The S&P BSE Bankex rose 1.84% during the week.
HDFC Bank rose 1.53%.
Axis Bank gained 2.74%. The bank announced lending rates based on marginal cost of funds on Friday, 1 April 2016. Axis Bank's Marginal Cost of Funds based Lending Rate (MCLR) for overnight loans will be 9.10%, for one month will be 9.20% and for three months will be 9.40%. The MCLR on 6-month loans will be 9.45% and for one-year loans the rate would be 9.50%, the bank said. The MCLR on two-year loans will be 9.60% and for three-year loans the rate would be 9.65%, the bank said.
ICICI Bank rose 1.84%. The bank announced lending rates based on marginal cost of funds after market hours on Thursday, 31 March 2016. ICICI's Marginal Cost of Funds based Lending Rate (MCLR) for overnight loans will be 9%, for one month will be 9% and for three months will be 9.1%. The MCLR on 6-month loans will be 9.15% and for one-year loans the rate would be 9.2%, the bank said.
In a separate announcement, ICICI Bank said that it sold 9% shareholding in ICICI Lombard General Insurance Company, a subsidiary of the bank, to its joint venture partner, Fairfax Financial Holdings. Following the receipt of the requisite approvals, the bank completed the transfer of the shares on 31 March, 2016. The transfer of 2% stake in ICICI Prudential Life Insurance Company to Compassvale Investments, an indirectly wholly-owned subsidiary of the Singapore-based investment Company, Temasek, was also completed following receipt of requisite approvals, it said.
State Bank of India slipped 0.56% to Rs 195.70. According to the announcement on the bank's website, State Bank of India (SBI)'s Marginal Cost of Funds based Lending Rate (MCLR) for overnight loans will be 8.95%, for one month will be 9.05% and for three months will be 9.10%. The MCLR on 6-month loans will be 9.15% and for one-year loans the rate would be 9.2%, the bank said. MCLR for two-year loans would be at 9.3% and loans with three-year maturity would carry an MCLR of 9.35%, the bank said. As per RBI's new norms, which take effect from 1 April 2016, interest rate on advances will be based on marginal cost of funds.
RBI clarified that fixed-rate loans of up to three years' tenor will be priced with reference to MCLR with effect from 1 April 2016. Fixed rate loans of tenor above three years will continue to be exempted from MCLR system. As regards the effective date for applying MCLR on floating rate loans, the RBI said that MCLR prevailing on the date of first disbursement, whether partial or full, will be applicable on the floating rate loan and future reset dates determined accordingly.
For computing the marginal cost of funds, commercial banks will have the option to reckon the outstanding balances of deposits and other borrowings as on any day, not more than seven calendar days, prior to the date from which the MCLR becomes effective. The chosen time lag shall be maintained consistently for a period not less one year.
The tenor of the funds in the single largest maturity bucket, provided it is more than 30% of the entire funds, will be reckoned for determining the MCLR. In cases where a bank does not have a single time bucket with more than 30% share of the funds reckoned for MCLR, the weighted average tenor of two or more maturity buckets that together account for more than 30% will be reckoned for determining the MCLR.
Dr Reddy's Laboratories (DRL) fell 2.21%. The company announced during trading hours on Thursday, 31 March 2016, that it has entered into a licensing agreement with Eisai Co., Japan by which Dr. Reddy's will be granted exclusive worldwide development and commercialization rights (excluding Japan and Asia) for Eisai's investigational anticancer agent E7777. Eisai will be responsible for the development and marketing of E7777 in Japan and Asia, while DRL holds the option for rights to develop and market the agent in India. In exchange of these rights, Eisai will receive milestone payments in line with obtaining marketing approval and the achievement of agreed upon sales targets. Through this agreement, the two companies aim to accelerate development and maximize the value of E7777.
Lupin dropped 3.88%. The company announced during trading hours on Thursday, 31 March 2016, that its US subsidiary, Lupin Pharmaceuticals Inc. has launched its Donepezil Hydrochloride Tablets, 23 mg in the United States. Lupin's Donepezil Hydrochloride Tablets, 23 mg are the AB rated generic equivalent of Eisai Inc's Aricept Tablets, 23mg. It is indicated for the treatment of dementia of the Alzheimer's type. Aricept had US sales of $47.1 million (IMS MAT December 2015).
