Market provisionally settles with modest gains

Trading for the week started on a positive note as key benchmark indices settled with modest gains today, 24 October 2016 as firmness in global stocks boosted sentiment. The barometer index, the S&P BSE Sensex rose 128.08 points or 0.46% at 28,205.26, as per the provisional closing data. The gains for the Nifty 50 index were lower than the Sensex's gains in percentage terms. The Nifty gained 18.85 points or 0.22% at 8,711.90, as per the provisional closing data.

The Sensex rose 179.47 points or 0.63% at the day's high of 28,256.65 in mid-afternoon trade, its highest level since 6 October 2016. The barometer index lost 1.23 points at the day's low of 28,075.95 in early trade. The Nifty rose 43.90 points or 0.5% at the day's high of 8,736.95 in mid-afternoon trade, its highest level since 10 October 2016. The index lost 8.90 points or 0.1% at the day's low of 8,684.15 in early trade.

In overseas stock markets, European stocks edged higher as investors focused on fresh economic data and corporate earnings. Economic activity in the eurozone accelerated at the beginning of the fourth quarter, led by an upturn in Germany, according to surveys of purchasing managers at manufacturers and service providers. IHS Markit said today, 24 October 2016 that its measure of private-sector activity, the Composite Purchasing Managers Index, rose to 53.7 in October from 52.6 in September, a ten-month high. A reading above 50 indicates an increase in activity.

Asian stocks gained in volatile trade led by gains in Chinese stock market. China's Shanghai Composite closed 1.21% higher. Latest data showed that the Nikkei Flash Japan Manufacturing Purchasing Managers' Index (PMI) rose to 51.7 in October from September's 50.4, improving at the sharpest rate in nine months. Most US stocks closed slightly lower on Friday, 21 October 2016 after earnings from McDonald's helped offset a fall in energy and healthcare shares.

Closer home, the market breadth indicating the overall health of the market was positive. On BSE, 1,681 shares rose and 1,171 shares fell. A total of 222 shares were unchanged. The BSE Mid-Cap index provisionally fell 0.13 %, underperforming the Sensex. The BSE Small-Cap index provisionally gained 0.52%, outperforming the Sensex.

The total turnover on BSE amounted to Rs 3380.91 crore, higher than turnover of Rs 3200.73 crore registered during the previous trading session.

Wipro shed 3.09% after consolidated net income fell 8% to Rs 2070 crore on 10% increase in gross revenues to Rs 13770 crore in Q2 September 2016 over Q2 September 2015. The result was announced after market hours on Friday, 21 October 2016. During the quarter, Wipro's non-GAAP constant currency IT services segment revenue in dollar terms grew 0.9% over Q1 June 2016 and grew 7.2% over Q2 September 2015. IT services segment revenue was $1916.30 million, a decrease of 0.8% over Q1 June 2016 and an increase of 4.6% over Q2 September 2015.

IT services segment profits fell 5% to Rs 2340 crore on 9% increase in revenue to Rs 13140 crore in Q2 September 2016 over Q2 September 2015. Wipro expects revenues from its IT services business to be in the range of $1,916 million to $1,955 million in the year ending 31 March 2017 (FY 2017).

Cairn India declined 0.39% in volatile trade after announcing Q2 results. The company's consolidated net profit rose 139.16% to Rs 778.70 crore on 9.08% decline in net sales to Rs 2038.59 crore in Q2 September 2016 over Q2 September 2015. The result was announced after market hours on Friday, 21 October 2016. Earnings before interest, taxes, depreciation and amortization (EBITDA) rose 31% to Rs 1039 crore in Q2 September 2016 over Q1 June 2016.

Revenue in Q2 September 2016 increased marginally over Q1 June 2016 as discount to Brent for Rajasthan crude declined substantially from $8.2 per bbl to $4.3 per bbl, implying a reduction in discount from 18% to 9.3%. An improvement in differential between Bonny Light and Brent, and strong refining crack for fuel oil and waxy residue helped reduce the discount, the company said in a statement.

Cairn India's average price realisation fell 4% to $41.80 per barrel of oil equivalent (boe) in Q2 September 2016 compared with $43.70 boe in Q2 September 2015. Average price realisation rose 10% compared with $38 boe in Q1 June 2016.

In its outlook, the company said that with an aim to create long term value to the shareholders, it will remain focused on monetizing its Rajasthan resource base. A net capital investment of $100 million is estimated for the year ending March 2017 (FY17), including 20% for exploration activities and 80% for development of RDG Gas project and completion activities of Mangala EOR. The gross production from Rajasthan for FY 2017 is expected to be maintained at the year ended March 2016 (FY16) level. Efforts are ongoing to further improve the economics of key projects - Bhagyam and Aishwariya EOR, Barmer Hill and Satellite Fields, at low oil prices and the pre-development investment is underway to ensure project readiness for the development with grant of extension of PSC. The company retains the flexibility to raise its capital investment as oil prices improve and aims to generate a healthy cash flow post capex so as to retain the ability to pay dividends.

ONGC rose 4.61% after the company said that the board of directors of the company will consider a proposal for declaration of bonus issue, if any, in a meeting, scheduled on 27 October 2016. The announcement was made during market hours today, 24 October 2016.

Separately, ONGC on Saturday, 22 October 2016 in its clarification with respect to news titled, Bombay high court asks ONGC to release $20 million to Swiber said that as per the current status the Bombay High Court decided on 18 October 2016 that parties are trying their best to arrive at an amicable settlement of their disputes. The parties are still trying to finalize the terms of the settlement and directed ONGC to release $11.1 million to the Judicial Manager, subject to a workable mechanism, so that this amount is utilized for the purpose of the project only and to deposit $8.44 million in the court before the next date of hearing on 26 October 2016.

The matter is in the normal execution of contract/project and the amount due and payable towards contract/project execution is to be deposited in the court and there is nothing material in the court decision. ONGC, Offshore Engineering Services had awarded three projects i.e. Daman Development Project, Pipeline Replacement Project-4 & C-26 Cluster Pipeline Project to Swiber Offshore Construction(SOC), Singapore a subsidiary of Swiber Holdings Pte Ltd Singapore.

Auto stocks gained. Mahindra & Mahindra (M&M) (up 1.02%), Ashok Leyland (up 1.15%), Maruti Suzuki India (up 1.23%), and Tata Motors (up 2.41%) gained. Eicher Motors shed 0.75%. Shares of two-wheeler makers declined. TVS Motor Company (down 0.05%), Bajaj Auto (down 0.49%), and Hero MotoCorp (down 0.91%) declined.

Huhtamaki PPL rose 1.09% after the company said that it is setting up a new flexible packaging manufacturing unit in Assam, which is likely to be commissioned during the first half of 2017, to better service its customers based in North East India. The company's subsidiary, Webtech Labels, is setting up a new label manufacturing unit in Sikkim, to service its customers based in North East India and likely to be commissioned during the first half of 2017. Further, the main Label manufacturing unit of Webtech Labels, located at Mahape, Navi Mumbai, primarily catering to pharmaceutical companies will be relocated to a new facility in the Greater Mumbai Region by the end of 2017. The combined value of these investments/modernisation is expected to be approximately Rs 65 crore. The announcement was made during market hours today, 24 October 2016.

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