Market declines on negative global cues
Key benchmark indices dropped in the week ended Friday, 14 October 2016 weighed by weak global cues. The barometer index, the S&P BSE Sensex, dropped below the psychologically important 28,000 level during the week. Key indices edged lower in one out of three trading sessions during the truncated trading week ended Friday, 14 October 2016.
In the week ended Friday, 14 October 2016, the Sensex fell 387.54 points or 1.38% to settle at 27,673.60. The Nifty 50 index fell 114.20 points or 1.31% to settle at 8,583.40. The BSE Mid-Cap index lost 123 points or 0.91% to settle at 13,419.62. The BSE Small-Cap index fell 45.64 points or 0.35% to settle at 13,176.76. The fall in both these indices was lower than the Sensex's decline in percentage terms.
Trading for the week began on a positive note as the key benchmark indices eked out small gains on Monday, 10 October 2016 ahead of a two-day holiday. The Sensex rose 21.20 points or 0.08% to settle at 28,082.34, its highest closing level since 6 October 2016.
The stock market remained closed on Tuesday, 11 October 2016, on account of Dussehra. The market also remained closed on Wednesday, 12 October 2016, on account of Muharram.
Key benchmark indices suffered sharp losses on Thursday, 13 October 2016 on subdued index of industrial production (IIP) data for August 2016 and weak global stocks. The Sensex lost 439.23 points or 1.56% to settle at 27,643.11, its lowest closing level since 11 July 2016.
Key benchmark indices ended the volatile trading session with small gains on Friday, 14 October 2016. The Sensex rose 30.49 points or 0.11% to settle at 27,673.60, its highest closing level since 10 October 2016.
Among the 30-share Sensex pack, 20 stocks fell and the rest of them rose in the week ended Friday, 14 October 2016.
ONGC (up 3.31%), Cipla (up 2.96%) and Asian Paints (up 1.88%) edged higher from the Sensex pack.
Adani Ports and Special Economic Zone (down 4.72%), Bharti Airtel (down 4.47%) and Reliance Industries (down 2.86%) edged lower from the Sensex pack.
Infosys rose 1.46% to Rs 1,027.40. Infosys' consolidated net profit rose 4.9% to Rs 3606 crore on 3.1% growth in revenue to Rs 17310 crore in Q2 September 2016 over Q1 June 2016. The results are as per International Financial Reporting Standards (IFRS). The result was announced during market hours on Friday, 14 October 2016. In constant currency terms, the company now expects revenue to grow by 8% to 9% for the year ending 31 March 2017 (FY 2017). The company had forecast 10.5%-12% growth in revenue for FY 2017 in constant currency terms at the time of announcing Q1 June 2016 results on 15 July 2016. The company had at the beginning of FY 2017 estimated its revenue growth at 11.5-13.5%.
IT major TCS shed 0.1% to Rs 2,365.90. The company reported a 4.3% growth in its consolidated net profit at Rs 6586 crore on 0.1% decline in revenue to Rs 29284 crore in Q2 September 2016 over Q1 June 2016. The result was announced after market hours on Thursday, 13 October 2016. Commenting on the company's Q2 performance, CEO and MD, N Chandrasekaran said it has been an unusual Q2 for TCS. Growing uncertainties in the environment is creating caution among customers and resulted in holdbacks in discretionary spending this quarter, he said. In addition, volatility in markets like India and Latin America also muted revenue growth, he said. It has been a good quarter from a profitability perspective where despite multiple headwinds the company's disciplined approach and focus on operations has helped it deliver a strong margin performance, Chandrasekaran said.
Hindustan Unilever (HUL) dropped 4.14%. The company's parent, Unilever Plc reported a disappointing revenue growth in Q3. Unilever posted an underlying sales growth of 3.2% in Q3 September 2016 over Q3 September 2015. Volumes declined 0.4% during this period. Sales increased by 3.4% at constant exchange rates while turnover, which is at current rates, declined 0.1% in Q3 September 2016 over Q3 September 2015. Consumer demand remained weak and in the markets in which Unilever operates volumes have slowed further and are flat in aggregate, the company said. This is particularly the case in Latin America where currency devaluation has pushed up the cost of living of its consumers, squeezing disposable incomes, it added. Unilever holds 58.32% stake in Hindustan Unilever (HUL) as per the shareholding pattern as on 30 September 2016.
