Trading for the truncated trading week started on a sour note as key benchmark indices settled with heavy losses, extending sharp drubbing witnessed in the previous session. The barometer index, the S&P BSE Sensex, shed 548.17 points or 2.04% at 26,270.65, as per the provisional closing data. The losses for the Nifty 50 index were higher in percentage terms than those for the Sensex. The Nifty lost 201.80 points or 2.43% at 8,094.50, as per the provisional closing data. The Sensex, and the Nifty, both, hit their lowest level in almost a week. Fall intensified in late trade after indices languished in the negative terrain throughout the session after witnessing a lower opening. Key indices dropped for the second day in a row today, 15 November 2016.
Likely short term negative impact on the economy of recent demonetization of higher denomination notes by the Indian government and worries that the recently elected US president Donald Trump's policies stance - from protectionism and fiscal expansion - will boost inflation and lead the Federal Reserve to raise interest rates more than expected weighed on sentiment. US bond yields surged and investors fear that a higher interest rates in the US will spark capital outflows from the emerging equity markets.
Meanwhile, the Indian government on 8 November 2016, removed legal tender of Rs 500 and Rs 1,000 denomination notes, with effect from 9 November 2016, and gave time till December end to deposit these notes in the banks in a biggest crackdown on black money. The move is likely to affect consumption due to cash liquidity crunch and will pull down the growth of economy in short term while in the long term it is expected to have a positive impact on the economy.
The recent selling by the foreign portfolio investors (FPIs) of Indian stocks also affected sentiment. FPIs sold shares worth a net Rs 1493.27 crore on Friday, 11 November 2016, as per provisional data released by the stock exchanges, when indices slumped around 2.5% on that day. The market remained closed on Monday, 14 November 2016, on account of holiday.
The Sensex lost 565.19 points, or 2.1% at the day's low of 26,253.63 in late trade, its lowest level since 9 November 2016. The index fell 9.21 points, or 0.03% at the day's high of 26,809.61 in early trade. The Nifty skidded 203.10 points, or 2.44% at the day's low of 8,093.20 in late trade, its lowest level since 9 November 2016. The index fell 7.75 points, or 0.09% at the day's high of 8,288.55 in early trade.
The broad market depicted weakness. There were more than six losers against every gainer on BSE. 2,351 shares fell and 349 shares rose. A total of 113 shares were unchanged. The BSE Mid-Cap index provisionally dropped 3.91%. The BSE Small-Cap index provisionally declined 4.67%. The decline in both these indices was higher than the Sensex's decline in percentage terms.
The total turnover on BSE amounted to Rs 6521.18 crore, much higher than turnover of Rs 3461.19 crore registered during the previous trading session.
Tata Steel dropped 7.95% after the company reported net loss of Rs 49.38 crore in Q2 September 2016, as against net profit of Rs 5609.43 crore in Q2 September 2015. The result was announced was announced after market hours on Friday, 11 November 2016. Tata Steel's total income declined 22.5% to Rs 26602.03 crore in Q2 September 2016 over Q2 September 2015. Other income dropped 97.09% to Rs 231.08 crore in Q2 September 2016 over Q2 September 2015.
The company's consolidated earnings before interest, taxation, depreciation and amortization (EBITDA) fell 8.5% to Rs 2992 crore in Q2 September 2016 over Q2 September 2015. The drop in margins was due to lower realisations in India and ramp-up costs of Kalinganagar. EBITDA rose 66% in Q2 September 2016 over Q2 September 2015 largely due to significant improvement in the operating performance at Tata Steel Europe.
Bank of Baroda jumped 8.03% after net profit jumped 343.54% to Rs 552.12 crore on 2.1% decline in operating income to Rs 12046.60 crore in Q2 September 2016 over Q2 September 2015. The result was announced after market hours on Friday, 11 November 2016.
The bank's gross non-performing assets (NPAs) stood at Rs 42949.25 crore as on 30 September 2016 as against Rs 42991.68 crore as on 30 June 2016 and Rs 23710.33 crore as on 30 September 2015. The ratio of gross NPAs to gross advances stood at 11.35% as on 30 September 2016 as against 11.15% as on 30 June 2016 and 5.56% as on 30 September 2015. The ratio of net NPAs to net advances stood at 5.46% as on 30 September 2016 as against 5.73% as on 30 June 2016 and 3.08% as on 30 September 2015. The bank's provisions and contingencies (excluding tax provisions) fell 5.07% to Rs 1795.84 crore in Q2 September 2016 over Q2 September 2015. Provision coverage ratio of the bank was at 62.95% as on 30 September 2016.
Tata Motors tanked 9.33%. The company reported consolidated net profit of Rs 848.16 crore in Q2 September 2016 as compared with net loss of Rs 1740.20 crore in Q2 September 2015. Total income rose 7% to Rs 66,106.96 crore in Q2 September 2016 over Q2 September 2015. The result was announced on Monday, 14 November 2016, when the stock market was closed for a public holiday.
