Key benchmark indices ended the volatile trading session with small gains. The barometer index, the S&P BSE Sensex, rose 30.49 points or 0.11% to settle at 27,673.60. The Nifty 50 index rose 10.05 points or 0.12% to settle at 8,583.40.
On the economic front, 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 yesterday, 13 October 2016.
Meanwhile, data released by the government during market hours today, 14 October 2016, showed that the annual rate of inflation, based on monthly wholesale price index (WPI), stood at 3.57% (provisional) in September 2016 compared to 3.74% (provisional) in August 2016 and minus 4.59% in September 2015.
In overseas stock markets, European stocks were higher after stronger-than-anticipated inflation data from China helped to calm nerves over global growth prospects. UK construction output slipped 1.5% in August 2016 over July 2016. UK construction output rose 0.2% in August 2016 over August 2015. Asia stocks were trading higher, reversing some early losses, as investors weighed price increases in China and the possibility of a US interest rate hike later in the year. 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. US stocks finished in the red yesterday, 13 October 2016, as investors grew jittery following the Federal Reserve's latest meeting minutes as well as weak Chinese economic reports. 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.
Back home, the Sensex rose 30.49 points or 0.11% to settle at 27,673.60, its highest closing level since 10 October 2016. The index rose 120.43 points, or 0.44% at the day's high of 27,763.54. The index fell 94.93 points, or 0.34% at the day's low of 27,548.18.
The Nifty rose 10.05 points or 0.12% to settle at 8,583.40, its highest closing level since 10 October 2016. The index rose 31.10 points, or 0.36% at the day's high of 8,604.45. The index fell 23.55 points, or 0.27% at the day's low of 8,549.80.
The market breadth indicating the overall health of the market was strong. On BSE, 1,735 shares rose and 1,060 shares fell. A total of 178 shares were unchanged. The BSE Mid-Cap index rose 0.81%. The BSE Small-Cap index rose 0.83%. Both these indices outperformed the Sensex.
The total turnover on BSE amounted to Rs 3408.47 crore, lower than turnover of Rs 3945.28 crore registered during the previous trading session.
Among the sectoral indices on BSE, the S&P BSE Oil & Gas index (up 2.20%), the S&P BSE Energy index (up 1.65%), the S&P BSE Capital Goods index (up 1.56%), the S&P BSE Industrials index (up 1.37%), the S&P BSE Utilities index (up 1.28%), the S&P BSE Realty index (up 0.79%), the S&P BSE Power index (up 0.75%), the S&P BSE Basic Materials index (up 0.59%), the S&P BSE Healthcare index (up 0.37%), the S&P BSE Bankex (up 0.36%), the S&P BSE Consumer Durables index (up 0.25%), the S&P BSE Finance index (up 0.18%) and the S&P BSE FMCG index (up 0.12%), outperformed the Sensex. The S&P BSE Auto index (up 0.10%), the S&P BSE Consumer Discretionary Goods & Services index (down 0.21%), the S&P BSE IT index (down 0.5%), the S&P BSE Metal index (down 0.52%), the S&P BSE Teck index (down 0.73%) and the S&P BSE Telecom index (down 0.76%), underperformed the Sensex.
IT major TCS rose 1.61% to Rs 2,365.90 after 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 yesterday, 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.
Rajesh Gopinathan, Chief Financial Officer of TCS said that Q2 September 2016 has been a quarter of good financial performance with sequential improvement in profitability and strong cash generation despite multiple headwinds including global currency and market volatility through the quarter.
Infosys fell 2.34% to Rs 1,027.40 after the company trimmed revenue growth guidance for the current financial year at the time of announcing Q2 September 2016 results today, 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%.
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 today, 14 October 2016.
Infosys' CEO Dr. Vishal Sikka said that the company focused on strong execution in Q2 September 2016 with its core IT services business showing good progress on the strength of its innovation and operational initiatives. While the company continues to navigate an uncertain external environment, it remains focused on executing its strategy and increasing momentum of its software plus services model, Sikka said.
M.D. Ranganath, CFO of Infosys said the company's margins expanded during the quarter on the back of further improvement in operational efficiency. Operating cash flows for the quarter were healthy and the company effectively navigated a volatile currency environment through prudent hedging, he said.
Hindustan Unilever (HUL) dropped 2.32% to Rs 841.95, with the stock extending previous session's losses triggered by the company's parent, Unilever Plc reporting a disappointing revenue growth in Q3. Shares of HUL had settled 1.61% lower at Rs 861.95 yesterday, 13 October 2016 after Unilever yesterday, 13 October 2016 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 2.51% to Rs 1,472.50 after 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 today, 14 October 2016.
Tata Motors rose 2.05% to Rs 555.45 on reports that a foreign brokerage has retained its overweight rating on the stock and revised target price on the stock to Rs 642 from Rs 585 earlier. The brokerage reportedly said that Jaguar Land Lover (JLR) numbers are expected to be driven by high average selling price. Volume growth will moderate buy scale will gain, it said. JLR is likely to post 22% earnings per share (EPS) compound annual growth rate (CAGR) between FY 2016-2018, it added.
Private sector banks edged higher. RBL Bank (up 2.64%), City Union Bank (up 1.81%), Kotak Mahindra Bank (up 1.32%), Federal Bank (up 0.78%), Axis Bank (up 0.37%), ICICI Bank (up 0.27%) and HDFC Bank (up 0.05%), edged higher. IndusInd Bank fell 0.04%
Yes Bank rose 0.39% to Rs 1,259.95 amid volatility after the bank said it will issue update on qualified institutional placement and fund raising when its board will meet on 20 October 2016 for announcing the bank's Q2 results. Yes Bank said that a meeting of the board of directors of the bank will be held on 20 October 2016, to consider Q2 September 2016 results and to update on qualified institutional placement (QIP) and fund raising by way of QIP and debt issues, under the current shareholders approval which is valid till 6 June 2017. The announcement was made after market hours yesterday, 13 October 2016.
Karnataka Bank rose 3.42% to Rs 149.60 after the bank said it has fixed 25 October 2016 as record date for the rights issue of shares. Karnataka Bank proposes to issue rights in the ratio of 1:2 i.e. one equity share for every two equity shares held on the record date. The size of the issue is Rs 659.65 crore. The rights issue price is Rs 70 per share. The announcement was made after market hours yesterday, 13 October 2016.
Public sector banks were mixed. Dena Bank (up 1.53%), United Bank of India (up 0.95%), Canara Bank (up 0.92%), State Bank of India (up 0.88%), Allahabad Bank (up 0.81%), Bank of India (up 0.81%), Punjab National Bank (up 0.76%), Vijaya Bank (up 0.62%), Andhra Bank (up 0.45%), Indian Bank (up 0.12%) and Central Bank of India (up 0.11%), edged higher. Bank of Baroda (down 0.1%), Punjab & Sind Bank (down 0.39%), Corporation Bank (down 0.49%), Syndicate Bank (down 0.49%), UCO Bank (down 0.69%), Bank of Maharashtra (down 0.81%) and Union Bank of India (down 0.84%), edged lower.
The Sensex has declined 192.36 points or 0.69% in this month so far (till 14 October 2016). The Sensex has risen 1,556.06 points or 5.96% in calendar year 2016 so far (till 14 October 2016). From a 52-week low of 22,494.61 hit on 29 February 2016, the barometer index has risen 5,178.99 points or 23.02%. From a 52-week high of 29,077.28 hit on 8 September 2016, the barometer index has fallen 1,403.68 points or 4.83%. The Sensex is off 2,351.14 points or 7.83% from a record high of 30,024.74 hit on 4 March 2015.
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