Nifty settles at over 16-months high
Key benchmark indices edged higher on last trading day of the month as sentiment was boosted after the Union Cabinet today, 31 August 2016 gave ex-post-facto approval for the foreign direct investment (FDI) policy amendments announced by the Government in June this year. The barometer index, the S&P BSE Sensex rose 109.16 points or 0.39% to settle at 28,452.17. The gains for the Nifty 50 index were higher than the Sensex's gains in percentage terms. The Nifty gained 41.85 points or 0.48% to settle at 8,786.20. Key indices gained for the third day in a row today, 31 August 2016. The Sensex settled at its highest level in more than thirteen months. The Nifty settled at its highest level in more than sixteen months.
The Union Cabinet chaired by the Prime Minister Narendra Modi gave its ex-post-facto approval today, 31 August 2016 for the foreign direct investment (FDI) policy amendments announced by the Government on 20 June 2016. The Cabinet approved liberalization of FDI rules in aviation, pharmaceutical, defence, trading in food products and single brand retail trading. The FDI policy amendments are meant to liberalise and simplify the FDI policy so as to provide ease of doing business in the country leading to larger FDI inflows contributing to growth of investment, incomes and employment, government said in a statement.
Private sector bank stocks rose. Shares of RBL Bank saw strong gains on its debut. Public sector banks saw mixed trend. Metal and mining stocks declined. Most capital goods stocks gained. Construction stocks rose after the Union Cabinet approved initiatives to revive the construction sector.
The Sensex rose 109.16 points or 0.39% to settle at 28,452.17, its highest closing level since 22 July 2015. The Sensex rose 189.24 points or 0.66% at the day's high of 28,532.25. The barometer index gained 20.09 points or 0.07% at the day's low of 28,363.10.
The Nifty gained 41.85 points or 0.48% to settle at 8,786.20, its highest closing level since 13 April 2015. The Nifty rose 74.85 points or 0.85% at the day's high of 8,819.20. The index gained 9.70 points or 0.11% at the day's low of 8,754.05.
The market breadth indicating the overall health of the market was negative. On BSE, 1,358 shares fell and 1,319 shares rose. A total of 227 shares were unchanged. The BSE Mid-Cap index rose 0.37%. The BSE Small-Cap index gained 0.18%. Both these indices underperformed the Sensex.
In overseas stock markets, European stocks were mixed today, 31 August 2016, as global markets gear up for Friday's US jobs report. The non-farm payrolls report will be eagerly watched by the US Federal Reserve and could determine whether the central bank increases interest rates in September. Asian stocks also settled mixed. US stocks slipped yesterday, 30 August 2016, as the dollar strengthened on expectations that the Federal Reserve was moving closer to raising interest rates. US consumer confidence rose to an 11-month high in August, with households more upbeat about the labour market, data showed overnight.
The total turnover on BSE amounted to Rs 3223 crore, lower than turnover of Rs 3458.43 crore registered during the previous trading session.
Among the sectoral indices on BSE, the S&P BSE Telecom index (up 0.43%), the S&P BSE Consumer Durables index (up 0.71%), the S&P BSE Industrials index (up 1.04%), the S&P BSE Finance index (up 1.08%), the S&P BSE Bankex (up 1.2%), the S&P BSE Capital Goods index (up 1.4%) outperformed the Sensex. The S&P BSE Metal index (down 1.4%), the S&P BSE Realty index (down 0.81%), the S&P BSE Energy index (down 0.47%), the S&P BSE Healthcare index (down 0.42%), the S&P BSE IT index (down 0.39%), the S&P BSE Teck index (down 0.14%), the S&P BSE Oil & Gas index (down 0.03%), the S&P BSE Power index (up 0.02%), the S&P BSE Basic Materials index (up 0.03%), the S&P BSE FMCG index (up 0.15%), the S&P BSE Consumer Discretionary Goods & Services index (up 0.18%), the S&P BSE Utilities index (up 0.3%), the S&P BSE Auto index (up 0.35%) underperformed the Sensex.
