Key benchmark indices registered small losses as index heavyweights HDFC, ITC and Reliance Industries (RIL) edged lower. The market breadth indicating the overall health of the market was negative. The barometer index, the S&P BSE Sensex, fell 27.86 points or 0.1% to settle at 27,809.35. A divergent trend was witnessed among various index constituents.
Zee Entertainment Enterprises edged lower in volatile trade after announcing Q4 March 2015 results. Power generation stocks edged lower. FMCG stocks also declined. Auto stocks were mixed. Shares of pharmaceutical companies edged lower. Banking stocks also edged lower. Realty shares were mixed. Shares of PSU OMCs fell after crude oil prices rose. Metal shares declined after weak Chinese manufacturing data.
Foreign portfolio investors (FPIs) bought shares worth a net Rs 123.79 crore from the secondary equity market yesterday, 20 May 2015, as per data from Central Depository Services (India). Domestic institutional investors (DIIs) bought shares worth a net Rs 103.58 crore yesterday, 20 May 2015, as per provisional data released by the stock exchanges.
Meanwhile, the finance ministry yesterday, 20 May 2015, constituted a three-member committee headed Justice A.P. Shah to look into the issue of Minimum Alternate Tax (MAT) on foreign institutional investors (FIIs).
In the overseas market, European stocks edged lower after the latest data showed that the eurozone economy slowed for the second straight month in May. Asian stocks ended on a mixed note. US stocks ended a choppy trading session slightly lower yesterday, 20 May 2015, as modest post-Fed-minutes gains evaporated by the close of the trading day.
The S&P BSE Sensex fell 27.86 points or 0.1% to settle at 27,809.35, its lowest closing level since 19 May 2015. The index fell 124.48 points at the day's low of 27,712.73 in early afternoon trade. The index rose 74.23 points at the day's high of 27,911.44 in early trade, its highest level since 23 April 2015.
The CNX Nifty fell 2.25 points or 0.03% to settle at 8,421, its lowest closing since 19 May 2015. The index hit a low of 8,382.50 in intraday trade. The index hit a high of 8,446.35 in intraday trade, its highest level since 23 April 2015.
The BSE Mid-Cap index fell 43.86 points or 0.41% to settle at 10,606.92. The decline in this index was higher than the Sensex's decline in percentage terms. The BSE Small-Cap index fell 5.99 points or 0.05% to settle at 11,194.71. The decline in this index was lower than the Sensex's decline in percentage terms.
The market breadth indicating the overall health of the market was negative. On BSE, 1,507 shares fell and 1,184 shares rose. A total of 130 shares were unchanged.
The total turnover on BSE amounted to Rs 3706 crore, higher than turnover of Rs 2763.99 crore registered during the previous trading session.
Among the sectoral indices on BSE, the BSE Bankex (down 0.15%), the BSE Metal index (down 0.39%), the BSE Oil & Gas index (down 0.46%), the BSE Power index (down 0.61%) and the S&P BSE FMCG index (down 0.76%) underperformed the Sensex. The BSE Realty index (up 0.96%), the BSE Auto index (up 0.8%), the BSE Capital Goods index (up 0.53%), the S&P BSE IT index (up 0.27%), the BSE Healthcare index (up 0.24%), the BSE Consumer Durables index (up 0.05%) and the BSE Teck index (down 0.05%) outperformed the Sensex.
Index heavyweight and housing finance major HDFC fell 1.11% to Rs 1,253.25. The stock hit high of Rs 1,273.70 and low of Rs 1,246.05.
Another index heavyweight Reliance Industries (RIL) fell 1.29% to Rs 895.65. The stock hit high of Rs 915.50 and low of Rs 894.
Metal shares declined on weak Chinese manufacturing data. China is the world's largest consumer of copper, steel, and aluminium. National Aluminum Company (down 2.02%), Steel Authority of India (down 0.9%), Vedanta (down 2.99%), NMDC (down 1.36%), Hindustan Copper (down 1.1%), JSW Steel (down 0.05%), Jindal Steel & Power (down 0.55%) edged lower. Hindustan Zinc (up 0.46%) and Hindalco Industries (up 0.14%) rose.
