Market extends initial losses

Key benchmark indices extended initial losses and hit fresh intraday low in morning trade. At 10:20 IST, the barometer index, the S&P BSE Sensex, was down 368.99 points or 1.38% at 26,449.83. The losses for the Nifty 50 index were higher in percentage terms than those for the Sensex. The Nifty was down 141.35 points or 1.7% at 8,154.95. The Sensex and the Nifty, both hit their lowest level in almost one week. Heavy selling in mid-cap and small-cap stocks continued in today's trade.

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 Sensex lost 497.81 points, or 1.85% at the day's low of 26,321.01 in morning 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 170.70 points, or 2.05% at the day's low of 8,125.60 in morning 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 more than seven losers against every gainer on BSE. 1,944 shares fell and 268 shares rose. A total of 74 shares were unchanged. The BSE Mid-Cap index was currently down 4.03%. The BSE Small-Cap index was currently down 4.92%. The decline in both these indices was higher than the Sensex's decline in percentage terms.

In overseas markets, most Asian stocks gained. 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.

Auto stocks declined. Mahindra & Mahindra (M&M) (down 2.55%), Ashok Leyland (down 3.26%), Maruti Suzuki India (down 4.4%), Eicher Motors (down 3.1%), Hero MotoCorp (down 2.21%), Bajaj Auto (down 2.66%) and TVS Motor Company (down 3.48%) declined.

Tata Motors shed 7%. The company reported consolidated net profit of Rs 848.16 crore in Q2 September 2016 as compared with net loss of Rs 1740.20 crore in Q2 September 2015. Total income rose 7% to Rs 66,106.96 crore in Q2 September 2016 over Q2 September 2015. The result was announced on Monday, 14 November 2016, when the stock market was closed for a public holiday.

Tata Motors said that in Jaguar Land Rover (JLR) business, strong sales were seen in all the regions UK, Europe, North America, China and other overseas markets. In standalone business, the demand pause in medium and heavy commercial vehicle (M&HCV) partially offset by continued growth in the domestic light commercial vehicle (LCV) segment, car segment and exports, Tata Motors said.

Tata Motors' consolidated profit before tax (before exceptional item) dropped 17.46% to Rs 983 crore in Q2 September 2016 over Q2 September 2015 broadly due to higher volumes and favourable operating exchange, in Jaguar Land Rover business more than offset by the realized hedging losses of Rs 3510 crore, and adverse commodity derivatives impact of Rs 187 crore.

After the exceptional items, the consolidated profit before tax was Rs 999 crore in Q2 September 2016, against loss before tax of Rs 2150 crore in Q2 September 2015, which included exceptional items of Rs 2493 crore on account of the vehicles damaged at Tianjin Port explosion in Jaguar Land Rover business.

Realty stocks extended recent losses as the sector is expected to feel the heat of the government's recent move to phase out the old Rs 500 and Rs 1000 notes. Sobha (down 4.68%), Indiabulls Real Estate (down 5.98%), Unitech (down 5.57%), Oberoi Realty (down 4.56%), DLF (down 4.11%), and Omaxe (down 0.53%) edged lower. Analysts expect that a lot of property purchases may get deferred in the short term in the wake of the government's latest measures to curb black money. Reports suggested that luxury real estate and land prices could correct near term, though it may be a positive over the long run.

BPCL fell 2.17%. The company posted 26.16% rise in net profit to Rs 1305.18 crore on 2.67% fall in total income to Rs 45715.06 crore in Q2 September 2016 over Q2 September 2015. The result was announced after market hours on Friday, 11 November 2016. BPCL's average gross refining margin (GRM) rose to $4.56 per barrel in Q2 September 2016 over $3.08 per barrel in Q2 September 2015.

Separately, BPCL after market hours on Friday, 11 November 2016 announced formation of Joint Venture with GAIL Gas for a City Gas Distribution (CGD). Consortium of BPCL and GAIL Gas has been awarded the authorization for laying, building, operating and expanding of a City Gas Distribution Network (CGD Network) in the geographical area of North Goa by the Petroleum and Natural Gas Regulatory Board established under the PNGRB Act, 2006. The board of directors of the company has approved the proposal to form a new Joint Venture Company (JVC) for this purpose, BPCL said. The proposed JVC shall have equal equity participation from BPCL and Gail Gas and with a provision for equity stake of up to 10% for government of Goa or its nominee. The authorization provides exclusively for laying gas pipelines and related infrastructure in the GA over the next 25 years and a marketing exclusivity for 5 years. The CGD Network shall cater to the demand of CNG and Piped Natural Gas to consumers in the domestic, commercial and industrial segments.

On macro front, 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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