Private sector bank stocks rose. ICICI Bank (up 0.61%), HDFC Bank (up 1.83%), IndusInd Bank (up 2.73%), Axis Bank (up 0.77%) and Yes Bank (up 0.57%) edged higher.
Kotak Mahindra Bank rose 2.77% after the Reserve Bank of India (RBI) has informed the bank that it has granted approval to Canada Pension Plan Investment Board (CPPIB) for acquiring shares in excess of 5% and below 10% of the paid up capital of the bank. CPPIB, a registered foreign institutional investor in India, already owns 4.89% stake in Kotak Mahindra Bank (as per the shareholding pattern as on 30 June 2016). The announcement was made after market hours yesterday, 30 August 2016.
Shares of RBL Bank settled at Rs 299.30 on BSE, a premium of 33.02% over the initial public offer price of Rs 225. The stock debuted at Rs 273.70, a premium of 21.64% to the initial public offer (IPO) price. The stock hit a high of Rs 305 and low of Rs 273.70 in intraday trade. On BSE, 2.04 crore shares were traded on the counter. RBL Bank is professionally managed and has no identifiable promoter.
Public sector banks saw mixed trend. Bank of Maharashtra (up 1.78%), UCO Bank (up 0.49%), Punjab National Bank (up 0.28%), State Bank of India (SBI) (up 0.14%), Union Bank of India (up 0.11%), and Bank of India (up 0.47%) edged higher.
Indian Bank (down 1.77%), Central Bank of India (down 1.65%), Vijaya Bank (down 1.53%), Bank of Baroda (down 0.79%) and Canara Bank (down 0.12%) fell.
IDBI Bank rose 0.69% after the bank said that it has raised Rs 1500 crore through issue of Basel III compliant Additional Tier-1 bonds on private placement basis to strengthen bank's capital adequacy. The announcement was made after market hours yesterday, 30 August 2016. The bonds are perpetual bonds with a coupon rate of 11.09% per annum.
HDFC rose 0.99% after the company's announcement that it is aiming to raise Rs 500 crore by issuing rupee denominated bonds to overseas investors. The announcement was made after market hours yesterday, 30 August 2016. HDFC said the rupee denominated overseas bond issue will open today, 31 August 2016 and will close tomorrow, 1 September 2016. The bonds will be listed on the London Stock Exchange (LSE). This is second overseas rupee denominated bond issue from HDFC. HDFC became the first Indian company when it raised Rs 3000 crore from rupee denominated overseas bonds last month.
BPCL dropped 1.22% as the company's average gross refining margin dropped to $6.09 per barrel in Q1 June 2016 from $8.55 per barrel in Q1 June 2015. BPCL's net profit rose 11.01% to Rs 2620.50 crore on 2.99% fall in total income to Rs 57380.65 crore in Q1 June 2016 over Q1 June 2015. In Q1 June 2016, BPCL did not get any discount from ONGC/GAIL (India)/NRL in respect of crude oil/products purchased from them compared with discount of Rs 203.33 crore in Q1 June 2015. The company announced Q1 June 2016 results during market hours today, 31 August 2016.
Tata Power Company rose 1.82%. Tata Power Company after market hours today, 31 August 2016 announced that the company operating through its Strategic Engineering Division (SED), has signed a letter of intent (LOI) with Javelin Joint Venture team, a partnership between Raytheon and Lockheed Martin, to explore co-development and production of the Javelin anti-armour missile system. As part of the LOI, the Javelin Joint Venture (JVV) and Tata Power Company SED will create a strategy to co-develop and produce Javelin missile system and integrate platform mounts to meet Indian requirements. This includes ground combat vehicles, dismounted infantry and rotorcraft applications, Tata Power Company said.