Tata Steel lost 4.65% to Rs 344.55. The stock hit a high of Rs 351 and a low of Rs 344.25. On a consolidated basis, Tata Steel posted net loss of Rs 5674.29 crore in Q4 March 2015 as compared to net profit of Rs 1035.87 crore in Q4 March 2014. The result was announced after market hours yesterday, 20 May 2015. Total income from operations (net) fell 20.65% to Rs 33666.18 crore in Q4 March 2015 over Q4 March 2014. Total exceptional expense surged to Rs 4811.20 crore in Q4 March 2015 from Rs 45.84 crore in Q4 March 2014. The exceptional expense represents non-cash write down of goodwill and other assets in certain nonperforming business units within the group, primarily relating to European operations and the group's investments in coal assets. The impairment included a write-down of investments in overseas raw materials projects in Mozambique and Ivory Coast and the Taconite project in Canada because the economic viability of these projects remains uncertain at the current level of commodity prices. Tata Steel said that the company's liquidity position and financial covenants are unaffected by this non-cash write-down.
Dr Karl-Ulrich Kler, MD & CEO of Tata Steel's European operations said that there are opportunities to increase the company's sales in the current financial year through higher precision. Steel demand in the European Union (EU) is forecast to grow modestly and the EU steel industry is in a stronger position to benefit than it was pre-crisis. But surging Chinese exports look set to remain a serious concern, Kler said.
Mr Koushik Chatterjee, Group Executive Director (Finance and Corporate), Tata Steel said that the company continues to pursue its strategy of exiting non-core assets and has initiated action on de-risking its exposure to the UK Pension scheme that would help the long term sustenance of the UK business amidst difficult business environment.
With regard to Tata Steel's Indian operations, Tata Steel said that the commercial production at the company's 3 million tonnes per annum greenfield expansion at Kalinganagar in Odisha is expected to commence during the second half of the current financial year. Meanwhile, the first phase of the company's Gopalpur ferrochrome plant is expected to start operation by October 2015.
Index heavyweight and cigarette major ITC declined 1.50% to Rs 327.45. The stock hit a high of Rs 332.95 and low of Rs 326.10. ITC is scheduled to announce its Q4 March 2015 results tomorrow, 22 May 2015.
FMCG stocks declined. Britannia Industries (down 1.71%), Marico (down 0.79%), GlaxoSmithKline Consumer Healthcare (down 0.54%), Godrej Consumer Products (down 0.51%), Nestle India (down 0.35%), Procter & Gamble Hygiene & Health Care (down 0.29%), Colgate Palmolive (India) (down 0.28%) and Jyothy Laboratories (down 0.02%) edged lower.
Tata Global Beverages (up 0.31%), Bajaj Corp (up 0.47%) and Hindustan Unilever (up 1.05%) edged higher.
Dabur India fell 1.52%. Dabur India after market hours today, 21 May 2015, said that CRISIL has reaffirmed its rating on the company's long term bank facilities of Rs 125 crore at CRISIL AAA/Stable. CRISIL also reaffirmed the rating on the company's short term bank facilities (bank guarantees) of Rs 32.50 crore at CRISIL A1+. CRISIL reaffirmed the rating on the company's non convertible debenture programme of Rs 20 crore at CRISIL AAA/Stable and commercial paper programme of Rs 200 crore at CRISIL A1+.
Auto stocks were mixed. Ashok Leyland (down 0.78%), Eicher Motors (down 0.65%), Maruti Suzuki India (down 0.33%) edged lower. Hero MotoCorp (up 0.73%) Tata Motors (up 1.14%) and TVS Motor Company (up 4.18%) edged higher.
Bajaj Auto jumped 7.4% to Rs 2,309.55. The stock was volatile. The scrip hit high of Rs 2,313.30 and low of Rs 2,124. The company's net profit fell 18.62% to Rs 621.62 crore on 4.36% decline in total income to Rs 4893.61 crore in Q4 March 2015 over Q4 March 2014. The result was announced during trading hours today, 21 May 2015.
Bajaj Auto's operating EBITDA (earnings before interest, taxation, depreciation and amortization) before mark-to-market (MTM) gain/loss declined 9.02% to Rs 937 crore in Q4 March 2015 over Q4 March 2014. Operating EBITDA margin stood at 19.4% in Q4 March 2015 as against 20.6% in Q4 March 2014. Bajaj Auto said that EBITDA margin declined on year-on-year basis in Q4 March 2015 largely due to one-off expenses. For one, there was an increase in employee costs. There was increase in employee costs due to increase in charge due to actuarial valuation for gratuity to Rs 90 crore from Rs 31 crore. Bajaj Auto also said that the company provided for loss on account of a fire incident at the company's Akurdi unit in January 2015 in Q4 March 2015.