Sun Pharmaceutical Industries lost 3.6%. The company announced that its wholly-owned subsidiary will acquire the portfolio consisting of 14 established prescription brands from Novartis AG and Novartis Pharma AG (together Novartis) in Japan for a cash consideration of $293 million. These brands have combined annualized revenues of approximately $160 million and address medical conditions across several therapeutic areas. Under the terms of the agreements, Novartis will continue to distribute these brands, for a certain period, pending transfer of all marketing authorizations to Sun Pharma's subsidiary. The acquired brands will be marketed by a reliable and established local marketing partner under the Sun Pharma label. The local marketing partner will also be responsible for distribution of the brands. As per the December 2015 IMS data, the size of the Japanese pharmaceutical market was estimated at $73 billion, accounting for over 7% of the $1 trillion global pharmaceutical market.
Mahindra & Mahindra lost 4.37%. The Supreme Court on Thursday, 31 March 2016, extended a ban on the registration of diesel vehicles above 2,000cc in the capital city and NCR until the next hearing of the case. Reports suggested that the Supreme Court also indicated that it may impose environment cess on luxury diesel vehicles if the registration ban is lifted. It may be recalled that the Supreme Court had earlier issued a ban on registration of any new diesel cars in the capital city and NCR region till 31 March 2016 to curb dangerously high levels of pollution.
Separately, M&M announced during market hours on Friday, 1 April 2016 that its total auto sales rose 17% to 52,718 units in March 2016 over March 2015. Total domestic sales rose 19% to 48,967 units in March 2016 over March 2015. Exports dropped 7% to 3,751 units in March 2016 over March 2015.
Bharat Heavy Electricals (Bhel) rose 0.3%. The company announced successful commissioning of a 250 megawatts (MW) coal-based thermal power plant (TPP) in Bihar. The 250 MW unit has been commissioned at the upcoming greenfield 1,000 MW Nabinagar Thermal Power Project which is being set up by Bhartiya Rail Bijlee Company (BRBCL), a joint venture of NTPC and the Indian Railways, Bhel said.
Shares of state-run gas transmission and distribution firm GAIL (India) fell 2.37%. The company announced that it has started drilling the first exploratory well as operator in its NELP-IX block in Cambay Basin. GAIL (India) said that the process, technically called spudding started on 27 March 2016 in the well situated in Dugari village in Tarapur Tehsil of Anand district of Gujarat. GAIL (India) is the lead operator of the block with 25% participating interest. Other partners in this block are Bharat Petro Resources, Engineers India, Monnet Ispat Energy and Bharat Forge Infrastructure.
The consortium will drill eight exploratory wells in the initial exploration phase as per minimum work commitment of production sharing contract (PSC). While this phase will continue till March 2017, acquisition, processing and interpretation (API) of 2D and 3D seismic data have already been completed, GAIL (India) said.
NTPC rose 2.04%. The company announced after market hours on Monday, 28 March 2016, that unit-3 of 660 megawatts (MW) of Mouda Super Thermal Power Station of NTPC has been commissioned on 28 March 2016. With this, the total installed capacity of Mouda Super Thermal Power Station has become 1,660 MW. The total installed capacity of NTPC on standalone basis has become 40,012 MW and that of NTPC group has become 46,653 MW.
Tata Steel fell 1.2%. The company announced that it has decided to explore all options for portfolio restructuring including the potential divestment of its UK subsidiary Tata Steel UK, in whole or in parts. Tata Steel said that its board of directors after reviewing the recent performance of the European business of the company noted with deep concern the deteriorating financial performance of the UK subsidiary in the last twelve months. The management has advised the board of its European holding company Tata Steel Europe to explore all options for portfolio restructuring including the potential divestment of Tata Steel UK, in whole or in parts. Given the severity of the funding requirement in the foreseeable future, the Tata Steel Europe board will be advised to evaluate and implement the most feasible option in a time bound manner, Tata Steel said in a statement.
Economic data released by the government after trading hours on Thursday, 31 March 2016, showed that the output of eight core industries comprising nearly 38% of the weight of items included in the Index of Industrial Production (IIP) surged 5.7% in February 2016, the highest rate of expansion in the past 15 months. The cumulative growth during the period April 2015 to February 2016 stood at 2.3%.
