Saturday, April 30, 2016

THE WEEK AHEAD

Quarterly earnings of India Inc, global cues to dictate trend


Macroeconomic data, next batch of Q4 results of India Inc., trend in global markets, investment by foreign portfolio investors (FPIs) and domestic institutional investors (DIIs), the movement of rupee against the dollar and crude oil price movement will dictate market trend in the near term. Stock markets in Hong Kong and China are closed on Monday, 2 May 2016, for a public holiday.

Investors will closely track the next batch of Q4 results of India Inc. HDFC announces its Q4 March 2016 result on Monday, 2 May 2016. Adani Ports and Special Economic Zone will announce its Q4 March 2016 result on Tuesday, 3 May 2016. Eicher Motors and Hero MotoCorp will declare their Q4 March 2016 results on Thursday, 5 May 2016.
Stocks of auto companies will be in focus as companies start unveiling monthly sales volume data for April 2016 from Sunday, 1 May 2016.

Stocks of public sector oil marketing companies (PSU OMCs) will be in focus as a fuel price review is due on Saturday, 30 April 2016. PSU OMCs undertake fuel price review twice during the month based on the trend in international oil market. The first price review takes place during the middle of the month and the second on the last day of the month.

Airline stocks will be in focus as a monthly review of jet fuel prices is due on Saturday, 30 April 2016. PSU OMCs review jet fuel prices on the last day every month based on the average imported crude oil price for the month. Jet fuel prices are directly linked to crude oil price.

In the primary market, the initial public offer (IPO) of dairy firm Parag Milk Foods opens for bidding on Wednesday, 4 May 2016. The issue closes on Friday, 6 May 2016. The price band of the IPO is Rs 220 to Rs 227 per share.

On political front, developments in budget session of Parliament will be closely watched. The second part of the budget session of Parliament commenced on 25 April 2016, after a month long recess and will conclude on 13 May 2016, during which government hopes to receive support of opposition parties in passage of key legislations including the Goods & Services Tax (GST) Bill.

Among domestic macro economic data, Markit Economics will announce the India Manufacturing PMI for April 2016 on Monday, 2 May 2016. The Nikkei India Services PMI will be declared on Wednesday, 4 May 2016.

On the global front, China's official April manufacturing purchasing managers' index will be announced on Sunday, 1 May 2016. April's non-manufacturing PMI will also be released on the same day. On Monday, 2 May 2016, Markit Economics will announce the Nikkei Japan Manufacturing PMI, Markit Eurozone Manufacturing PMI and the Markit US Manufacturing PMI. Markit Economics will announce Caixin China General Manufacturing PMI on Tuesday, 3 May 2016. The influential monthly US nonfarm payroll data for April 2016 will be released by the Labor Department on Friday, 6 May 2016.

THE WEEK THAT WAS

Market drops on weak global cues


Key benchmark indices dropped in the week ended Friday, 29 April 2016 on weak global cues. The barometer index, the S&P BSE Sensex, failed to hold onto the psychological 26,000 mark after regaining that mark the during the week. Key indices edged higher in three out of five trading sessions during the week. World stocks fell after the Bank of Japan left its main policies unchanged after the conclusion of a two-day monetary policy meeting, disappointing market expectations the central bank would take further extraordinary steps to stimulate Japan's economy.

In the week ended Friday, 29 April 2016, the 30-share S&P BSE Sensex fell 231.52 points or 0.9% to settle at 25,606.62. The losses for the Nifty 50 index were lower in percentage terms than those for the Sensex. The Nifty fell 49.50 points or 0.63% to settle at 7,849.80.

The BSE Mid-Cap index rose 24.28 points or 0.22% to settle at 11,042.92, outperforming the Sensex. The BSE Small-Cap index shed 58.25 points or 0.53% to settle at 11,020.59. The fall in this index was lower than Sensex's decline in percentage terms.

Trading for the week started on a weak note. Stocks of public sector banks, pharma and metal firms and index heavyweights Reliance Industries, HDFC and ITC led losses for key benchmark indices on Monday, 25 April 2016. The Sensex fell 159.21 points or 0.62% to settle at 25,678.93, its lowest closing level since 13 April 2016.

Key benchmark indices logged strong gains on Tuesday, 26 April 2016, reversing intraday losses, led by gains in banking stocks and index heavyweights HDFC, ITC and Infosys. The Sensex rose 328.37 points or 1.28% to settle at 26,007.30, its highest closing level since 1 January 2016.

A divergent trend for various index constituents resulted in small gains for the two key benchmark indices on Wednesday, 27 April 2016. The Sensex rose 56.82 points or 0.22% to settle at 26,064.12, its highest closing level since 1 January 2016.

A disappointment from the Japanese central bank, which held off from expanding monetary stimulus, pulled global stocks lower, with Indian stocks witnessing a sharp slide on Thursday, 28 April 2016. The Sensex slumped 461.02 points or 1.77% to settle at 25,603.10, its lowest closing level since 12 April 2016.

Key benchmark indices logged small gains in a volatile trading session on Friday, 29 April 2016. The Sensex rose 3.52 points or 0.01% to settle at 25,606.62, its highest closing level since 27 April 2016.

Among the 30-share Sensex pack, 22 stocks declined and the rest of them rose in the week ended Friday, 29 April 2016.

HDFC Bank (up 3.77%), Adani Ports and Special Economic Zone (up 3.36%) and Cipla (up 1.03%) edged higher from the Sensex pack.

State Bank of India (down 5.48%), HDFC (down 3.77%) and Hero MotoCorp (down 3.32%) edged lower from the Sensex pack.

Index heavyweight Reliance Industries (RIL) dropped 5.41%. RIL's consolidated net profit rose 15.93% to Rs 7398 crore on 10.95% fall in total income to Rs 62010 crore in Q4 March 2016 over Q4 March 2015. The result was announced after trading hours on Friday, 22 April 2016. Strong operating performance from refining and petrochemicals businesses coupled with favorable exchange rate movement was partially offset by lower contribution from oil and gas business. The decline in revenue was led by the 41.4% decline in benchmark oil price which averaged at $30.4 per barrel in Q4 March 2016 as compared to $51.9 per barrel in Q4 March 2015. Based on standalone performance, the gross refining margin (GRM) increased to $10.80 per barrel in Q4 March 2016 from $10.10 per barrel in Q4 March 2015.

RIL did not specify when exactly it would start commercial roll out of telecom services. RIL said that the commercial roll out is expected in coming months. Reliance Jio Infocomm (RJIL) launched full-scale service offerings for the RIL group employees, partners, vendors and associates on a trial basis on 28 December 2015. RIL's telecom business is being carried out through its subsidiary RJIL.

Maruti Suzuki India slipped 0.59%. The company reported 11.72% fall in net profit to Rs 1133.60 crore on 10.62% rise in total income to Rs 15426.90 crore in Q4 March 2016 over Q4 March 2015. The company's board of directors has recommended a final dividend of Rs 35 per share for the year ended 31 March 2016. The company's sales volumes rose 3.9% to 3.6 lakh vehicles in Q4 March 2016 over Q4 March 2015. Loss of 10,000 units due to Jat reservation agitation in Haryana, increased advertising expenses and lower other income impacted profits during Q4 March 2016. Maruti's other income dropped 62.11% to Rs 121.20 crore in Q4 March 2016 over Q4 March 2015. The result was announced during market hours on Tuesday, 26 April 2016.

IT stocks were mmixed. Infosys (down 0.25%) and Wipro (down 0.72%) fell. TCS gained 4.67%. The S&P BSE IT index slipped 0.14% during the week.

Global credit rating agency Moody's Investors Service said in a sector report that it expects the Indian IT services sector to maintain global market share gains despite headwinds. According to Moody's, economic stability in developed countries will fuel growth for the global IT services outsourcing industry, benefiting Indian IT services companies in particular. However, currency volatility will pressure growth estimates for the Indian IT services sector, according to Moody's. While revenue is predominantly denominated in US dollar and euro for the Indian IT services sector, the cost base remains primarily denominated in Indian currency, resulting in a potential mismatch.

