Sensex, Nifty hit one-week closing low
Acceleration in consumer price inflation in April 2016 triggered losses for Indian stocks as the data triggered speculation that the Reserve Bank of India (RBI) would hold off on cutting rates at its policy review next month. The barometer index, the S&P BSE Sensex, shed 300.65 points or 1.17% to settle at 25,489.57. The losses for the Nifty 50 index were lower than the Sensex's decline in percentage terms. The Nifty dropped 85.50 points or 1.08% to settle at 7,814.90. Weakness in global stocks also weighed on the domestic bourses. The Sensex and the Nifty, both, hit one-week closing low.
Stocks of metal and pharma firms, public sector banks and index heavyweights HDFC and Reliance Industries (RIL) led losses for the two benchmark indices. Interest rate sensitive banking and realty stocks dropped after data showing acceleration in consumer price inflation in April 2016 sparked concerns that the Reserve Bank of India (RBI) would hold off on cutting rates at its policy review next month.
Asian Paints edged higher with the stock extending recent gains triggered by the company's strong Q4 results. Eicher Motors dropped after the promoter group pared stake in the company. Nestle India surged after the company reported strong results on sequential basis in Q1 March 2016.
On the macro front, the latest data showing acceleration in consumer price inflation in April 2016 has triggered speculation that the Reserve Bank of India (RBI) would hold off on cutting rates at its policy review next month. Inflation based on consumer price index (CPI) surged to 5.39% in April 2016 from six months low of 4.8% recorded in March 2016. The core CPI inflation rose to 4.76% in April 2016 from 4.54% in March 2016. Reserve Bank of India governor Raghuram Rajan was quoted as saying in speech in London today, 13 May 2016, that the core inflation remains sticky and a bit higher than policymakers would like to see. Rajan said the RBI would continue with the task of anchoring inflation expectations.
The RBI next undertakes monetary policy review on 7 June 2016. In its bid to boost economic growth, RBI announced a reduction of 25 basis points (bps) in its benchmark lending rate viz. the repo rate to 6.5% from 6.75% after a scheduled monetary policy review on 5 April 2016. At that time, Rajan had indicated in his monetary policy statement that the central bank may cut the repo rate further in the coming months if macroeconomic and financial developments provide room for further rate cut.
Meanwhile, another data announced by the government showed that the industrial production growth moderated to 0.1% in March 2016 over March 2015 compared with 2% growth recorded in February 2016. The electricity generation surged at double-digit pace of 11.3% in March 2016. However, the mining output declined 0.1% and manufacturing production dipped 1.2% contributing to the overall slower growth in industrial output in March 2016. Both, CPI and industrial production data hit the market after trading hours yesterday, 12 May 2016.
The Sensex shed 300.65 points or 1.17% to settle at 25,489.57, its lowest closing level since 6 May 2016. The index dropped 389.95 points or 1.51% at the day's low of 25,400.27. The barometer index lost 46.53 points or 0.18% at the day's high of 25,743.69.
The Nifty 50 index dropped 85.50 points or 1.08% to settle at 7,814.90, its lowest closing level since 6 May 2016. The Nifty shed 116.20 points or 1.47% at the day's low of 7,784.20. The index fell 19.40 points or 0.24% at the day's high of 7,881.
In overseas stock markets, European stocks edged lower in choppy trade after a revised reading on eurozone gross domestic product (GDP) came below market expectations. GDP in the currency bloc grew at a quarterly rate of 0.5% in Q1 March 2016, below a preliminary reading of 0.6%. Meanwhile, the latest data released by the Germany's statistics office Destatis showed that German economic growth accelerated sharply in the first quarter of 2016, led by domestic consumption and brisk construction activity. The economy grew at a quarterly rate of 0.7% in Q1 March 2016, which translates into an annualized rate of 2.7% and is more than double the rate of 0.3% recorded in Q4 December 2015. Earlier during the global day, most Asian stocks dropped as decline in crude oil prices sapped risk appetite. Most US stocks fell yesterday, 12 May 2016, after poor sales numbers from the retailers and after the latest data showed an unexpected spike in weekly jobless claims last week.
