Disappointment from the latest batch of corporate earnings pulled key benchmark indices lower for the third straight trading session. The barometer index, the S&P BSE Sensex, dropped 66.87 points or 0.25% to settle at 26,779.66. The 50-unit CNX Nifty shed 23.80 points or 0.29% to settle at 8,107.90. With small losses for the day, the Sensex and the Nifty, both, hit their lowest closing level in almost two weeks. TCS dropped after the company's top management indicated at a post Q2 result conference call that the company continues to face issues in its UK based business process outsourcing subsidiary Diligenta and in the Japan region and expects it to continue over the next two quarters at least. HUL dropped after reporting flat bottom line after adjusting for exceptional items.
Index heavyweights HDFC and Reliance Industries (RIL) nudged higher. Shares of most public sector banks declined. Shares of private sector banks were mixed. Metal and mining stocks witnessed a mixed trend after China's inflation data for September 2015 added to concerns about the health of the world's second-biggest economy.
The Sensex dropped 66.87 points or 0.25% to settle at 26,779.66, its lowest closing level since 1 October 2015. The barometer index dropped 133.25 points or 0.49% at the day's low of 26,713.28. The Sensex gained 22.55 points or 0.08% at the day's high of 26,869.08 in mid-afternoon trade.
The Nifty shed 23.80 points or 0.29% to settle at 8,107.90, its lowest closing level since 1 October 2015. The Nifty shed 35.35 points or 0.43% at the day's low of 8,096.35. The index gained 7.60 points or 0.09% at the day's high of 8,139.30.
Among the sectoral indices on BSE, the S&P BSE Bankex (down 0.08%), the S&P BSE Consumer Durables index (up 1.41%), the S&P BSE Oil & Gas index (up 0.07%), the S&P BSE FMCG index (down 0.1%), the S&P BSE Realty index (down 0.16%), and the S&P BSE Healthcare index (up 0.36%), outperformed the Sensex. The S&P BSE IT index (down 1.32%), the S&P BSE Teck index (down 1.16%), the S&P BSE Metal index (down 0.3%), the S&P BSE Power index (down 0.7%), and the S&P BSE Auto index (down 0.72%) underperformed the Sensex. The S&P BSE Capital Goods index fell 0.25%, with the decline marching Sensex's fall in percentage terms.
The market breadth indicating overall health of the market was positive. On BSE, 1,501 shares rose and 1,265 shares fell. A total of 137 shares were unchanged. The BSE Mid-Cap index dropped 0.34%. The decline in this index was higher than Sensex's decline in percentage terms. The BSE Small-Cap index rose 0.35%, outperforming the Sensex.
The total turnover on BSE amounted to Rs 3189 crore, higher than turnover of Rs 2779.08 crore registered during the previous trading session.
Index heavyweight HDFC rose 1.08% to Rs 1,291.10. The stock hit high of Rs 1,295 and low of Rs 1,265.35 in intraday trade.
Index heavyweight Reliance Industries (RIL) gained 1.06% to Rs 902. The stock hit high of Rs 904 and low of Rs 892.30 in intraday trade.
TCS lost 4.48% at Rs 2,481 after the company's top management indicated at a post Q2 result conference call that the company continues to face issues in its UK based business process outsourcing subsidiary Diligenta and in the Japan region (on account of the ITS integration) and expects it to continue over the next two quarters at least. TCS has been citing stress in three areas -- Diligenta, Japan and Latin America. These areas have drawn overall performance lower despite strong growth in other areas. In September 2015 quarter, the situation in Latin America saw stabilization, as revenue from this geography grew by 6.2% on sequential basis in constant currency terms.
TCS' consolidated net profit rose 6.5% to Rs 6085 crore 5.8% growth in revenue to Rs 27165 crore in Q2 September 2015 over Q1 June 2015. The result was announced after market hours yesterday, 13 October 2015. In a conference call, TCS said that similar to the trend seen in the previous years, Q3 December 2015 is expected to be weak on account of fewer working days and furloughs. The extent of the impact of furloughs will be known fully by mid-November, TCS said.
Other IT stocks witnessed a mixed trend. Tech Mahindra (down 1.93%), Wipro (down 0.55%), MindTree (down 0.28%) and Infosys (down 0.16%) declined. Oracle Financial Services Software (up 0.43%) and HCL Technologies (up 0.3%) gained.
Shares of state-run coal mining giant Coal India (CIL) were off 1.72% at Rs 334.65 after the Union Cabinet approved the recommendations of the Committee of Secretaries to regularize the 2007 pay revision implemented by CIL with effect from 1 January 2007 in the loss making subsidiaries. This is being allowed as a special dispensation to CIL. The Cabinet also approved the payment of performance related pay (PRP) to executives and non-unionised supervisors of CIL and its subsidiaries. The payment would be out of the corpus created by pooling the profits of CIL subsidiary companies, duly setting off the losses of the loss making subsidiaries and stand-alone profits of CIL, excluding dividends received from its subsidiary companies.
HUL dropped after reporting flat bottom line after adjusting for exceptional items. The stock lost 2.26% to Rs 794. HUL's net profit before exceptional item rose 1.4% to Rs 970.31 crore in Q2 September 2015 over Q2 September 2014. Net sales rose 4.7% to Rs 7819.64 crore in Q2 September 2015 over Q2 September 2014. Net sales of the domestic consumer business rose 5.1%. Volume growth of domestic consumer business stood at 7%. HUL said that the phasing out of excise duty incentives and fall in product prices adversely impacted the company's performance in Q2 September 2015. The company reduced product prices in a bid to pass on the benefit of lower commodity costs to consumers.