Axis Bank fell 0.51%. The bank's net profit fell 1.2% to Rs 2154.28 crore on 9.75% rise in total income to Rs 13592.97 crore in Q4 March 2016 over Q4 March 2015. The Q4 March 2016 results were announced after trading hours on Tuesday, 26 April 2016. The bank's management in a conference call on Tuesday, 26 April 2016 said that it expects bad loans to rise and credit costs to be sharply higher in the current financial year. The bank's gross non-performing assets (NPAs) stood at Rs 6087.51 crore as on 31 March 2016 as against Rs 5724.05 crore as on 31 December 2015 and Rs 4110.19 crore as on 31 March 2015. The ratio of gross NPAs to gross advances stood at 1.67% as on 31 March 2016 as against 1.68% as on 31 December 2015 and 1.34% as on 31 March 2015. The ratio of net NPAs to net advances stood at 0.7% as on 31 March 2016 as against 0.75% as on 31 December 2015 and 0.44% as on 31 March 2015. The bank's provisions and contingencies jumped 64.59% to Rs 1168.33 crore in Q4 March 2016 over Q4 March 2015. Axis Bank created a contingency asset provision of Rs 300 crore in Q4 March 2016 taking the cumulative balance of contingency asset provisions to Rs 480 crore as on 31 March 2016. The cumulative value of net restructured advances as on 31 March 2016 stood at Rs 8072 crore, constituting 2.25% of net customer assets, compared to Rs 7745 crore, constituting 2.31% of net customer assets as on 31 December 2015.

Bharti Airtel rose 2.99%. The company's consolidated net profit rose 2.78% to Rs 1290.30 crore on 8.43% rise in total income to Rs 24983.10 crore in Q4 March 2016 over Q4 March 2015. The result as per the International Financial Reporting Standards (IFRS) was announced after market hours on Wednesday, 27 April 2016. Stable currencies in most of the geographies resulted in lower forex and derivative losses of Rs 190 crore in Q4 March 2016 compared to Rs 1081 crore in Q4 March 2015. Bharti Airtel's bottom line during the quarter was impacted due to higher exceptional expenses.

Meanwhile, Bharti Airtel before market hours on Friday, 29 April 2016 said that it will undertake buyback of shares only after the approval from Delhi High Court for the scheme of amalgamation of its wholly owned subsidiary with the company. Bharti Airtel said that the scheme of amalgamation of Augere Wireless Broadband India (Augere), a wholly owned subsidiary with the company is under consideration for approval by the Delhi High Court. Bharti Airtel's board of directors at its meeting held on 27 April 2016, approved the proposal to buyback the shares on a proportionate basis through a tender offer. The buyback shall be up to an aggregate amount not exceeding Rs 1434 crore at a price of Rs 400 per share translating into approximately 3.58 crore shares, representing 0.9% of the total paid up equity share capital of the company.

ICICI Bank dropped 6.09% to Rs 236.60 and was the top loser from the Sensex. ICICI Bank's net profit declined 75.97% to Rs 701.89 crore on 14.51% growth in total income to Rs 18590.86 crore in Q4 March 2016 over Q4 March 2015. The result was announced during market hours on Friday, 29 April 2016. The bank's gross non-performing advances (net of write-off) stood at Rs 26221.25 crore as on 31 March 2016 compared with Rs 21149.19 crore as on 31 December 2015 and Rs 15094.69 crore as on 31 March 2015. The ratio of gross non-performing advances to gross advances stood at 5.82% as on 31 March 2016 compared with 4.72% as on 31 December 2015 and 3.78% as on 31 March 2015. The ratio of net non-performing advances to net advances stood at 2.98% as on 31 March 2016 as against 2.28% as on 31 December 2015 and 1.61% as on 31 March 2015. ICICI Bank said that the increase in non-performing assets was primarily due to the continuing challenges in the operating and recovery environment and the Reserve Bank of India's (RBI) objective of early recognition of stress and provisioning for the banking sector. The RBI has directed India's banks to review certain loan accounts and their classification over a period of two quarters starting from Q3 December 2015. ICICI Bank said that it has now completed the exercise of review of classification of cases highlighted by RBI.

Drug maker Lupin rose 3.18%. The company announced on Thursday, 28 April 2016. that it has re-introduced Methergine (methylergonovine maleate) Oral Tablets 0.2mg in the US for the prevention and management of postpartum hemorrhage. Methergine is the only FDA-approved oral uterotonic and is a preferred oral agent in the management of PPH, according to guidelines issued by the American Congress of Obstetricians and Gynecologists (ACOG).

On the global front, the Bank of Japan unexpectedly held off from expanding monetary stimulus on Wednesday, 27 April 2016. The Bank of Japan (BOJ) voted to keep its current level of asset purchases unchanged and rates on hold while announcing a ¥300 billion ($2.69 billion) lending program to support banks in the region hit by this month's Kyushu earthquake. Speculation was rise that the Japanese the central bank would announce a further easing of the monetary policy to stimulate Japan's economy.

Meanwhile, the Federal Reserve left interest rates unchanged after the conclusion of a two-day monetary policy meeting on Wednesday, 27 April 2016. The Fed's signal that it was in no rush to raise rates relieved investors. The stance of monetary policy remains accommodative, thereby supporting further improvement in labor market conditions and a return to 2% inflation, the Fed said in its monetary policy statement. The US central bank's mandate centers on maximizing employment and keeping inflation at a 2% target level, which is considered a healthy level of price increases.
Data on Monday, 25 April 2016 showed that German business sentiment deteriorated unexpectedly in April. The Ifo's business climate index slipped to 106.6 in April from 106.7 in March, bringing it further below levels seen at the end of last year. The Ifo's measure of the current business situation dropped to 113.2 in April from 113.8 in March, but its gauge of business expectations rose to 100.4 from 100 the previous month. The German economy is the Europe's biggest economy.

THE END SESSION ( 29 / 04 )

Benchmark indices settle near the flat line


Amid a divergent trend among various index constituents, the two key benchmark indices ended virtually unchanged for the day. The barometer index, the S&P BSE Sensex, rose 3.52 points or 0.01% to settle at 25,606.62. The Nifty rose 2.55 points or 0.03% to settle at 7,849.80. ICICI Bank edged lower in choppy trade on increase in sticky loans in Q4 March 2016. Shares of oil exploration and production companies rose as global crude oil prices rose. HCL Technologies tumbled, with the stock extending losses registered during the previous trading session triggered by disappointment from the company's earnings for the quarter ended 31 March 2016.
Idea Cellular slumped after the company reported a sharp fall in bottom line in Q4 March 2016. Bharti Airtel edged lower after the company said it will undertake buyback of shares only after the approval from Delhi High Court for the scheme of amalgamation of its wholly owned subsidiary with the company.

In overseas stock markets, Asian and European stocks edged lower in the wake of the Japanese central bank's decision against expanding monetary stimulus. Losses for US stocks overnight also weighed on Asian markets. After the conclusion of a two-day monetary policy, the Bank of Japan (BOJ) yesterday, 28 April 2016, voted to keep its current level of asset purchases unchanged and rates on hold while announcing a ¥300 billion ($2.69 billion) lending program to support banks in the region hit by this month's Kyushu earthquake. Speculation was rise that the Japanese the central bank would announce a further easing of the monetary policy to stimulate Japan's economy. US stocks ended lower yesterday, 28 April 2016, under the combined weight of disappointing data and weak corporate earnings. US gross domestic product grew only 0.5% in the first quarter, its slowest pace of growth in two years.

The Sensex rose 3.52 points or 0.01% to settle at 25,606.62, its highest closing level since 27 April 2016. The index lost 179.07 points, or 0.7% at the day's low of 25,424.03. The index rose 152.33 points, or 0.59% at the day's high of 25,755.43.

The Nifty 50 index rose 2.55 points or 0.03% to settle at 7,849.80, its highest closing level since 27 April 2016. The index lost 58.55 points, or 0.75% at the day's low of 7,788.70. The index rose 41.80 points, or 0.53% at the day's high of 7,889.05.

The market breadth indicating the overall health of the market was negative. On BSE, 1,353 shares fell and 1,141 shares rose. A total of 166 shares were unchanged. The BSE Mid-Cap index rose 0.22%, outperforming the Sensex. The BSE Small-Cap index fell 0.05%, underperforming the Sensex.

