Weakness continued on the bourses in mid-afternoon trade. At 14:15 IST, the barometer index, the S&P BSE Sensex, was off 231.20 points or 0.85% at 27,022.24. The 50-unit CNX Nifty was off 70.50 points or 0.86% at 8,162.40. The Sensex regained the psychological 27,000 mark after falling below that level in afternoon trade. Bank stocks led decline for key benchmark indices. Axis Bank tumbled on concerns regarding the private sector bank's slippages in Q2 September 2015.
Weakness in Asian stocks weighed on sentiment on the domestic bourses. The Sensex hit its lowest level in almost two weeks when it fell 278.02 points or 1.02% at the day's low of 26,975.42 in afternoon trade. The Nifty also hit its lowest level in almost two weeks when it fell 80.80 points or 0.98% at the day's low of 8,152.10 in afternoon trade.
In overseas equity markets, stocks in China and Indonesia led decline in Asian markets as investors turned cautious ahead of the outcome of a monetary policy review from the US Federal Reserve which could provide clues about the timing of the Fed's first interest rate hike in a decade. The Fed is widely expected to leave benchmark interest rates unchanged near zero at its two-day monetary policy meeting which concludes today, 28 October 2015. US stocks edged lower for a second consecutive trading session yesterday, 27 October 2015, on a combination of slumping oil prices, soft economic data and mixed earnings.
The market breadth indicating the overall health of the market turned negative from positive in mid-afternoon trade. On BSE, 1,412 shares declined and 1,075 shares rose. A total of 184 shares were unchanged. The BSE Mid-Cap index was down 0.54%. The decline in this index was lower than the Sensex's decline in percentage terms. The BSE Small-Cap index was up 0.06%, outperforming the Sensex.
Shares of pharma major Lupin extended its post-result slide. The stock was currently off 2.6% at Rs 1,895. The stock had dropped 5.25% to settle at Rs 1,945.65 yesterday, 27 October 2015, after the company reported weak Q2 results. On a consolidated basis, Lupin's net profit fell 35.1% to Rs 408.80 crore on 2% rise in net sales to Rs 3178.30 crore in Q2 September 2015 over Q2 September 2014. The result was announced during market hours yesterday, 27 October 2015.
Power sector stocks declined. NTPC (down 1.81%), Tata Power Company (down 1.83%), Reliance Infrastructure (down 1.15%), Reliance Power (down 1.11%), CESC (down 0.39%), Power Grid Corporation of India (down 2.25%), NHPC (down 0.28%), Jaiprakash Power Ventures (down 0.29%) and Adani Power (down 0.82%) edged lower. JSW Energy rose 1.48%.
Axis Bank tumbled on concerns regarding the private sector bank's slippages in Q2 September 2015. The stock was currently off 6.9% at Rs 485.35. The stock hit high of Rs 495.70 and low of Rs 482.75 so far during the day. The stock had ended almost unchanged after seeing intraday volatility yesterday, 27 October 2015, in the wake of the announcement of the bank's second quarter results. According to a post earnings research report of a domestic brokerage, Axis Bank sold loans aggregating about Rs 1820 crore to asset reconstruction companies (ARCs) for net consideration of about Rs 650 crore in Q2 September 2015. Axis Bank's gross slippages were Rs 589 crore or 1% of loans in Q2 September 2015 which was lower than gross slippages of Rs 1190 crore or 2.1% of loans in Q1 June 2015. However, adjusted for Rs 1820-crore sale to ARCs, gross slippages were about Rs 2400 crore or 4% of loans in Q2 September 2015, according to the brokerage.
Axis Bank's net profit rose 18.93% to Rs 1915.64 crore on 13.75% rise in total income to Rs 12001.01 crore in Q2 September 2015 over Q2 September 2014. The result was announced during market hours yesterday, 27 October 2015.
Concerns about Axis Bank's slippages weighed on stocks of other banks. ICICI Bank (down 3.89%), IndusInd Bank (down 0.63%), Yes Bank (down 2.91%) declined. HDFC Bank (up 0.24%) and Kotak Mahindra Bank (up 1.76%) rose.
Among PSU bank stocks, State Bank of India (SBI) (down 2.27%), Union Bank of India (down 2.13%), Bank of India (down 1.75%), Punjab National Bank (down 2.57%), Bank of Baroda (down 2.44%) and Canara Bank (down 2.02%) fell. IDBI Bank rose 0.12%.
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