Metal and mining stocks declined. Jindal Steel & Power (down 2.73%), Vedanta (down 2.75%), Tata Steel (down 1.95%), Steel Authority of India (down 1.13%), JSW Steel (down 1.66%), Hindustan Zinc (down 0.72%), National Aluminium Company (down 3.08%), NMDC (down 0.18%) and Hindalco Industries (down 1.87%) edged lower.
High Grade Copper for December 2016 delivery was currently up 0.31% at $2.083 per pound on the COMEX.
Hindustan Copper rose 0.54% after the company said it has executed a joint venture agreement with Chhattisgarh Mineral Development Corporation for copper mining. The announcement was made during trading hours today, 31 August 2016. The joint venture company (JVC) will undertake exploration, mining and beneficiation of copper and its associated minerals in Chhattisgarh. In the JVC, the equity share holding of Hindustan Copper will be 74% and Chhattisgarh Mineral Development Corporation (CMDC) will hold the remaining 26% stake. Initially the JVC will be formed with an authorized paid up capital of Rs 10 crore to meet the cost of exploration. CMDC will be allotted 26% equity in the JVC for consideration other than cash which would be against the services to be provided by CMDC for facilitating the varied licenses and approvals from Chhattisgarh state government. Any further capital requirement in JVC for development of mine & beneficiation plant may be structured on mutual consent, depending on the project viability post exploration. CMDC is a Chhattisgarh state government enterprise.
Zee Entertainment Enterprises (Zee) rose after the company announced that it has entered into definitive agreements to sell its loss making sports broadcasting business to Sony Pictures Networks India. The stock gained 1.97% at Rs 539.65. The stock hit a high of Rs 543.85 in intraday trade which is a 52-week high for the counter. The stock hit a low of Rs 523.85 in intraday trade. Zee will sell its sports broadcasting business to Sony Pictures Networks India and its affiliates for all-cash consideration of $385 million. Zee's sports broadcasting business is carried through TEN Sports channels brand that operates in several countries including the Indian sub-continent, Maldives, Singapore, Hong Kong, Middle East and Caribbean. TEN Sports holds cricket broadcast rights from major cricket boards in the world. It also holds rights to wrestling, football, tennis, golf among other sporting events across the world. The announcement was made during market hours today, 31 August 2016.
The transaction is expected to be completed within 4 to 5 months. Zee said that the decision to sell the sports business is a part of reshuffle of the product portfolio. Zee is currently focusing on transforming itself into an all-round media and content company comprising of five verticals viz. broadcast, digital, films, live events and international business. The sports broadcasting business clocked revenue of Rs 631 crore for the year ended 31 March 2016 (FY 2016), constituting 10.79% of Zee's consolidated revenue. The sports business incurred a net loss of Rs 37.20 crore in FY 2016.
Most capital goods stocks gained. L&T (up 2.71%), ABB India (up 0.68%), Bharat Electronics (up 0.1%), Thermax (up 0.41%) and Punj Lloyd (up 11.57%) rose. Siemens (down 0.79%) and Bharat Heavy Electricals (Bhel) (down 1.14%) declined.
Tata Motors rose 1.82% to Rs 537.90 on reports that the company is overhauling its domestic supply chain, product portfolio and organisational structure as part of a three-year strategy to turnaround domestic business. The stock hit a high of Rs 548.15 in intraday trade, which is a 52-week high for the counter. Tata Motors Chief Executive Officer & Managing Director Guenter Butschek was quoted as saying that the company is aiming to be among the top three car brands in India by year ended 31 March 2019 (FY 2019), from being in the fifth position in FY 2016. The company is rationalising the number of suppliers and will eliminate those that do not meet its standards on quality, cost and timely delivery, Butschek said according to reports.
Butschek who is at the helm of all operations of Tata Motors in India, South Korea, Thailand, Indonesia and South Africa was quoted as saying that Tata Motors has completed a study of its passenger vehicles business and will consider phasing out models that are not performing well. Butschek further said that company will launch products with new technologies and a focus on safety, low emissions and fuel economy, according to reports.
