Tuesday, June 21, 2016

THE END SESSION ( 21 / 06 )

Key indices snap two-day winning streak


The two key benchmark indices snapped a two-day winning streak in what was a lacklustre trading session. The barometer index, the S&P BSE Sensex, fell 54.14 points or 0.2% to settle at 26,812.78. The Nifty 50 index fell 18.60 points or 0.23% to settle at 8,219.90. The market breadth indicating the overall health of the market was positive. On BSE, 1,317 shares rose and 1,287 shares fell. A total of 200 shares were unchanged. The BSE Mid-Cap index rose 0.12%. The BSE Small-Cap index rose 0.36%. Both these indices outperformed the Sensex.

In overseas stock markets, main European markets edged higher after Germany's Federal Constitutional Court ruled in favour of the European Central Bank's (ECB) Outright Monetary Transactions or OMT unlimited bond-buying program created by the ECB at the height of Europe's debt crisis in September 2012. UK stocks reversed initial losses. The FTSE 100 index was currently up 0.05%. The key event in the UK and Europe this week is the Brexit referendum on Thursday, 23 June 2016, where British voters will decide whether the country should remain a member of the European Union or leave it. Two opinion polls yesterday, 20 June 2016, predicted opposite results on whether British voters will vote for Britain to remain or leave the European Union (EU) in a referendum on Thursday, 23 June 2016, with one poll predicting respondents backing membership in the EU and the other poll showing respondents backing the leave vote.

The Organization for Economic Cooperation and Development (OECD) has warned that Britain's leaving the EU -- the so-called Brexit -- could send shocks through global financial markets. The OECD said on 1 June 2016 that a United Kingdom vote to leave the EU would trigger negative economic effects on the UK, other European countries and the rest of the world. Brexit would lead to economic uncertainty and hinder trade growth, with global effects being even stronger if the British withdrawal from the EU triggers volatility in financial markets, the OECD said. By 2030, post-Brexit UK GDP could be over 5% lower than if the country remained in the European Union, the OECD said.

Earlier during the global day, most Asian shares rose on growing expectations that British voters will opt to remain in the European Union in this week's referendum. Japanese stocks edged higher as the yen eased from earlier gains against the US dollar. The Nikkei 225 Average ended 1.28% higher for the trading session. The yen eased after approaching a 22-month high against the dollar. A stronger yen hurts the competitiveness of Japanese exporters. Japan's finance minister Taro Aso said at a regular news conference that the government wouldn't intervene in currency markets easily. US stocks edged higher yesterday, 20 June 2016, following the lead of European markets as polls showed support swinging back toward the UK remaining a member of the European Union ahead of a referendum.

The Sensex fell 54.14 points or 0.2% to settle at 26,812.78, its lowest closing level since 17 June 2016. The Sensex fell 112.32 points, or 0.41% at the day's low of 26,754.60. The index rose 58.72 points, or 0.22% at the day's high of 26,925.64.

The Nifty fell 18.60 points or 0.23% to settle at 8,219.90, its lowest closing level since 17 June 2016. The Nifty fell 36.35 points, or 0.44% at the day's low of 8,202.15. The index rose 18.75 points, or 0.23% at the day's high of 8,257.25.

Among the sectoral indices on BSE, the S&P BSE Utilities index (down 0.78%), the S&P BSE Power index (down 0.7%), the S&P BSE Bankex (down 0.65%), the S&P BSE Healthcare index (down 0.4%) and the S&P BSE Capital Goods index (down 0.39%) underperformed the Sensex. The S&P BSE Finance index (down 0.17%), the S&P BSE Teck index (down 0.17%), the S&P BSE Basic Materials index (down 0.16%), the S&P BSE Metal index (down 0.15%), the S&P BSE IT index (down 0.13%), the S&P BSE FMCG index (down 0.09%), the S&P BSE Telecom index (down 0.08%), the S&P BSE Realty index (down 0.01%), the S&P BSE Industrials index (up 0.05%), the S&P BSE Energy index (up 0.17%), the S&P BSE Consumer Discretionary Goods & Services index (up 0.28%), the S&P BSE Oil & Gas index (up 0.34%), the S&P BSE Consumer Durables index (up 0.39%) and the S&P BSE Auto index (up 0.58%) outperformed the Sensex.

