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Sensex attains 3-week closing high

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Trading for the week ended on an upbeat note as key equity benchmark indices in India surged, joining in a global rally after the Bank of Japan said it would adopt a negative interest rate policy for the first time. The barometer index, the S&P BSE Sensex, jumped 401.12 points or 1.64% to settle at 24,870.69. The gains for the 50-unit Nifty 50 index were higher in percentage terms than those for the Sensex. The Nifty gained 138.90 points or 1.87% to settle at 7,563.55. The Sensex attained a three-week closing high and the Nifty hit 2-1/2-week closing high.

Shares of Vedanta jumped and Cairn India fell on media reports that Vedanta's board of directors is likely to meet today, 29 January 2016, to discuss merger of Cairn India with the company with modified terms. Shares of oil exploration and production firms rose on a recovery in global crude oil prices. Yes Bank jumped after the bank said it continues to show resilience on all asset quality parameters with an improving outlook going forward. ICICI Bank dropped after the bank reported a rise in bad loans in Q3 December 2015.

Dr Reddy's Laboratories rose after the company received approval from United States Food & Drug Administration (USFDA) for ZEMBRACESymTouch (sumatriptan succinate) injection for the treatment of acute migraines in adults. NTPC edged lower after reporting weak third quarter results. Bharti Airtel edged lower in volatile trade after reporting weak third quarter results. Titan Company jumped after reporting decent growth in bottom line in Q3 December 2015.

The Sensex jumped 401.12 points or 1.64% to settle at 24,870.69, its highest closing level since 8 January 2016. The index jumped 442.33 points or 1.8% at the day's high of 24,911.90. The index fell 129.51 points or 0.52% at the day's low of 24,340.06.

The Nifty gained 138.90 points or 1.87% o settle at 7,563.55, its highest closing level since 11 January 2016. The index rose 151 points or 2.03% at the day's high of 7,575.65. The index shed 21.85 points or 0.29% at the day's low of 7,402.80.

The market breadth indicating the overall health of the market was strong. On BSE, 1,565 shares gained and 1,023 shares fell. A total of 195 shares were unchanged. The BSE Mid-Cap index rose 2.02%, outperforming the Sensex. The BSE Small-Cap index gained 1.07%, underperforming the Sensex.

The total turnover on BSE amounted to Rs 2618 crore, higher than turnover of Rs 2451.22 crore registered during the previous trading session.

NTPC declined 1.49% after the company's net profit fell 18.9% to Rs 2492.87 crore on 8.84% decline in total income to Rs 17657.99 crore in Q3 December 2015 over Q3 December 2014. The company announced result during market hours today, 29 January 2016. NTPC's non-operational income or the so called other income declined 52.39% to Rs 244.68 crore in Q3 December 2015 over Q3 December 2014.

Separately, NTPC announced during market hours today, 29 January 2016, that board of directors accorded investment approval for Telangana Super Thermal Power Project, Phase-1 at current estimated cost of Rs 10598.98 crore. Power purchasing agreements (PPAs) have been signed with Southern Power Distribution Company of Telangana and Northern Power Distribution Company of Telangana. The commercial operation date (CoD) of first unit is envisaged in 52 months and second unit at an interval of 6 months thereafter.

Bharti Airtel fell 0.55% to Rs 289.70 after the company reported weak Q3 results. The stock was volatile. The stock hit high of Rs 296.65 and low of Rs 282.30 in intraday trade. The company's consolidated net profit fell 22.24% to Rs 1116.90 crore on 3.76% rise in total income to Rs 24103.40 crore in Q3 December 2015 over Q3 December 2014. The results are as per International Financial Reporting Standards (IFRS). The result was announced after market hours yesterday, 28 January 2016. EBITDA rose 8.3% to Rs 8475 crore in Q3 December 2015 over Q3 December 2014. EBITDA margin expanded to 35.2% in Q3 December 2015 from 33.7% in Q3 December 2014.

Meanwhile, Bharti Airtel and Axiata Group Berhad (Axiata) yesterday, 28 January 2016, signed a definitive agreement to merge their respective telecommunication subsidiaries in Bangladesh; namely, Airtel Bangladesh (Airtel) and Robi Axiata (Robi). The agreement follows the 9 September 2015 announcement of both parties entering into an exclusive discussion to explore possibility of combining the business operations in Bangladesh.

Post-merger, the combined entity operating as Robi will serve approximately 4 crore customers. The joint strengths of Robi and Airtel will deliver the widest mobile network coverage across Bangladesh, strengthening its position in the mobile internet segment as well as consolidating its position as the second largest operator in the country, Bharti Airtel and Axiata said in a joint press release. The proposed transaction is subject to conditions precedent including receiving applicable approvals from relevant authorities and is expected to complete in the first half of 2016, the two companies said. Upon completion, Axiata will hold 68.3% controlling stake in the combined entity, while Bharti will hold 25%. The remaining 6.7% will be held by the existing shareholder, NTT DOCOMO of Japan.

Auto stocks gained. Mahindra & Mahindra (M&M) (up 2.62%), Ashok Leyland (up 1.3%), Eicher Motors (up 4.32%), Bajaj Auto (up 3.18%), Hero MotoCorp (up 4.67%) and Tata Motors (up 0.81%) gained.

Maruti Suzuki India rose 0.16% to Rs 4,100 after announcing good Q3 results. The stock was volatile. The stock hit high of Rs 4,114.20 and low of Rs 1,927.20 in intraday trade. Maruti Suzuki India's net profit rose 27.06% to Rs 1019.30 crore on 18.95% growth in total income to Rs 15113.40 crore in Q3 December 2015 over Q3 December 2014. Higher volumes, material cost reduction initiatives and favorable foreign exchange contributed to growth in bottom line on year-on-year basis in Q3 December 2015, Maruti Suzuki India said. The result was announced market hours yesterday, 28 January2016.

Maruti Suzuki India said that going forward it could experience uncertainty on foreign exchange front and in commodity prices. On the flip side, interest rates and fuel prices remain benign. Maruti will continue launching new models, it said. The company had witnessed higher sales volume in Q4 March 2015 which would result in muted year-on-year growth in Q4 March 2016.

TVS Motor Company lost 0.05%. The company's net profit rose 19.4% to Rs 107.70 crore on 11% growth in revenue to Rs 2940 crore in Q3 December 2015 over Q3 December 2014. The result was announced during market hours today, 29 January 2016. During the quarter, the company has provided for a provision for one off expense of Rs 7.5 crore consequent to floods in Chennai and a further sum of Rs 10.6 crore was provided on account of retrospective amendment to Bonus Act. Out of this amount, a sum of Rs 5.7 crore relating to the previous financial year (FY 2015) has been shown as exceptional item, TVS Motor said.

TVS Motor Company's board of directors at a meeting held today, 29 January 2016, approved in-principle, an investment of a sum not exceeding 10 million Hongkong dollars for establishment of a wholly owned subsidiary of the company in Hongkong, mainly to widen the potential in the export market and strengthen the supply chain management in the overseas countries. Details of the proposed subsidiary will be finalized and submitted for ratification by the board of directors in course of time, TVS Motor said.

Pharma stocks gained. Sun Pharmaceutical Industries (up 4.6%), Aurobindo Pharma (up 2.88%), Cipla (up 1.9%), Lupin (up 0.19%), Wockhardt (up 1.39%), Divi's Laboratories (up 1.27%), Glenmark Pharmaceuticals (up 2.69%) and Cadila Healthcare (up 1.79%) gained.

Dr Reddy's Laboratories gained 3.21% after the company received approval from United States Food & Drug Administration (USFDA) for ZEMBRACESymTouch (sumatriptan succinate) injection for the treatment of acute migraines in adults. ZEMBRACESymTouch will be marketed in the United States by Promius Pharma, a wholly owned subsidiary of Dr Reddy's.

Coal India rose 4.73% to Rs 320.05. The stock hit a high of Rs 324 and a low of Rs 306 in intraday trade.

FMCG major Hindustan Unilever (HUL) rose 3.29%, with the stock extending previous session's 3.02% gains.

Index heavyweight and housing finance major HDFC rose 2.56% to Rs 1,177.60. The stock hit a high of Rs 1,187.60 and a low of Rs 1,145.60 in intraday trade.

Index heavyweight and IT major Infosys rose 2.96% to Rs 1,164.85. The stock hit a high of Rs 1,169.70 and a low of Rs 1,132 in intraday trade.

Shares of oil exploration and production firms rose on a recovery in global crude oil prices. Reliance Industries (RIL) (up 1.78%), Oil India (up 1.95%) and ONGC (up 2.87%) edged higher. Higher crude oil prices would result in higher realization from crude sales for oil exploration firms.

Shares of Vedanta jumped and Cairn India fell on media reports that Vedanta's board of directors is likely to meet today, 29 January 2016, to discuss merger of Cairn India with the company with modified terms. Vedanta was up 6.62% at Rs 71.70. Cairn India was off 1.29%. Life Insurance Corporation of India (LIC) and other major shareholders are likely to give their approval to the modified merger scheme, according to reports. Vedanta in its Q3 results press release yesterday, 28 January 2016, said that it expects the merger of Cairn India with the company to be completed by Q1 June 2016.