With regard to motorcycles, Bajaj Auto said that the newly launched Pulsar RS 200 and Pulsar AS 200 models would see further gain the company's domestic motorcycle market share. Bajaj Auto also said that the newly launched CT100 model has been well received in the domestic market. With the success of CT100 and the new Pulsar models, April 2015 saw the company increase its share in domestic motorcycle market by over 300 basis points sequentially.
Bajaj Auto said that growth in the company's exports is back on track due to normalcy returning across major geographical markets where it exports its vehicles.
Mahindra & Mahindra (M&M) was down 0.43%. The company announced during trading hours today, 21 May 2015, that it has entered into a strategic partnership with Japan's Mitsubishi Heavy Industries (MHI) in the agricultural machinery field. Under the definitive agreement, M&M will invest $25 million for acquiring 33% voting stake in MHI subsidiary, Mitsubishi Agricultural Machinery Co. (MAM) through fresh issue of common shares and Class A (non-voting) shares of MAM. The deal is expected to close by 1 October 2015, with the new funding to be used to increase MAM's capital base.
Mitsubishi Agricultural Machinery is a full range agri-machinery company producing and selling tractors, combine harvesters, rice transplanters and other agri-machinery. The company clocked revenue of approximately yen 50 billion ($408 million) in 2014-15.
Shares of pharmaceutical companies were mixed. Aurobindo Pharma (down 2.33%), Cipla (down 2.19%), Glenmark Pharmaceuticals (down 1.21%) and Lupin (down 0.69%) edged lower. Dr Reddy's Laboratories (up 0.33%), GlaxoSmithKline Pharmaceuticals (up 0.18%), Wockhardt (up 1.74%) and Sun Pharmaceutical Industries (up 1.24%) edged higher.
Banking stocks were mixed. Among PSU bank stocks, State Bank of India (SBI) (down 0.53%), Punjab National Bank (down 1%) and Bank of Baroda (down 1.81%) dropped. Union Bank of India (up 0.58%), Canara Bank (up 0.48%) and Bank of India (up 0.53%) rose.
Among private bank stocks, IndusInd Bank (down 0.25%), and ICICI Bank (down 1.44%) declined. HDFC Bank (up 0.1%), Kotak Mahindra Bank (up 0.96%) and Axis Bank (up 2.04%) rose.
Yes Bank was down 1.35% to Rs 862.95 on turning ex-dividend today, 21 May 2015 for final dividend of Rs 9 per share for the year ended 31 March 2015.
Capital goods shares were mixed. ABB India (down 0.54%), Thermax (down 1.74%), BEML (down 0.74%) edged lower. Larsen & Toubro (up 1.36%), Bharat Heavy Electricals (up 0.3%), Siemens (down 0.35%) and Bharat Electronics (up 1.61%) edged higher.
Crompton Greaves was down 1.47%. Crompton Greaves announced after trading hours yesterday, 20 May 2015, that the production at the Nasik factory of the company has been disrupted by a faction of employees of the unrecognised union by company, opposing the wage settlement reached by the management with the recognised union earlier this year in accordance with law and in terms of the specific order of the industrial court in Nasik which had directed the management not to negotiate with any trade union on any issue other than a recognised union. Crompton Greaves said that the action of the unrecognised union is in violation of the order of the industrial court in Nasik.
Crompton Greaves further said that all the necessary measures have been undertaken to guarantee the safety of employees, who have chosen not to take part in the action against the company's assets and assets of third parties in the company's premises. The company has always acted in the interest of the workmen and within the framework of the law and has urged the disruptive workmen to return to work. The management continues to work with the appropriate authorities for ending the stalemate and normalise production, the company said. In the meanwhile the company has activated its contingency plans in line with business continuity management processes intended to ensure that there is minimum disruption of orders from customers, Crompton Greaves said.
Cement shares edged higher. UltraTech Cement (up 0.71%), ACC (up 1.45%) and Ambuja Cements (up 0.27%) edged higher. Shree Cement shed 0.04%.
Grasim Industries was up 2.4%. Grasim has exposure to cement sector through its holding in UltraTech Cement.