Index heavyweight Reliance Industries (RIL) fell 0.66% to Rs 984. The stock hit a high of Rs 995 and a low of Rs 980.20 in intraday trade. RIL in a collaboration with Indian Institute of Petroleum (IIP) Dehradun has developed an indigenous technology to restrict benzene, a carcinogenic element in gasoline and naphtha. The announcement was made during trading hours today, 21 June 2016. Refiners across the world are under pressure to reduce the amount of benzene and other hazardous air pollutants.
Index heavyweight and cigarette major ITC fell 0.33% to Rs 357.10. The stock hit a high of Rs 359.30 and a low of Rs 355.20 in intraday trade.

Index heavyweight and IT major Infosys fell 0.19% to Rs 1,206.25. The stock hit a high of Rs 1,215 and a low of Rs 1,196.50 in intraday trade.

Engineering & construction major L&T fell 0.96% to Rs 1,491.25. The stock hit a high of Rs 1.509.20 and a low of Rs 1.491.25 in intraday trade.

Bank stocks declined. Among public sector banks, Union Bank of India (down 1.91%), Syndicate Bank (down 1.59%), IDBI Bank (down 0.91%), Punjab & Sind Bank (down 3.11%), UCO Bank (down 1.77%), Andhra Bank (down 0.63%), Corporation Bank (down 1.5%), Bank of Baroda (down 1.28%), State Bank of India (down 0.88%), Dena Bank (down 1.22%), Bank of Maharashtra (down 1.49%), Vijaya Bank (down 2.44%), Central Bank of India (down 1.17%) and United Bank of India (down 0.66%) fell.
Punjab National Bank (up 0.88%), Canara Bank (up 1.63%), Allahabad Bank (up 0.92%) and Indian Bank (up 0.04%) rose.

Bank of India shed 0.57%. Bank of India today, 21 June 2016, announced said the bank has decided to sell its 18% stake in Star Union Dai-ichi Life Insurance Company (SUD) to Dai-ichi Life Insurance Company Limited (DILIC). After the completion of the transaction, the shareholding of Bank of India in SUD will be reduced to 30% from 48% and the shareholding of DILIC will rise to 44% from 26%. Union Bank of India will continue to hold 26% stake in the life insurance joint venture. The announcement was made during market hours today, 21 June 2016.

SUD was incorporated in the year 2007 as a joint venture company among Bank of India, Union Bank of India and DILIC to undertake life insurance business in India. The business of the joint venture has been increasing steadily with support of all the partners of the joint venture.

Among private sector banks, Axis Bank (down 1.37%), HDFC Bank (down 0.59%), IndusInd Bank (down 1.06%), Kotak Mahindra Bank (down 0.81%), Federal Bank (down 0.88%), City Union Bank (down 2.55%), ICICI Bank (down 0.02%) and Yes Bank (down 0.43%) edged lower.

Meanwhile, the finance ministry in its quarterly revision on interest rates on small savings schemes has kept the rates unchanged for Q2 September 2016. The government now announces revision in interest rates on small saving schemes on quarterly basis as against the earlier practice of annual revision. The decision to shift to quarterly revision from annual revision was taken to ensure that interest rates under small savings schemes are more dynamically related to the prevailing market rates. It may be recalled that the finance ministry had in March 2016 announced reduction in interest rates on small savings schemes for Q1 June 2016 in a move to bring the rates in line with the prevailing money market rates.

Index heavyweight and housing finance major HDFC rose 0.38% to Rs 1,232.25. The stock hit a high of Rs 1,241.25 and a low of Rs 1,220.65 in intraday trade.

Most auto stocks edged higher. TVS Motor Company (up 1.16%), Mahindra & Mahindra (up 0.92%), Tata Motors (up 0.7%), Ashok Leyland (up 2.41%), Bajaj Auto (up 0.23%), Eicher Motors (up 0.24%) and Maruti Suzuki (India) (up 0.14%) edged higher. Escorts slipped 0.55%.