Maruti Suzuki India shed 0.32% to Rs 5,052.65. The stock turned ex-dividend today, 31 August 2016, for final dividend of Rs 35 per share for the year ended 31 March 2016. Before turning ex-dividend, the stock offered a dividend yield of 0.69% based on the closing price of Rs 5,068.90 yesterday, 30 August 2016.
UltraTech Cement rose 3.61% after the Reserve Bank of India notified increase in the ceiling on investment in the company's shares by foreign investors to 30% of the company's paid up capital. Ultra Tech Cement's board of directors and the company's shareholders have already approved increase in ceiling on investment in the company's shares by foreign institutional investors.
Grasim Industries shed 0.29%. Grasim has exposure to the cement sector through its holding in UltraTech Cement.
TCS declined 1.42%. The company announced that it has developed an innovative digital solution to connect Intelligent LEDs, to GE's Predix operating system for the industrial Internet through Intel Atom-based gateways, providing critical analytics to save significant time and costs in the manufacturing process. The announcement was made after market hours yesterday, 30 August 2016.
Construction stocks rose after the Union Cabinet approved initiatives to revive the construction sector. HCC (up 19.83%), Unity Infraprojects (up 12.27%), Gammon Infrastructure Projects (up 4.88%), NCC (up 3.09%), Valecha Engineering (up 2.06%), Tarmat (up 0.11%), Patel Engineering (up 1.39%), KNR Constructions (up 2.86%), NBCC (up 0.02%), RPP Infra Projects (up 0.79%), and Sunil Hitech (up 0.01%), edged higher. Man Infraconstruction (down 1.82%), Sadbhav Engineering (down 0.05%) and IRB Infrastructure Developers (down 2.28%) edged lower. The Cabinet Committee on Economic Affairs (CCEA) today, 31 August 2016, approved a series of initiatives to revive the construction sector. As per the new initiatives, CCEA allowed contractors to move to the new speedier arbitration process, approved release of 75% of the amount in dispute against margin free bank guarantee and provided for a conciliation board comprising of independent subject experts in order to ensure speedy disposal of pending or new cases.
Item-rate contracts, may be substituted by engineering, procurement, and construction (turnkey) contracts, and PSUs/departments may adopt the model EPC contracts for construction works. The Department of Financial Services, in consultation with Reserve Bank of India, may evolve a suitable one-time scheme for addressing stressed bank loans in the construction sector, the government said in a statement.
These initiatives are expected to help in improving the liquidity in the short run and reform the contracting regime in the long run. Given the significant multiplier effect the construction sector has on the economy, these measures are expected to give a major boost to economic growth. As the sector provides the largest segment of direct and indirect employment, the revival of the sector would also help in significant employment generation, according to the government statement.
Cox & Kings fell 3.05% after consolidated net profit fell 23.67% to Rs 108.07 crore on 2.84% decline in net sales to Rs 2062.46 crore in Q1 June 2016 over Q1 June 2015. The result was announced after market hours yesterday, 30 August 2016.
Goodyear India rose 1.09% after net profit rose 11.36% to Rs 41.28 crore on 2.46% fall in net sales to Rs 415.38 crore in the quarter ended 30 June 2016 over the quarter ended 30 June 2015. The result was announced after market hours yesterday, 30 August 2016.
Surya Roshni rose 1.09% after media reports suggested that two private equity firms have evinced interest in buying the Indian company's lighting business. According to a media reports, Warburg Pincus and Bain Capital have expressed interest to buy into the lighting business of Surya Roshni, as the New Delhi-headquartered company is demerging it into a standalone unit. The private equity acquirers could shell about $400 million for the acquisition of the business, as per reports.
