Sensex, Nifty attain highest closing level in more than two weeks
The passage of the Insolvency and Bankruptcy Code, 2016 in Rajya Sabha and gains in European stocks triggered upmove on the domestic bourses. The barometer index, the S&P BSE Sensex, gained 193.20 points or 0.75% to settle at 25,790.22. The gains for the Nifty 50 index were lower than Sensex's gains in percentage terms. The Nifty rose 51.55 points or 0.66% to settle at 7,900.40. The Sensex and the Nifty, both hit their highest closing level in more than two weeks.
Stocks of public sector banks edged higher after the Rajya Sabha passed the Insolvency and Bankruptcy Code, 2016 yesterday, 11 May 2016. Shares of oil exploration and production (E&P) firms edged higher after sharp surge in crude oil prices. Pharma major Dr Reddy's Laboratories (DRL) rose after announcing Q4 March 2016 results. Hindalco Industries extended previous trading session's gains triggered by its US subsidiary Novelis Inc reporting strong Q4 results. Asian Paints extended previous trading session's gains triggered by the company declaring good Q4 results.
In overseas stock markets, oil and gas stocks led gains in European equities as crude oil prices rose after Paris based International Energy Agency said in its monthly report on the oil sector that global oil stocks will experience a sharp reduction in the second half of the current calendar year on the back of strong demand and falling supply by some major producers. Meanwhile, UK's central bank Bank of England is widely expected to keep its main interest rate on hold at a record low of 0.5% after the conclusion of its monetary policy meeting today, 12 May 2016.
Earlier during the global day, Asian markets ended on a mixed note. US stocks dropped yesterday, 11 May 2016, as disappointing earnings from Walt Disney Co. and a slump in stock prices of retailers led to selling.
The Sensex rose 193.20 points or 0.75% to settle at 25,790.22, its highest closing level since 27 April 2016. The index rose 230.01 points or 0.89% at the day's high of 25,827.03. The index gained 23.25 points or 0.09% at the day's low of 25,620.27.
The Nifty rose 51.55 points or 0.66% to settle at 7,900.40, its highest closing level since 27 April 2016. The index gained 67.20 points or 0.85% at the day's high of 7,916.05. The index rose 0.80 points or 0.01% at the day's low of 7,849.65.
The BSE Mid-Cap index rose 0.69%, underperforming the Sensex. The BSE Small-Cap index rose 0.93%, outperforming the Sensex.
The market breadth indicating the overall health of the market was strong. On BSE, 1,569 shares rose and 1,001 shares declined. A total of 183 shares were unchanged.
Total turnover on BSE amounted to Rs 2640 crore, higher than turnover of Rs 2574.47 crore registered during the previous trading session.
Among the sectoral indices on BSE, the S&P BSE Energy index (up 1.07%), the BSE IT index (up 1.12%), the BSE Bank index (up 0.95%) and the BSE Realty index (up 1.12%) outperformed the Sensex. The BSE Telecom index (up 0.7%), the BSE Metal index (up 0.69%) and the BSE Power index (up 0.64%) underperformed the Sensex.
Stocks of public sector banks edged higher after the Rajya Sabha passed the Insolvency and Bankruptcy Code, 2016 yesterday, 11 May 2016. State Bank of India (SBI) (up 1.87%), Union Bank of India (up 1.2%), Canara Bank (up 0.78%), Bank of Baroda (up 0.54%) and Bank of India (up 0.46%) edged higher. Punjab National Bank was flat at Rs 79.50.
The news of Rajya Sabha's clearance for the bankruptcy bill hit the market after trading hours yesterday, 11 May 2016. The Lok Sabha passed the bankruptcy bill on 5 May 2016. Once the bill becomes a law when it receives President of India's assent, it will help creditors recover bad debt faster. The law aims to consolidate the laws relating to insolvency of companies and limited liability entities (including limited liability partnerships and other entities with limited liability), unlimited liability partnerships and individuals, presently contained in a number of legislations, into a single legislation which in turn will provide for a greater clarity in law and facilitate the application of consistent and coherent provisions to different stakeholders affected by business failure or inability to pay debt. The essential idea of the new law is that when a firm defaults on its debt and control shifts from the shareholders/promoters to a Committee of Creditors, the creditors will get a time span of 180 days to evaluate proposals from various players about resuscitating the company or taking it into liquidation.
When decisions are taken in a time-bound manner, there is a greater chance that the firm can be saved as a going concern and the productive resources of the economy (the labour and the capital) can be put to the best use. This is in complete departure with the experience under the Sick Industrial Companies (Special Provisions) Act, 1985 regime where there were delays leading to destruction of the value of the firm.