On the global front, the US Federal Reserve on Tuesday, 29 March 2016, said that it would move slowly to raise interest rates in the US. Federal Reserve chairwoman Janet Yellen in a speech in New York reiterated a need to proceed cautiously in lifting interest rates in the backdrop of weaker-than-expected growth overseas and a cloudy US inflation outlook. On Friday, 25 March 2016, data showed that the US economy grew at a 1.4% seasonally adjusted annual rate in the fourth quarter, higher than a previous estimate for 1% growth.
In the week ended Friday, 1 April 2016, the 30-share S&P BSE Sensex fell 67.92 points or 0.27% to settle at 25,269.64, its lowest closing level since 29 March 2016. The losses for the Nifty 50 index were lower in percentage terms than those for the Sensex. The Nifty slipped 3.45 points or 0.04% to settle at 7,713.05, its lowest closing level since 29 March 2016.
The BSE Mid-Cap index advanced 117.85 points or 1.12% to settle at 10,642.32. The BSE Small-Cap index advanced 138.04 points or 1.31% to settle at 10,639.84. Both these indices outperformed the Sensex.
Trading for the week started on a weak note. Fears of an early interest-rate increase in the United States pulled Indian stocks lower on Monday, 28 March 2016 with the barometer index, the S&P BSE Sensex, falling below the psychologically important 25,000 mark. The Sensex lost 371.16 points or 1.46% to settle at 24,966.40, its lowest closing level since 18 March 2016.
Losses for stocks of pharma and IT companies and index heavyweight HDFC outweighed gains for stocks of telecom firms, private sector banks and index heavyweight Reliance Industries (RIL), with the two key benchmark indices registering small losses on Tuesday, 29 March 2016. The Sensex fell 65.94 points or 0.26% to settle at 24,900.46, its lowest closing level since 17 March 2016.
Metal, banking and capital goods stocks led a rally on the domestic bourses on Wednesday, 30 March 2016 triggered by expectations that US interest rates will not be raised quickly, with the barometer index, the S&P BSE Sensex, surpassing the psychologically important 25,000 mark. The Sensex rose 438.12 points or 1.76% to settle at 25,338.58, its highest closing level since 6 January 2016.
Amid a divergent trend among various index constituents, the two key benchmark indices ended near the flat line on Thursday, 31 March 2016 on the last trading day of the financial year. The Sensex rose 3.28 points or 0.01% to settle at 25,341.86, its highest closing level since 6 January 2016.
Losses in IT, telecom stocks and index heavyweight Reliance Industries (RIL) outweighed gains in stocks of public sector banks and index heavyweights ITC and HDFC, with the two key benchmark indices registering small losses on Friday, 1 April 2016. The Sensex fell 72.22 points or 0.28% to settle at 25,269.64, its lowest closing level since 29 March 2016.
Among the 30-share Sensex pack, 16 stocks declined and the rest of them rose in the week ended Friday, 1 April 2016.
Coal India (down 3.29%), ONGC (down 2.7%) and GAIL (India) (down 2.37%) edged lower from the Sensex pack.
Hero MotoCorp (up 2.95%), Bajaj Auto (up 2.66%) and Asian Paints (up 2.45%) edged higher from the Sensex pack.
Index heavyweight and cigarette major ITC rose 3.58% to Rs 336. It was the top gainer from the Sensex pack during the week.
Telecom major Bharti Airtel lost 6.5% to Rs 335.25. It was the top loser from the Sensex pack during the week. .
Index heavyweight and housing finance major HDFC lost 4.43% to Rs 1,111.55. The company before market hours on Friday, 1 April 2016, announced that it has completed the sale of a 9% stake in HDFC Standard Life Insurance Company (HDFC Life), a subsidiary of the company, to Standard Life (Mauritius Holdings) 2006 Limited.
Bank stocks edged higher after the Reserve Bank of India (RBI) after market hours on Tuesday, 29 March 2016, clarified some of the provisions relating to the Marginal Cost of Funds based Lending Rate (MCLR) system, which came into effect from 1 April 2016. The S&P BSE Bankex rose 1.84% during the week.
HDFC Bank rose 1.53%.
Axis Bank gained 2.74%. The bank announced lending rates based on marginal cost of funds on Friday, 1 April 2016. Axis Bank's Marginal Cost of Funds based Lending Rate (MCLR) for overnight loans will be 9.10%, for one month will be 9.20% and for three months will be 9.40%. The MCLR on 6-month loans will be 9.45% and for one-year loans the rate would be 9.50%, the bank said. The MCLR on two-year loans will be 9.60% and for three-year loans the rate would be 9.65%, the bank said.