Key benchmark indices rose for the third straight trading session. The Sensex has risen 669.92 points or 2.41% in three trading sessions from its close of 27,782.25 on 26 August 2016. The Sensex has risen 400.31 points or 1.43% in August 2016. The Sensex has risen 2,334.63 points or 8.94% in calendar year 2016 so far (till 31 August 2016). From a 52-week low of 22,494.61 hit on 29 February 2016, the barometer index has risen 5,957.56 points or 26.48%. The Sensex is off 1,572.57 points or 5.24% from a record high of 30,024.74 hit on 4 March 2015.
The Union Cabinet chaired by the Prime Minister Narendra Modi gave its ex-post-facto approval today, 31 August 2016 for the foreign direct investment (FDI) policy amendments announced by the Government on 20 June 2016. The Cabinet approved liberalization of FDI rules in aviation, pharmaceutical, defence, trading in food products and single brand retail trading. The FDI policy amendments are meant to liberalise and simplify the FDI policy so as to provide ease of doing business in the country leading to larger FDI inflows contributing to growth of investment, incomes and employment, government said in a statement.
Private sector bank stocks rose. Shares of RBL Bank saw strong gains on its debut. Public sector banks saw mixed trend. Metal and mining stocks declined. Most capital goods stocks gained. Construction stocks rose after the Union Cabinet approved initiatives to revive the construction sector.
The Sensex rose 109.16 points or 0.39% to settle at 28,452.17, its highest closing level since 22 July 2015. The Sensex rose 189.24 points or 0.66% at the day's high of 28,532.25. The barometer index gained 20.09 points or 0.07% at the day's low of 28,363.10.
The Nifty gained 41.85 points or 0.48% to settle at 8,786.20, its highest closing level since 13 April 2015. The Nifty rose 74.85 points or 0.85% at the day's high of 8,819.20. The index gained 9.70 points or 0.11% at the day's low of 8,754.05.
The market breadth indicating the overall health of the market was negative. On BSE, 1,358 shares fell and 1,319 shares rose. A total of 227 shares were unchanged. The BSE Mid-Cap index rose 0.37%. The BSE Small-Cap index gained 0.18%. Both these indices underperformed the Sensex.
In overseas stock markets, European stocks were mixed today, 31 August 2016, as global markets gear up for Friday's US jobs report. The non-farm payrolls report will be eagerly watched by the US Federal Reserve and could determine whether the central bank increases interest rates in September. Asian stocks also settled mixed. US stocks slipped yesterday, 30 August 2016, as the dollar strengthened on expectations that the Federal Reserve was moving closer to raising interest rates. US consumer confidence rose to an 11-month high in August, with households more upbeat about the labour market, data showed overnight.
The total turnover on BSE amounted to Rs 3223 crore, lower than turnover of Rs 3458.43 crore registered during the previous trading session.
Among the sectoral indices on BSE, the S&P BSE Telecom index (up 0.43%), the S&P BSE Consumer Durables index (up 0.71%), the S&P BSE Industrials index (up 1.04%), the S&P BSE Finance index (up 1.08%), the S&P BSE Bankex (up 1.2%), the S&P BSE Capital Goods index (up 1.4%) outperformed the Sensex. The S&P BSE Metal index (down 1.4%), the S&P BSE Realty index (down 0.81%), the S&P BSE Energy index (down 0.47%), the S&P BSE Healthcare index (down 0.42%), the S&P BSE IT index (down 0.39%), the S&P BSE Teck index (down 0.14%), the S&P BSE Oil & Gas index (down 0.03%), the S&P BSE Power index (up 0.02%), the S&P BSE Basic Materials index (up 0.03%), the S&P BSE FMCG index (up 0.15%), the S&P BSE Consumer Discretionary Goods & Services index (up 0.18%), the S&P BSE Utilities index (up 0.3%), the S&P BSE Auto index (up 0.35%) underperformed the Sensex.
Private sector bank stocks rose. ICICI Bank (up 0.61%), HDFC Bank (up 1.83%), IndusInd Bank (up 2.73%), Axis Bank (up 0.77%) and Yes Bank (up 0.57%) edged higher.
