Small, Mid-Cap indices outperform Sensex
Key benchmark indices logged tiny-to-small losses in the truncated trading week. The barometer index, the S&P BSE Sensex, retained the psychologically important 28,000 level. Key indices edged lower in three out of four trading sessions during the week ended 19 August 2016. The BSE Mid-Cap and the BSE Small-Cap indices outperformed the Sensex. Stock markets remained closed on Monday, 15 August 2016 on account of Independence Day.
In the week ended Friday, 19 August 2016, the Sensex fell 75.40 points or 0.26% to settle at 28,077. The Nifty 50 index fell 5.25 points or 0.06% to settle at 8,666.90. The BSE Mid-Cap index rose 281.76 points or 2.2% to settle at 13,035.17. The BSE Small-Cap index gained 245.23 points or 2% to settle at 12,459.46. Both these indices outperformed the Sensex.
Trading for the week began on subdued note. Losses for IT stocks and index heavyweights HDFC and Reliance Industries (RIL) pushed the two key benchmark indices lower on Tuesday, 10 August 2016. The Sensex fell 87.79 points or 0.31% to settle at 28,064.61, its lowest closing level since 11 August 2016.
IT stocks and index heavyweight Reliance Industries (RIL) led losses for key benchmark indices on Wednesday, 17 August 2016.The Sensex fell 59.24 points or 0.21% to settle at 28,005.37, its lowest closing level since 11 August 2016.
Key benchmark indices registered modest gains on Thursday, 18 August 2016 after the minutes of the latest US Federal Reserve meeting indicated that a rate hike from the Fed was unlikely at the Fed's September policy meeting. The Sensex rose 118.07 points or 0.42% to settle at 28,123.44, its highest closing level since 12 August 2016.
Key benchmark indices declined in lackluster trading session on Friday, 19 August 2016. The Sensex fell 46.44 points or 0.17% to settle at 28,077, its lowest closing level since 17 August 2016.
Among the 30-share Sensex pack, 16 stocks rose and the rest of them fell in the week ended Friday, 19 August 2016.
GAIL (India) (down 2.53%), Sun Pharmaceutical Industries (down 2.38%) and Asian Paints (down 2.36%) edged lower from the Sensex pack. Cipla (up 7.52%), Tata Steel (up 4.66%) and NTPC (up 4.05%) edged higher from the Sensex pack.
IT stocks edged lower. The S&P BSE IT index lost 3.72% during the week. TCS (down 4.69%) and Wipro (down 4.25%) dropped.
Infosys lost 3.96%. The company announced on 13 August 2016 that it had lost a contract from Royal Bank of Scotland (RBS) as RBS decided not to pursue its plan to separate and list a new UK standalone bank, Williams & Glyn (W&G). Subsequent to this decision by RBS, Infosys will carry out an orderly ramp-down of about 3,000 employees, primarily in India, over the next few months. Infosys was a W&G program technology partner for consulting, application delivery and testing services. As per reports, the decision of RBS will impact revenues of Infosys for the year ending 31 March 2017 (FY 2017) by about $40 million.
Reliance Industries (RIL) fell 1.94%. The company issued a clarification with reference to news item suggesting that the oil ministry slapped $250 million profit petroleum penalty on RIL owing to the firm's inability to meet the natural gas production targets from the Krishna-Godavari (KG) D6 block. RIL said that on cumulative basis up to the year 2014-15, the Government of India (GoI) has disallowed cost recovery of $2.756 billion from the D6 block. GoI has also on cumulative basis made demand of $246.90 million as GoI's share of profit petroleum from the block. RIL said the dispute between the contractor group (RIL, BP and NIKO) and the GoI on disallowance of cost recovery which started in 2011 is currently under arbitration in accordance with provisions of the Production Sharing Contract (PSC). RIL also clarified that GoI has already collected gross $81.7 million in Gas Pool Account, towards the aforesaid claim.
Shares of state-run power transmission major Power Grid Corporation of India rose 1.68%. The company said in an investor presentation on the first quarter results submitted to the stock exchanges that it is implementing projects worth about Rs 1.13 lakh crore (as of July 2016). It has identified new projects worth about Rs 15000 crore. The total works in hand is about Rs 1.44 lakh crore.
State Bank of India (SBI) jumped 6.29%. The state-run bank after trading hours on Thursday, 18 August 2016, announced the merger of 5 associate banks with itself. State Bank of Bikaner and Jaipur (SBBJ), State Bank of Mysore (SBM), State Bank of Travancore (SBT), State Bank of Hyderabad and State Bank of Patiala will be merged with SBI. As per the swap ratio for the merger, 28 equity shares of SBI will be issued for every 10 shares held in SBBJ. For both SBM and SBT, the swap ratio for merger is 22 shares of SBI for every 10 shares held in SBM and SBT.