Engineering and construction major Larsen & Toubro (L&T) rose 1.21%. The company said its construction division has secured a major order worth Rs 3799 crore from the Dedicated Freight Corridor Corporation of India. The latest order has been secured by a consortium of L&T and Sojitz Corp, Japan. The announcement was made during market hours on Friday, 14 October 2016.
Banks stocks edged lower. State Bank of India (down 2.46%), Axis Bank (down 2.38%) and HDFC Bank (down 1.29%), edged lower.
ICICI Bank declined 3.49%. The bank announced on Wednesday, 12 October 2016, that it has notified The Bank of New York Mellon (Trustee) that all outstanding 7.25% perpetual non-cumulative subordinated debt securities (Notes) of the bank will be redeemed in full on 31 October 2016 (redemption date) at a redemption price equal to 100% of the principal amount thereof plus accrued and unpaid interest to the redemption date. The amount of accrued and unpaid interest with respect to the Notes to the redemption date will be $36.25 on each $1,000 of Notes. The redemption price including the amount of accrued and unpaid interest with respect to the Notes for all outstanding Notes on the redemption date will be $1036.25 for each $1,000 of Notes. ICICI Bank acting through its Bahrain branch had issued a $340,000,000 7.25% perpetual non-cumulative subordinated debt securities on 24 August 2006 with an optional redemption by the bank on 31 October 2016, or on any subsequent interest payment date.
Shares of Mahindra & Mahindra (M&M) shed 1.22%. SsangYong Motor Company, part of the Mahindra group on Wednesday, 12 October 2016 announced that as a part of its effort to grow in China, the company signed a letter of intent with the Shaanxi Automobile Group for a joint venture that will establish a local production for CBU vehicles. The joint venture, which will become SsangYong's first overseas production base, in a 50/50 partnership with the Shaanxi Automobile Group, will construct production facilities for CBU vehicles and an engine plant. The first phase of construction will establish a plant with an annual capacity of 150,000 units per year by the end of 2019 and the second phase will involve an expansion of the facilities to 300,000 units annually. Further, SsangYong will establish an automotive cluster with its major suppliers that will also enter the market, to ensure product competitiveness, and start the production of SsangYong's current models and models under development, in the second half of 2019.
Tata Motors lost 1.81%. The company announced that it is desirous of offering the fifth series of its rated, listed, unsecured, redeemable, non convertible debentures (NCDs) aggregating to Rs 500 crore and in this regard is holding a meeting of its duly constituted committee of the board of directors on 18 October 2016. The issuance is pursuant to the approval of the shareholders passed vide special resolution at the 71th Annual General Meeting of the company held on 9 August 2016 and the board of directors resolution passed at its meeting held on 26 August 2016. The announcement was made on Wednesday, 12 October 2016.
HDFC lost 6.15%. The company announced that pursuant to the approval of the board of directors of the company at its meetings held previously, the company is contemplating, subject to market conditions, undertaking the fourth issuance of Rupee denominated bonds to overseas investors. The issue size of the bonds will be up to Rs 500 crore. The issue will open on 14 October 2016 and closes on the same day. The pricing and the tenure of the bonds to be issued pursuant to the said issue will be intimated in due course. The announcement was made before market hours on Thursday, 13 October 2016.
India's largest cigarette maker by sales ITC rose 0.27%. The corporate management committee of the company approved divestment of the company's entire shareholding (204 shares of common stock with no par value) in King Maker Marketing Inc, US, a wholly-owned subsidiary, along with assignment of certain trademarks owned by the company. The announcement was made on Sunday, 9 October 2016. The consideration to be received is estimated at around $24 million in terms of the share purchase agreement and subject to regulatory approvals and customary closing conditions, ITC said. The buyer in the transaction is Premier Manufacturing, Inc., USA, it added.
Dr Reddy's Laboratories slipped 0.82%. The company announced its entry into Columbia with its portfolio of high quality and affordable medicines for cancer patients. Ramana, Executive Vice President and Head, Branded Markets, Global Generics, Dr Reddy's Laboratories' (DRL) said that the company's initial focus would be to provide access to affordable cancer medicines to patients through its proven portfolio of oncology products. The announcement was made after market hours on Friday, 7 October 2016.