Kotak Mahindra Bank rose 2.77% after the Reserve Bank of India (RBI) has informed the bank that it has granted approval to Canada Pension Plan Investment Board (CPPIB) for acquiring shares in excess of 5% and below 10% of the paid up capital of the bank. CPPIB, a registered foreign institutional investor in India, already owns 4.89% stake in Kotak Mahindra Bank (as per the shareholding pattern as on 30 June 2016). The announcement was made after market hours yesterday, 30 August 2016.
Shares of RBL Bank settled at Rs 299.30 on BSE, a premium of 33.02% over the initial public offer price of Rs 225. The stock debuted at Rs 273.70, a premium of 21.64% to the initial public offer (IPO) price. The stock hit a high of Rs 305 and low of Rs 273.70 in intraday trade. On BSE, 2.04 crore shares were traded on the counter. RBL Bank is professionally managed and has no identifiable promoter.
Public sector banks saw mixed trend. Bank of Maharashtra (up 1.78%), UCO Bank (up 0.49%), Punjab National Bank (up 0.28%), State Bank of India (SBI) (up 0.14%), Union Bank of India (up 0.11%), and Bank of India (up 0.47%) edged higher.
Indian Bank (down 1.77%), Central Bank of India (down 1.65%), Vijaya Bank (down 1.53%), Bank of Baroda (down 0.79%) and Canara Bank (down 0.12%) fell.
IDBI Bank rose 0.69% after the bank said that it has raised Rs 1500 crore through issue of Basel III compliant Additional Tier-1 bonds on private placement basis to strengthen bank's capital adequacy. The announcement was made after market hours yesterday, 30 August 2016. The bonds are perpetual bonds with a coupon rate of 11.09% per annum.
HDFC rose 0.99% after the company's announcement that it is aiming to raise Rs 500 crore by issuing rupee denominated bonds to overseas investors. The announcement was made after market hours yesterday, 30 August 2016. HDFC said the rupee denominated overseas bond issue will open today, 31 August 2016 and will close tomorrow, 1 September 2016. The bonds will be listed on the London Stock Exchange (LSE). This is second overseas rupee denominated bond issue from HDFC. HDFC became the first Indian company when it raised Rs 3000 crore from rupee denominated overseas bonds last month.
BPCL dropped 1.22% as the company's average gross refining margin dropped to $6.09 per barrel in Q1 June 2016 from $8.55 per barrel in Q1 June 2015. BPCL's net profit rose 11.01% to Rs 2620.50 crore on 2.99% fall in total income to Rs 57380.65 crore in Q1 June 2016 over Q1 June 2015. In Q1 June 2016, BPCL did not get any discount from ONGC/GAIL (India)/NRL in respect of crude oil/products purchased from them compared with discount of Rs 203.33 crore in Q1 June 2015. The company announced Q1 June 2016 results during market hours today, 31 August 2016.
Tata Power Company rose 1.82%. Tata Power Company after market hours today, 31 August 2016 announced that the company operating through its Strategic Engineering Division (SED), has signed a letter of intent (LOI) with Javelin Joint Venture team, a partnership between Raytheon and Lockheed Martin, to explore co-development and production of the Javelin anti-armour missile system. As part of the LOI, the Javelin Joint Venture (JVV) and Tata Power Company SED will create a strategy to co-develop and produce Javelin missile system and integrate platform mounts to meet Indian requirements. This includes ground combat vehicles, dismounted infantry and rotorcraft applications, Tata Power Company said.
Metal and mining stocks declined. Jindal Steel & Power (down 2.73%), Vedanta (down 2.75%), Tata Steel (down 1.95%), Steel Authority of India (down 1.13%), JSW Steel (down 1.66%), Hindustan Zinc (down 0.72%), National Aluminium Company (down 3.08%), NMDC (down 0.18%) and Hindalco Industries (down 1.87%) edged lower.
High Grade Copper for December 2016 delivery was currently up 0.31% at $2.083 per pound on the COMEX.