Shares of private sector banks ended on a mixed note. ICICI Bank (up 3.46%) and IndusInd Bank (up 0.83%) edged higher. Axis Bank (down 1.19%) and Yes Bank (down 0.15%) declined.
Index heavyweight HDFC Bank rose 1.05% at Rs 1,149.90. The stock hit a high of Rs 1,151 and a low of Rs 1,133 in intraday trade.
Kotak Mahindra Bank declined 0.62% to Rs 726.60. The stock was volatile. The stock hit high of Rs 744 and low of Rs 721.50 in intraday trade. The stock had risen 1.34% to settle at Rs 731.15 yesterday, 11 May 2016 after the private sector bank announced strong Q4 results. The bank's net profit rose 31.99% to Rs 695.78 crore on 52.26% rise in total income to Rs 4947.32 crore in Q4 March 2016 over Q4 March 2015. The results are not comparable due to merger of ING Vysya Bank with Kotak Mahindra Bank, which took effect from 1 April 2015.
Index heavyweight and housing finance major HDFC declined 0.69% at Rs 1,195.35. The company announced the issue of senior, secured, redeemable non-convertible debentures amounting to Rs 1035 crore on private placement basis. The announcement was made during market hours today, 12 May 2016. The debentures have issue price of Rs 1 crore and carry a coupon rate of 8.35% per annum with tenor of 10 years. The issue opens and closes on the same day on 13 May 2016. The object of the issue is to augment the long term resources of the company. The proceeds of the issue would be utilised for financing/refinancing the housing finance business of the company.
IT stocks edged higher on renewed buying. TCS (up 1.96%), Persistent Systems (up 1.79%), Tech Mahindra (up 1.62%), Wipro (up 0.92%) and HCL Technologies (up 1.02%) rose. Oracle Financial Services Software was off 0.04%.
Index heavyweight Infosys was up 0.76% at Rs 1,210.20. The stock hit a high of Rs 1,212.50 and a low of Rs 1,197.80 in intraday trade.
Pharma stocks witnessed a mixed trend. Lupin (up 1.28%), Strides Shasun (up 1.3%), Sun Pharmaceutical Industries (up 0.95%), Wockhardt (up 0.38%), Glenmark Pharmaceuticals (up 0.12%) and Cadila Healthcare (up 0.18%) rose. Aurobindo Pharma (down 1.94%), GlaxoSmithkline Pharmaceuticals (down 1.24%), Alkem Laboratories (down 1.03%), Ipca Laboratories (down 0.25%), Divi's Laboratories (down 0.31%) and Cipla (down 0.21%) declined.
Pharma major Dr Reddy's Laboratories (DRL) rose 3.65% at Rs 2,973.85 after announcing Q4 March 2016 results. The company's consolidated net profit dropped 85.62% to Rs 74.60 crore on 2.47% decline in total income to Rs 3786.90 crore in Q4 March 2016 over Q4 March 2015. The results are as per International Financial Reporting Standards (IFRS). The company's Co-Chairman and CEO G V Prasad said that the sharp fall in profitability in Q4 March 2016 was due to provision made as a matter of abundant precaution to write down outstanding receivables from the company's subsidiary in Venezuela. DRL made provision of Rs 430.90 crore in Q4 March 2016 on its outstanding receivables from Venezuela. Similar charge on account of translation of net monetary assets was Rs 84.30 crore in Q4 March 2015.
Shares of oil exploration and production (E&P) firms edged higher after sharp surge in crude oil prices. ONGC (up 0.51%) rose. Oil India (down 0.26%) declined.
Shares of public sector oil marketing companies (PSU OMCs) also moved higher. Indian Oil Corporation (up 1.29%) and BPCL (up 0.37%) edged higher. HPCL (down 0.8%) declined.
Crude oil prices edged higher after Paris-based International Energy Agency said in its monthly report on the oil sector that global oil stocks will experience a sharp reduction in the second half of the current calendar year on the back of strong demand and falling supply by some major producers. Brent for July settlement was currently up 39 cents at $47.99 a barrel. The contract had surged $2.08 a barrel or 4.56% to settle at $47.60 a barrel during the previous trading session after the US government said crude inventories fell for the first time since March, adding to concerns over supply outages in Canada and Nigeria.
Index heavyweight Reliance Industries was up 1.66% at Rs 991.05. The stock hit a high of Rs 992.45 and a low of Rs 975.70 in intraday trade.