Among the sectoral indices on BSE, the S&P BSE Realty index (up 1.18%), the S&P BSE Power index (up 0.93%), the S&P BSE Healthcare index (up 0.76%), the S&P BSE Utilities index (up 0.62%), the S&P BSE Metal index (up 0.51%), the S&P BSE Basic Materials index (up 0.46%), the S&P BSE Oil & Gas index (up 0.39%), the S&P BSE Bankex (up 0.33%), the S&P BSE Finance index (up 0.24%), the S&P BSE FMCG index (up 0.10%) and the S&P BSE Sensex index (up 0.01%), outperformed the Sensex. The S&P BSE Industrials index (down 0.11%), the S&P BSE Auto index (down 0.21%), the S&P BSE Consumer Discretionary Goods & Services index (down 0.21%), the S&P BSE Capital Goods index (down 0.24%), the S&P BSE Energy index (down 0.26%), the S&P BSE IT index (down 0.45%), the S&P BSE Teck index (down 0.62%), the S&P BSE Consumer Durables index (down 0.97%) and the S&P BSE Telecom index (down 2.15%), underperformed the Sensex.

The total turnover on BSE amounted to Rs 2797 crore, lower than turnover of Rs 2866.02 crore registered during the previous trading session.

Pharmaceutical stocks witnessed a mixed trend. Piramal Enterprises (up 4.92%), Cipla (up 1.89%), Sun Pharmaceutical Industries (up 1.09%), IPCA Laboratories (up 0.59%), Dr Reddy's Laboratories (up 0.25%) and Divi's Laboratories (up 0.04%), edged higher. Strides Shasun (down 0.06%), Wockhardt (down 0.3%), Cadila Healthcare (down 0.34%), Alkem Laboratories (down 0.36%) and GlaxoSmithKline Pharmaceuticals (down 0.99%) edged lower.

Lupin rose 1.94% after the company announcement that it has re-introduced Methergine (methylergonovine maleate) Oral Tablets 0.2mg in the US for the prevention and management of postpartum hemorrhage. Shares of Lupin had risen 0.44% to settle at Rs 1,577.15 yesterday, 28 April 2016. Methergine is the only FDA-approved oral uterotonic and is a preferred oral agent in the management of PPH, according to guidelines issued by the American Congress of Obstetricians and Gynecologists (ACOG).

Glenmark Pharmaceuticals rose 1.48% after the company said its US arm has been granted tentative approval by the United States Food & Drug Administration for a generic drug. Glenmark Pharmaceuticals Inc., USA has been granted tentative approval by the United States Food & Drug Administration (USFDA) for Adapalene and Benzoyl Peroxide Gel, 0.1%/2.5%, the generic version of Epiduo Gel of Galderma Laboratories L.P. According to IMS Health sales data for the 12 month period ended February 2016, the Epiduo Gel market achieved annual sales of approximately $351.8 million in the US.

Aurobindo Pharma fell 0.48%. The company has received final approval from the US Food & Drug Administration (USFDA) to manufacture and market Lacosamide Tablets, 50 mg, 100 mg, 150 mg and 200 mg. The product is bioequivalent and therapeutically equivalent to the reference listed drug product (RLD) Vimpat Tablets of UCB, Inc. The drug is indicated for adjunctive therapy in the treatment of partial-onset seizures. The drug had an estimated market size of $782 million in the US for the twelve months ended February 2016, according to IMS data. Aurobindo was one of the first applicants to submit a substantially complete Abbreviated New Drug Application (ANDA) ANDA with a paragraph IV certification and the company is eligible for 180 days of generic drug shared exclusivity. The launch of this product will be based on the outcome of the litigation in the United States Court with UCB, the company said in a statement. The announcement was made during trading hours today, 29 April 2016.

Shares of oil exploration and production companies rose as global crude oil prices rose. Cairn India (up 1.58%), Oil India (up 0.44%) and ONGC (up 0.44%), edged higher. Higher crude oil prices will result in higher realization from crude sales for oil exploration firms.

Index heavyweight Reliance Industries (RIL) fell 1.48% to Rs 982.55. The stock hit a high of Rs 998.75 and a low of Rs 977.85 in intraday trade.

Brent for June settlement was currently up 31 cents at $48.45 a barrel. The contract had risen 96 cents or 2.03% to settle at $48.14 a barrel during the previous trading session. Brent June futures contract expires today, 29 April 2016. Brent for July settlement was currently up 39 cents at $48.16 a barrel.

Shares of public sector oil marketing companies also edged higher. Indian Oil Corporation (up 2.04%), BPCL (up 1.68%) and HPCL (up 0.33%) edged higher.
Shares of state-run banks edged lower. Bank of India (down 3.39%), Canara Bank (down 2.09%), Dena Bank (down 1.82%), State Bank of India (down 1.67%), Vijaya Bank (down 1.56%), UCO Bank (down 1.37%), Bank of Baroda (down 1.34%), Punjab National Bank (down 1.25%), Allahabad Bank (down 1.1%), Central Bank of India (down 1.1%), Andhra Bank (down 0.99%), Union Bank of India (down 0.86%), Punjab and Sind Bank (down 0.68%), Bank of Maharashtra (down 0.67%), IDBI Bank (down 0.65%), Corporation Bank (down 0.64%), United Bank of India (down 0.51%) and Indian Bank (down 0.31%), edged lower.

Shares of private sector banks were mixed. Kotak Mahindra Bank (up 1.92%), IndusInd Bank (up 1.47%) and Axis Bank (up 0.85%), edged higher. Yes Bank (down 0.14%), City Union Bank (down 0.96%) and Federal Bank (down 0.97%), edged lower.
Index heavyweight HDFC Bank rose 1.69% to Rs 1,133.45. The stock hit a high of Rs 1,136 and a low of Rs 1,106.80 in intraday trade.

ICICI Bank edged lower in choppy trade on increase in sticky loans in Q4 March 2016. The stock lost 1.48% to Rs 236.60. ICICI Bank's net profit declined 75.97% to Rs 701.89 crore on 14.51% growth in total income to Rs 18590.86 crore in Q4 March 2016 over Q4 March 2015. The result was announced during market hours today, 29 April 2016.

The bank's gross non-performing advances (net of write-off) stood at Rs 26221.25 crore as on 31 March 2016 compared with Rs 21149.19 crore as on 31 December 2015 and Rs 15094.69 crore as on 31 March 2015. The ratio of gross non-performing advances to gross advances stood at 5.82% as on 31 March 2016 compared with 4.72% as on 31 December 2015 and 3.78% as on 31 March 2015. The ratio of net non-performing advances to net advances stood at 2.98% as on 31 March 2016 as against 2.28% as on 31 December 2015 and 1.61% as on 31 March 2015.

ICICI Bank said that the increase in non-performing assets was primarily due to the continuing challenges in the operating and recovery environment and the Reserve Bank of India's (RBI) objective of early recognition of stress and provisioning for the banking sector. The RBI has directed India's banks to review certain loan accounts and their classification over a period of two quarters starting from Q3 December 2015. ICICI Bank said that it has now completed the exercise of review of classification of cases highlighted by RBI.

ICICI Bank has created a collective contingency and related reserve of Rs 3600 crore in Q4 March 2016 over and above provisions made for non-performing and restructured loans. This contingency provision is towards exposure to stressed assets in certain sectors, including iron and steel, mining, power, rigs and cement. The weak global economic environment, the sharp downturn in the commodity cycle and the gradual nature of the domestic economic recovery has adversely impacted the borrowers in these sectors. Given the weak operating and recovery environment, it may take some time for resolution of stress on borrowers in these sectors, ICICI Bank said.

The bank's provisions excluding collective contingency and related reserve jumped 147.28% to Rs 3326 crore in Q4 March 2016 over Q4 March 2015. The bank's provisioning coverage ratio, including cumulative prudential/technical write-offs was 61% as at 31 March 2016. The provisioning coverage ratio, excluding cumulative prudential/technical write-offs was 50.6%. The bank's current and savings account (CASA) deposits rose 17% in Q4 March 2016 over Q4 March 2015. CASA ratio improved to 45.8% as on 31 March 2016, from 45.2% as on 31 December 2015 and 45.5% as on 31 March 2015.

ICICI Bank's board of directors at its meeting held today, 29 April 2016, approved seeking consent of the shareholders to invite subscription for non-convertible debentures or bonds on a private placement basis for an amount of upto Rs 25000 crore. The board approved the sale of a part of its shareholding in its insurance subsidiary ICICI Prudential Life Insurance Company through an initial public offer by the bank, subject to market conditions and necessary approvals. The size and other details of the offer would be determined in due course, the bank said.

HCL Technologies tumbled, with the stock extending losses registered during the previous trading session triggered by disappointment from the company's earnings for the quarter ended 31 March 2016. The stock shed 6.19%. The stock had lost 4.51% to settle at Rs 799.95 yesterday, 28 April 2016. As per media reports, a total of three brokerages have cut their price target on the HCL Tech stock following disappointing earnings. The company declared its results for the quarter ended 31 March 2016 before market hours yesterday, 28 April 2016.

