Market gains as crude oil extends slide

Key benchmark indices logged modest gains on first trading day of the week on sustained buying demand in index pivotals. The barometer index, the S&P BSE Sensex, gained 240.61 points or 0.69% at 35,198.80, as per the provisional closing data. The Nifty 50 index gained 83.50 points or 0.79% at 10,688.65, as per the provisional closing data. The Sensex provisionally settled well above the psychological 35,000 mark after regaining that level in opening trade. A decline in crude oil prices boosted investors' sentiment.

In commodities market, oil prices fell today, 28 May 2018, extending a steep decline in the previous session, as the market eyed an increase in output from the world's three top crude producers, Russia, the United States and Saudi Arabia. The slide in global crude oil prices will help India in containing inflation, current account and fiscal deficits. India imports about 80% of its crude oil requirement.

In the global commodities markets, Brent for July 2018 settlement was down $1.08 a barrel or 1.41% to $75.36 a barrel. The contract slumped $2.35 a barrel or 2.98% to settle at $76.44 a barrel during the previous trading session.

Trading for the week began on an upbeat note as domestic stocks saw gap-up opening as crude oil extended a steep decline in the previous session. The Sensex regained the psychological 35,000 level in opening trade. Key benchmark indices extended early gains and hit fresh intraday high in morning trade. Stocks trimmed some gains in mid-morning trade. Indices hit fresh intraday high in afternoon trade. Firmness prevailed on the bourses in mid-afternoon trade on sustained buying demand in index pivotals.

The S&P BSE Mid-Cap index rose 1.35%. The S&P BSE Small-Cap index rose 1.6%. Both these indices outperformed the Sensex.

The market breadth, indicating the overall health of the market, was strong. On the BSE, 1838 shares rose and 849 shares fell. A total of 173 shares were unchanged.

Index heavyweight and engineering and construction major L&T advanced 2.52% ahead of its Q4 result today, 28 May 2018. L&T said that water & effluent treatment business of L&T Construction has won orders valued Rs 5704 crore. The announcement was made during market hours today, 28 May 2018.

NTPC rose 1.42% after net profit surged 40.69% to Rs 2925.59 crore on 13.07% rise in total income to Rs 23617.83 crore in Q4 March 2018 over Q4 March 2017. The result was announced during trading hours today, 28 May 2018.

Sun Pharmaceuticals Industries jumped 6.42%. On a consolidated basis, net profit after minority interest of Sun Pharmaceuticals Industries rose 10.35% to Rs 1528.99 crore on 1.67% decline in net sales to Rs 6711.01 crore in Q4 March 2018 over Q4 March 2017. The result was announced after market hours on Friday, 25 May 2018.

The decline in Q4 net sales was primarily driven by the US and the Active Pharmaceutical Ingredients (API) businesses. All other businesses recorded positive growth for the quarter. For Q4 March 2018, external sales of API were at Rs 332 crore, a decline of 16% over Q4 last year.

India sales were reported at Rs 1963 crores, growth of 2% over Q4 last year. US finished dosage sales were reported at $368 million, down by 3% over Q4 last year. Emerging markets sales were reported at $199 million, up by 10% over Q4 last year. Rest of World sales were reported at $116 million, a growth of 6% over Q4 last year. Research and development (R&D) investments were reported at Rs 743 crores (11% of sales) compared to Rs. 600 crores (9% of sales) for Q4 March 2017.

Other operating income for the quarter was reported at Rs 266 crore, which includes $20 million of milestone payment from Almirall S.A (Spain) as part of the licensing agreement for the development and commercialization of Tildrakizumab for psoriasis in Europe.

Dilip Shanghvi, managing director of the company said that the company's Q4 performance is in-line with its guidance. Over the last four quarters, the company has been able to record a gradual improvement in performance despite a challenging US generic pricing environment. FY 2019 will mark the crossing of some important milestones in the company's specialty journey with the likely launch of 3 specialty products in the US - Ilumya, OTX-101 and Yonsa - which will entail upfront investments. The company is also planning to conduct additional clinical trials for a new indication of Ilumya. The company will continue to evaluate opportunities in the specialty segment to further enhance this business.

Tech Mahindra dropped 3.86%. On a consolidated basis, net profit of Tech Mahindra rose 33.15% to Rs 1230.80 crore on 3.58% rise in net sales to Rs 8054.50 crore in Q4 March 2018 over Q3 December 2017. The result was announced after market hours on Friday, 25 May 2018.

Consolidated earnings before interest, taxes, depreciation and amortization (EBITDA) rose 11.7% to Rs 1412 crore in Q4 March 2018 over Q3 December 2017. The software services exporter saw a rise of 8.3% in the number of active clients, and strong growth in deal wins in the $5 million and $10 million client categories.

Avanti Feeds fell 6.78% after consolidated net profit fell 3.09% to Rs 86 crore on 24.22% increase in net sales to Rs 834.28 crore in Q4 March 2018 over Q4 March 2017. The result was announced on Saturday, 26 May 2018.

Overseas, European and Asian stocks edged higher on signs that the United States and North Korea are still working towards holding a summit next month. Profits earned by Chinese industrial firms in April reportedly rose at their fastest pace in six months, data from the National Bureau of Statistics (NBS) showed on Sunday, 27 May 2018 as factories benefited from higher prices and strong demand.

US stocks ended mostly lower Friday, 25 May 2018, on lighter than normal volume as a plunge in crude-oil futures, sparked by reports that OPEC and major oil-producer Russia were considering increasing output, slammed shares of energy-related companies.

US President Donald Trump reportedly said on Sunday, 27 May 2018, that a US team had arrived in North Korea to prepare for a proposed summit between him and North Korean leader Kim Jong Un on 12 June 2018 in Singapore, which Trump pulled out of last week before reconsidering.

Meanwhile, US markets will remain closed today, 28 May 2018 for Memorial Day. UK markets is also closed today, 28 May 2018 for the spring bank holiday.

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