ICICI Bank rose 1.84%. The bank announced lending rates based on marginal cost of funds after market hours on Thursday, 31 March 2016. ICICI's Marginal Cost of Funds based Lending Rate (MCLR) for overnight loans will be 9%, for one month will be 9% and for three months will be 9.1%. The MCLR on 6-month loans will be 9.15% and for one-year loans the rate would be 9.2%, the bank said.
In a separate announcement, ICICI Bank said that it sold 9% shareholding in ICICI Lombard General Insurance Company, a subsidiary of the bank, to its joint venture partner, Fairfax Financial Holdings. Following the receipt of the requisite approvals, the bank completed the transfer of the shares on 31 March, 2016. The transfer of 2% stake in ICICI Prudential Life Insurance Company to Compassvale Investments, an indirectly wholly-owned subsidiary of the Singapore-based investment Company, Temasek, was also completed following receipt of requisite approvals, it said.
State Bank of India slipped 0.56% to Rs 195.70. According to the announcement on the bank's website, State Bank of India (SBI)'s Marginal Cost of Funds based Lending Rate (MCLR) for overnight loans will be 8.95%, for one month will be 9.05% and for three months will be 9.10%. The MCLR on 6-month loans will be 9.15% and for one-year loans the rate would be 9.2%, the bank said. MCLR for two-year loans would be at 9.3% and loans with three-year maturity would carry an MCLR of 9.35%, the bank said. As per RBI's new norms, which take effect from 1 April 2016, interest rate on advances will be based on marginal cost of funds.
RBI clarified that fixed-rate loans of up to three years' tenor will be priced with reference to MCLR with effect from 1 April 2016. Fixed rate loans of tenor above three years will continue to be exempted from MCLR system. As regards the effective date for applying MCLR on floating rate loans, the RBI said that MCLR prevailing on the date of first disbursement, whether partial or full, will be applicable on the floating rate loan and future reset dates determined accordingly.
For computing the marginal cost of funds, commercial banks will have the option to reckon the outstanding balances of deposits and other borrowings as on any day, not more than seven calendar days, prior to the date from which the MCLR becomes effective. The chosen time lag shall be maintained consistently for a period not less one year.
The tenor of the funds in the single largest maturity bucket, provided it is more than 30% of the entire funds, will be reckoned for determining the MCLR. In cases where a bank does not have a single time bucket with more than 30% share of the funds reckoned for MCLR, the weighted average tenor of two or more maturity buckets that together account for more than 30% will be reckoned for determining the MCLR.
Dr Reddy's Laboratories (DRL) fell 2.21%. The company announced during trading hours on Thursday, 31 March 2016, that it has entered into a licensing agreement with Eisai Co., Japan by which Dr. Reddy's will be granted exclusive worldwide development and commercialization rights (excluding Japan and Asia) for Eisai's investigational anticancer agent E7777. Eisai will be responsible for the development and marketing of E7777 in Japan and Asia, while DRL holds the option for rights to develop and market the agent in India. In exchange of these rights, Eisai will receive milestone payments in line with obtaining marketing approval and the achievement of agreed upon sales targets. Through this agreement, the two companies aim to accelerate development and maximize the value of E7777.
Lupin dropped 3.88%. The company announced during trading hours on Thursday, 31 March 2016, that its US subsidiary, Lupin Pharmaceuticals Inc. has launched its Donepezil Hydrochloride Tablets, 23 mg in the United States. Lupin's Donepezil Hydrochloride Tablets, 23 mg are the AB rated generic equivalent of Eisai Inc's Aricept Tablets, 23mg. It is indicated for the treatment of dementia of the Alzheimer's type. Aricept had US sales of $47.1 million (IMS MAT December 2015).
Sun Pharmaceutical Industries lost 3.6%. The company announced that its wholly-owned subsidiary will acquire the portfolio consisting of 14 established prescription brands from Novartis AG and Novartis Pharma AG (together Novartis) in Japan for a cash consideration of $293 million. These brands have combined annualized revenues of approximately $160 million and address medical conditions across several therapeutic areas. Under the terms of the agreements, Novartis will continue to distribute these brands, for a certain period, pending transfer of all marketing authorizations to Sun Pharma's subsidiary. The acquired brands will be marketed by a reliable and established local marketing partner under the Sun Pharma label. The local marketing partner will also be responsible for distribution of the brands. As per the December 2015 IMS data, the size of the Japanese pharmaceutical market was estimated at $73 billion, accounting for over 7% of the $1 trillion global pharmaceutical market.