Cairn India rose 1% at Rs 136.80. Cairn India Holdings (CIHL), an overseas subsidiary of Cairn India, has decided to extend maturity of the loan of $1.25 billion, which was given for a term of two years in May 2014, to THL Zinc (TZL), an overseas subsidiary of Vedanta Limited, for a further period of two years. The extension is on arm's length at a revised rate of interest of LIBOR plus 450 basis points (bps) in the first year and at LIBOR plus 475 bps in the second year (compared to the existing rate of LIBOR plus 300 bps). The loan will continue to be secured by a guarantee from Vedanta Resources Plc. The loan will provide higher yield to CIHL compared to the return it is earning from its existing investments. TZL is the holding company of the Vedanta Group's international zinc business. The announcement was made during market hours today, 12 May 2016.
Shares of Vedanta Limited were up 2.9% at Rs 102.75.
Stocks of Tata group companies rose almost across the board. Trent (up 1.62%), Tata Motors (up 1.87%), Tata Chemicals (up 1.12%), Tata Global Beverages (up 1.41%), Titan Company (up 1.15%), Tata Communications (up 1%) and Tata Steel (up 0.55%) rose.
Hindalco Industries rose 1.97% to Rs 93.40, with the stock extending previous trading session's gains triggered by its US subsidiary Novelis Inc reporting strong Q4 results. The stock had risen 1.95% to settle at Rs 91.60 yesterday, 11 May 2016.
Novelis' net profit excluding tax-effected special items rose 35% to $50 million on 14% fall in revenue to $2.4 billion in Q4 March 2016 over Q4 March 2015. The result was announced after trading hours in India on 10 May 2016.
Asian Paints rose 2.13% to Rs 926.75, with the stock extending previous trading session's gains triggered by the company declaring good Q4 results at the fag end of the session yesterday, 11 May 2016. The stock hit a high of Rs 931.50 in intraday trade, which is record high for the counter. The stock hit a low of Rs 915 in intraday trade. Asian Paints' consolidated net profit rose 19.9% to Rs 408.80 crore on 12.3% rise in income from operations to Rs 3971.30 crore in Q4 March 2016 over Q4 March 2015. The stock had risen 0.97% to settle at Rs 907.40 yesterday, 11 May 2016.
The Sensex has risen 183.60 points or 0.71% in this month so far (till 12 May 2016). The Sensex has fallen 327.32 points or 1.25% in calendar year 2016 so far (till 12 May 2016). From a 52-week low of 22,494.61 hit on 29 February 2016, the barometer index has risen 3,295.61 points or 14.65%. The Sensex is off 2,788.11 points or 9.75% from a 52-week high of 28,578.33 hit on 23 July 2015. The Sensex is off 4,234.52 points or 14.1% from a record high of 30,024.74 hit on 4 March 2015.
Stocks of public sector banks edged higher after the Rajya Sabha passed the Insolvency and Bankruptcy Code, 2016 yesterday, 11 May 2016. Shares of oil exploration and production (E&P) firms edged higher after sharp surge in crude oil prices. Pharma major Dr Reddy's Laboratories (DRL) rose after announcing Q4 March 2016 results. Hindalco Industries extended previous trading session's gains triggered by its US subsidiary Novelis Inc reporting strong Q4 results. Asian Paints extended previous trading session's gains triggered by the company declaring good Q4 results.
In overseas stock markets, oil and gas stocks led gains in European equities as crude oil prices rose after Paris based International Energy Agency said in its monthly report on the oil sector that global oil stocks will experience a sharp reduction in the second half of the current calendar year on the back of strong demand and falling supply by some major producers. Meanwhile, UK's central bank Bank of England is widely expected to keep its main interest rate on hold at a record low of 0.5% after the conclusion of its monetary policy meeting today, 12 May 2016.
Earlier during the global day, Asian markets ended on a mixed note. US stocks dropped yesterday, 11 May 2016, as disappointing earnings from Walt Disney Co. and a slump in stock prices of retailers led to selling.
The Sensex rose 193.20 points or 0.75% to settle at 25,790.22, its highest closing level since 27 April 2016. The index rose 230.01 points or 0.89% at the day's high of 25,827.03. The index gained 23.25 points or 0.09% at the day's low of 25,620.27.
The Nifty rose 51.55 points or 0.66% to settle at 7,900.40, its highest closing level since 27 April 2016. The index gained 67.20 points or 0.85% at the day's high of 7,916.05. The index rose 0.80 points or 0.01% at the day's low of 7,849.65.
The BSE Mid-Cap index rose 0.69%, underperforming the Sensex. The BSE Small-Cap index rose 0.93%, outperforming the Sensex.
The market breadth indicating the overall health of the market was strong. On BSE, 1,569 shares rose and 1,001 shares declined. A total of 183 shares were unchanged.