Closer home, the market breadth indicating the overall health of the market was negative. On BSE, 1,496 shares fell and 1,053 shares rose. A total of 173 shares were unchanged. The BSE Mid-Cap index fell 0.58%. The BSE Small-Cap index declined 0.25%. The fall in both these indices was lower than the Sensex's decline in percentage terms.
Total turnover on BSE amounted to Rs 2492 crore, lower than turnover of Rs 2650.92 crore registered during the previous trading session.
Realty stocks declined after data showing acceleration in consumer price inflation in April 2016 triggered speculation that the Reserve Bank of India (RBI) would hold off on cutting rates at its policy review next month. Godrej Properties (down 0.36%), Housing Development & Infrastructure (HDIL) (down 3.15%), Sobha (down 0.71%), Indiabulls Real Estate (down 4.43%), Unitech (down 1.94%), DLF (down 4.58%), and D B Realty (down 2.16%) edged lower. Purchases of both residential and commercial property are largely driven by finance.
Metal & mining stocks declined. Bhushan Steel (down 2.11%), Jindal Steel & Power (down 2.34%), Vedanta (down 4.4%), Tata Steel (down 2.66%), NMDC (down 1.21%), Hindalco Industries (down 4.18%), Steel Authority of India (down 2%), JSW Steel (down 1.07%), Hindustan Zinc (down 1.58%) and National Aluminium Company (down 1.05%) edged lower.
Copper price edged higher in the global commodities market. High Grade Copper for July 2016 delivery was currently up 0.1% at $2.076 per pound on the COMEX.
Index heavyweight and housing finance major HDFC declined 2.45% to Rs 1,166.05. The stock hit high of Rs 1,203.35 and low of Rs 1,158.75 in intraday trade.
Index heavyweight Reliance Industries (RIL) declined 1.32% to Rs 978. The stock hit high of Rs 990.90 and low of Rs 975.50 in intraday trade.
Asian Paints rose 1.7% to Rs 942.50, with the stock extending recent gains triggered by the company's strong Q4 results. The stock hit a high of Rs 948 in intraday trade, which is record high for the counter. The stock hit a low of Rs 927 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 result was announced on 11 May 2016.
Eicher Motors (EML) fell 3.82% after Anita Lal, Rukmani Joshi and The Eicher Goodearth Trust, part of the promoter group of EML, sold 11.40 lakh equity shares, or 4.2% equity, in EML for Rs 2100 crore. This sale has been done to provide liquidity to the promoters. The proceeds will be utilized for personal uses such as portfolio and other investments and for charitable purposes, the statement issued by the promoters stated.
Following the sale, the promoter group will continue to hold 50.67% stake in EML. The promoters intend to maintain a majority share in EML and do not plan to sell any further shares in the foreseeable future, the statement added. Siddhartha Lal, managing director and CEO of EML and also a part of the promoter group said that EML is a standout success and there is a huge growth potential for EML in its domestic and overseas markets. It has the right business strategy and management team to deliver growth aspirations.
As on 31 March 2016, The Eicher Goodearth Trust held 0.06% stake, Anita Lal held 11.13% stake and Rukmani Joshi held 1.33% stake in EML. Total promoter holding stood at 54.87% as on 31 March 2016.
Nestle India surged after the company reported strong results on sequential basis in Q1 March 2016. The stock surged 7.44%. Nestle India's net profit rose 41.38% to Rs 259 crore on 17.5% increase in total income from operations (net) to Rs 2302.46 crore in Q1 March 2016 over Q4 December 2015. Net profit fell 19.13% to Rs 259 crore on 8.5% decline in total income from operations (net) to Rs 2302.46 crore in Q1 March 2016 over Q1 March 2015. The result hit the market after trading hours yesterday, 12 May 2016.
The company said that the Maggi Noodles issue adversely impacted the financial performance in the first quarter. Nestle relaunched Maggi noodles in the market at the beginning of November 2015 after it withdrew the product from the market in June 2015 amid allegations that it contained high levels of lead.