HCL Tech's consolidated net profit rose 0.3% to Rs 1926 crore on 3.4% growth in revenue to Rs 10698 crore in the quarter ended 31 March 2016 over the quarter ended 31 December 2015. Revenue in constant currency terms rose 1.7% on sequential basis in the quarter ended 31 March 2016. In dollar terms, HCL Tech's net profit declined 2% to $285 million on 1.3% growth in revenue to $1,587 million in the quarter ended 31 March 2016 over the quarter ended 31 December 2015. HCL Tech has changed its accounting year to the period from 1 April to 31 March from earlier 1 July to 30 June.

Bharti Airtel lost 2.32% after the company said it will undertake buyback of shares only after the approval from Delhi High Court for the scheme of amalgamation of its wholly owned subsidiary with the company. Bharti Airtel said that the scheme of amalgamation of Augere Wireless Broadband India (Augere), a wholly owned subsidiary with the company is under consideration for approval by the Delhi High Court. The announcement was made before market hours today, 29 April 2016.
Bharti Airtel's board of directors at its meeting held on 27 April 2016, approved the proposal to buyback the shares on a proportionate basis through a tender offer. The buyback shall be up to an aggregate amount not exceeding Rs 1434 crore at a price of Rs 400 per share translating into approximately 3.58 crore shares, representing 0.9% of the total paid up equity share capital of the company.

Meanwhile, according to reports, a foreign brokerage has maintained its underperform rating on Bharti Airtel stock citing expensive valuations considering the near-term risks.

Idea Cellular slumped 6.52% after consolidated net profit fell 38.87% to Rs 575.63 crore on 10.63% growth in total income to Rs 9524.09 crore in Q4 March 2016 over Q4 March 2015. Idea Cellular's earnings before interest, taxation, depreciation and amortization (EBITDA) margin improved to 38.1% in Q4 March 2016 from 36.4% in Q4 March 2015. EBITDA rose 18% to Rs 3616 crore in Q4 March 2016 over Q4 March 2015. The result was announced after market hours yesterday, 28 April 2016.

Meanwhile, Idea Cellular announced during trading hours today, 29 April 2016, that its board has taken note of the approval of a draft Scheme of Amalgamation by the board of directors of Idea Mobile Commerce Services ('IMCSL'), a wholly-owned subsidiary of the company. The Scheme of Amalgamation contemplates the merger of IMCSL with Aditya Birla Idea Payments Bank (‘ABIPBL'), an entity which has been recently incorporated, wherein Aditya Birla Nuvo (a promoter of the company) holds 51% equity and the balance 49% equity is held by the company. ABIPBL will be applying to the Reserve Bank of India for grant of Payments Bank license in due course.

For the year ended March 31, 2016, IMCSL had revenues of Rs. 72.10 million, contributing approximately 0.02% of the consolidated revenues of the company. The net worth of IMCSL as on 31 March 2016 is Rs 1.46 crore comprising miniscule percent of company's net-worth.

Upon completion of merger, ABIPBL will be issuing equity shares to the company in lieu of its existing shareholding in IMCSL. Following completion of the merger of IMCSL into ABIPBL, the company will continue to hold 49% equity in ABIPBL. The proposed amalgamation is expected to take around 6 to 9 months and shall be subject to all requisite approvals, the company said.

The Sensex clocked gains of 267.76 points or 1.06% in this month. The Sensex has fallen 506.92 points or 1.94% in calendar year 2016 so far (till 29 April 2016). From a 52-week low of 22,494.61 hit on 29 February 2016, the barometer index has risen 3,114.01 points or 13.84%. The Sensex is off 2,970.71 points or 10.39% from a 52-week high of 28578.33 hit on 23 July 2015. The Sensex is off 4,418.12 points or 14.71% from a record high of 30,024.74 hit on 4 March 2015.

Thursday, April 28, 2016

THE END SESSION ( 28 / 04 )

Sensex, Nifty hit lowest closing level in more than two weeks


A disappointment from the Japanese central bank, which held off from expanding monetary stimulus, pulled global stocks lower, with Indian stocks witnessing a sharp slide. The barometer index, the S&P BSE Sensex, slumped 461.02 points or 1.77% to settle at 25,603.10. The decline for the Nifty 50 index was lower than the Sensex's fall in percentage terms. The Nifty shed 132.65 points or 1.66% to settle at 7,847.25. The Sensex fell below the psychologically important 26,000 mark. The Sensex and the Nifty, both, hit their lowest closing level in more than two weeks. World stocks fell after the Bank of Japan left its main policies unchanged after the conclusion of a two-day monetary policy meeting, disappointing market expectations the central bank would take further extraordinary steps to stimulate Japan's economy.

Stocks of public sector firms, metal and auto companies and index heavyweights Infosys, ITC, HDFC, Reliance Industries, HDFC Bank led losses for key benchmark indices. The Sensex and the Nifty snapped a two-day winning streak.

Car major Maruti Suzuki India dropped as the Japanese yen strengthened against the dollar after the Bank of Japan surprised financial markets by keeping its main policies unchanged after the conclusion of a two-day monetary policy meeting. HCL Technologies edged lower after the financial results for the quarter ended 31 March 2016 fell below market expectations. Yes Bank moved higher on reports that a total of four foreign brokerages have raised their target price on the Yes Bank stock in the wake of the bank's impressive Q4 March 2016 earnings.

The broad market depicted weakness. More than two stocks fell for each stock that rose on BSE. 1,697 shares fell and 832 shares rose. A total of 167 shares were unchanged. The BSE Mid-Cap index fell 0.78%. The BSE Small-Cap index fell 1.05%. The decline in both these indices was lower than the Sensex's decline in percentage terms. Among the sectoral indices on BSE, barring the S&P BSE Realty index, all other sectoral indices on BSE registered losses.

In overseas stock markets, Asian and European stocks edged lower after the Bank of Japan unexpectedly held off from expanding monetary stimulus. Japanese stocks led losses for Asian equities. The Nikkei 225 Average ended 3.61% lower. The Bank of Japan (BOJ) voted to keep its current level of asset purchases unchanged and rates on hold while announcing a ¥300 billion ($2.69 billion) lending program to support banks in the region hit by this month's Kyushu earthquake. Speculation was rise that the Japanese the central bank would announce a further easing of the monetary policy to stimulate Japan's economy.

Trading in US index futures indicated that the Dow Jones Industrial Average could fall 148 points at the opening bell today, 28 April 2016. US stocks closed mostly higher yesterday, 27 April 2016, but the gains were checked by weakness in the technology sector. Meanwhile, the Federal Reserve left interest rates unchanged after the conclusion of a two-day monetary policy meeting yesterday, 27 April 2016. The Fed's signal that it was in no rush to raise rates relieved investors. The stance of monetary policy remains accommodative, thereby supporting further improvement in labor market conditions and a return to 2% inflation, according to the Fed in its monetary policy statement. The US central bank's mandate centers on maximizing employment and keeping inflation at a 2% target level, which is considered a healthy level of price increases.

The Sensex slumped 461.02 points or 1.77% to settle at 25,603.10, its lowest closing level since 12 April 2016. The Sensex fell 502.95 points, or 1.93% at the day's low of 25,561.17. The barometer index rose 36.42 points, or 0.14% at the day's high of 26,100.54.

The Nifty shed 132.65 points or 1.66% to settle at 7,847.25, its lowest closing level since 12 April 2016. The Nifty fell 145.45 points, or 1.82% at the day's low of 7,834.45. The index rose 12.10 points, or 0.15% at the day's high of 7,992.

The total turnover on BSE amounted to Rs 2856 crore, higher than turnover of Rs 2500.07 crore registered during the previous trading session.

Among the sectoral indices on BSE, the S&P BSE Oil & Gas index (down 2.18%), the S&P BSE Metal index (down 2.16%), the S&P BSE Energy index (down 2.11%), the S&P BSE Power index (down 2.01%), the S&P BSE Auto index (down 1.99%), the S&P BSE Utilities index (down 1.96%), the S&P BSE FMCG index (down 1.95%) underperformed the Sensex. The S&P BSE Industrials index (down 1.58%), the S&P BSE Capital Goods index (down 1.49%), the S&P BSE IT index (down 1.42%), the S&P BSE Consumer Discretionary Goods & Services index (down 1.35%), the S&P BSE Finance index (down 1.31%), the S&P BSE Basic Materials index (down 1.28%), the S&P BSE Teck index (down 1.23%), the S&P BSE Bankex (down 0.89%), the S&P BSE Healthcare index (down 0.76%), the S&P BSE Consumer Durables index (down 0.55%), the S&P BSE Telecom index (down 0.46%) and the S&P BSE Realty index (up 1.68%) outperformed the Sensex.