State Bank of Hyderabad and State Bank of Patiala are both not listed on the bourses. SBI also announced the merger of unlisted Bharatiya Mahila Bank (BMBL) with itself. SBI had announced in May 2016 that it was considering the merger of 5 associate banks and BMBL with itself.
Among private sector banks, ICICI Bank (up 3.27%) and HDFC Bank (up 1.35%) rose. Axis Bank fell 0.29%.
Coal India fell 1.1%. As per reports, the government proposes to divest 5-10% stake in the company in Q4 March 2017. GoI currently holds 79.65% in Coal India (as on 30 June 2016).
Bharti Airtel rose 0.86%. Singapore Telecommunications on Thursday, 18 August 2016, announced that it has entered into conditional share purchase agreement with Temasek to acquire an additional 7.39% stake in Bharti Telecom from Temasek. Bharti Telecom is the holding company of Bharti Airtel. Singapore Telecommunications or Singtel will pay a total consideration of Singapore dollar 2.47 billion to Temasek for acquiring 7.39% stake in Bharti Telecom and 21% stake in Intouch Holdings Public Company (Intouch).
Hero MotoCorp rose 1.38%. The company announced that Sunil Kant Munjal has resigned from the board of directors of the company as part of a realignment of business interest amongst the promoter Munjal family. Sunil Kant Munjal's resignation from the company's board of directors comes as his tenure as the Joint Managing Director of the company ended on Tuesday, 16 August 2016. Sunil Kant Munjal will henceforth not be classified as a promoter of the company. However, he will continue to hold 32,500 equity shares of the company representing 0.02% of the issued and paid up share capital of the company in his individual capacity.
On the macro front, inflation based on wholesale price index (WPI) accelerated to 3.55% in July 2016 from 1.62% in June 2016. The government announced the data during trading hours Tuesday, 16 August 2016. Inflation based on CPI accelerated to 6.07% in July 2016 from 5.77% in June 2016. The core CPI inflation moved up to 4.52% in July 2016 from 4.39% in June 2016. The data was released after market hours on Friday, 12 August 2016.
Another data showed that industrial production (IIP) expanded 2.1% in June 2016 from a year earlier. The rise was primarily led by expansion in electricity and mining production. The data was released after market hours on Friday, 12 August 2016.
On the global front, minutes of the US Federal Reserve's July meeting released on Wednesday, 17 August 2016, showed policy makers remain divided on prospects for a near-term rate increase.
In the week ended Friday, 19 August 2016, the Sensex fell 75.40 points or 0.26% to settle at 28,077. The Nifty 50 index fell 5.25 points or 0.06% to settle at 8,666.90. The BSE Mid-Cap index rose 281.76 points or 2.2% to settle at 13,035.17. The BSE Small-Cap index gained 245.23 points or 2% to settle at 12,459.46. Both these indices outperformed the Sensex.
Trading for the week began on subdued note. Losses for IT stocks and index heavyweights HDFC and Reliance Industries (RIL) pushed the two key benchmark indices lower on Tuesday, 10 August 2016. The Sensex fell 87.79 points or 0.31% to settle at 28,064.61, its lowest closing level since 11 August 2016.
IT stocks and index heavyweight Reliance Industries (RIL) led losses for key benchmark indices on Wednesday, 17 August 2016.The Sensex fell 59.24 points or 0.21% to settle at 28,005.37, its lowest closing level since 11 August 2016.
Key benchmark indices registered modest gains on Thursday, 18 August 2016 after the minutes of the latest US Federal Reserve meeting indicated that a rate hike from the Fed was unlikely at the Fed's September policy meeting. The Sensex rose 118.07 points or 0.42% to settle at 28,123.44, its highest closing level since 12 August 2016.
Key benchmark indices declined in lackluster trading session on Friday, 19 August 2016. The Sensex fell 46.44 points or 0.17% to settle at 28,077, its lowest closing level since 17 August 2016.
Among the 30-share Sensex pack, 16 stocks rose and the rest of them fell in the week ended Friday, 19 August 2016.
GAIL (India) (down 2.53%), Sun Pharmaceutical Industries (down 2.38%) and Asian Paints (down 2.36%) edged lower from the Sensex pack. Cipla (up 7.52%), Tata Steel (up 4.66%) and NTPC (up 4.05%) edged higher from the Sensex pack.
IT stocks edged lower. The S&P BSE IT index lost 3.72% during the week. TCS (down 4.69%) and Wipro (down 4.25%) dropped.
Infosys lost 3.96%. The company announced on 13 August 2016 that it had lost a contract from Royal Bank of Scotland (RBS) as RBS decided not to pursue its plan to separate and list a new UK standalone bank, Williams & Glyn (W&G). Subsequent to this decision by RBS, Infosys will carry out an orderly ramp-down of about 3,000 employees, primarily in India, over the next few months. Infosys was a W&G program technology partner for consulting, application delivery and testing services. As per reports, the decision of RBS will impact revenues of Infosys for the year ending 31 March 2017 (FY 2017) by about $40 million.
Reliance Industries (RIL) fell 1.94%. The company issued a clarification with reference to news item suggesting that the oil ministry slapped $250 million profit petroleum penalty on RIL owing to the firm's inability to meet the natural gas production targets from the Krishna-Godavari (KG) D6 block. RIL said that on cumulative basis up to the year 2014-15, the Government of India (GoI) has disallowed cost recovery of $2.756 billion from the D6 block. GoI has also on cumulative basis made demand of $246.90 million as GoI's share of profit petroleum from the block. RIL said the dispute between the contractor group (RIL, BP and NIKO) and the GoI on disallowance of cost recovery which started in 2011 is currently under arbitration in accordance with provisions of the Production Sharing Contract (PSC). RIL also clarified that GoI has already collected gross $81.7 million in Gas Pool Account, towards the aforesaid claim.
Shares of state-run power transmission major Power Grid Corporation of India rose 1.68%. The company said in an investor presentation on the first quarter results submitted to the stock exchanges that it is implementing projects worth about Rs 1.13 lakh crore (as of July 2016). It has identified new projects worth about Rs 15000 crore. The total works in hand is about Rs 1.44 lakh crore.
State Bank of India (SBI) jumped 6.29%. The state-run bank after trading hours on Thursday, 18 August 2016, announced the merger of 5 associate banks with itself. State Bank of Bikaner and Jaipur (SBBJ), State Bank of Mysore (SBM), State Bank of Travancore (SBT), State Bank of Hyderabad and State Bank of Patiala will be merged with SBI. As per the swap ratio for the merger, 28 equity shares of SBI will be issued for every 10 shares held in SBBJ. For both SBM and SBT, the swap ratio for merger is 22 shares of SBI for every 10 shares held in SBM and SBT.
State Bank of Hyderabad and State Bank of Patiala are both not listed on the bourses. SBI also announced the merger of unlisted Bharatiya Mahila Bank (BMBL) with itself. SBI had announced in May 2016 that it was considering the merger of 5 associate banks and BMBL with itself.
Among private sector banks, ICICI Bank (up 3.27%) and HDFC Bank (up 1.35%) rose. Axis Bank fell 0.29%.
Coal India fell 1.1%. As per reports, the government proposes to divest 5-10% stake in the company in Q4 March 2017. GoI currently holds 79.65% in Coal India (as on 30 June 2016).
Bharti Airtel rose 0.86%. Singapore Telecommunications on Thursday, 18 August 2016, announced that it has entered into conditional share purchase agreement with Temasek to acquire an additional 7.39% stake in Bharti Telecom from Temasek. Bharti Telecom is the holding company of Bharti Airtel. Singapore Telecommunications or Singtel will pay a total consideration of Singapore dollar 2.47 billion to Temasek for acquiring 7.39% stake in Bharti Telecom and 21% stake in Intouch Holdings Public Company (Intouch).
Hero MotoCorp rose 1.38%. The company announced that Sunil Kant Munjal has resigned from the board of directors of the company as part of a realignment of business interest amongst the promoter Munjal family. Sunil Kant Munjal's resignation from the company's board of directors comes as his tenure as the Joint Managing Director of the company ended on Tuesday, 16 August 2016. Sunil Kant Munjal will henceforth not be classified as a promoter of the company. However, he will continue to hold 32,500 equity shares of the company representing 0.02% of the issued and paid up share capital of the company in his individual capacity.
On the macro front, inflation based on wholesale price index (WPI) accelerated to 3.55% in July 2016 from 1.62% in June 2016. The government announced the data during trading hours Tuesday, 16 August 2016. Inflation based on CPI accelerated to 6.07% in July 2016 from 5.77% in June 2016. The core CPI inflation moved up to 4.52% in July 2016 from 4.39% in June 2016. The data was released after market hours on Friday, 12 August 2016.
Another data showed that industrial production (IIP) expanded 2.1% in June 2016 from a year earlier. The rise was primarily led by expansion in electricity and mining production. The data was released after market hours on Friday, 12 August 2016.
On the global front, minutes of the US Federal Reserve's July meeting released on Wednesday, 17 August 2016, showed policy makers remain divided on prospects for a near-term rate increase.
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