Total turnover on BSE amounted to Rs 2640 crore, higher than turnover of Rs 2574.47 crore registered during the previous trading session.
Among the sectoral indices on BSE, the S&P BSE Energy index (up 1.07%), the BSE IT index (up 1.12%), the BSE Bank index (up 0.95%) and the BSE Realty index (up 1.12%) outperformed the Sensex. The BSE Telecom index (up 0.7%), the BSE Metal index (up 0.69%) and the BSE Power index (up 0.64%) underperformed the Sensex.
Stocks of public sector banks edged higher after the Rajya Sabha passed the Insolvency and Bankruptcy Code, 2016 yesterday, 11 May 2016. State Bank of India (SBI) (up 1.87%), Union Bank of India (up 1.2%), Canara Bank (up 0.78%), Bank of Baroda (up 0.54%) and Bank of India (up 0.46%) edged higher. Punjab National Bank was flat at Rs 79.50.
The news of Rajya Sabha's clearance for the bankruptcy bill hit the market after trading hours yesterday, 11 May 2016. The Lok Sabha passed the bankruptcy bill on 5 May 2016. Once the bill becomes a law when it receives President of India's assent, it will help creditors recover bad debt faster. The law aims to consolidate the laws relating to insolvency of companies and limited liability entities (including limited liability partnerships and other entities with limited liability), unlimited liability partnerships and individuals, presently contained in a number of legislations, into a single legislation which in turn will provide for a greater clarity in law and facilitate the application of consistent and coherent provisions to different stakeholders affected by business failure or inability to pay debt. The essential idea of the new law is that when a firm defaults on its debt and control shifts from the shareholders/promoters to a Committee of Creditors, the creditors will get a time span of 180 days to evaluate proposals from various players about resuscitating the company or taking it into liquidation.
When decisions are taken in a time-bound manner, there is a greater chance that the firm can be saved as a going concern and the productive resources of the economy (the labour and the capital) can be put to the best use. This is in complete departure with the experience under the Sick Industrial Companies (Special Provisions) Act, 1985 regime where there were delays leading to destruction of the value of the firm.
Shares of private sector banks ended on a mixed note. ICICI Bank (up 3.46%) and IndusInd Bank (up 0.83%) edged higher. Axis Bank (down 1.19%) and Yes Bank (down 0.15%) declined.
Index heavyweight HDFC Bank rose 1.05% at Rs 1,149.90. The stock hit a high of Rs 1,151 and a low of Rs 1,133 in intraday trade.
Kotak Mahindra Bank declined 0.62% to Rs 726.60. The stock was volatile. The stock hit high of Rs 744 and low of Rs 721.50 in intraday trade. The stock had risen 1.34% to settle at Rs 731.15 yesterday, 11 May 2016 after the private sector bank announced strong Q4 results. The bank's net profit rose 31.99% to Rs 695.78 crore on 52.26% rise in total income to Rs 4947.32 crore in Q4 March 2016 over Q4 March 2015. The results are not comparable due to merger of ING Vysya Bank with Kotak Mahindra Bank, which took effect from 1 April 2015.
Index heavyweight and housing finance major HDFC declined 0.69% at Rs 1,195.35. The company announced the issue of senior, secured, redeemable non-convertible debentures amounting to Rs 1035 crore on private placement basis. The announcement was made during market hours today, 12 May 2016. The debentures have issue price of Rs 1 crore and carry a coupon rate of 8.35% per annum with tenor of 10 years. The issue opens and closes on the same day on 13 May 2016. The object of the issue is to augment the long term resources of the company. The proceeds of the issue would be utilised for financing/refinancing the housing finance business of the company.
IT stocks edged higher on renewed buying. TCS (up 1.96%), Persistent Systems (up 1.79%), Tech Mahindra (up 1.62%), Wipro (up 0.92%) and HCL Technologies (up 1.02%) rose. Oracle Financial Services Software was off 0.04%.
Index heavyweight Infosys was up 0.76% at Rs 1,210.20. The stock hit a high of Rs 1,212.50 and a low of Rs 1,197.80 in intraday trade.
Pharma stocks witnessed a mixed trend. Lupin (up 1.28%), Strides Shasun (up 1.3%), Sun Pharmaceutical Industries (up 0.95%), Wockhardt (up 0.38%), Glenmark Pharmaceuticals (up 0.12%) and Cadila Healthcare (up 0.18%) rose. Aurobindo Pharma (down 1.94%), GlaxoSmithkline Pharmaceuticals (down 1.24%), Alkem Laboratories (down 1.03%), Ipca Laboratories (down 0.25%), Divi's Laboratories (down 0.31%) and Cipla (down 0.21%) declined.
