Sunday, July 24, 2016

THE WEEK THAT WAS

Broad market depicts strength


Key benchmark indices registered minuscule losses in the week ended Friday, 22 July 2016. The barometer index, the S&P BSE Sensex settled below the psychologically important 28,000 level after surpassing that level in the course of trading during the week. The Sensex lost 33.26 points or 0.11% to settle at 27,803.24. The Nifty 50 index fell 0.20 points to settle at 8,541.20. The broader market depicted strength. The BSE Mid-Cap index rose 1.25%. The BSE Small-Cap index rose 1.06%. Both these indices outperformed the Sensex.

Key benchmark indices registered modest losses in the first trading session of the week on Monday, 18 July 2016. The Sensex lost 89.84 points or 0.32% to settle at 27,746.66, its lowest closing level since 11 July 2016.

Oil sector stocks led the upmove as the two key benchmark indices eked out small gains on Tuesday, 19 July 2016. The Sensex rose 40.96 points or 0.15% to settle at 27,787.62, its highest closing level since 15 July 2016.

Stocks of pharmaceutical companies and public sector firms led gains for key benchmark indices on Wednesday, 20 July 2016. The Sensex rose 128.27 points or 0.46% to settle at 27,915.89, its highest closing level since 14 July 2016.

Banking, metal stocks and index heavyweight Reliance Industries (RIL) led losses for key benchmark indices on Thursday, 21 July 2016. The Sensex lost 205.37 points or 0.74% to settle at 27,710.52, its lowest closing level since 11 July 2016.

Key benchmark indices registered modest gains on the last trading session of the week on Friday, 22 July 2016 as media reports suggesting that the Goods and Services Tax (GST) constitutional amendment bill has been listed for discussion in the Rajya Sabha next week boosted sentiment. The Sensex rose 92.72 points or 0.33% to settle at 27,803.24, its highest closing level since 20 July 2016.

Among the 30-share Sensex pack, 18 stocks rose and remaining stocks declined in the week ended Friday, 22 July 2016. Adani Ports and Special Economic Zone (up 2.13%), Asian Paints (up 1.98%), Coal India (up 3.39%), GAIL (India) (up 0.76%), NTPC (up 0.12%) and Power Grid Corporation of India (up 1.55%) edged higher from the Sensex pack. Tata Steel (down 2.02%), HDFC (down 0.33%), L&T (down 0.75%) and ONGC (down 3.47%) edged lower from the Sensex pack.

Bank stocks declined with the S&P BSE Bankex index losing 1.58%.

State Bank of India (down 3.47%) edged lower.

HDFC Bank was up 0.64%. The bank's net profit rose 20.2% to Rs 3238.90 crore on 17.1% growth in total income to Rs 19322.60 crore in Q1 June 2016 over Q1 June 2015. The result was announced during market hours on Thursday, 21 July 2016.
Separately, HDFC Bank announced after market hours on Wednesday, 20 July 2016 that S&P Global Ratings (S&P) has affirmed its 'BBB-' long-term issue ratings on the senior unsecured bonds issued by the Bahrain branch of the bank. S&P has also removed its ratings on these bonds from CreditWatch.

ICICI Bank fell 0.62%. The bank during market hours on Monday, 18 July 2016 said that its subsidiary company, ICICI Prudential Life Insurance Company, has filed a draft red herring prospectus with the Securities and Exchange Board of India for a public offer of up to 18.13 crore equity shares of ICICI Prudential Life Insurance Company, representing approximately 12.65% of its equity share capital, for cash, through an offer for sale by ICICI Bank. The offer includes a proposed reservation of up to 1.81 crore equity shares or 10% of the offer for individual and Hindu Undivided Family (HUF) shareholders of ICICI Bank.

Axis Bank shed 4.81%. The Reserve Bank of India (RBI) on Friday, 15 July 2016, notified increase in foreign investment ceiling in the bank. RBI notified that Foreign Institutional Investors (FIIs)/Registered Foreign Portfolios Investors (RFPIs) can now invest up to 74% from existing 62% of the paid up capital of the bank under the Portfolio Investment Scheme (PIS).

IT stocks rose with the S&P BSE IT index gaining 0.41%.

Infosys (up 0.03%) and TCS (up 2.75%) gained.

Wipro fell 3.1%. The company's consolidated net profit fell 6% to Rs 2050 crore on 11% rise in gross revenue to Rs 13600 crore in Q1 June 2016 over Q1 June 2015. The result was announced after market hours on Tuesday, 19 July 2016. The results are as per International Financial Reporting Standards (IFRS).

Pharma stocks rose with the S&P BSE Healthcare index gaining 1.91%.

Cipla (up 0.68%), Dr Reddy's Laboratories (up 0.62%) and Lupin (up 1.69%) edged higher.

Sun Pharmaceutical Industries (Sun Pharma) was up 2.25%. The company announced that one of its subsidiaries received final approval from the US drug regulator for generic version of Crestor. The announcement was made during market hours on Wednesday, 20 July 2016.

Auto stocks rose with the S&P BSE Auto index gaining 1.08%.

Bajaj Auto (up 1.2%), Hero MotoCorp (up 0.57%), Tata Motors (up 2.73%) edged higher. Mahindra & Mahindra (down 1.56%) and Maruti Suzuki India (down 1%) edged lower.

Bharti Airtel was down 2.52%. The company announced on 17 July 2016 an effective reduction in pre-paid data tariffs by increasing data benefits on some of its pre-paid data recharge packs with effect from 17 July 2016.

Reliance Industries (RIL) rose 0.22%. The company's consolidated net profit rose 18.1% to Rs 7113 crore on 13.4% decline in turnover to Rs 71451 crore in Q1 June 2016 over Q1 June 2015. The result was announced after market hours on Friday, 15 July 2016.

Hindustan Unilever (HUL) down 3.9%. The company's net profit rose 9.79% to Rs 1173.90 crore on 3.36% growth in total income to Rs 8235.77 crore in Q1 June 2016 over Q1 June 2015. The result hit the market during the fag end of trading hours on Monday, 18 July 2016.

ITC rose 0.26%. The company's net profit rose 10.09% to Rs 2384.67 crore on 8.61% increase in total income to Rs 13673.58 crore in Q1 June 2016 over Q1 June 2015. The result was announced after trading hours on Thursday, 21 July 2016.

Meanwhile, global credit rating agency Fitch Ratings said on Monday, 18 July 2016, affirmed India's Long-Term Foreign- and Local-Currency Issuer Default Ratings at 'BBB-'. The outlook on the rating is stable. The affirmation of India's sovereign ratings balances a strong medium-term growth outlook and favourable external balances against a weak fiscal position and still-difficult business environment. Fitch expects the government's continued structural reform push to support GDP growth in the medium term. On the flip side, India still ranks lowest among sovereigns in the 'BBB' category in the World Bank's Ease of Doing Business index and Fitch does not expect change anytime soon.

On the global front, data released on Tuesday, 19 July 2016, showed that US housing starts rose 4.8% in June, a sign of steady improvement in the market for newly constructed homes.

In an interview to a British radio station taped in mid-June and broadcast on Thursday, 21 July 2016, Bank of Japan (BOJ) Governor Haruhiko Kuroda ruled out the idea of using helicopter money -- or directly underwriting the budget deficit -- to combat deflation. The BOJ is scheduled to review monetary policy at a two-day meeting on 28-29 July 2016.

The European Central Bank (ECB) held rates unchanged after a monetary policy review on Thursday, 21 July 2016, and emphasized that it intends to keep rates at current or lower levels for an extended period and that its program of monthly bond buys would run until at least March 2017, and possibly beyond.

No comments: