Market registers small losses

Key benchmark indices registered small losses on provisional basis after witnessing volatility towards late trade. The barometer index, the S&P BSE Sensex, lost 45.01 points or 0.16% at 27,790.90, as per the provisional closing data. The Nifty 50 index lost 17.25 points or 0.2% at 8,574.95, as per the provisional closing data. Key benchmark indices extended losses in mid-afternoon trade after witnessing a range bound movement until then. Benchmark indices trimmed losses in late trade.

The Sensex fell 138.92 points or 0.49% at the day's low of 27,696.99 in mid-afternoon trade, its lowest level since 4 August 2016. The barometer index rose 99.97 points or 0.35% at the day's high of 27,935.88 in early trade. The Nifty fell 44.65 points or 0.51% at the day's low of 8,547.55 in mid-afternoon trade, its lowest level since 11 August 2016. The index rose 30.75 points or 0.35% at the day's high of 8,622.95 in early trade.

 

Caution prevailed on the bourses ahead of a speech by Federal Reserve Chairwoman Janet Yellen later in the global day at the Kansas City Fed's annual Monetary Policy Symposium in Jackson Hole, Wyoming, which could provide hints about the timing of the next rate hike from the Fed. High US interest rates would pull money out of emerging markets and redirect it to the US. Minutes from the Federal Open Market Committee's (FOMC) July meeting showed officials were split on whether an increase in interest rate was needed soon.

Closer home, the market breadth indicating the overall health of the market was negative. On BSE, 1,559 shares declined and 1,085 shares rose. A total of 206 shares were unchanged. The BSE Mid-Cap index provisionally rose 0.17%, outperforming the Sensex. The BSE Small-Cap index provisionally lost 0.12%. The decline in this index was lower than the Sensex's decline in percentage terms.

The total turnover on BSE amounted to Rs 2784 crore, lower than turnover of Rs 2922.56 crore registered during the previous trading session.

IT stocks declined. Wipro (down 2.97%), HCL Technologies (down 2.43%) and Oracle Financial Services Software (down 0.86%) edged lower. Tech Mahindra (up 0.62%) edged higher.

Index heavyweight and software major Infosys was down 1.43% at Rs 1,021.70. The stock hit a high of Rs 1,046 and a low of Rs 1,017.10 in intraday trade. Infosys Chief Financial Officer Ranganath D Mavinakere reportedly said at an analyst meet today, 26 August 2016, that there is some 'softness' in clients after Britain voted in June to leave the European. Infosys will be in a better position by October to evaluate the impact of this on its earnings outlook for the current financial year, Mavinakere said, according to reports. Mavinakere reportedly said that growth in the second quarter would be better than the previous three months.

TCS lost 0.72%. The company announced new software that enables retailers to leverage insightful data to deepen relationships with customers. The new software enables retailers to leverage insightful data either from in-store sensors or other Internet of Things (IoT) devices to deepen relationships with customers through more personalized customer engagement strategies. The announcement was made after market hours yesterday, 25 August 2016.

Index heavyweight Reliance Industries was up 1.36% at Rs 1,026.85. The stock hit a high of Rs 1,030 and a low of Rs 1,014.65 in intraday trade.

Tata Motors shrugged off weak Q1 results. The stock was up 4.24% at Rs 514.70. The stock was volatile. The stock hit a high of Rs 515 and a low of Rs 486.10 in intraday trade. The company's consolidated net profit declined 57.25% to Rs 2236 crore on 9.01% growth in revenue to Rs 67056 crore in Q1 June 2016 over Q1 June 2015. The result was announced during market hours today, 26 August 2016.

The profit before tax fell 67.41% to Rs 2066 crore in Q1 June 2016 over Q1 June 2015. Higher volumes in both standalone as well as Jaguar Land Rover (JLR) business was more than offset by the adverse foreign currency impact of Rs 2296 crore and adverse commodity derivatives impact of Rs 167 crore in the operating profit mainly in the Jaguar Land Rover business. The profitability was also adversely impacted by lower local market incentive in the JLR business as compared to the corresponding quarter last year and higher depreciation and amortization expenses as compared to the corresponding quarter last year.

There was an exceptional income of Rs 478.32 crore in Q1 June 2016 pertaining to further recoveries on account of the Tianjin incident which happened during the previous financial year (FY 2016). Tata Motors attributed the increase in top line during the quarter to strong sales from Jaguar Land Rover (JLR) business and continued volume growth in M&HCV segment and the LCV segment.

Tata Motors board approved raising funds aggregating Rs 3000 crore by way of issue of secured/unsecured debentures and/or bonds in one or more tranches, from time to time.

Meanwhile, RBI after trading hours yesterday, 25 August 2016, announced a package of measures for the development of fixed income and currency markets. The central said it has been decided to enhance the aggregate limit of partial credit enhancement (PCE) provided by banks, permit brokers in corporate bond repos, authorise the platform for repo in corporate bonds and encourage credit supply for large borrowers through market mechanism. The RBI has allowed banks to issue issue rupee bonds overseas (Masala Bonds) for their capital requirements and for financing infrastructure and affordable housing.

Foreign Portfolio Investors (FPIs) will be given direct access to NDS-OM to ease the process of investment in debt securities. The RBI said it has also been decided to provide FPIs facility to trade directly in corporate bonds.

Meanwhile, the India Meteorological Department (IMD) in its monsoon update issued yesterday, 25 August 2016, said that for the country as a whole, cumulative rainfall during this year's monsoon so far (till 25 August 2016) was 3% below the long period average (LPA).

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