Index heavyweight and cigarette major ITC lost 2.81% to Rs 323.95. The stock hit a high of Rs 331 and low of Rs 321.50 in intraday trade.

Index heavyweight Reliance Industries (RIL) lost 2.52% to Rs 994. The stock hit a high of Rs 1,019.70 and low of Rs 992 in intraday trade.

Auto stocks declined. Mahindra & Mahindra (M&M) (down 2.87%), Tata Motors (down 2.14%), Ashok Leyland (down 2.22%), Bajaj Auto (down 2.44%), Hero MotoCorp (down 1.93%) and TVS Motor Company (down 2.42%) declined. Eicher Motors rose 0.56%.
Car major Maruti Suzuki India fell 3.21% to Rs 3,738 as the Japanese yen strengthened against the dollar after the Bank of Japan surprised financial markets by keeping its main policies unchanged after the conclusion of a two-day monetary policy meeting. A strong yen adversely impacts Maruti Suzuki India's (Maruti) operating profit margin. Maruti pays royalty to its Japanese parent Suzuki Motor Corporation in yen terms for some of its earlier models. As per recent media reports, Maruti will start paying royalty to its Japanese parent in rupee term on all new models from the current financial year, which began on 1 April 2016. Maruti also has an exposure to the yen to the extent it imports raw materials from Japan.

Pharma major Lupin rose 0.62%. Lupin and its US subsidiary, Lupin Pharmaceuticals, Inc. have announced the re-introduction of Methergine (methylergonovine maleate) Oral Tablets 0.2mg in the US for the prevention and management of postpartum hemorrhage (PPH). Methergine is the only FDA-approved oral uterotonic and is a preferred oral agent in the management of PPH, according to guidelines issued by the American Congress of Obstetricians and Gynecologists (ACOG). Lupin made the announcement at fag end of the trading session.

Bank stocks declined. Among private bank stocks, HDFC Bank (down 1.28%), Kotak Mahindra Bank (down 1.22%), ICICI Bank (down 1.96%), IndusInd Bank (down 0.82%) declined. Axis Bank rose 0.11%.

Yes Bank rose 3.42% to Rs 946.90 on reports that a total of four foreign brokerages have raised their target price on the Yes Bank stock in the wake of the bank's impressive Q4 March 2016 earnings. The stock had risen 0.55% to settle at Rs 915.60 to yesterday, 27 April 2016. The results hit the market during trading hours yesterday, 27 April 2016. Yes Bank's net profit rose 27.42% to Rs 702.11 crore on 17.73% rise in total income to Rs 4331.11 crore in Q4 March 2016 over Q4 March 2015.

Among PSU bank stocks, State Bank of India (SBI) (down 2.29%), Punjab National Bank (down 2.11%), Bank of Baroda (down 0.84%), Canara Bank (down 0.97%), IDBI Bank (down 1.62%), Bank of India (down 1.03%) and Union Bank of India (down 2.2%) dropped.

Index heavyweight and housing finance major HDFC declined 3.12% to Rs 1,088. The stock hit high of Rs 1,125.10 and low of Rs 1,083 in intraday trade.

Stocks of public sector firms dropped. Bharat Heavy Electricals (Bhel) (down 1.95%), Coal India (down 1.77%), GAIL (India) (down 2.53%), NTPC (down 2.45%), Power Grid Corporation of India (down 1.01%), Bharat Electronics (down 2.07%) declined.

Metal shares edged lower. Hindalco Industries (down 4.96%), NMDC (down 3.8%), Jindal Steel & Power (down 2.86%), National Aluminium Company (down 2.85%), Tata Steel (down 2.24%), Hindustan Copper (down 1.88%), Bhushan Steel (down 0.84%) and Hindustan Zinc (down 0.55%), edged lower. JSW Steel (up 0.56%) and Steel Authority of India (up 2.18%), edged higher.

Copper prices edged lower in the global commodities markets. High Grade Copper for July 2016 delivery was currently down 0.54% at $2.2125 per pound on the COMEX.
Vedanta lost 4.1%. On a consolidated basis, the company posted net loss of Rs 11181 crore in Q4 March 2016, lower than net loss of Rs 19228 crore in Q4 March 2015. Net sales fell 11% to Rs 15829 crore in Q4 March 2016 over Q4 March 2015. Net profit before exceptional items surged 89% to Rs 955 crore in Q4 March 2016 over Q4 March 2015. Non-operational income or the so-called other income surged 3485.68% to Rs 1289 crore in Q4 March 2016 over Q4 March 2015. Vedanta said that the non-operational income income was significantly higher in Q4 March 2016 largely due to timing differences wherein income earned on certain investments are recognized at maturity. During the quarter, a substantial portion of investments were liquidated at Hindustan Zinc on account of an announcement of special dividend and at Cairn India.

Earnings before interest, tax, depreciation and amortization (EBITDA) dropped 13% to Rs 3508 crore in Q4 March 2016 over Q4 March 2015. Exceptional items in Q4 March 2016 totalled Rs 12312 crore, of which Rs 12304 crore pertained to impairment. The impairment was triggered by the continued fall in oil prices during the year. Further, in light of the declining iron ore prices, both the acquisition goodwill and carrying value of the exploratory assets in West Africa (Western Cluster, Liberia) have also been impaired to the extent of Rs 1490 crore. Additionally, certain unused fixed assets and goodwill at copper mines of Tasmania and Bellary, Karnataka (Iron Ore) incurred an impairment charge of Rs 456 crore. Vedanta announced the fourth quarter results after trading hours.

Cement major ACC rose 1.3% to Rs 1,448. The company's consolidated net profit dropped 4.05% to Rs 226.95 crore on 1.45% rise in net sales to Rs 2927.38 crore in Q1 March 2016 over Q1 March 2015. Operating earnings before interest, tax, depreciation and amortization (EBITDA) dropped 28.85% to Rs 433.59 crore in Q1 March 2016 over Q1 March 2015. EBITDA dropped in Q1 March 2016 due to higher operating EBITDA in Q1 March 2015 as it included an accrual of Rs 139.74 crore pursuant to a favourable order from the Jharkhand High Court pertaining to sales tax incentives for earlier years. ACC's other operating income declined 67.52% to Rs 63.22 crore in Q1 March 2016 over Q1 March 2015. Other operating income in Q1 March 2015 includes Rs 139.74 crore being accrual of sales tax incentives pertaining to the period August 2005 to March 2015.

Bharti Airtel fell 0.51% to Rs 371.25. The company's consolidated net profit rose 2.78% to Rs 1290.30 crore on 8.43% rise in total income to Rs 24983.10 crore in Q4 March 2016 over Q4 March 2015. The result as per the International Financial Reporting Standards (IFRS) was announced after market hours yesterday, 27 April 2016.

Bharti Airtel's consolidated earnings before interest, tax, depreciation and amortization (EBITDA) rose 14.1% to Rs 9188 crore in Q4 March 2016 over Q4 March 2015. The EBITDA margin increased to 36.8% in Q4 March 2016 from 35% in Q4 March 2015. Stable currencies in most of the geographies resulted in lower forex and derivative losses of Rs 190 crore in Q4 March 2016 compared to Rs 1081 crore in Q4 March 2015. Bharti Airtel's bottom line during the quarter was impacted due to higher exceptional expenses. There were exceptional expenses of Rs 300 crore in Q4 March 2016, higher than exceptional expense of Rs 146.90 crore in Q4 March 2015. 

Exceptional items during Q4 March 2016 comprises of charge of Rs 10.70 crore pertaining to the divestment of telecom tower assets, charge of Rs 100.30 crore towards operating costs on network refarming and upgradation program. There was a charge of Rs 76.60 crore towards restructuring activities in a few countries and other regulatory costs. A charge of Rs 112.40 crore was incurred on account of termination of a long-term contract.

Bharti Airtel's board of directors approved the proposal to buyback the shares on a proportionate basis through a tender offer. The buy back shall be up to an aggregate amount not exceeding Rs 1434 crore at a price of Rs 400 per share translating into approximately 3.58 crore shares, representing 0.9% of the total paid up equity share capital of the company.

