Trading for the week is likely to begin on a weak note on negative Asian stocks. Trading of Nifty 50 index futures on the Singapore stock exchange indicates that the Nifty could slump 73 points at the opening bell. The market will also react to weak industrial production data released after market hours on Friday, 10 June 2016. The government is scheduled to unveil the consumer price index (CPI) data for the month of May 2016 at 17:30 IST today, 13 June 2016.
On the macro front, data released after market hours on Friday, 10 June 2016 showed that India's industrial production (IIP) declined 0.8% in April 2016 over April 2015. The electricity generation surged at two-year high pace of 14.6%, while the mining output also moved up 1.4% in April 2016. However, the manufacturing sector production dipped 3.1% contributing to the decline in industrial output in April 2016. The IIP growth in March 2016 has been revised upwards to 0.3% in the first revision compared with 0.05% reported provisionally. Meanwhile, the growth in January 2016 has been revised downwards to -1.6% at the final revision from -1.5% at first revision and reported provisionally.
Meanwhile, the government is scheduled to unveil the consumer price index (CPI) data (rural, urban and combined) for the month of May 2016 at 17:30 IST today, 13 June 2016. The all-India General CPI inflation surged to 5.39% in April 2016 (new base 2012=100) from six months low of 4.8% recorded in March 2016.
In overseas markets, Asian stocks were sharply lower ahead of central bank meetings in the US and Japan this week.US stocks declined on Friday, 10 June 2016 as nervousness over an impending vote that could see the UK leave the European Union, as well as a drop in oil prices, spurred a global selloff.
Closer home, foreign portfolio investors (FPIs) bought shares worth a net Rs 201.32 crore on Friday, 10 August 2016, as per provisional data released by the stock exchanges. Domestic institutional investors (DIIs) sold shares worth a net Rs 165.62 crore on Friday, 10 June 2016, as per provisional data.
Dr Reddy's Laboratories (DRL) may edge higher after the company inked a definitive agreement with Teva Pharmaceutical Industries and an affiliate of Allergan plc to acquire a portfolio of eight Abbreviated New Drug Applications (ANDAs) in the US for $350 million in cash. The acquired portfolio consists of products that are being divested by Teva as a precondition to its completion of the acquisition of Allergan's generics business. The portfolio being acquired is a mix of filed ANDAs pending approval and one approved ANDA. The portfolio comprises of complex generic products across diverse dosage forms. The branded versions of these drugs had aggregate sales of about $3.5 billion in the United States for 12-month period ended April 2016, according to IMS Health data. DRL is acquiring this portfolio of drugs on a cash-free, debt-free basis and expects to finance the transaction using a combination of cash on hand and available borrowings under existing credit facilities. The acquisition of these ANDAs is contingent on the successful completion of the Teva/Allergan generics transaction and approval by the US Federal Trade Commission of DRL as a buyer.
Yes Bank will be in focus after the Reserve Bank of India (RBI) raised the ceiling on investment by foreign institutional investors (FIIs) to 74% of the private sector bank's paid up capital from earlier 60%. RBI's nod for higher ceiling on investment by FIIs came after Yes Bank's board of directors and shareholders approved the proposal. The RBI has capped the total foreign shareholding from all sources in Yes Bank at 74% of the bank's equity. Last month, the Cabinet Committee on Economic Affairs cleared Yes Bank's proposal for increase in foreign investment limit in the bank's equity capital to 74% from 41.87% without any sub-limits. Stocks of public sector companies will be in focus after the Ministry of Heavy Industry & Public Enterprises announced the setting up of 3rd Pay Revision Committee which will give its recommendation on the revision of salaries of the executives of the Central Public Sector Undertakings (CPSEs). The committee will provide its recommendations on the matter to the government, covering board level functionaries, below-board level executives and non-unionized supervisory staff of CPSEs. While submitting the final recommendations to the government, the committee will take into account the report of the 7th Central Pay Commission. The Pay Revision Committee will make its recommendations within 6 months. The decision of the government on the recommendations of the committee will take effect from 1 January 2017.
Stocks of aviation firms will be in focus after the Ministry of Civil Aviation said in its proposed draft amendments to Civil Aviation Requirements (CARs) that airlines shall refund all statutory taxes and User Development Fee (UDF)/Airport Development Fee (ADF)/Passenger Service Fee (PSF) to the passengers in case of cancellation of tickets/non-utilisation of tickets/no show. In no circumstances, the cancellation charge shall be more than the basic fare.
In case of denied boarding, flight cancellation and flight delays, the ministry has proposed that an amount equal to 200% of booked one way basic fair plus airline fuel charge subject to maximum of Rs 10,000 would be paid to passengers in case airline arranges alternate flight that is to depart after one hour but within 24 hours of the booked scheduled departure. The ministry has proposed that an airline shall refund an amount equal to 400% of booked one-way basic fare plus airline fuel charge subject to maximum of Rs 20,000 in case where the airline arranges alternate flight that is scheduled to depart beyond 24 hours of the booked scheduled departure. In case passenger does not opt for alternate flight, the airline shall refund full value of ticket and compensation equal to 400% of booked one-way basic fare plus airline fuel charge, subject to maximum of Rs 20,000.
With regard to checked-in baggage charges, the ministry has proposed that the airline should restrict additional baggage charge at Rs 100 per kg for baggage between 15 to 20 kg. Director General of Civil Aviation M Sathiyavathy was quoted as saying on Saturday, 11 June 2016, that the changes in excess baggage fee norms will be implemented from 15 June 2016.
Key benchmark indices dropped on Friday, 10 June 2016 on weakness in global stocks. The Sensex shed 127.71 points or 0.48% to settle at 26,635.75, its lowest closing level since 26 May 2016.
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