HUL Chairman Harish Manwani said that the deflationary commodity cost environment is likely to continue in the near term and the company's strategy of delivering consistent and competitive growth with sustainable improvement in operating margin remains unchanged.
Zee Entertainment Enterprises (Zee) fell 3.17% at Rs 388.45. The consolidated net profit rose 8.7% to Rs 247.40 crore on 23.9% rise in net sales to Rs 1384.90 crore in Q2 September 2015 over Q2 September 2014. Zee's bottom line in Q2 September 2015 was adversely affected by a write off of investment of Rs 33.06 crore. This pertains to write-off of an investment made by Asia Today Limited, a wholly owned overseas subsidiary of the company made in 2013 for acquiring minority stake in MirriAD Ltd., UK. This write-off was on account of continuing losses and consequent capital reduction/restructuring in MirriAD Ltd., UK.
Zee's operating profit rose 10.7% to Rs 354.60 crore in Q2 September 2015 over Q2 September 2014. The operating profit margin declined sharply to 25.6% in Q2 September 2015 from 28.67% in Q2 September 2014.
Shares of most public sector banks declined. UCO Bank (down 0.61%), Punjab National Bank (down 0.8%), Corporation Bank (down 0.56%), Bank of India (down 0.67%), Union Bank of India (down 2.55%), and Canara Bank (down 1.26%) edged lower. United Bank of India (up 0.67%), Syndicate Bank (up 1.49%) and State Bank of India (SBI) (up 0.35%) gained.
Bank of Baroda dropped 1.48% after the Central Bureau of Investigation (CBI) yesterday, 13 October 2015, arrested two employees of Bank of Baroda, Ashok Vihar, New Delhi branch in an on-going investigation into illegal overseas remittance of a large amount of foreign exchange from Bank of Baroda's Ashok Vihar, New Delhi branch. Bank of Baroda in a statement said Mr. S. K. Garg, the Assistant General Manager, and Mr. Jainish Dubey, the officer in charge of foreign exchange were arrested by the investigating agencies in connection with their probe into illegal overseas remittance foreign exchange from the bank's Ashok Vihar, New Delhi branch. Bank of Baroda had already suspended them.
Shares of private sector banks were mixed. Axis Bank (up 0.89%), HDFC Bank (up 0.79%), Yes Bank (up 0.64%) and IndusInd Bank (up 0.43%) edged higher. ICICI Bank (down 1.58%), Kotak Mahindra Bank (down 0.52%), and Federal Bank (down 0.69%) declined.
Auto stocks were mixed. Mahindra & Mahindra (up 0.37%), Eicher Motors (up 1.98%), and Ashok Leyland (up 0.8%) edged higher. TVS Motor Company (down 0.04%), Bajaj Auto (down 0.84%), Hero MotoCorp (down 1.25%) and Tata Motors (down 2.4%) declined.
Maruti Suzuki India lost 0.55%. The company after market hours yesterday, 13 October 2015, announced the opening of pre-launch bookings for its premium passenger car Baleno. The car is slated for launch by the end of the month.
Pharma stocks witnessed mixed trend. Divi's Laboratories (down 2.3%), Glenmark Pharmaceuticals (down 0.73%), Dr Reddy's Laboratories (down 0.69%), Cipla (down 0.01%) and GlaxoSmithkline Pharmaceuticals (down 0.08%) edged lower. Wockhardt (up 1.23%), Ipca Laboratories (up 0.69%), Sun Pharmaceutical Industries (up 0.16%) and Strides Arcolab (up 0.86%) edged higher.
Lupin rose 1.91% after the company announced a strategic alliance to market Boehringer Ingelheim's anti-diabetes drug in India under separate new brands. Boehringer will simultaneously continue to sell its anti-diabetes drug linagliptin under its exiting own brands in India.
Metal and mining stocks witnessed a mixed trend after China's inflation data for September 2015 added to concerns about the health of the world's second-biggest economy. Hindalco Industries (up 3.14%), Vedanta (up 0.09%), Tata Steel (up 1.14%), and Steel Authority of India (up 2.13%) edged higher. Jindal Steel & Power (down 0.6%), NMDC (down 0.55%), National Aluminium Company (down 0.61%), and Hindustan Zinc (down 0.43%) declined. China is the world's largest consumer of steel, copper and aluminum.
China's consumer-price index rose 1.6% on year-on-year basis in September 2015, slower than a 2% rise in August 2015. The producer-price index dropped 5.9% in September 2015 from a year earlier, marking the 43rd consecutive month of deflation. The inflation data adds to a recent report showing China's exports and imports falling in September 2015.
Key indices dropped for the third day in a row today, 14 October 2015. The Sensex has declined 299.85 points or 1.1% in the preceding three trading sessions from a recent high of 27,079.51 on 9 October 2015. The Sensex has risen 624.83 points or 2.38% in this month so far (till 14 October 2015). The Sensex has fallen 719.76 points or 2.61% in this calendar year so far (till 14 October 2015). From a 52-week low of 24,833.54 hit on 8 September 2015, the Sensex has risen 1,946.12 points or 7.83%. The Sensex is off 3,245.08 points or 10.8% from a record high of 30,024.74 hit on 4 March 2015.
On the macro front, the latest data showed that the annual rate of inflation based on monthly wholesale price index (WPI) stood at negative 4.54% (provisional) for September 2015 as compared to negative 4.95% (provisional) in August 2015. The Reserve Bank of India's (RBI) main inflation gauge which is the consumer price index accelerated last month, as per data released by the government early this week.
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