Pharma major Dr Reddy's Laboratories (DRL) rose 3.65% at Rs 2,973.85 after announcing Q4 March 2016 results. The company's consolidated net profit dropped 85.62% to Rs 74.60 crore on 2.47% decline in total income to Rs 3786.90 crore in Q4 March 2016 over Q4 March 2015. The results are as per International Financial Reporting Standards (IFRS). The company's Co-Chairman and CEO G V Prasad said that the sharp fall in profitability in Q4 March 2016 was due to provision made as a matter of abundant precaution to write down outstanding receivables from the company's subsidiary in Venezuela. DRL made provision of Rs 430.90 crore in Q4 March 2016 on its outstanding receivables from Venezuela. Similar charge on account of translation of net monetary assets was Rs 84.30 crore in Q4 March 2015.
Shares of oil exploration and production (E&P) firms edged higher after sharp surge in crude oil prices. ONGC (up 0.51%) rose. Oil India (down 0.26%) declined.
Shares of public sector oil marketing companies (PSU OMCs) also moved higher. Indian Oil Corporation (up 1.29%) and BPCL (up 0.37%) edged higher. HPCL (down 0.8%) declined.
Crude oil prices edged higher after Paris-based International Energy Agency said in its monthly report on the oil sector that global oil stocks will experience a sharp reduction in the second half of the current calendar year on the back of strong demand and falling supply by some major producers. Brent for July settlement was currently up 39 cents at $47.99 a barrel. The contract had surged $2.08 a barrel or 4.56% to settle at $47.60 a barrel during the previous trading session after the US government said crude inventories fell for the first time since March, adding to concerns over supply outages in Canada and Nigeria.
Index heavyweight Reliance Industries was up 1.66% at Rs 991.05. The stock hit a high of Rs 992.45 and a low of Rs 975.70 in intraday trade.
Cairn India rose 1% at Rs 136.80. Cairn India Holdings (CIHL), an overseas subsidiary of Cairn India, has decided to extend maturity of the loan of $1.25 billion, which was given for a term of two years in May 2014, to THL Zinc (TZL), an overseas subsidiary of Vedanta Limited, for a further period of two years. The extension is on arm's length at a revised rate of interest of LIBOR plus 450 basis points (bps) in the first year and at LIBOR plus 475 bps in the second year (compared to the existing rate of LIBOR plus 300 bps). The loan will continue to be secured by a guarantee from Vedanta Resources Plc. The loan will provide higher yield to CIHL compared to the return it is earning from its existing investments. TZL is the holding company of the Vedanta Group's international zinc business. The announcement was made during market hours today, 12 May 2016.
Shares of Vedanta Limited were up 2.9% at Rs 102.75.
Stocks of Tata group companies rose almost across the board. Trent (up 1.62%), Tata Motors (up 1.87%), Tata Chemicals (up 1.12%), Tata Global Beverages (up 1.41%), Titan Company (up 1.15%), Tata Communications (up 1%) and Tata Steel (up 0.55%) rose.
Hindalco Industries rose 1.97% to Rs 93.40, with the stock extending previous trading session's gains triggered by its US subsidiary Novelis Inc reporting strong Q4 results. The stock had risen 1.95% to settle at Rs 91.60 yesterday, 11 May 2016.
Novelis' net profit excluding tax-effected special items rose 35% to $50 million on 14% fall in revenue to $2.4 billion in Q4 March 2016 over Q4 March 2015. The result was announced after trading hours in India on 10 May 2016.
Asian Paints rose 2.13% to Rs 926.75, with the stock extending previous trading session's gains triggered by the company declaring good Q4 results at the fag end of the session yesterday, 11 May 2016. The stock hit a high of Rs 931.50 in intraday trade, which is record high for the counter. The stock hit a low of Rs 915 in intraday trade. Asian Paints' consolidated net profit rose 19.9% to Rs 408.80 crore on 12.3% rise in income from operations to Rs 3971.30 crore in Q4 March 2016 over Q4 March 2015. The stock had risen 0.97% to settle at Rs 907.40 yesterday, 11 May 2016.
The Sensex has risen 183.60 points or 0.71% in this month so far (till 12 May 2016). The Sensex has fallen 327.32 points or 1.25% in calendar year 2016 so far (till 12 May 2016). From a 52-week low of 22,494.61 hit on 29 February 2016, the barometer index has risen 3,295.61 points or 14.65%. The Sensex is off 2,788.11 points or 9.75% from a 52-week high of 28,578.33 hit on 23 July 2015. The Sensex is off 4,234.52 points or 14.1% from a record high of 30,024.74 hit on 4 March 2015.
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