HCL Technologies lost 4.38% to Rs 801 after the financial results for the quarter ended 31 March 2016 fell below market expectations. Consolidated net profit rose 0.3% to Rs 1926 crore on 3.4% growth in revenue to Rs 10698 crore in the quarter ended 31 March 2016 over the quarter ended 31 December 2015. The result was announced before market hours today, 28 April 2016. HCL Technologies' (HCL Tech) revenue in constant currency terms rose 1.7% on sequential basis in the quarter ended 31 March 2016. In dollar terms, HCL Tech's net profit declined 2% to $285 million on 1.3% growth in revenue to $1,587 million in the quarter ended 31 March 2016 over the quarter ended 31 December 2015. HCL Tech has changed its accounting year to the period from 1 April to 31 March from earlier 1 July to 30 June.
The Sensex and the Nifty snapped a two-day winning streak. The Sensex had gained 385.19 points or 1.5% in the preceding two trading sessions to settle at 26,064.12 yesterday, 27 April 2016, from its close of 25,678.93 on 25 April 2016. The Sensex has risen 261.24 points or 1.09% in this month so far (till 28 April 2016). The Sensex has fallen 514.44 points or 1.96% in calendar year 2016 so far (till 28 April 2016). From a 52-week low of 22,494.61 hit on 29 February 2016, the barometer index has risen 3,108.49 points or 13.81%. The Sensex is off 2,975.23 points or 10.41% from a 52-week high of 28,578.33 hit on 23 July 2015. The Sensex is off 4,421.64 points or 14.72% from a record high of 30,024.74 hit on 4 March 2015.

Wednesday, April 27, 2016

THE END SESSION ( 27 / 04 )

Nifty attains 25-week closing high


A divergent trend for various index constituents resulted in small gains for the two key benchmark indices. The barometer index, the S&P BSE Sensex, rose 56.82 points or 0.22% to settle at 26,064.12. The Nifty 50 index rose 17.25 points or 0.22% to settle at 7,979.90. The two key benchmark indices edged higher for the second day in a row. The small gains took the Nifty to 25-week closing high and the Sensex to its highest closing level in nearly 17 weeks.

Telecom major Bharti Airtel gained ahead of its Q4 results. IT stocks rose after global credit rating agency Moody's Investors Service said in a sector report that it expects the Indian IT services sector to maintain global market share gains despite headwinds. HCL Technologies dropped 1.58% ahead of its quarterly results. Shares of oil exploration and production companies rose as global crude oil prices surged.
Axis Bank edged lower after the bank's management said in a conference call that it expects bad loans to rise and credit costs to be sharply higher in the current financial year. Yes Bank edge higher in volatile trade after the private sector bank reported strong Q4 results.

In overseas stock markets, the main European markets rose. Earlier during the global day, Asian stocks declined as traders awaited policy decisions from the Federal Reserve and the Bank of Japan. The Bank of Japan's (BOJ) two-day monetary policy meeting began today, 27 April 2016. Speculation is rife that the Japanese central bank will announce further easing of monetary policy. The BOJ in January decided to begin charging 0.1% interest on some bank reserves parked with the institution, in a bid to kick-start the economy and pull it out of two decades of deflation.

US stocks closed with mixed results yesterday 26 April 2016, ahead of a barrage of tech earnings and monetary policy statement from the Federal Reserve. The Federal Reserve's two-day policy meeting concludes today, 27 April 2016. As per market expectations, the Fed is likely to hold rates steady this week. The Fed statement could provide clues on the future interest rate increases.

The barometer index, the S&P BSE Sensex, rose 56.82 points or 0.22% to settle at 26,064.12, its highest closing level since 1 January 2016. The Sensex rose 85.63 points, or 0.33% at the day's high of 26,092.93. The index fell 122.06 points, or 0.47% at the day's low of 25,885.24.

The Nifty 50 index rose 17.25 points or 0.22% to settle at 7,979.90, its highest closing level since 4 November 2015. The Nifty rose 28.35 points, or 0.36% at the day's high of 7,991. The index fell 22.10 points, or 0.28% at the day's low of 7,940.55.

The market breadth indicating the overall health of the market was negative. On BSE, 1,294 shares fell and 1,277 shares rose. A total of 188 shares were unchanged. The BSE Mid-Cap index rose 0.13%, underperforming the Sensex. The BSE Small-Cap index rose 0.28%, outperforming the Sensex.

The total turnover on BSE amounted to Rs 2489 crore, lower than turnover of Rs 2685.52 crore registered during the previous trading session.

Among the sectoral indices on BSE, the S&P BSE Telecom index (up 2.93%), the S&P BSE Oil & Gas index (up 1.23%), the S&P BSE FMCG index (up 1.02%), the S&P BSE Energy index (up 0.8%), the S&P BSE Teck index (up 0.72%), the S&P BSE IT index (up 0.44%), the S&P BSE Consumer Discretionary Goods & Services index (up 0.37%), the S&P BSE Auto index (up 0.3%), the S&P BSE Consumer Durables index (up 0.28%), the S&P BSE Industrials index (up 0.26%) outperformed the Sensex. The S&P BSE Metal index (up 0.01%), the S&P BSE Healthcare index (down 0.13%), the S&P BSE Utilities index (down 0.14%), the S&P BSE Basic Materials index (down 0.16%), the S&P BSE Capital Goods index (down 0.24%), the S&P BSE Realty index (down 0.36%), the S&P BSE Finance index (down 0.48%), the S&P BSE Power index (down 0.5%) and the S&P BSE Bankex (down 0.87%) underperformed the Sensex.
Index heavyweight and cigarette major ITC rose 1.40% to Rs 332.30. The stock hit a high of Rs 334.20 and a low of Rs 326.45 in intraday trade.

Telecom major Bharti Airtel gained 3.63% to Rs 373.50 ahead of its Q4 results today, 27 April 2016. Along with the Q4 results, the company's board of directors will also consider a proposal for buyback of equity shares of the company.

Telecom towers firm Bharti Infratel rose 3.24% to Rs 375.60 after consolidated net profit rose 19% to Rs 661.70 crore on 7% growth in revenue to Rs 3161.90 crore in Q4 March 2016 over Q4 March 2015. The result was announced after market hours yesterday, 26 April 2016. Bharti Infratel's earnings before interest, taxation, depreciation and amortization (EBITDA) rose 9% to Rs 1443.90 crore in Q4 March 2016 over Q4 March 2015. EBITDA margin edged higher to 45.7% in Q4 March 2016, from 45.1% in Q4 March 2015.

Bharti Infratel's board of directors at its meeting held yesterday, 26 April 2016, approved the proposal to buyback equity shares of the company on a proportionate basis through a tender offer. The buyback shall be up to an aggregate amount not exceeding Rs 2000 crore at a maximum price of Rs 450 per share. At maximum buyback price, the buyback translates into approximately 4.44 crore equity shares of the company, representing 2.34% of the total paid up equity share capital of the company.

IT stocks rose after global credit rating agency Moody's Investors Service said in a sector report that it expects the Indian IT services sector to maintain global market share gains despite headwinds. TCS (up 0.67%), Infosys (up 0.65%), Wipro (up 1.13%), Oracle Financial Services Software (up 0.39%), Tech Mahindra (up 0.75%) and MphasiS (up 1.09%) rose.

According to Moody's, economic stability in developed countries will fuel growth for the global IT services outsourcing industry, benefiting Indian IT services companies in particular. However, currency volatility will pressure growth estimates for the Indian IT services sector, according to Moody's. While revenue is predominantly denominated in US dollar and euro for the Indian IT services sector, the cost base remains primarily denominated in Indian currency, resulting in a potential mismatch.
HCL Technologies dropped 1.58% ahead of its quarterly results. The company is schedule to announce its results for the quarter ended 31 March 2016 tomorrow 28 April 2016. HCL Tech has changed its accounting year to the period from 1 April to 31 March from earlier 1 July to 30 June.

Shares of oil exploration and production companies rose as global crude oil prices surged. Cairn India (up 1.10%), Oil India (up 2.79%), ONGC (up 3.34%) and Reliance Industries (up 0.17%) edged higher. Higher crude oil prices will result in higher realization from crude sales for oil exploration firms.

