Trading of Nifty 50 index futures on the Singapore stock exchange indicates that the Nifty could fall 35 points at the opening bell tracking weakness in Asian stocks.
In overseas stock markets, most Asian stocks dropped as investors reacted to a slew of earnings at companies from Samsung Electronics to Nintendo. Data showed that profit growth in China's industrial firms slowed in September from the previous month's rapid pace as several sectors showed weak activity, suggesting the world's second-biggest economy remains underpowered despite emerging signs of stability. Profits in September rose 7.7% to 577.1 billion yuan, slowing sharply from August's 19.5% jump, according to data released by the National Bureau of Statistics (NBS). US stocks edged lower yesterday, 26 October 2016 as health care companies fell and Apple pulled technology companies down.
Closer home, foreign portfolio investors (FPIs) sold shares worth a net Rs 1450.65 crore yesterday, 26 October 2016, as per provisional data released by the stock exchanges. Domestic institutional investors (DIIs) purchased shares worth a net Rs 989.46 crore yesterday, 26 October 2016, as per provisional data.
The market may remain volatile today, 27 October 2016 as traders roll over positions in the futures & options (F&O) segment from the near month October 2016 series to November 2016 series. The near month October 2016 derivatives contracts expire today, 27 October 2016.
Among corporate news, Hindustan Unilever's (HUL) net profit rose 11.54% to Rs 1095.60 crore on 2.22% growth in total income to Rs 8733.09 crore in Q2 September 2016 over Q2 September 2015. The result was announced after market hours yesterday, 26 October 2016. During the quarter, in a challenging context where market growth continued to be under pressure, HUL's domestic consumer business grew at 2% and EBITDA (earnings before interest, taxation, depreciation and amortization) margin expanded by 60 basis points (bps), the company said. HUL's profit after tax before exceptional items, PAT (bei) grew by 9% to Rs 1082 crore in Q2 September 2016 over Q2 September 2015. Harish Manwani, Chairman of HUL commented that in challenging market conditions, the company delivered another quarter of profitable growth. The company remains focused on market development, consumer led innovations and an even sharper drive on operating efficiences. With a good monsoon, the company expects a gradual improvement in market demand and remain positive on the mid-long term outlook for the industry, Manwani said. HUL's strategic agenda of delivering consistent, competitive, profitable and responsible growth remains unchanged, he added.
Hero MotoCorp's net profit rose 27.74% to Rs 1004.22 crore on 15.33% increase in total income to Rs 8601.10 crore in Q2 September 2016 over Q2 September 2015. The result was announced after market hours yesterday, 26 October 2016. Earnings before interest, taxes, depreciation and amortization (EBITDA) margin improved to its highest-ever 16.20% in Q2 September 2016, as against 14.91% in Q2 September 2015 aided by softer commodities and cost control measures.
Pawan Munjal, Chairman, Managing Director & Chief Executive Officer, Hero MotoCorp, said the highest-ever volume sales during the quarter is a reiteration of the overwhelming customer preference of the company's products. At the same time, the company has also delivered on its commitment of further strengthening its profitability by crossing the threshold Rs 1000 crore in PAT for the first time in a quarter. The domestic market has seen a revival in the past two quarters due to an above-average monsoon and positive consumer sentiment. The trend is expected to continue through the year and likely to result in double-digit growth for the industry. In the global markets, however, the industry continues to face headwinds due to volatile business environment driven by continued weakness in crude prices and sharp depreciation of local currencies.
Meanwhile, in a separate announcement, Hero MotoCorp said that its board of directors approved an investment of up to Rs 205 crore, in one or more tranches, for approximately 26-30% shareholding in Ather Energy. Ather is a Bangalore-based technology start-up engaged in the business of designing and manufacturing smart Electric Vehicles (EV) and associated charging infrastructure. The said strategic investment is subject to execution of definitive agreements and completion of certain conditions customary for a transaction of this nature.
As the market leader and a global automotive major, Hero MotoCorp takes the lead in many areas that benefit the environment, customer and the industry. Adoption of environment-friendly fuel is a priority for Hero MotoCorp, as is propagating sustainable manufacturing through green facilities. Hero MotoCorp intends to enhance its participation in the EV space by pursuing its internal EV program in addition to partnering with Ather.
GlaxoSmithKline Pharmaceuticals, Glenmark Pharmaceuticals, Indian Oil Corporation (IOC), JSW Steel, Jubilant Life Sciences, Maruti Suzuki India, ONGC, Tech Mahindra and TVS Motor Company will declare July-September 2016 quarter results today, 27 October 2016.
Meanwhile, banking, metal and pharma sector stocks led modest losses for key benchmark indices yesterday, 26 October 2016. The Sensex dropped 254.91 points or 0.91% to settle at 27,836.51, its lowest closing level since 17 October 2016.
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