Nestle India's Chairman and Managing Director Suresh Narayanan said that Maggi noodles has already regained leadership with over 50% market share within 5 months of relaunch. He said that Nestle India is gearing up for volume growth with renewed focus and commitment on consumer relevant innovation and renovation. Narayanan said that the management is working on increasing penetration for all product categories of the company including milk & nutrition, chocolate & confectionary and coffee & beverages. Narayanan said that the company's Q1 March 2016 results show further improvement in sequential performance, both in sales and profit margins.
Pharma stocks edged lower. Wockhardt (down 1.58%), Lupin (down 1.83%), Sun Pharmaceutical Industries (down 1.08%), GlaxoSmithkline Pharmaceuticals (down 0.62%), Cipla (down 0.65%) and Alkem Laboratories (down 0.77%) declined. Glenmark Pharmaceuticals (up 1.24%), Divi's Laboratories (up 1.27%) and Ipca Laboratories (up 0.1%) rose.
Dr Reddy's Laboratories (DRL) edged lower on reports that a foreign brokerage has cut its sales and EPS forecast for the drug maker by about 3% for FY 2017 and FY 2018, citing increased competition for the company's US business. The stock was down 2.08% to Rs 2,912.10. The brokerage has also reportedly cut its price target and retained its sell rating on the stock. The DRL stock had risen 3.64% to settle at Rs 2,973.85 yesterday, 12 May 2016, after the company's Q4 March 2016 results showed a sharp year-on-year decline in bottom line due to an exceptional write off related to the company's subsidiary in Venezuela.
Aurobindo Pharma declined 2.14%. The company during market hours today, 13 May 2016, announced that it has received final approval from the United States Food & Drug Administration (USFDA) to manufacture and market Zolmitriptan Tablets, 2.5 mg and 5 mg. The product is expected to be launched in Q2 September 2016.
Zolmitriptan Tablets is used in the acute treatment of migraine with or without aura in adults. The approved product had an estimated market size of $46.7 million in the US for the twelve months ended 31 March 2016, according to IMS data.
Bank stocks dropped after data showing acceleration in consumer price inflation in April 2016 sparked concerns that the Reserve Bank of India (RBI) would hold off on cutting rates at its policy review next month. Among public sector banks, State Bank of India (SBI) (down 1.8%), and Union Bank of India (down 1.86%), edged lower.
The Reserve Bank of India (RBI) has proposed additional risk weight and higher standard asset provision for commercial banks with respect to large lending exposure to a single borrower to be effective from the financial year 2017-18 onwards. The RBI has proposed standard asset provision of 3% on the incremental exposure of the banking system in excess of the normally permitted lending limit (NPLL) to be distributed in proportion to each bank's funded exposure to the specified large borrower. There will be additional risk weight of 75% over and above the applicable risk weight for the exposure to the large specified borrower to be distributed in proportion to each bank's funded exposure to the specified borrower. The RBI said that its analysis of data on banks' lending exposure shows build-up of high concentration of credit risk at the systemic level in the banking sector. This has resulted in banks collectively having very large exposures to some of the large corporates in India. The RBI has sought public comments on a discussion paper on the framework for enhancing credit supply for large borrowers by 30 May 2016.
Punjab National Bank dropped 2.45% after MSCI said the scrip will be removed from MSCI India Domestic Index from 1 June 2016. The scrip will be added in MSCI India Domestic Small Cap Index from 1 June 2016.
Canara Bank (down 1.06%) and Bank of India (down 1.61%) declined. MSCI said Canara Bank and Bank of India will be added in MSCI India Domestic Small Cap Index from 1 June 2016.
Among private sector banks, Axis Bank (down 0.34%), HDFC Bank (down 0.73%), ICICI Bank (down 2.29%), Kotak Mahindra Bank (down 2.44%), IndusInd Bank (down 0.2%) and Yes Bank (down 1.01%) dropped. Federal Bank rose 2.35%.