Mahindra & Mahindra lost 4.37%. The Supreme Court on Thursday, 31 March 2016, extended a ban on the registration of diesel vehicles above 2,000cc in the capital city and NCR until the next hearing of the case. Reports suggested that the Supreme Court also indicated that it may impose environment cess on luxury diesel vehicles if the registration ban is lifted. It may be recalled that the Supreme Court had earlier issued a ban on registration of any new diesel cars in the capital city and NCR region till 31 March 2016 to curb dangerously high levels of pollution.
Separately, M&M announced during market hours on Friday, 1 April 2016 that its total auto sales rose 17% to 52,718 units in March 2016 over March 2015. Total domestic sales rose 19% to 48,967 units in March 2016 over March 2015. Exports dropped 7% to 3,751 units in March 2016 over March 2015.
Bharat Heavy Electricals (Bhel) rose 0.3%. The company announced successful commissioning of a 250 megawatts (MW) coal-based thermal power plant (TPP) in Bihar. The 250 MW unit has been commissioned at the upcoming greenfield 1,000 MW Nabinagar Thermal Power Project which is being set up by Bhartiya Rail Bijlee Company (BRBCL), a joint venture of NTPC and the Indian Railways, Bhel said.
Shares of state-run gas transmission and distribution firm GAIL (India) fell 2.37%. The company announced that it has started drilling the first exploratory well as operator in its NELP-IX block in Cambay Basin. GAIL (India) said that the process, technically called spudding started on 27 March 2016 in the well situated in Dugari village in Tarapur Tehsil of Anand district of Gujarat. GAIL (India) is the lead operator of the block with 25% participating interest. Other partners in this block are Bharat Petro Resources, Engineers India, Monnet Ispat Energy and Bharat Forge Infrastructure.
The consortium will drill eight exploratory wells in the initial exploration phase as per minimum work commitment of production sharing contract (PSC). While this phase will continue till March 2017, acquisition, processing and interpretation (API) of 2D and 3D seismic data have already been completed, GAIL (India) said.
NTPC rose 2.04%. The company announced after market hours on Monday, 28 March 2016, that unit-3 of 660 megawatts (MW) of Mouda Super Thermal Power Station of NTPC has been commissioned on 28 March 2016. With this, the total installed capacity of Mouda Super Thermal Power Station has become 1,660 MW. The total installed capacity of NTPC on standalone basis has become 40,012 MW and that of NTPC group has become 46,653 MW.
Tata Steel fell 1.2%. The company announced that it has decided to explore all options for portfolio restructuring including the potential divestment of its UK subsidiary Tata Steel UK, in whole or in parts. Tata Steel said that its board of directors after reviewing the recent performance of the European business of the company noted with deep concern the deteriorating financial performance of the UK subsidiary in the last twelve months. The management has advised the board of its European holding company Tata Steel Europe to explore all options for portfolio restructuring including the potential divestment of Tata Steel UK, in whole or in parts. Given the severity of the funding requirement in the foreseeable future, the Tata Steel Europe board will be advised to evaluate and implement the most feasible option in a time bound manner, Tata Steel said in a statement.
Economic data released by the government after trading hours on Thursday, 31 March 2016, showed that the output of eight core industries comprising nearly 38% of the weight of items included in the Index of Industrial Production (IIP) surged 5.7% in February 2016, the highest rate of expansion in the past 15 months. The cumulative growth during the period April 2015 to February 2016 stood at 2.3%.
On the global front, the US Federal Reserve on Tuesday, 29 March 2016, said that it would move slowly to raise interest rates in the US. Federal Reserve chairwoman Janet Yellen in a speech in New York reiterated a need to proceed cautiously in lifting interest rates in the backdrop of weaker-than-expected growth overseas and a cloudy US inflation outlook. On Friday, 25 March 2016, data showed that the US economy grew at a 1.4% seasonally adjusted annual rate in the fourth quarter, higher than a previous estimate for 1% growth.
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