Key benchmark indices registered small losses after the Reserve Bank of India (RBI) kept its benchmark lending rate viz. the repo rate unchanged after a policy review. The barometer index, the S&P BSE Sensex, fell 122.17 points or 0.43% at 28,060.40, as per the provisional closing data. The Nifty 50 index fell 33.10 points or 0.38% at 8,678.25, as per the provisional closing data. The Sensex provisionally settled above the psychological 28,000 mark. The barometer index alternately moved above and below that mark after falling below the mark in early afternoon trade. The RBI's decision to keep the repo rate unchanged was in line with market expectations.
The Sensex lost 225.80 points or 0.8% at the day's low of 27,956.77 in afternoon trade, its lowest level since 5 August 2016. The barometer index rose 107.39 points or 0.38% at the day's high of 28,289.96 at onset of trading session, its highest level since 10 August 2015. The Nifty fell 73.15 points or 0.83% at the day's low of 8,638.20 in afternoon trade, its lowest level since 5 August 2016. The index rose 17 points or 0.2% at the day's high of 8,728.35 at onset of trading session, its highest level since 16 April 2015.
The market breadth indicating the overall health of the market was negative. On BSE, 1,554 shares fell and 1,196 shares rose. A total of 137 shares were unchanged. The BSE Mid-Cap index was provisionally off 0.35%. The fall in this index was lower than the Sensex's decline in percentage terms. The BSE Small-Cap index was provisionally off 0.45%. The fall in this index was higher than the Sensex's decline in percentage terms.
The total turnover on BSE amounted to Rs 3522 crore, lower than turnover of Rs 3742.64 crore registered during the previous trading session.
In overseas stock markets, European stocks edged higher and most Asian shares rose as US crude oil traded near its highest price in two weeks. US stocks closed lower yesterday, 8 August 2016, after touching record highs as Wall Street caught its breath in the wake of last week's upbeat jobs data.
Adani Ports and Special Economic Zone (APSEZ) edged lower after announcing Q1 June 2016 results. The stock shed 0.79%. The company's consolidated net profit rose 31% to Rs 836 crore on 11% growth in total income to Rs 2084 crore in Q1 June 2016 over Q1 June 2015. The result was announced during market hours today, 9 August 2016.
APSEZ's consolidated cargo volumes increased by 7% to 42.33 million metric tonne (MMT) in Q1 June 2016 over Q1 June 2015.
APSEZ's Chief Executive Officer Karan Adani said that a healthy growth in cargo volumes, operational efficiencies and the company's strategy to increase bulk cargo volumes, other than coal volumes have enabled APSEZ to report all round growth in Q1 June 2016. The growth in bottom line during the quarter was a result of immense focus on controlling borrowing costs along with maintaining high EBITDA (earnings before interest, taxation, depreciation and amortization) margin, Adani said. Going forward, coastal shipping, commissioning of CT4, further growth in volumes at Kattupalli will be the company's focus areas, Adani added.
Pharma stocks declined. Cipla (down 0.65%), Wockhardt (down 0.38%), Ipca Laboratories (down 0.8%), Divis Laboratories (down 1.26%), GlaxoSmithKline Pharmaceuticals (down 0.03%), Dr Reddy's Laboratories (down 0.12%), Aurobindo Pharma (down 1.51%) declined. Glenmark Pharmaceuticals (up 0.8%), Alkem Laboratories (up 1.6%) and Cadila Healthcare (up 1%) rose.
Lupin dropped in volatile trading after announcing strong Q1 June 2016 result. The stock lost 5.48% to Rs 1,600. The stock hit high of Rs 1,729.50 and low of Rs 1,598 in intraday trade. Lupin's consolidated net profit rose 55.12% to Rs 881.95 crore on 39.92% growth in total income to Rs 4522.02 crore in Q1 June 2016 over Q1 June 2015. Nilesh Gupta, Managing Director, Lupin attributed the strong performance to robust growth across all key markets - the United States, India and Japan. The company remains committed to maintaining its growth trajectory given new product launches and approvals, Gupta said.
Sun Pharmaceutical Industries (Sun Pharma) fell 0.62%. The company announced the extension of its Imatinib Mesylate Savings Card Program beyond 31 July 2016. Sun Pharma launched this program as part of the Imatinib Mesylate launch in February 2016. The program is aimed at delivering greater access to the drug by patients who have commercial insurance, but whose out-of-pocket cost may exceed an affordable amount. The announcement was made after market hours yesterday, 8 August 2016.
Idea Cellular dropped after the company announced weak Q1 results. The stock lost 5.92% to Rs 97. The stock hit a low of Rs 96.55 in intraday trade, which is a 52-week low for the counter. The stock hit a high of Rs 99.50 in intraday trade. The company's consolidated net profit slumped 74.21% to Rs 220.41 crore on 7.22% rise in total income to Rs 9552.44 crore in Q1 June 2016 over Q1 June 2015. The result was announced after market hours yesterday, 8 August 2016.
Idea Cellular said it remains confident to tap all emerging opportunities in mobile voice and broadband businesses.
Meanwhile, the Reserve Bank of India (RBI) kept its benchmark lending rate viz. the repo rate unchanged at 6.5% after a monetary policy review today, 9 August 2016. The RBI also kept the cash reserve ratio (CRR) of scheduled banks unchanged at 4% of net demand and time liabilities (NDTL). The central bank said it will continue to provide liquidity as required and will progressively lower the average ex ante liquidity deficit in the system from 1% of NDTL to a position closer to neutrality. The RBI announced the outcome of the monetary policy review at around 11:00 IST.
The RBI said that the recent sharper-than-anticipated increase in food prices has pushed up the projected trajectory of inflation over the rest of the year. The central bank also said that the strong improvement in sowing on the back of the monsoon's steady progress, along with supply management measures, augers well for the food inflation outlook. According to the central bank, risks to the inflation target of 5% for March 2017 continue to be on the upside.
The RBI has retained the projected GVA growth projection for 2016-17 at 7.6%. According to the central bank, the risk to this projection is evenly balanced. The central bank expects the momentum of growth to be quickened by the normal monsoon raising agricultural growth and rural demand, as well as by the stimulus to consumption spending that can be expected from the disbursement of pay, pension and arrears following the implementation of the 7th CPC's award. The passage of the Goods and Services Tax (GST) Bill augurs well for the growing political consensus for economic reforms. While timely implementation of GST will be challenging, its implementation will raise returns on investment across much of the economy and also strengthen government finances over the medium-term, according to the central bank.
The RBI said that the stance of monetary policy remains accommodative and will continue to emphasise the adequate provision of liquidity. According to the central bank, easy liquidity conditions are already prompting banks to modestly transmit past policy rate cuts through their MCLRs (Marginal Cost of Funds based Lending Rate) and pro-active liquidity management should facilitate more pass-through.
Meanwhile, the amended goods and services tax (GST) constitutional amendment bill was passed by the Lok Sabha yesterday, 8 August 2016. The bill was passed by the Rajya Sabha last week. Prime Minister Narendra Modi in Lok Sabha said that with GST, the government intends to bring uniformity in taxation. Most of the things that can impact consumer inflation have been kept out of the ambit of GST, Modi said. He was intervening during the debate in the Lok Sabha on the GST Bill yesterday, 8 August 2016. The government plans to implement the nationwide GST from 1 April 2017. The main objective of the GST is to eliminate excessive taxation. GST is a uniform indirect tax levied on goods and services across a country. The measure would harmonize 11 state and central levies into a national sales tax, reducing business transaction costs.
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