The Reserve Bank of India (RBI) has allowed foreign banks having branch presence in India to acquire up to 10% in a private sector bank as the central bank announced changes in the guidelines on ownership/shareholding in private sector banks in India yesterday, 12 May 2016. The RBI said that in case of exceptional circumstances, such as, restructuring of problem/weak banks or in the interest of consolidation in the banking sector, the RBI may permit a foreign bank to own more than 10% in a private sector bank. The ownership of non-regulated and non-diversified financial institutions in private sector banks will be capped at 15%. In the case of regulated, well diversified, listed entities from the financial sector and shareholding by supranational institutions or public sector undertaking or the Government of India, a uniform limit upto 40% of the paid-up capital of the private sector bank has been permitted for both promoters/promoter group and non-promoters.
The RBI said that it has revised the guidelines on ownership in private sector banks against the background of the guidelines on licensing of new banks in the private sector issued in February 2013, the need for additional capital for the banks consequent to the implementation of Basel III capital regulations and to rationalise the ownership limits.
IL&FS Transportation Networks rose 2.24% after consolidated net profit rose 3.30% to Rs 80.42 crore on 71.41% increase in total income to Rs 2695.41 crore in Q4 March 2016 over Q4 March 2015. The result was announced during trading hours today, 13 May 2016.
ITD Cementation India rose 0.91% after the company reported consolidated net profit of Rs 23.02 crore in Q1 March 2016, as compared with net loss of Rs 96.67 crore in Q1 March 2015. The company's consolidated net sales rose 73% to Rs 1015.34 crore in Q1 March 2016 over Q1 March 2015. The company declared its results after trading hours yesterday, 12 May 2016.
The Sensex has fallen 117.05 points or 0.45% in this month so far (till 13 May 2016). The Sensex has fallen 627.97 points or 2.4% in calendar year 2016 so far (till 13 May 2016). From a 52-week low of 22,494.61 hit on 29 February 2016, the barometer index has risen 2,994.96 points or 13.31%. The Sensex is off 3,088.76 points or 10.8% from a 52-week high of 28,578.33 hit on 23 July 2015. The Sensex is off 4,535.17 points or 15.1% from a record high of 30,024.74 hit on 4 March 2015.
Meanwhile, the Union Cabinet yesterday, 12 May 2016, approved the National Intellectual Property Rights (IPR) Policy that will lay the future roadmap for intellectual property in India. According to a government statement, the IPR policy recognises the abundance of creative and innovative energies that flow in India and the need to tap into and channelise these energies towards a better and brighter future for all. The objective of the IPR policy, among other things, is to have strong and effective IPR laws, which balances the interests of rights owners with larger public interest. The IPR policy also aims at facilitating commercialization of IPRs.
Stocks of metal and pharma firms, public sector banks and index heavyweights HDFC and Reliance Industries (RIL) led losses for the two benchmark indices. Interest rate sensitive banking and realty stocks dropped after data showing acceleration in consumer price inflation in April 2016 sparked concerns that the Reserve Bank of India (RBI) would hold off on cutting rates at its policy review next month.
Asian Paints edged higher with the stock extending recent gains triggered by the company's strong Q4 results. Eicher Motors dropped after the promoter group pared stake in the company. Nestle India surged after the company reported strong results on sequential basis in Q1 March 2016.
On the macro front, the latest data showing acceleration in consumer price inflation in April 2016 has triggered speculation that the Reserve Bank of India (RBI) would hold off on cutting rates at its policy review next month. Inflation based on consumer price index (CPI) surged to 5.39% in April 2016 from six months low of 4.8% recorded in March 2016. The core CPI inflation rose to 4.76% in April 2016 from 4.54% in March 2016. Reserve Bank of India governor Raghuram Rajan was quoted as saying in speech in London today, 13 May 2016, that the core inflation remains sticky and a bit higher than policymakers would like to see. Rajan said the RBI would continue with the task of anchoring inflation expectations.
The RBI next undertakes monetary policy review on 7 June 2016. In its bid to boost economic growth, RBI announced a reduction of 25 basis points (bps) in its benchmark lending rate viz. the repo rate to 6.5% from 6.75% after a scheduled monetary policy review on 5 April 2016. At that time, Rajan had indicated in his monetary policy statement that the central bank may cut the repo rate further in the coming months if macroeconomic and financial developments provide room for further rate cut.