GAIL (India) rose 3.9%. GAIL (India) on Monday, 10 October 2016, announced that it has received intimation from the Ministry of Petroleum and Natural Gas that the Cabinet Committee on Economic Affairs (CCEA) approved 40% capital grant (limited to Rs 5176 crore) of the estimated capital cost of Rs 12940 crore to GAIL (India) for execution Jagdishpur-Haldia/Bokaro-Dhamra gas pipeline (JHBDPL) project by 2020.
On the economic front, India's industrial production declined 0.7% in August 2016 compared with a revised 2.5% decline in July 2016. The government unveiled the industrial production data for August 2016 after trading hours on Monday, 10 October 2016. Decline in production in metal and manufacturing sector led the decline in industrial production in August 2016. Production of the mining sector declined 5.6% and manufacturing production fell 0.3%. As per use-based classification, capital goods production declined sharply by 22.2% in August 2016. Consumer goods production rose 1.1%.
The all-India general CPI inflation dipped to 13-months low of 4.31% in September 2016, compared with 5.05% in August 2016. The core CPI inflation moved up to 4.77% in September 2016 from 4.59% in August 2016. The data was announced after market hours on Thursday, 13 October 2016.
Meanwhile, data released by the government during market hours on Friday, 14 October 2016 showed that the annual rate of inflation, based on monthly WPI, stood at 3.57% (provisional) in September 2016 compared to 3.74% (provisional) in August 2016 and minus 4.59% in September 2015.
On the global front, China's exports sank 10% year-on-year in September to $184.5 billion, while imports fell 1.9% to $142.5 billion. Meanwhile, minutes from the US Federal Reserve's September meeting raised expectations of a December interest rate hike and weak Chinese trade data for September 2016 weighed on investor sentiment. Meanwhile, China's producer price index edged up 0.1% in September from a year earlier, reversing a 0.8% on-year drop in August, the National Bureau of Statistics said. The number of Americans filing for unemployment benefits held at a 43-year low last week, pointing to sustained labor market strength that could pave the way for the Federal Reserve to raise interest rates in December. Initial claims for state unemployment benefits were unchanged at a seasonally adjusted 246,000 for the week ended 8 October 2016, the lowest reading since November 1973, the Labor Department said.
In the week ended Friday, 14 October 2016, the Sensex fell 387.54 points or 1.38% to settle at 27,673.60. The Nifty 50 index fell 114.20 points or 1.31% to settle at 8,583.40. The BSE Mid-Cap index lost 123 points or 0.91% to settle at 13,419.62. The BSE Small-Cap index fell 45.64 points or 0.35% to settle at 13,176.76. The fall in both these indices was lower than the Sensex's decline in percentage terms.
Trading for the week began on a positive note as the key benchmark indices eked out small gains on Monday, 10 October 2016 ahead of a two-day holiday. The Sensex rose 21.20 points or 0.08% to settle at 28,082.34, its highest closing level since 6 October 2016.
The stock market remained closed on Tuesday, 11 October 2016, on account of Dussehra. The market also remained closed on Wednesday, 12 October 2016, on account of Muharram.
Key benchmark indices suffered sharp losses on Thursday, 13 October 2016 on subdued index of industrial production (IIP) data for August 2016 and weak global stocks. The Sensex lost 439.23 points or 1.56% to settle at 27,643.11, its lowest closing level since 11 July 2016.
Key benchmark indices ended the volatile trading session with small gains on Friday, 14 October 2016. The Sensex rose 30.49 points or 0.11% to settle at 27,673.60, its highest closing level since 10 October 2016.
Among the 30-share Sensex pack, 20 stocks fell and the rest of them rose in the week ended Friday, 14 October 2016.
ONGC (up 3.31%), Cipla (up 2.96%) and Asian Paints (up 1.88%) edged higher from the Sensex pack.
Adani Ports and Special Economic Zone (down 4.72%), Bharti Airtel (down 4.47%) and Reliance Industries (down 2.86%) edged lower from the Sensex pack.
