Capital goods, metal stocks skid

A bout of volatility was witnessed in early afternoon trade as key benchmark indices trimmed losses after hitting fresh intraday low. At 12:20 IST, the barometer index, the S&P BSE Sensex, was down 340.83 points or 1.27% at 26,477.76. The losses for the Nifty 50 index were higher in percentage terms than those for the Sensex. The Nifty was down 129.45 points or 1.56% at 8,166.85.

Likely short term negative impact on the economy of the recent demonetization of higher denomination notes by the Indian government and uncertainty over the future policies of newly elected US president Donald Trump and their impact on the global economy continued to weigh on sentiment. The Indian government on 8 November 2016, removed legal tender of Rs 500 and Rs 1000 with effect from 9 November 2016, and gave time till December end to deposit these notes in the banks in a biggest crackdown on black money. The move is likely to affect consumption due to cash liquidity crunch and will pull down the growth of economy in short term while in the long term it is expected have a positive impact on the economy.

The recent selling by the foreign portfolio investors (FPIs) of Indian stocks also affected sentiment. FPIs sold shares worth a net Rs 1493.27 crore on Friday, 11 November 2016, as per provisional data released by the stock exchanges, when indices slumped around 2.5% on that day.

The Sensex lost 500.93 points, or 1.86% at the day's low of 26,317.89 in early afternoon trade, its lowest level since 9 November 2016. The index fell 9.21 points, or 0.03% at the day's high of 26,809.61 in early trade. The Nifty skidded 177.75 points, or 2.14% at the day's low of 8,118.55 in early afternoon trade, its lowest level since 9 November 2016. The index fell 7.75 points, or 0.09% at the day's high of 8,288.55 in early trade.

The broad market depicted weakness. There were almost losers against every gainer on BSE. 2,187 shares fell and 276 shares rose. A total of 93 shares were unchanged. The BSE Mid-Cap index was currently down 3.72%. The BSE Small-Cap index was currently down 4.7%. The decline in both these indices was higher than the Sensex's decline in percentage terms.

Metal and mining stocks dropped. Bhushan Steel (down 4.33%), Jindal Steel & Power (down 3.68%), Vedanta (down 6.69%), NMDC (down 4.38%), Steel Authority of India (down 3.21%), JSW Steel (down 1.59%), Hindustan Zinc (down 4.8%) and National Aluminium Company (down 1.87%) edged lower.

Hindalco Industries gained 1.68% after net profit surged 256.18% to Rs 439.74 crore on 1.28% rise in total income to Rs 9,494.40 crore in Q2 September 2016 over Q2 September 2015. The result was announced on Saturday, 12 November 2016. Hindalco Industries said that in aluminium segment, the company delivered robust operational performance in Q2 September 2016 in a challenging macroeconomic environment on the back of efficiency gains and lower input costs. Improved visibility over coal sourcing and cost and major portion of requirement secured through linkages, Hindalco Industries said. In copper segment, copper performance rebounded strongly in Q2 September 2016 post successful completion of planned maintenance shutdown.

Hindalco Industries' board of directors approved raising of long term finance by way of public or private offerings through equity or equity-linked instruments on preferential allotment basis through qualified institutional placement, rights offer, global depository receipts, American depository receipts and foreign currency convertible bonds of up to Rs 5000 crore.

Tata Steel dropped 6.65% after the company recorded consolidated net loss of Rs 49.38 crore in Q2 September 2016 compared with consolidated net profit of Rs 5609.43 crore in Q2 September 2015. Total income fell 0.01% to Rs 27579.57 crore in Q2 September 2016 over Q2 September 2015. The result was announced was announced after market hours on Friday, 11 November 2016.

Corporation Bank jumped 9.74% after net profit net profit rose 9.4% to Rs 206.28 crore on 5.8% decline in operating income to Rs 5750.62 crore in Q2 September 2016 over Q2 September 2015. The result was announced on Monday, 14 November 2016,

Corporation Bank's gross non-performing assets (NPAs) stood at Rs 15611.06 crore as on 30 September 2016 as against Rs 15726.12 crore as on 30 June 2016 and Rs 7729.07 crore as on 30 September 2015. The ratio of gross NPAs to gross advances stood at 10.81% as on 30 September 2016 as against 11.01% as on 30 June 2016 and 5.32% as on 30 September 2015. The ratio of net NPAs to net advances stood at 6.91% as on 30 September 2016 as against 7.22% as on 30 June 2016 and 3.54% as on 30 September 2015. The bank's provisions and contingencies (excluding tax provisions) rose 46.66% to Rs 826.80 crore in Q2 September 2016 over Q2 September 2015. Provision coverage ratio of the bank was at 57.39% as on 30 September 2016.

Capital goods stocks also dropped. BEML (down 1.69%), Bharat Heavy Electricals (Bhel) (down 1.87%), Havells India (down 4.87%), L&T (down 0.42%), Thermax (down 5.98%), Crompton Greaves (down 2.73%) and Siemens (down 6.15%) declined.

In overseas markets, Asian stocks trade mixed. US stocks closed little changed yesterday, 14 November 2016, after rising dramatically the week before and a decline in the technology sector offset a steep rise in financial stocks as investors bet on higher interest rates. The Dow Jones Industrial Average settled at another record closing high.

On macro front, inflation based on wholesale price index (WPI) eased slightly to 3.39% (provisional) in October 2016 over October 2015, as compared to 3.57% (provisional) for the September 2016 and -3.7% in October 2015. Build up inflation rate in the financial year so far was 4.34% compared to a build up rate of 0.45% in the corresponding period of the previous year. The data was announced during market hours today, 15 November 2016.

The government will announce monthly inflation data based on consumer price index (CPI) for October 2016 after market hours today, 15 November 2016. India's consumer prices increased by 4.31% year-on-year in September 2016, easing from a 5.05% growth in August.

The industrial production (IIP) data announced after market hours on Friday, 11 November 2016 showed that IIP rose 0.7% in September 2016 over September 2015. The IIP contracted 0.7% in August, and shrank 2.5% in July.

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