Crude oil prices rose in the global commodities markets after weekly data from the American Petroleum Institute showed decline in US crude inventories last week. Brent for June settlement was currently up $1.02 a barrel at $46.76 a barrel. The contract had risen $1.26 a barrel or 2.83% to settle at $45.74 a barrel during the previous trading session.

Shares of public sector oil marketing companies also edged higher. HPCL (up 0.18%), BPCL (up 0.38%) and Indian Oil Corporation (up 0.66%), edged higher.

PSU bank stocks declined. State Bank of India (SBI) (down 2.34%), Bank of Baroda (down 0.49%), Bank of India (down 0.77%), Punjab National Bank (down 0.28%) and Canara Bank (down 0.82%) declined. IDBI Bank was unchanged at Rs 70.95. Vijaya Bank (up 0.31%) and Union Bank of India (up 0.23%) rose.

Private sector bank stocks saw mixed trend. HDFC Bank (up 0.95%), Kotak Mahindra Bank (up 1.42%), IndusInd Bank (up 1.82%) rose. ICICI Bank dropped 3.44%.
Axis Bank lost 3.19% after the bank's management said in a conference call that it expects bad loans to rise and credit costs to be sharply higher in the current financial year. The bank flagged a watch list of loans totaling Rs 22628 crore, indicating that there could be increased stress from this pile. This forms about 4% of Axis Bank's total loan book and 13% of its corporate loan book. The bank expects 60% of loans from this pile, or about Rs 13000 crore, to turn bad over eight quarters. While timing of slippage is difficult to predict precisely, it expects that there would be a slight bias towards the first half of the current financial year. Credit costs for the bank are likely to increase to 125 basis points (bps) in FY 2017 from 111 bps for FY 2016. In the worst-case scenario, credit cost for the current financial year could be as high as 150 basis points. The conference call was held after the announcement of Q4 March 2016 results after trading hours yesterday, 26 April 2016. The bank's net profit fell 1.2% to Rs 2154.28 crore on 9.75% rise in total income to Rs 13592.97 crore in Q4 March 2016 over Q4 March 2015.

The bank's gross non-performing assets (NPAs) stood at Rs 6087.51 crore as on 31 March 2016 as against Rs 5724.05 crore as on 31 December 2015 and Rs 4110.19 crore as on 31 March 2015. The ratio of gross NPAs to gross advances stood at 1.67% as on 31 March 2016 as against 1.68% as on 31 December 2015 and 1.34% as on 31 March 2015. The ratio of net NPAs to net advances stood at 0.7% as on 31 March 2016 as against 0.75% as on 31 December 2015 and 0.44% as on 31 March 2015.

The bank's provisions and contingencies jumped 64.59% to Rs 1168.33 crore in Q4 March 2016 over Q4 March 2015. Axis Bank created a contingency asset provision of Rs 300 crore in Q4 March 2016 taking the cumulative balance of contingency asset provisions to Rs 480 crore as on 31 March 2016. The cumulative value of net restructured advances as on 31 March 2016 stood at Rs 8072 crore, constituting 2.25% of net customer assets, compared to Rs 7745 crore, constituting 2.31% of net customer assets as on 31 December 2015.

Yes Bank edge higher in volatile trade after the private sector bank reported strong Q4 results. The stock rose 0.55% to Rs 915.60. The stock hit a high of Rs 923.90 in intraday day, which is a record high for the stock. The stock hit a low of Rs 897.60 in intraday trade. Yes Bank's net profit rose 27.42% to Rs 702.11 crore on 17.73% rise in total income to Rs 4331.11 crore in Q4 March 2016 over Q4 March 2015. The bank's provisions and contingencies jumped 47.56% to Rs 186.46 crore in Q4 March 2016 over Q4 March 2015. The provision coverage ratio dropped to 62% as on 31 March 2016 from 66.5% as on 31 December 2015. The provision coverage ratio stood at 72% as on 31 March 2015.

Yes Bank's gross non-performing assets (NPAs) stood at Rs 748.98 crore as on 31 March 2016 as against Rs 558.57 crore as on 31 December 2015 and Rs 313.40 crore as on 31 March 2015. The ratio of gross NPAs to gross advances stood at 0.76% as on 31 March 2016 as against 0.66% as on 31 December 2015 and 0.41% as on 31 March 2015. The ratio of net NPAs to net advances stood at 0.29% as on 31 March 2016 as against 0.22% as on 31 December 2015 and 0.12% as on 31 March 2015.

The Sensex rose for the second day in a row. The barometer index has gained 385.19 points or 1.5% in two trading days from its close of 25,678.93 on 25 April 2016. The Sensex has risen 722.26 points or 2.85% in this month so far (till 27 April 2016). The Sensex has fallen 53.42 points or 0.2% in calendar year 2016 so far (till 27 April 2016). From a 52-week low of 22,494.61 hit on 29 February 2016, the barometer index has risen 3,569.51 points or 15.86%. The Sensex is off 2,514.21 points or 8.79% from a 52-week high of 28,578.33 hit on 23 July 2015. The Sensex is off 3,960.62 points or 13.19% from a record high of 30,024.74 hit on 4 March 2015.

THE END SESSION ( 26 / 04 )

Sensex, Nifty settle at 16-1/2 weeks high


Key benchmark indices logged strong gains, reversing intraday losses, led by gains in banking stocks and index heavyweights HDFC, ITC and Infosys. The barometer index, the S&P BSE Sensex, rose 328.37 points or 1.28% to settle at 26,007.30. The Nifty 50 index rose 107.60 points or 1.37% to settle at 7,962.65. The Sensex closed a tad above the psychologically important 26,000 level which it had crossed in mid-afternoon trade. The Sensex and the Nifty, both, settled at their highest closing level in 16-1/2 weeks. All the nineteen sectoral indices on BSE registered gains.

Index heavyweight and housing finance major HDFC rose. Another index heavyweight and IT major Infosys rose. Index heavyweight and engineering & construction major L&T advanced. Index heavyweight and cigarette major ITC reversed intraday losses on bargain hunting after recent decline. Metal shares edged higher. Auto stocks gained on renewed buying. Bank stocks advanced.

The Sensex rose 328.37 points or 1.28% to settle at 26,007.30, its highest closing level since 1 January 2016. The Sensex jumped 376.07 points, or 1.46% at the day's high of 26,055. The index fell 129.88 points, or 0.51% at the day's low of 25,549.05.

The Nifty rose 107.60 points or 1.37% to settle at 7,962.65, its highest closing level since 1 January 2016. The Nifty jumped 119.45 points, or 1.52% at the day's high of 7,974.5. The index fell 32.50 points, or 0.41% at the day's low of 7,822.55.

The market breadth indicating the overall health of the market was strong. On BSE, 1,587 shares rose and 981 shares fell. A total of 171 shares were unchanged. The BSE Mid-Cap index rose 0.79%. The BSE Small-Cap index rose 0.68%. Both these indices underperformed the Sensex.

The total turnover on BSE amounted to Rs 2676 crore, lower than turnover of Rs 4413.64 crore registered during the previous trading session.

Among the sectoral indices on BSE, the S&P BSE Bankex (up 2.02%), the S&P BSE Metal index (up 1.98%), the S&P BSE Realty index (up 1.93%), the S&P BSE Finance index (up 1.78%), the S&P BSE Auto index (up 1.57%) outperformed the Sensex. The S&P BSE Consumer Discretionary Goods & Services index (up 1.19%), the S&P BSE Teck index (up 1.16%), the S&P BSE IT index (up 1.13%), the S&P BSE Industrials index (up 1.07%), the S&P BSE Basic Materials index (up 1%), the S&P BSE Healthcare index (up 0.94%), the S&P BSE Telecom index (up 0.85%), the S&P BSE Capital Goods index (up 0.83%), the S&P BSE Utilities index (up 0.82%), the S&P BSE Power index (up 0.81%), the S&P BSE FMCG index (up 0.77%), the S&P BSE Oil & Gas index (up 0.45%), the S&P BSE Consumer Durables index (up 0.41%) and the S&P BSE Energy index (up 0.28%) underperformed the Sensex.

Index heavyweight and housing finance major HDFC rose 1.77% to Rs 1131.25. The stock hit a high of Rs 1132 and a low of Rs 1103.90 in intraday trade.

Index heavyweight and IT major Infosys rose 1.06% to Rs 1230. The stock hit a high of Rs 1239 and a low of Rs 1209 in intraday trade.

Index heavyweight and engineering & construction major L&T rose 1.07% to Rs 1279. The stock hit a high of Rs 1283 and a low of Rs 1258 in intraday trade.