Power generation stocks declined. GMR Infrastructure (down 2.14%), Adani Power (down 1.44%), Reliance Infrastructure (down 1.06%), Jaiprakash Power Ventures (down 0.95%), Reliance Power (down 0.74%), NTPC (down 0.7%), Torrent Power (down 0.61%) and CESC (down 0.36%), edged lower. NHPC (up 0.52%) and JSW Energy (up 0.80%) edged higher.
Tata Power Company fell 1.49%. With respect to media reports titled "Tata Power Renewable looking to buy wind, solar power assets", Tata Power Company during market hours today, 21 May 2015, clarified that the details mentioned by Rahul Shah, Chief Executive of Tata Power Renewable Energy in his interview are a repeat of what has been said on earlier occasions also and not a new development. Media reports had quoted Rahul Shah as saying that Tata Power Renewable Energy, a subsidiary of Tata Power Company, is set to expand its wind power generation capacity by 150 megawatts (MW) this fiscal.
Realty shares rose. Unitech (up 1.77%), Sobha (up 3.67%), Oberoi Realty (up 0.07%), Housing Development and Infrastructure (HDIL) (up 2.96%) and Godrej Properties (up 5.91%), edged higher. Parsvnath Developers (down 0.23%), Indiabulls Real Estate (down 0.86%), and edged lower.
DLF rose 0.85%. The company's consolidated net profit fell 21.87% to Rs 171.62 crore on 16.67% decline in total income to Rs 2101.16 crore in Q4 March 2015 over Q4 March 2014. The stock hit high of Rs 125.90 and low of Rs 122.10 so far during the trading session. DLF's consolidated EBITDA (earnings before interest, taxes, depreciation and amortization) fell 8% to Rs 843 crore in Q4 March 2015 over Q4 March 2014. The Q4 result was announced after market hours yesterday, 20 May 2015.
Shares of PSU OMCs (public sector oil marketing companies) fell after crude oil prices rose. HPCL (down 2.43%) and BPCL (down 1.32%) edged lower. Higher crude oil prices will increase under recovery of PSU OMCs on domestic sale of LPG and kerosene at controlled prices. The government has already freed pricing of petrol and diesel.
Brent crude oil futures extended gains registered during the previous trading session. Brent for July settlement was up 77 cents at $65.80 a barrel. The contract had risen $1.01 a barrel or 1.58% to settle at $65.03 a barrel during the previous trading session.
Indian Oil Corporation rose 1.43%. With respect to media reports titled "Indian Oil Corp to own 45% stake in Ennore LNG's Tamil Nadu terminal", Indian Oil Corporation after market hours yesterday, 20 May 2015, clarified that as per the company's earlier clarification on 5 January 2015, the company's board at its meeting held in October 2014 had accorded approval for setting up a 5 million tonne LNG project at Ennore through a joint venture company. The cost of the project is estimated at Rs 5150 crore. The project would be implemented through a joint venture company and not directly by the company, Indian Oil Corporation said. Indian Oil Corporation will hold 45% equity stake, TIDCO (a Tamil Nadu state government enterprise) will own 5% stake and balance 50% will be held by financial institutions. Indian Oil Corporation clarified that no significant or material development has taken place with respect to this project after this clarification issued by the company on 5 January 2015.
Zee Entertainment Enterprises edged lower in volatile trade after announcing Q4 March 2015 results. The stock was off 0.77% at Rs 315.85. The stock hit a high of Rs 323.35 and a low of Rs 312.20. The company's consolidated net profit rose 6.06% to Rs 230.77 crore on 19.51% rise in total income to Rs 1403.47 crore in Q4 March 2015 over Q4 March 2014. The company announced results during market hours today, 21 May 2015.
Zee Entertainment Enterprises' advertising revenues rose 15% to Rs 669.70 crore in Q4 March 2015 over Q4 March 2014. Subscription revenues were Rs 510.80 crore in Q4 March 2015. Domestic subscription revenues stood at Rs 417.50 crore in Q4 March 2015. International subscription revenues stood at Rs 93.30 crore in Q4 March 2015.
Zee's non-operational income jumped 263.9% to Rs 56.40 crore in Q4 March 2015 over Q4 March 2014.
Earnings before interest, taxation, depreciation and amortization (EBITDA) fell 13.1% to Rs 270.80 crore in Q4 March 2015 over Q4 March 2014.