Infosys rose 1.46% to Rs 1,027.40. Infosys' consolidated net profit rose 4.9% to Rs 3606 crore on 3.1% growth in revenue to Rs 17310 crore in Q2 September 2016 over Q1 June 2016. The results are as per International Financial Reporting Standards (IFRS). The result was announced during market hours on Friday, 14 October 2016. In constant currency terms, the company now expects revenue to grow by 8% to 9% for the year ending 31 March 2017 (FY 2017). The company had forecast 10.5%-12% growth in revenue for FY 2017 in constant currency terms at the time of announcing Q1 June 2016 results on 15 July 2016. The company had at the beginning of FY 2017 estimated its revenue growth at 11.5-13.5%.
IT major TCS shed 0.1% to Rs 2,365.90. The company reported a 4.3% growth in its consolidated net profit at Rs 6586 crore on 0.1% decline in revenue to Rs 29284 crore in Q2 September 2016 over Q1 June 2016. The result was announced after market hours on Thursday, 13 October 2016. Commenting on the company's Q2 performance, CEO and MD, N Chandrasekaran said it has been an unusual Q2 for TCS. Growing uncertainties in the environment is creating caution among customers and resulted in holdbacks in discretionary spending this quarter, he said. In addition, volatility in markets like India and Latin America also muted revenue growth, he said. It has been a good quarter from a profitability perspective where despite multiple headwinds the company's disciplined approach and focus on operations has helped it deliver a strong margin performance, Chandrasekaran said.
Hindustan Unilever (HUL) dropped 4.14%. The company's parent, Unilever Plc reported a disappointing revenue growth in Q3. Unilever posted an underlying sales growth of 3.2% in Q3 September 2016 over Q3 September 2015. Volumes declined 0.4% during this period. Sales increased by 3.4% at constant exchange rates while turnover, which is at current rates, declined 0.1% in Q3 September 2016 over Q3 September 2015. Consumer demand remained weak and in the markets in which Unilever operates volumes have slowed further and are flat in aggregate, the company said. This is particularly the case in Latin America where currency devaluation has pushed up the cost of living of its consumers, squeezing disposable incomes, it added. Unilever holds 58.32% stake in Hindustan Unilever (HUL) as per the shareholding pattern as on 30 September 2016.
Engineering and construction major Larsen & Toubro (L&T) rose 1.21%. The company said its construction division has secured a major order worth Rs 3799 crore from the Dedicated Freight Corridor Corporation of India. The latest order has been secured by a consortium of L&T and Sojitz Corp, Japan. The announcement was made during market hours on Friday, 14 October 2016.
Banks stocks edged lower. State Bank of India (down 2.46%), Axis Bank (down 2.38%) and HDFC Bank (down 1.29%), edged lower.
ICICI Bank declined 3.49%. The bank announced on Wednesday, 12 October 2016, that it has notified The Bank of New York Mellon (Trustee) that all outstanding 7.25% perpetual non-cumulative subordinated debt securities (Notes) of the bank will be redeemed in full on 31 October 2016 (redemption date) at a redemption price equal to 100% of the principal amount thereof plus accrued and unpaid interest to the redemption date. The amount of accrued and unpaid interest with respect to the Notes to the redemption date will be $36.25 on each $1,000 of Notes. The redemption price including the amount of accrued and unpaid interest with respect to the Notes for all outstanding Notes on the redemption date will be $1036.25 for each $1,000 of Notes. ICICI Bank acting through its Bahrain branch had issued a $340,000,000 7.25% perpetual non-cumulative subordinated debt securities on 24 August 2006 with an optional redemption by the bank on 31 October 2016, or on any subsequent interest payment date.
Shares of Mahindra & Mahindra (M&M) shed 1.22%. SsangYong Motor Company, part of the Mahindra group on Wednesday, 12 October 2016 announced that as a part of its effort to grow in China, the company signed a letter of intent with the Shaanxi Automobile Group for a joint venture that will establish a local production for CBU vehicles. The joint venture, which will become SsangYong's first overseas production base, in a 50/50 partnership with the Shaanxi Automobile Group, will construct production facilities for CBU vehicles and an engine plant. The first phase of construction will establish a plant with an annual capacity of 150,000 units per year by the end of 2019 and the second phase will involve an expansion of the facilities to 300,000 units annually. Further, SsangYong will establish an automotive cluster with its major suppliers that will also enter the market, to ensure product competitiveness, and start the production of SsangYong's current models and models under development, in the second half of 2019.