Hindustan Copper rose 0.54% after the company said it has executed a joint venture agreement with Chhattisgarh Mineral Development Corporation for copper mining. The announcement was made during trading hours today, 31 August 2016. The joint venture company (JVC) will undertake exploration, mining and beneficiation of copper and its associated minerals in Chhattisgarh. In the JVC, the equity share holding of Hindustan Copper will be 74% and Chhattisgarh Mineral Development Corporation (CMDC) will hold the remaining 26% stake. Initially the JVC will be formed with an authorized paid up capital of Rs 10 crore to meet the cost of exploration. CMDC will be allotted 26% equity in the JVC for consideration other than cash which would be against the services to be provided by CMDC for facilitating the varied licenses and approvals from Chhattisgarh state government. Any further capital requirement in JVC for development of mine & beneficiation plant may be structured on mutual consent, depending on the project viability post exploration. CMDC is a Chhattisgarh state government enterprise.
Zee Entertainment Enterprises (Zee) rose after the company announced that it has entered into definitive agreements to sell its loss making sports broadcasting business to Sony Pictures Networks India. The stock gained 1.97% at Rs 539.65. The stock hit a high of Rs 543.85 in intraday trade which is a 52-week high for the counter. The stock hit a low of Rs 523.85 in intraday trade. Zee will sell its sports broadcasting business to Sony Pictures Networks India and its affiliates for all-cash consideration of $385 million. Zee's sports broadcasting business is carried through TEN Sports channels brand that operates in several countries including the Indian sub-continent, Maldives, Singapore, Hong Kong, Middle East and Caribbean. TEN Sports holds cricket broadcast rights from major cricket boards in the world. It also holds rights to wrestling, football, tennis, golf among other sporting events across the world. The announcement was made during market hours today, 31 August 2016.
The transaction is expected to be completed within 4 to 5 months. Zee said that the decision to sell the sports business is a part of reshuffle of the product portfolio. Zee is currently focusing on transforming itself into an all-round media and content company comprising of five verticals viz. broadcast, digital, films, live events and international business. The sports broadcasting business clocked revenue of Rs 631 crore for the year ended 31 March 2016 (FY 2016), constituting 10.79% of Zee's consolidated revenue. The sports business incurred a net loss of Rs 37.20 crore in FY 2016.
Most capital goods stocks gained. L&T (up 2.71%), ABB India (up 0.68%), Bharat Electronics (up 0.1%), Thermax (up 0.41%) and Punj Lloyd (up 11.57%) rose. Siemens (down 0.79%) and Bharat Heavy Electricals (Bhel) (down 1.14%) declined.
Tata Motors rose 1.82% to Rs 537.90 on reports that the company is overhauling its domestic supply chain, product portfolio and organisational structure as part of a three-year strategy to turnaround domestic business. The stock hit a high of Rs 548.15 in intraday trade, which is a 52-week high for the counter. Tata Motors Chief Executive Officer & Managing Director Guenter Butschek was quoted as saying that the company is aiming to be among the top three car brands in India by year ended 31 March 2019 (FY 2019), from being in the fifth position in FY 2016. The company is rationalising the number of suppliers and will eliminate those that do not meet its standards on quality, cost and timely delivery, Butschek said according to reports.
Butschek who is at the helm of all operations of Tata Motors in India, South Korea, Thailand, Indonesia and South Africa was quoted as saying that Tata Motors has completed a study of its passenger vehicles business and will consider phasing out models that are not performing well. Butschek further said that company will launch products with new technologies and a focus on safety, low emissions and fuel economy, according to reports.
Maruti Suzuki India shed 0.32% to Rs 5,052.65. The stock turned ex-dividend today, 31 August 2016, for final dividend of Rs 35 per share for the year ended 31 March 2016. Before turning ex-dividend, the stock offered a dividend yield of 0.69% based on the closing price of Rs 5,068.90 yesterday, 30 August 2016.