Meanwhile, another data announced by the government showed that the industrial production growth moderated to 0.1% in March 2016 over March 2015 compared with 2% growth recorded in February 2016. The electricity generation surged at double-digit pace of 11.3% in March 2016. However, the mining output declined 0.1% and manufacturing production dipped 1.2% contributing to the overall slower growth in industrial output in March 2016. Both, CPI and industrial production data hit the market after trading hours yesterday, 12 May 2016.
The Sensex shed 300.65 points or 1.17% to settle at 25,489.57, its lowest closing level since 6 May 2016. The index dropped 389.95 points or 1.51% at the day's low of 25,400.27. The barometer index lost 46.53 points or 0.18% at the day's high of 25,743.69.
The Nifty 50 index dropped 85.50 points or 1.08% to settle at 7,814.90, its lowest closing level since 6 May 2016. The Nifty shed 116.20 points or 1.47% at the day's low of 7,784.20. The index fell 19.40 points or 0.24% at the day's high of 7,881.
In overseas stock markets, European stocks edged lower in choppy trade after a revised reading on eurozone gross domestic product (GDP) came below market expectations. GDP in the currency bloc grew at a quarterly rate of 0.5% in Q1 March 2016, below a preliminary reading of 0.6%. Meanwhile, the latest data released by the Germany's statistics office Destatis showed that German economic growth accelerated sharply in the first quarter of 2016, led by domestic consumption and brisk construction activity. The economy grew at a quarterly rate of 0.7% in Q1 March 2016, which translates into an annualized rate of 2.7% and is more than double the rate of 0.3% recorded in Q4 December 2015. Earlier during the global day, most Asian stocks dropped as decline in crude oil prices sapped risk appetite. Most US stocks fell yesterday, 12 May 2016, after poor sales numbers from the retailers and after the latest data showed an unexpected spike in weekly jobless claims last week.
Closer home, the market breadth indicating the overall health of the market was negative. On BSE, 1,496 shares fell and 1,053 shares rose. A total of 173 shares were unchanged. The BSE Mid-Cap index fell 0.58%. The BSE Small-Cap index declined 0.25%. The fall in both these indices was lower than the Sensex's decline in percentage terms.
Total turnover on BSE amounted to Rs 2492 crore, lower than turnover of Rs 2650.92 crore registered during the previous trading session.
Realty stocks declined after data showing acceleration in consumer price inflation in April 2016 triggered speculation that the Reserve Bank of India (RBI) would hold off on cutting rates at its policy review next month. Godrej Properties (down 0.36%), Housing Development & Infrastructure (HDIL) (down 3.15%), Sobha (down 0.71%), Indiabulls Real Estate (down 4.43%), Unitech (down 1.94%), DLF (down 4.58%), and D B Realty (down 2.16%) edged lower. Purchases of both residential and commercial property are largely driven by finance.
Metal & mining stocks declined. Bhushan Steel (down 2.11%), Jindal Steel & Power (down 2.34%), Vedanta (down 4.4%), Tata Steel (down 2.66%), NMDC (down 1.21%), Hindalco Industries (down 4.18%), Steel Authority of India (down 2%), JSW Steel (down 1.07%), Hindustan Zinc (down 1.58%) and National Aluminium Company (down 1.05%) edged lower.
Copper price edged higher in the global commodities market. High Grade Copper for July 2016 delivery was currently up 0.1% at $2.076 per pound on the COMEX.
Index heavyweight and housing finance major HDFC declined 2.45% to Rs 1,166.05. The stock hit high of Rs 1,203.35 and low of Rs 1,158.75 in intraday trade.
Index heavyweight Reliance Industries (RIL) declined 1.32% to Rs 978. The stock hit high of Rs 990.90 and low of Rs 975.50 in intraday trade.
Asian Paints rose 1.7% to Rs 942.50, with the stock extending recent gains triggered by the company's strong Q4 results. The stock hit a high of Rs 948 in intraday trade, which is record high for the counter. The stock hit a low of Rs 927 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 result was announced on 11 May 2016.
