Key indices languish in negative zone

A range bound movement was witnessed as key benchmark indices languished in negative zone in morning trade. At 10:16 IST, the barometer index, the S&P BSE Sensex, was down 185.47 points or 0.72% at 25,421.15. The decline in the Nifty 50 index was lower than the Sensex's fall in percentage terms. The Nifty index was currently down 45.80 points or 0.58% at 7,804.

The Sensex hit its lowest level in nearly 3 weeks when it lost 225.12 points or 0.87% at the day's low of 25,381.50 in morning trade. The barometer index lost 41.18 points or 0.16% at the day's high of 25,565.44 in early trade. The Nifty, too, hit its lowest level in nearly 3 weeks when it lost 62.95 points or 0.8% at the day's low of 7,786.85 in morning trade. The index lost 26.80 points or 0.34% at the day's high of 7,823 in early trade.

In overseas stock markets, Japanese stocks led decline in Asian markets as the Japanese yen surged to 1-1/2-year high against the dollar. The Nikkei 225 Average was currently off 3.32%. The stronger yen makes Japanese exports less competitive and cuts into the value of repatriated earnings. Japanese stocks extended losses registered during the previous trading session triggered by the Bank of Japan's (BOJ) decision to keep its policies unchanged. Speculation was rife that the Japanese central bank would announce a further easing of the monetary policy to stimulate Japan's economy. Japanese markets were closed on Friday, 29 April 2016, for a national holiday.

US stocks edged lower during the previous trading session on Friday, 29 April 2016, after weak consumer spending data for March 2016 and monthly Chicago Business Barometer index for April showed slowdown in the manufacturing sector. The Chicago Business Barometer decreased 3.2 points to 50.4 in April from 53.6 in March led by a fall in new orders and a sharp drop in order backlogs. It marked a slow start to the second quarter, with most measures down from levels seen a year earlier.

Closer home, the market breadth indicating the overall health of the market was negative. On BSE, 942 shares declined and 804 shares rose. A total of 90 shares were unchanged. The BSE Mid-Cap index was currently up 0.45%, outperforming the Sensex. The BSE Small-Cap index was currently down 0.09%. The decline in this index was lower than Sensex's decline in percentage terms.

Telecom stocks were mixed. Bharti Airtel (down 1.04%) and Idea Cellular (down 0.68%) edged lower. Reliance Communications (up 1.16%) edged higher.

Shares of telecom towers company Bharti Infratel were up 0.32% at Rs 376.

IT stocks dropped. Tech Mahindra (down 1.48%), Persistent Systems (down 0.88%), Infosys (down 0.69%), TCS (down 0.55%) and HCL Technologies (down 0.34%) edged lower. Oracle Financial Services Software (up 0.52%) edged higher.

Wipro lost 1.03% at Rs 548. The company announced before market hours today, 2 May 2016, that its subsidiary Wipro Arabia and Saudi Aramco, Princess Nourah University (PNU) on 1 May 2016 inaugurated the Kingdom of Saudi Arabia's first all women business & technology park. The project is expected to create nearly 21,000 jobs for Saudi women over a period of ten years, Wipro said in a statement.

Bajaj Auto fell 0.41% to Rs 2,474.50 after the company announced that its total sales declined 2% to 3.30 lakh units in April 2016 over April 2015. Motorcycles sales rose 2% to 2.91 lakh units in April 2016 over April 2015. Sales of commercial vehicles dropped 24% to 38,211 units in April 2016 over April 2015. Exports declined 36% to 1.03 lakh units in April 2016 over April 2015. The company announced the monthly sales volume data during market hours today, 2 May 2016.

InterGlobe Aviation edged lower after announcing muted growth in Q4 earnings. The stock lost 3.35% at Rs 1,036.20. The company's net profit rose 0.3% to Rs 579.31 crore on 6.8% growth in net sales to Rs 4060.69 crore in Q4 March 2016 over Q4 March 2015. Earnings before interest, taxes, depreciation, amortization and rent (EBITDAR) rose 9.84% to Rs 1548.01 crore in Q4 March 2016 over Q4 March 2015. EBITDAR margin edged higher to 37.8% in Q4 March 2016, from 36.9% in Q4 March 2015. The result was announced after market hours on Friday, 29 April 2016.

Yes Bank rose 0.68% to Rs 950.10 after the Reserve Bank of India (RBI) notified on Friday, 29 April 2016, that foreign institutional investors (FIIs)/registered foreign portfolios investors (RFPIs) can now invest up to 60% of the paid-up capital of the bank from existing 49% under the Portfolio Investment Scheme (PIS). The RBI notified that the total foreign investment from all sources i.e. Global Depository Receipts (GDR)/American Depository Receipts (ADR)/Foreign Direct Investment (FDI)/Foreign Institutional Investors (FII)/ Registered Foreign Portfolios Investors (RFPIs)/Non-Resident Indians (NRI)/Persons of Indian Origin (PIO) in the company shall not exceed 60%. The central bank stated that Yes Bank has passed resolutions at its Board of Directors' level and a special resolution by the shareholders, agreeing for enhancing the limit for the purchase of its equity shares and convertible debentures by FIIs/RFPIs. The purchases could be made through primary market and stock exchanges.

ICICI Bank lost 4.23% at Rs 226.60 on reports that a foreign brokerage has cut its earnings estimates for the private sector bank by 15% to 16% for FY 2017 and FY 2018. The brokerage has reportedly maintained its neutral rating on the stock. Shares of ICICI Bank declined 1.47% to settle at Rs 236.60 during the previous trading session on Friday, 29 April 2016, triggered by the bank reporting increase in sticky loans. 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 trading hours on Friday, 29 April 2016.

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 stress 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.

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