The board of directors of the company today, 21 May 2015, approved the transfer of Ditto TV business division of the company to a wholly-owned subsidiary of the company under a Business Transfer Agreement on a net asset value (NAV) based valuation effective 1 June 2015. This subsidiary will handle and will be responsible for besides Ditto TV, digital properties (websites, apps etc.) of the Group and monetization of digital revenues across platforms/geographies.
The Sensex has risen 798.04 points or 2.95% in this month so far (till 21 May 2015). The Sensex has gained 309.93 points or 1.12% in this calendar year so far (till 21 May 2015). From a 52-week low of 24,107.99 on 21 May 2014, the Sensex has risen 3,652.88 points or 15.12%. The Sensex is off 2,215.39 points or 7.37% from a record high of 30,024.74 hit on 4 March 2015.
Meanwhile, the finance ministry yesterday, 20 May 2015, constituted a three-member committee headed Justice A.P. Shah to look into the issue of Minimum Alternate Tax (MAT) on foreign institutional investors (FIIs). It may be recalled that Finance minister Arun Jaitley had on 7 May 2015 announced the constitution of a committee headed by Chairman of Law Commission of India Justice A.P. Shah to look into the issue of the levy of MAT on FIIs as well as other issues which are referred to it.
To begin with, the committee will examine the matter relating to levy of MAT on FIIs for the period prior to 1 April 2015. The committee will also examine all the related legal provisions, judicial/quasi judicial pronouncements and such other relevant aspects as it may consider appropriate, the finance ministry said in a statement. The committee has been requested to give its recommendations on the issue of levy of MAT on FIIs expeditiously. Since initially the committee would focus on the issue of MAT on FIIs for giving its report expeditiously, other issues to be referred to the committee will be notified in due course, the finance ministry said. The term of the committee will be for one year or such period as may be notified by the government from time to time.
In overseas markets, European stocks edged lower today, 21 May 2015, after the latest data showed that the eurozone economy slowed for the second straight month in May. Key benchmark indices in UK, France and Germany were off 0.05 % to 0.55%.
Eurozone composite PMI declined to 3-month low of 53.4 in May 2015. Eurozone flash manufacturing PMI jumped to 13-month high of 52.3, while Eurozone flash services PMI dropped to 4-month low of 53.3.
Manufacturing activity in Germany grew at the slowest pace in three months in May, dampening optimism over the health of the euro zone's largest economy, preliminary data showed today, 21 May 2015. In a report, market research group Markit said that its preliminary German manufacturing purchasing managers' index declined to a seasonally adjusted 51.4 this month from a final reading of 52.1 in April. Separately, the preliminary services purchasing managers' index fell to a seasonally adjusted 52.9 this month from 54 in April.
In France, data compiler Markit said its preliminary composite purchasing managers index, surveying firms across the private sector, rose to 51 in May 2015, from 50.6 in April 2015, moving further above the 50-point threshold between an expansion and contraction.
Asian stocks were mixed today, 21 May 2015. Key benchmark indices in Hong Kong, South Korea and Taiwan were off 0.22% to 1.1%. Key benchmark indices in Singapore, Indonesia, China and Japan were up 0.01% to 1.89%.
The preliminary HSBC China Manufacturing Purchasing Managers Index, a gauge of nationwide manufacturing activity, edged up to 49.1 in May, compared with a final reading of 48.9 in April, HSBC Holdings PLC said today, 21 May 2015. The reading was still below the key 50 mark, which separates expansion from contraction when compared with the previous month, said Markit, which releases the index with HSBC.
The preliminary PMI figure, also called the HSBC Flash China PMI, is based on 85% to 90% of total responses to HSBC's survey each month, and is issued about one week before the final PMI reading.
Meanwhile, China's State Council has unveiled a 10-year plan for upgrading the nation's manufacturing capacity so it can catch up with production powerhouses like Germany and fend off competition from other developing countries. The Ministry of Industry and Telecommunication Technology (MIIT), which led the creation of the Made in China 2025 plan, said the strategy is intended to give China an edge in innovation, green development and quality goods. The MIIT put the focus on 10 sectors, including high-end computerized machinery and robotics, aerospace equipment, renewable-energy cars and biological medicine.
US stocks ended a choppy trading session slightly lower yesterday, 20 May 2015, as modest post-Fed-minutes gains evaporated by the close of the trading day. Officials at the Fed's April policy meeting believed it would be premature to raise interest rates in June and that a bump in inflation was being offset by a weaker labour market and softer data, according to the minutes.
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