Shares of Hero MotoCorp ended marginally higher at Rs 3,048.75.

Most power generation stocks declined. NTPC (down 1.43%), Reliance Power (down 1.05%), Jaiprakash Power Ventures (down 0.2%), Torrent Power (down 0.08%), JSW Energy (down 0.36%) and Reliance Infrastructure (down 0.18%) edged lower. CESC (up 0.69%), GMR Infrastructure (up 0.08%) and Adani Power (up 0.84%) edged higher. Shares of NHPC ended unchanged at Rs 24.85.

Tata Power lost 2.33%. The company announced during trading hours today, 21 June 2016, that its 100% subsidiary, Tata Power Renewable Energy (TPREL) has won solar grid connected photovoltaic project of 30 megawatts (MW) in Maharashtra. The project has been awarded in the DCR category under the Jawaharlal Nehru National Solar Mission (JNNSM). TPREL has received the Letter of Intent to develop the project and will sign a 25-year power purchase agreement (PPA) with NTPC Vidyut Vyapar Nigam. The JNNSM, launched in January 2010, is a major initiative of the Government of India that aims to establish India as a global leader in solar energy by creating favourable policy conditions for its diffusion across the country.

Telecom stocks were mostly lower. Bharti Airtel (down 0.70%), Idea Cellular (down 0.73%), Reliance Communications (down 0.72%) and MTNL (down 1.16%) edged lower. Tata Teleservices (Maharashtra) rose 3.98%.

Cement stocks witnessed selling pressure. Ambuja Cements (down 0.52%), UltraTech Cement (down 0.45%) and ACC (down 0.84%) edged lower.

Grasim Industries fell 0.15%. Grasim has exposure to cement sector through its holding in UltraTech Cement.

Asian Paints fell 1.18% after the company's announcement that it has re-looked at its product portfolio to be manufactured at the proposed manufacturing plant at Vishakhapatnam district, Andhra Pradesh and has decided to revise its plans of setting up of the plant with a maximum capacity of 5 lakh kilolitres per annum, to be put up in phases. The approximate amount that would be invested by the company in phases over a period of 12 years from the date of commencement of construction, including the cost of land, would be Rs 1785 crore. The announcement was made during market hours today, 21 June 2016.

Tata Communications rose 1.26% on media reports that its wholly-owned subsidiary, Tata Communications Payment Solutions (TCPSL), has put its ATM business on the block and is targeting a valuation of Rs 1000-1350 crore. TCPSL had carved out Indicash -the division that owns the white-label ATMs that are rented out to multiple banks. Tatas are looking to sell the entire stake in this business, reports suggested.
Godawari Power & Ispat lost 2.16% after the company said it has temporarily suspended mining operations at its Boria Tibu iron ore mines situated in Chhattisgarh due to labour unrest. The annual rated capacity at its Boria Tibu iron ore mines is 7.05 lakh tonnes per annum (TPA) as per approved mining plan, Godawari Power & Ispat said. Mining operations in these mines were started in the last financial year with very low volume and mines were partially under development stage and therefore, there is no major financial impact on the performance of the company since the contribution from mines in the profitability of the company was negligible till now, Godawari Power said.

Kesar Terminals & Infrastructure surged 12.97% after the company announced that its board of directors will meet on 24 June 2016, to consider issue of bonus shares. The announcement was made after market hours yesterday, 20 June 2016.

Key indices snapped a two-day winning streak. The Sensex had gained 341.46 points or 1.28% in the preceding two trading sessions to settle at 26866.92 yesterday, 20 June 2016, from its close of 26,525.46 on 16 June 2016. The Sensex has risen 144.82 points or 0.54% in this month so far (till 21 June 2016). The Sensex has risen 695.24 points or 2.66% in calendar year 2016 so far (till 21 June 2016). From a 52-week low of 22,494.61 hit on 29 February 2016, the barometer index has risen 4,318.17 points or 19.19%. The Sensex is off 1,765.55 points or 6.17% from a 52-week high of 28,578.33 hit on 23 July 2015. The Sensex is off 3,211.96 points 10.69% from a record high of 30,024.74 hit on 4 March 2015.

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