UltraTech Cement rose 3.61% after the Reserve Bank of India notified increase in the ceiling on investment in the company's shares by foreign investors to 30% of the company's paid up capital. Ultra Tech Cement's board of directors and the company's shareholders have already approved increase in ceiling on investment in the company's shares by foreign institutional investors.
Grasim Industries shed 0.29%. Grasim has exposure to the cement sector through its holding in UltraTech Cement.
TCS declined 1.42%. The company announced that it has developed an innovative digital solution to connect Intelligent LEDs, to GE's Predix operating system for the industrial Internet through Intel Atom-based gateways, providing critical analytics to save significant time and costs in the manufacturing process. The announcement was made after market hours yesterday, 30 August 2016.
Construction stocks rose after the Union Cabinet approved initiatives to revive the construction sector. HCC (up 19.83%), Unity Infraprojects (up 12.27%), Gammon Infrastructure Projects (up 4.88%), NCC (up 3.09%), Valecha Engineering (up 2.06%), Tarmat (up 0.11%), Patel Engineering (up 1.39%), KNR Constructions (up 2.86%), NBCC (up 0.02%), RPP Infra Projects (up 0.79%), and Sunil Hitech (up 0.01%), edged higher. Man Infraconstruction (down 1.82%), Sadbhav Engineering (down 0.05%) and IRB Infrastructure Developers (down 2.28%) edged lower. The Cabinet Committee on Economic Affairs (CCEA) today, 31 August 2016, approved a series of initiatives to revive the construction sector. As per the new initiatives, CCEA allowed contractors to move to the new speedier arbitration process, approved release of 75% of the amount in dispute against margin free bank guarantee and provided for a conciliation board comprising of independent subject experts in order to ensure speedy disposal of pending or new cases.
Item-rate contracts, may be substituted by engineering, procurement, and construction (turnkey) contracts, and PSUs/departments may adopt the model EPC contracts for construction works. The Department of Financial Services, in consultation with Reserve Bank of India, may evolve a suitable one-time scheme for addressing stressed bank loans in the construction sector, the government said in a statement.
These initiatives are expected to help in improving the liquidity in the short run and reform the contracting regime in the long run. Given the significant multiplier effect the construction sector has on the economy, these measures are expected to give a major boost to economic growth. As the sector provides the largest segment of direct and indirect employment, the revival of the sector would also help in significant employment generation, according to the government statement.
Cox & Kings fell 3.05% after consolidated net profit fell 23.67% to Rs 108.07 crore on 2.84% decline in net sales to Rs 2062.46 crore in Q1 June 2016 over Q1 June 2015. The result was announced after market hours yesterday, 30 August 2016.
Goodyear India rose 1.09% after net profit rose 11.36% to Rs 41.28 crore on 2.46% fall in net sales to Rs 415.38 crore in the quarter ended 30 June 2016 over the quarter ended 30 June 2015. The result was announced after market hours yesterday, 30 August 2016.
Surya Roshni rose 1.09% after media reports suggested that two private equity firms have evinced interest in buying the Indian company's lighting business. According to a media reports, Warburg Pincus and Bain Capital have expressed interest to buy into the lighting business of Surya Roshni, as the New Delhi-headquartered company is demerging it into a standalone unit. The private equity acquirers could shell about $400 million for the acquisition of the business, as per reports.
Key benchmark indices rose for the third straight trading session. The Sensex has risen 669.92 points or 2.41% in three trading sessions from its close of 27,782.25 on 26 August 2016. The Sensex has risen 400.31 points or 1.43% in August 2016. The Sensex has risen 2,334.63 points or 8.94% in calendar year 2016 so far (till 31 August 2016). From a 52-week low of 22,494.61 hit on 29 February 2016, the barometer index has risen 5,957.56 points or 26.48%. The Sensex is off 1,572.57 points or 5.24% from a record high of 30,024.74 hit on 4 March 2015.
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