Index heavyweight and cigarette major ITC rose 1.87% to Rs 327, reversing intraday losses on bargain hunting after recent decline. The stock hit a high of Rs 328.45 and a low of Rs 312 in intraday trade. The stock had declined 4.27% in the preceding four trading sessions to settle at Rs 321 yesterday, 25 April 2016, from its close of Rs 335.35 on 18 April 2016.

Shares of ITC fell in morning trade today, 26 April 2016, on reports that the government is working on a proposal to completely ban foreign direct investment in the tobacco sector. After making it mandatory to carry larger pictorial warnings on cigarette packets, the government is now working on a proposal to completely ban foreign direct investment (FDI) in the tobacco sector, the report suggested. The Commerce and Industry Ministry is proposing to even ban FDI in licensing for franchise, trademark, brand name and management contract in the sector, report added. The ban would eliminate the possibility of indirect flow of overseas funds to the tobacco sector, even through foreign technology collaboration including licensing for franchise, trademark and brand name.

Metal shares edged higher. Jindal Steel & Power (up 1.37%), Vedanta (up 3.97%), Tata Steel (up 2.78%), National Aluminium Company (up 4.91%), Steel Authority of India (up 1.77%), Hindustan Zinc (up 2.1%), JSW Steel (up 1.66%) edged higher. NMDC (down 0.36%) and Hindustan Copper (down 0.46%) fell.

Hindalco Industries advanced 4.93% after the company announced that it has communicated to its subsidiary, Aditya Birla Minerals its intention to accept the improved offer by Metal X to acquire shares of ABML. The announcement was made before market hours today, 26 April 2016.

Hindalco announced that it has communicated to Aditya Birla Minerals (ABML) its intention to accept the offer by Metal X to acquire shares of ABML subject to receiving the approval of the Reserve Bank of India and no bona fide superior proposal being announced by a third party within 5 business days of Metals X announcing its intention to make the aforesaid offer.

Metal X, a listed company in Australia has made an announcement regarding its intention to improve its ongoing takeover offer for acquiring shares of ABML under the relevant laws of Australia. ABML is a subsidiary of Hindalco Industries and listed on Australian Stock Exchange. Metal X has offered 1 fully paid ordinary share in Metals X for every 4.5 ABML shares and A$0.08 in cash for every ABML share held. The offer is conditional upon Hindalco's acceptance and confirmation that it has obtained the requisite approval of Reserve Bank of India in this regard.

Auto stocks gained on renewed buying. Tata Motors (up 1.99%), Mahindra & Mahindra (M&M) (up 1.95%), Eicher Motors (up 1.3%), Ashok Leyland (up 0.94%), and TVS Motor Company (up 2.14%) gained. Hero MotoCorp (down 1.23%) and Bajaj Auto (down 0.12%) fell.

Maruti Suzuki India surged 3.34%. The company reported 11.72% fall in net profit to Rs 1133.60 crore on 10.62% rise in total income to Rs 15426.90 crore in Q4 March 2016 over Q4 March 2015. The company's board of directors has recommended a final dividend of Rs 35 per share for the year ended 31 March 2016. The result was announced during market hours today, 26 April 2016.

The company's sales volumes rose 3.9% to 3.6 lakh vehicles in Q4 March 2016 over Q4 March 2015. Loss of 10,000 units due to Jat reservation agitation in Haryana, increased advertising expenses and lower other income impacted profits during Q4 March 2016. Maruti's other income dropped 62.11% to Rs 121.20 crore in Q4 March 2016 over Q4 March 2015.

Maruti Suzuki India's net profit rose 23.2% to Rs 4571.40 crore on 15.9% rise in net sales to Rs 56350.40 crore in the year ended 31 March 2016 (FY 2016) over FY 2015. Higher volumes aided by successful new model launches and network expansion, lower raw material cost and cost reduction initiatives led to growth in profits in FY 2016.

Bank stocks advanced. Among private bank stocks, HDFC Bank (up 1.88%), Kotak Mahindra Bank (up 3.65%), ICICI Bank (up 0.18%), Axis Bank (up 1.59%), IndusInd Bank (up 3.65%) and Yes Bank (up 3.7%) gained.

Among PSU bank stocks, State Bank of India (SBI) (up 1.62%), Punjab National Bank (up 1.23%), Bank of Baroda (up 2.41%), Canara Bank (up 3.26%), Bank of India (up 0.47%) and Union Bank of India (up 0.69%) rose. IDBI Bank fell 0.7%.

Most realty shares edged higher. Prestige Estates Projects (up 4.14%), Housing Development and Infrastructure (HDIL) (up 3.33%), Mahindra Lifespace Developers (up 3.10%), DLF (up 3.08%), Sunteck Realty (up 1.84%), Sobha (up 1.61%), Anant Raj (up 1.44%), Unitech (up 1.21%), Indiabulls Real Estate (up 0.98%), Oberoi Realty (up 0.82%), D B Realty (up 0.64%), Parsvnath Developers (up 0.26%) and Peninsula Land (up 0.26%), edged higher. Godrej Properties (down 0.36%) and Phoenix Mills (down 0.7%), edged lower.

Aurobindo Pharma gained 1.35% after the company received final approval from the USFDA to manufacture and market Amlodipine and Valsartan Tablets USP, 5 mg/160 mg, 10 mg/160 mg, 5 mg/320 mg and 10 mg/320 mg. This product is expected to be launched in Q1 June 2016. The announcement was made during market hours today, 26 April 2016.

The approved Abbreviated New Drug Application (ANDA) is bioequivalent and therapeutically equivalent to the reference listed drug product (RLD) Exforge Tablets of Norvartis Pharmaceuticals Corporation. Amlodipine and Valsartan Tablets are used in the treatment of hypertension to lower blood pressure. The approved product has an estimated market size of $123 million in US for the twelve months ending February 2016, according to IMS.

ABB India lost 4.03% as the company at the time of announcing Q1 March 2016 results reported a 1.4% decline in its order inflow at Rs 1830 crore over corresponding previous quarter. ABB India said that large orders, especially those based on industry capex, remained scarce as customers continued to delay investment decisions on low demand and under-utilized capacity. The company's order backlog stood at Rs 7804 crore as on 31 March 2016. ABB India's net profit rose 31.5% to Rs 71 crore on 10.2% growth in revenue to Rs 2000 crore in Q1 March 2016 over Q1 March 2015. The company attributed the growth in bottom line during the quarter to continuous focus on localization and engineering, while improving operational efficiences. The result was announced after market hours yesterday, 25 April 2016.

Bharat Forge rose 1.54% after the company said it has entered into a contract with Boeing for developing and manufacturing 777X titanium forgings. The announcement was made during market hours today, 26 April 2016. The titanium forgings will be developed and manufactured by Bharat Forge using a closed die forging process, the company said. The first two forgings are scheduled to begin shipping to Boeing in late 2016, and will be followed by two more forgings in early 2017, the company said. Bharat Forge said it has started supplying titanium forged flap tracks for the Boeing Next Generation 737 airplane earlier this year. The company will also supply forgings for the 737 MAX, scheduled to enter service in 2017.

The Sensex has risen 665.44 points or 2.62% in this month so far (till 26 April 2016). The Sensex has fallen 110.24 points or 0.42% in calendar year 2016 so far (till 26 April 2016). From a 52-week low of 22,494.61 hit on 29 February 2016, the barometer index has risen 3,512.69 points or 15.61%. The Sensex is off 2571.03 points or 8.99% from a 52-week high of 28,578.33 hit on 23 July 2015. The Sensex is off 4017.44 points or 13.38% from a record high of 30,024.74 hit on 4 March 2015.

In overseas markets, Asian and European stocks were mixed as investors braced for central bank policy meetings in the United States and Japan later this week. The Bank of Japan (BOJ) holds a two-day monetary policy meeting on Wednesday, 27 April 2016 and Thursday, 28 April 2016. Market participants are becoming more confident in their expectations of further easing from the Bank of Japan. The BOJ in January decided to begin charging 0.1% interest on some bank reserves parked with the institution, in a bid to kick-start the economy and pull it out of two decades of deflation.

US stock prices fell yesterday, 25 April 2016, as weaker oil prices weighed on energy shares. The US Federal Reserve holds a two-day policy meeting on Tuesday, 26 April 2016 and Wednesday, 27 April 2016. As per market expectations, the Fed is likely to hold rates steady this week. The Fed statement could provide clues on the future path for interest rates.