Eicher Motors (EML) fell 3.82% after Anita Lal, Rukmani Joshi and The Eicher Goodearth Trust, part of the promoter group of EML, sold 11.40 lakh equity shares, or 4.2% equity, in EML for Rs 2100 crore. This sale has been done to provide liquidity to the promoters. The proceeds will be utilized for personal uses such as portfolio and other investments and for charitable purposes, the statement issued by the promoters stated.
Following the sale, the promoter group will continue to hold 50.67% stake in EML. The promoters intend to maintain a majority share in EML and do not plan to sell any further shares in the foreseeable future, the statement added. Siddhartha Lal, managing director and CEO of EML and also a part of the promoter group said that EML is a standout success and there is a huge growth potential for EML in its domestic and overseas markets. It has the right business strategy and management team to deliver growth aspirations.
As on 31 March 2016, The Eicher Goodearth Trust held 0.06% stake, Anita Lal held 11.13% stake and Rukmani Joshi held 1.33% stake in EML. Total promoter holding stood at 54.87% as on 31 March 2016.
Nestle India surged after the company reported strong results on sequential basis in Q1 March 2016. The stock surged 7.44%. Nestle India's net profit rose 41.38% to Rs 259 crore on 17.5% increase in total income from operations (net) to Rs 2302.46 crore in Q1 March 2016 over Q4 December 2015. Net profit fell 19.13% to Rs 259 crore on 8.5% decline in total income from operations (net) to Rs 2302.46 crore in Q1 March 2016 over Q1 March 2015. The result hit the market after trading hours yesterday, 12 May 2016.
The company said that the Maggi Noodles issue adversely impacted the financial performance in the first quarter. Nestle relaunched Maggi noodles in the market at the beginning of November 2015 after it withdrew the product from the market in June 2015 amid allegations that it contained high levels of lead.
Nestle India's Chairman and Managing Director Suresh Narayanan said that Maggi noodles has already regained leadership with over 50% market share within 5 months of relaunch. He said that Nestle India is gearing up for volume growth with renewed focus and commitment on consumer relevant innovation and renovation. Narayanan said that the management is working on increasing penetration for all product categories of the company including milk & nutrition, chocolate & confectionary and coffee & beverages. Narayanan said that the company's Q1 March 2016 results show further improvement in sequential performance, both in sales and profit margins.
Pharma stocks edged lower. Wockhardt (down 1.58%), Lupin (down 1.83%), Sun Pharmaceutical Industries (down 1.08%), GlaxoSmithkline Pharmaceuticals (down 0.62%), Cipla (down 0.65%) and Alkem Laboratories (down 0.77%) declined. Glenmark Pharmaceuticals (up 1.24%), Divi's Laboratories (up 1.27%) and Ipca Laboratories (up 0.1%) rose.
Dr Reddy's Laboratories (DRL) edged lower on reports that a foreign brokerage has cut its sales and EPS forecast for the drug maker by about 3% for FY 2017 and FY 2018, citing increased competition for the company's US business. The stock was down 2.08% to Rs 2,912.10. The brokerage has also reportedly cut its price target and retained its sell rating on the stock. The DRL stock had risen 3.64% to settle at Rs 2,973.85 yesterday, 12 May 2016, after the company's Q4 March 2016 results showed a sharp year-on-year decline in bottom line due to an exceptional write off related to the company's subsidiary in Venezuela.
Aurobindo Pharma declined 2.14%. The company during market hours today, 13 May 2016, announced that it has received final approval from the United States Food & Drug Administration (USFDA) to manufacture and market Zolmitriptan Tablets, 2.5 mg and 5 mg. The product is expected to be launched in Q2 September 2016.
Zolmitriptan Tablets is used in the acute treatment of migraine with or without aura in adults. The approved product had an estimated market size of $46.7 million in the US for the twelve months ended 31 March 2016, according to IMS data.
Bank stocks dropped after data showing acceleration in consumer price inflation in April 2016 sparked concerns that the Reserve Bank of India (RBI) would hold off on cutting rates at its policy review next month. Among public sector banks, State Bank of India (SBI) (down 1.8%), and Union Bank of India (down 1.86%), edged lower.