Tata Motors said that in Jaguar Land Rover (JLR) business, strong sales were seen in all the regions UK, Europe, North America, China and other overseas markets. In standalone business, the demand pause in medium and heavy commercial vehicle (M&HCV) partially offset by continued growth in the domestic light commercial vehicle (LCV) segment, car segment and exports, Tata Motors said.
The company's consolidated profit before tax (before exceptional item) dropped 17.46% to Rs 983 crore in Q2 September 2016 over Q2 September 2015 broadly due to higher volumes and favourable operating exchange, in Jaguar Land Rover business more than offset by the realized hedging losses of Rs 3510 crore, and adverse commodity derivatives impact of Rs 187 crore.
After the exceptional items, the consolidated profit before tax was Rs 999 crore in Q2 September 2016, against loss before tax of Rs 2150 crore in Q2 September 2015, which included exceptional items of Rs 2493 crore on account of the vehicles damaged at Tianjin Port explosion in Jaguar Land Rover business.
BPCL fell 1.3%. The company posted 26.16% rise in net profit to Rs 1305.18 crore on 2.67% fall in total income to Rs 45715.06 crore in Q2 September 2016 over Q2 September 2015. The result was announced after market hours on Friday, 11 November 2016. BPCL's average gross refining margin (GRM) rose to $4.56 per barrel in Q2 September 2016 over $3.08 per barrel in Q2 September 2015.
Separately, BPCL after market hours on Friday, 11 November 2016 announced formation of Joint Venture with GAIL Gas for a City Gas Distribution (CGD). Consortium of BPCL and GAIL Gas has been awarded the authorization for laying, building, operating and expanding of a City Gas Distribution Network (CGD Network) in the geographical area of North Goa by the Petroleum and Natural Gas Regulatory Board established under the PNGRB Act, 2006. The board of directors of the company has approved the proposal to form a new Joint Venture Company (JVC) for this purpose, BPCL said. The proposed JVC shall have equal equity participation from BPCL and Gail Gas and with a provision for equity stake of up to 10% for government of Goa or its nominee. The authorization provides exclusively for laying gas pipelines and related infrastructure in the GA over the next 25 years and a marketing exclusivity for 5 years. The CGD Network shall cater to the demand of CNG and Piped Natural Gas to consumers in the domestic, commercial and industrial segments.
Sun Pharmaceutical Industries declined 1.12%. The company announced signing of tri-party agreement between Indian Council of Medical Research, Govt of Madhya Pradesh and Foundation for Disease Elimination and Control of India (FDECINDIA) to launch the Malaria Free India demonstration project in Mandla district of Madhya Pradesh. According to the agreement signed, FDEC-India will be responsible for implementation of the project in an independent manner in collaboration with NIRTH/ICMR, Govt of MP and all appropriate stakeholders. It will execute the malaria elimination project over a span of 3 to 5 years covering 1,233 villages in Mandla district. The Malaria Free India demonstration project in Mandla is expected to be launched by January 2017. The announcement was made during market hours today, 15 November 2016.
Aurobindo Pharma skidded 4.65%. The company's consolidated net profit rose 33.53% to Rs 605.64 crore on 12.03% rise in total income to Rs 3783.73 crore in Q2 September 2016 over Q2 September 2015. The result was announced on Monday, 14 November 2016. Aurobindo Pharma's consolidated earnings before interest, taxation, depreciation and amortization (EBITDA) before forex rose 19.3% to Rs 929.20 crore in Q2 September 2016 over Q2 September 2015. Consolidated EBITDA margin expanded to 24.6% in Q2 September 2016 from 23.1% in Q2 September 2015.
In overseas markets, European stocks gained as the US dollar stood near a 13-and-a-half-year high and treasury yields continued to rise as traders anticipate President-elect Donald Trump's policies will stoke inflation. German economic growth slowed more than expected in the third quarter of 2016 as exports fell following Britain's vote to leave the European Union. The economy grew by 0.2% on the quarter between July and September after expanding by 0.4% in the three months to June, Germany's Federal Statistics Office said. Asian stocks closed mixed. US stocks closed little changed yesterday, 14 November 2016, after rising dramatically the week before and a decline in the technology sector offset a steep rise in financial stocks as investors bet on higher interest rates. The Dow Jones Industrial Average settled at another record closing high.
Back home, on macro front, inflation based on wholesale price index (WPI) eased slightly to 3.39% (provisional) in October 2016 over October 2015, as compared to 3.57% (provisional) for the September 2016 and -3.7% in October 2015. Build up inflation rate in the financial year so far was 4.34% compared to a build up rate of 0.45% in the corresponding period of the previous year. The data was announced during market hours today, 15 November 2016.
The government will announce monthly inflation data based on consumer price index (CPI) for October 2016 after market hours today, 15 November 2016. The CPI had eased to 4.31% in September 2016, from a 5.05% growth in August.
Meanwhile, the industrial production (IIP) data announced after market hours on Friday, 11 November 2016 showed that IIP rose 0.7% in September 2016 over September 2015. The IIP contracted 0.7% in August, and shrank 2.5% in July.
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