Tata Motors lost 1.81%. The company announced that it is desirous of offering the fifth series of its rated, listed, unsecured, redeemable, non convertible debentures (NCDs) aggregating to Rs 500 crore and in this regard is holding a meeting of its duly constituted committee of the board of directors on 18 October 2016. The issuance is pursuant to the approval of the shareholders passed vide special resolution at the 71th Annual General Meeting of the company held on 9 August 2016 and the board of directors resolution passed at its meeting held on 26 August 2016. The announcement was made on Wednesday, 12 October 2016.
HDFC lost 6.15%. The company announced that pursuant to the approval of the board of directors of the company at its meetings held previously, the company is contemplating, subject to market conditions, undertaking the fourth issuance of Rupee denominated bonds to overseas investors. The issue size of the bonds will be up to Rs 500 crore. The issue will open on 14 October 2016 and closes on the same day. The pricing and the tenure of the bonds to be issued pursuant to the said issue will be intimated in due course. The announcement was made before market hours on Thursday, 13 October 2016.
India's largest cigarette maker by sales ITC rose 0.27%. The corporate management committee of the company approved divestment of the company's entire shareholding (204 shares of common stock with no par value) in King Maker Marketing Inc, US, a wholly-owned subsidiary, along with assignment of certain trademarks owned by the company. The announcement was made on Sunday, 9 October 2016. The consideration to be received is estimated at around $24 million in terms of the share purchase agreement and subject to regulatory approvals and customary closing conditions, ITC said. The buyer in the transaction is Premier Manufacturing, Inc., USA, it added.
Dr Reddy's Laboratories slipped 0.82%. The company announced its entry into Columbia with its portfolio of high quality and affordable medicines for cancer patients. Ramana, Executive Vice President and Head, Branded Markets, Global Generics, Dr Reddy's Laboratories' (DRL) said that the company's initial focus would be to provide access to affordable cancer medicines to patients through its proven portfolio of oncology products. The announcement was made after market hours on Friday, 7 October 2016.
GAIL (India) rose 3.9%. GAIL (India) on Monday, 10 October 2016, announced that it has received intimation from the Ministry of Petroleum and Natural Gas that the Cabinet Committee on Economic Affairs (CCEA) approved 40% capital grant (limited to Rs 5176 crore) of the estimated capital cost of Rs 12940 crore to GAIL (India) for execution Jagdishpur-Haldia/Bokaro-Dhamra gas pipeline (JHBDPL) project by 2020.
On the economic front, India's industrial production declined 0.7% in August 2016 compared with a revised 2.5% decline in July 2016. The government unveiled the industrial production data for August 2016 after trading hours on Monday, 10 October 2016. Decline in production in metal and manufacturing sector led the decline in industrial production in August 2016. Production of the mining sector declined 5.6% and manufacturing production fell 0.3%. As per use-based classification, capital goods production declined sharply by 22.2% in August 2016. Consumer goods production rose 1.1%.
The all-India general CPI inflation dipped to 13-months low of 4.31% in September 2016, compared with 5.05% in August 2016. The core CPI inflation moved up to 4.77% in September 2016 from 4.59% in August 2016. The data was announced after market hours on Thursday, 13 October 2016.
Meanwhile, data released by the government during market hours on Friday, 14 October 2016 showed that the annual rate of inflation, based on monthly WPI, stood at 3.57% (provisional) in September 2016 compared to 3.74% (provisional) in August 2016 and minus 4.59% in September 2015.
On the global front, China's exports sank 10% year-on-year in September to $184.5 billion, while imports fell 1.9% to $142.5 billion. Meanwhile, minutes from the US Federal Reserve's September meeting raised expectations of a December interest rate hike and weak Chinese trade data for September 2016 weighed on investor sentiment. Meanwhile, China's producer price index edged up 0.1% in September from a year earlier, reversing a 0.8% on-year drop in August, the National Bureau of Statistics said. The number of Americans filing for unemployment benefits held at a 43-year low last week, pointing to sustained labor market strength that could pave the way for the Federal Reserve to raise interest rates in December. Initial claims for state unemployment benefits were unchanged at a seasonally adjusted 246,000 for the week ended 8 October 2016, the lowest reading since November 1973, the Labor Department said.
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