Key benchmark indices ended sharply lower as fresh selling pressure emerged in late trade. The barometer index, the S&P BSE Sensex, fell 698.86 points or 2.54% to 26,818.82, as per the provisional closing data. The Nifty 50 index fell 229.45 points or 2.69% to 8,296.30, as per the provisional closing data.
A sudden spike in US bond yields to a 10-month high rattled emerging equity markets today, 11 November 2016. Donald Trump was declared as the 45th President of the United States on Wednesday, 9 November 2016. US bond yields have surged after Trump's election on worries his policies stance - from protectionism and fiscal expansion - will boost inflation and lead the Federal Reserve to raise interest rates more than expected. Investors fear that a higher interest rates in the US will spark capital outflows from the emerging equity markets.
The Sensex lost 740.50 points, or 2.69% at the day's low of 26,777.18 in late trade, its lowest level since 9 November 2016. The index fell 172.83 points, or 0.63% at the day's high of 27,344.85 in early trade. The Nifty fell 240.80 points, or 2.82% at the day's low of 8,284.95 in late trade, its lowest level since 9 November 2016. The index fell 65.15 points, or 0.76% at the day's high of 8,460.60 in early trade.
In overseas stock markets, most European and Asian shares edged lower. In US, the Dow Jones Industrial Average rallied to a record close yesterday, 10 November 2016, as investors continued to revise their strategies and reposition portfolios in response to Donald Trump's unexpected presidential election victory.
Back home, the broad market depicted weakness. There were more than four losers against every gainer on BSE. 2,198 shares fell and 489 shares rose. A total of 143 shares were unchanged. The BSE Mid-Cap index provisionally fell 3.62%. The BSE Small-Cap index provisionally fell 3.42%. The decline in both these indices was higher than the Sensex's decline in percentage terms.
The total turnover on BSE amounted to Rs 3450.15 crore, lower than turnover of Rs 3737.42 crore registered during the previous trading session.
Realty shares witnessed selling pressure. DLF (down 7.09%), Anant Raj (down 6.99%), D B Realty (down 6.49%), Phoenix Mills (down 6.29%), Oberoi Realty (down 5.83%), Sunteck Realty (down 5.56%), Peninsula Land (down 4.73%), Godrej Properties (down 4.52%), Sobha (down 4.32%), Unitech (down 4.24%), Housing Development and Infrastructure (HDIL) (down 4.15%), Parsvnath Developers (down 3.79%), Mahindra Lifespace Developers down 3.71%), Prestige Estates Projects (down 3.52%) and Omaxe (down 2.23%), edged lower.
Indiabulls Real Estate rose 6.63% to Rs 72.35 after the company said that its board will consider buyback of equity shares on 24 November 2016.
State Bank of India fell 2.81% to Rs 273.70 after net profit fell 34.56% to Rs 2538.32 crore on 8.29% growth in total income to Rs 50742.99 crore in Q2 September 2016 over Q2 September 2015. The result was announced during market hours today, 11 November 2016.
The bank's gross non-performing assets (NPAs) stood at Rs 1.05 lakh crore as on 30 September 2016 compared with Rs 1.01 lakh crore as on 30 June 2016 and Rs 56834.28 crore as on 30 September 2015. Ratio of gross NPAs to gross advances stood at 7.14% as on 30 September 2016 as against 6.94% as on 30 June 2016 and 4.15% as on 30 September 2015. Ratio of net NPAs to net advances stood at 4.19% as on 30 September 2016 as against 4.05% as on 30 June 2016 and 2.14% as on 30 September 2015. The bank's provisions and contingencies jumped 81.09% to Rs 7896.72 crore in Q2 September 2016 over Q2 September 2015. Of this, provisions for NPAs surged 99.63% to Rs 7669.66 crore in Q2 September 2016 over Q2 September 2015.
Mahindra & Mahindra (M&M) dropped 5.85% to Rs 1,244 after the company said it will participate in the proposed rights issue of Mahindra Lifespace Developers. The announcement was made during market hours today, 11 November 2016.
M&M said that the board of directors of the company approved investment of an amount not exceeding Rs 165 crore, in one or more tranches by subscribing to the proposed rights issue of Mahindra Lifespace Developers (MLDL). MLDL, a listed subsidiary of M&M on 27 October 2016 had said that its board approved raising funds by rights issue aggregating to Rs 300 crore.
Separately, M&M's net profit rose 27.08% to Rs 1163.27 crore on 16.98% rise in total income to Rs 12071.13 crore in Q2 September 2016 over Q2 September 2015. M&M's combined net profit of M&M and Mahindra Vehicle Manufacturers Limited (MVML) rose 29% to Rs 1253 crore on 18% increase in gross revenue and other income to Rs 12049 crore in Q2 September 2016 over Q2 September 2015. The result was announced during market hours today, 11 November 2016.
MVML was set up as a 100% subsidiary of M&M with a view to sourcing contemporary products for expanding the market offerings of the company. Hence it is a critical part of M&M's business and only the combined results of M&M and MVML (combined entity) can provide a comprehensive view of the company's performance.
M&M in its outlook said that India's macro economic story is slowly but surely taking shape although data on industrial production and slow trade growth continued to act as ceilings to India's growth. The IMF avers that in the current and projected global scenario, India will continue to standout with the fastest growth rate. And this prognosis is not without reason. After two years of sub-par rainfall, this year's monsoon has been abundant and well spread which will help revive farm income and push up private consumption. The first advance estimates released by the agriculture ministry for kharif crops this year suggests a record output, higher by 9%. Higher soil moisture due to good monsoon also augurs well for the Rabi crop. Higher crop output will help improve spends on agri-inputs and services. Moreover, prices of key agricultural inputs have stabilized which signals that farmer balance sheets are on the mend now and this will help revive the overall rural economy.
Importantly, there is discernible traction on reforms including GST which augurs well for India's growth trajectory. Moreover, there are signs of demand recovery manifesting through broader consumption pick-up in growth rates in automobile sales, air passenger traffic and retail loans. The Seventh Pay Commission and the OROP scheme award has put money in the pockets of government employees and pensioners which will further help demand. The lagged effects of interest rate cuts by the Reserve Bank of India (RBI) along with the increased transmission of lower interest rates will also be supportive of consumption. All of these bode well for broad-based consumption led growth in the coming quarters, M&M added.
On macro front, the government will announce data on index of industrial production (IIP) for September 2016 after market hours today, 11 November 2016. Industrial production declined 0.7% in August 2016 compared with a revised 2.5% decline in July 2016.
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