The Reserve Bank of India (RBI) has proposed additional risk weight and higher standard asset provision for commercial banks with respect to large lending exposure to a single borrower to be effective from the financial year 2017-18 onwards. The RBI has proposed standard asset provision of 3% on the incremental exposure of the banking system in excess of the normally permitted lending limit (NPLL) to be distributed in proportion to each bank's funded exposure to the specified large borrower. There will be additional risk weight of 75% over and above the applicable risk weight for the exposure to the large specified borrower to be distributed in proportion to each bank's funded exposure to the specified borrower. The RBI said that its analysis of data on banks' lending exposure shows build-up of high concentration of credit risk at the systemic level in the banking sector. This has resulted in banks collectively having very large exposures to some of the large corporates in India. The RBI has sought public comments on a discussion paper on the framework for enhancing credit supply for large borrowers by 30 May 2016.
Punjab National Bank dropped 2.45% after MSCI said the scrip will be removed from MSCI India Domestic Index from 1 June 2016. The scrip will be added in MSCI India Domestic Small Cap Index from 1 June 2016.
Canara Bank (down 1.06%) and Bank of India (down 1.61%) declined. MSCI said Canara Bank and Bank of India will be added in MSCI India Domestic Small Cap Index from 1 June 2016.
Among private sector banks, Axis Bank (down 0.34%), HDFC Bank (down 0.73%), ICICI Bank (down 2.29%), Kotak Mahindra Bank (down 2.44%), IndusInd Bank (down 0.2%) and Yes Bank (down 1.01%) dropped. Federal Bank rose 2.35%.
The Reserve Bank of India (RBI) has allowed foreign banks having branch presence in India to acquire up to 10% in a private sector bank as the central bank announced changes in the guidelines on ownership/shareholding in private sector banks in India yesterday, 12 May 2016. The RBI said that in case of exceptional circumstances, such as, restructuring of problem/weak banks or in the interest of consolidation in the banking sector, the RBI may permit a foreign bank to own more than 10% in a private sector bank. The ownership of non-regulated and non-diversified financial institutions in private sector banks will be capped at 15%. In the case of regulated, well diversified, listed entities from the financial sector and shareholding by supranational institutions or public sector undertaking or the Government of India, a uniform limit upto 40% of the paid-up capital of the private sector bank has been permitted for both promoters/promoter group and non-promoters.
The RBI said that it has revised the guidelines on ownership in private sector banks against the background of the guidelines on licensing of new banks in the private sector issued in February 2013, the need for additional capital for the banks consequent to the implementation of Basel III capital regulations and to rationalise the ownership limits.
IL&FS Transportation Networks rose 2.24% after consolidated net profit rose 3.30% to Rs 80.42 crore on 71.41% increase in total income to Rs 2695.41 crore in Q4 March 2016 over Q4 March 2015. The result was announced during trading hours today, 13 May 2016.
ITD Cementation India rose 0.91% after the company reported consolidated net profit of Rs 23.02 crore in Q1 March 2016, as compared with net loss of Rs 96.67 crore in Q1 March 2015. The company's consolidated net sales rose 73% to Rs 1015.34 crore in Q1 March 2016 over Q1 March 2015. The company declared its results after trading hours yesterday, 12 May 2016.
The Sensex has fallen 117.05 points or 0.45% in this month so far (till 13 May 2016). The Sensex has fallen 627.97 points or 2.4% in calendar year 2016 so far (till 13 May 2016). From a 52-week low of 22,494.61 hit on 29 February 2016, the barometer index has risen 2,994.96 points or 13.31%. The Sensex is off 3,088.76 points or 10.8% from a 52-week high of 28,578.33 hit on 23 July 2015. The Sensex is off 4,535.17 points or 15.1% from a record high of 30,024.74 hit on 4 March 2015.
Meanwhile, the Union Cabinet yesterday, 12 May 2016, approved the National Intellectual Property Rights (IPR) Policy that will lay the future roadmap for intellectual property in India. According to a government statement, the IPR policy recognises the abundance of creative and innovative energies that flow in India and the need to tap into and channelise these energies towards a better and brighter future for all. The objective of the IPR policy, among other things, is to have strong and effective IPR laws, which balances the interests of rights owners with larger public interest. The IPR policy also aims at facilitating commercialization of IPRs.
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