Shares of public sector oil marketing companies (PSU OMCs) edged higher. BPCL (up 2.86%) and Indian Oil Corporation (IOCL) (up 0.34%) gained. HPCL fell 0.1%.

In the global commodities markets, Brent for March settlement was down 28 cents at $33.61 a barrel. The contract had risen 79 cents or 2.39% to settle at $33.89 a barrel during the previous trading session.

Most shares of public sector banks declined. Punjab National Bank (down 0.27%), Corporation Bank (down 1.77%), and State Bank of India (SBI) (down 2.91%) declined. Bank of India (up 1.06%), Union Bank of India (up 3.99%), and Canara Bank (up 1.23%) edged higher. Allahabad Bank was flat.

Bank of Baroda declined 3.31%. The bank clarified at the fag end of the trading session that with regard to the Central Bureau of Investigation (CBI) filing FIR against a Gujarat firm for Rs 374 crore fraud, the bank has already classified the amount as non-performing asset as on 30 September 2015 and necessary provision was made as per RBI guidelines in Q2 September 2015 results. The bank issued the clarification after CBI yesterday, 28 January 2016, registered a case against two directors of an unnamed private firm and others for causing an alleged loss of about Rs 374.49 crore to Bank of Baroda.

Most shares of private sector banks gained. Federal Bank declined 0.65%. Axis Bank (up 0.38%), HDFC Bank (up 1.59%), Kotak Mahindra Bank (up 2.93%) and IndusInd Bank (up 2.1%) gained.

Yes Bank jumped 10.89% after the bank said it continues to show resilience on all asset quality parameters with an improving outlook going forward. Yes Bank's gross non-performing assets (NPAs) stood at Rs 558.57 crore as on 31 December 2015, compared with Rs 491.35 crore as on 30 September 2015 and Rs 278.66 crore as on 31 December 2014. The ratio of gross non-performing assets (NPAs) to gross advances stood at 0.66% as on 31 December 2015 as against 0.61% as on 30 September 2015 and 0.42% as on 31 December 2014. The ratio of net NPAs to net advances stood at 0.22% as on 31 December 2015 as against 0.2% as on 30 September 2015 and 0.1% as on 31 December 2014.

Yes Bank said it continues to show resilience on all asset quality parameters with an improving outlook going forward with credit costs for the current financial year being contained within 50 basis points as against the earlier guidance of 50-70 basis points. During the quarter, the bank has not done any restructuring. Further, there were no slippages from the restructured book into NPAs during the quarter as well as for the nine months ended 31 December 2015, Yes Bank said in a statement.

The bank's specific loan loss provision coverage was at 66.5% as at 31 December 2015. The provision coverage takes into account the bank's in-depth assessment of recoverability on the underlying accounts based on collateral and does not factor the potential benefits of an improving business environment, Yes Bank said.

Yes Bank's net profit rose 25.06% to Rs 675.74 crore on 17.49% growth in total income to Rs 4122.12 crore in Q3 December 2015 over Q3 December 2014. The result was announced during market hours today, 29 January 2016.

ICICI Bank dropped 1.22% after the bank reported a rise in bad loans in Q3 December 2015. The bank's gross non-performing assets (NPA) edged higher to Rs 21149.19 crore as on 31 December 2015 from Rs 15857.82 crore as on 30 September 2015 and Rs 13082.62 crore as on 31 December 2014. The bank's ratio of gross NPAs to gross advances stood at 4.72% as on 31 December 2015, compared with 3.77% as on 30 September 2015 and 3.4% as on 31 December 2014. The bank's ratio of net non-performing assets (NPAs) to net advances stood at 2.28% as on 31 December 2015, compared with 1.65% as on 30 September 2015 and 1.27% as on 31 December 2014.

ICICI Bank said that the increase in non-performing assets was primarily due to the decline and continuing weakness in the global steel cycle. Another reason for the increase in non-performing assets was the Reserve Bank of India (RBI) directing Indian banks to review certain loan accounts and their classification over a period of two quarters viz. Q3 December 2015 and Q4 March 2016 with the objective of early recognition of stress assets and to make provisions to cover them.

The bank's net profit rose 4.46% to Rs 3018.13 crore on 13.11% rise in total income to Rs 17562.95 crore in Q3 December 2015 over Q3 December 2014. Provisions and contingencies rose 190.3% to Rs 2844.05 crore in Q3 December 2015 over Q3 December 2014. The provisioning coverage ratio as on 31 December 2015 stood at 53.2%.

L&T rose 2.33%. The company's net profit fell 16.68% to Rs 882.93 crore on 1.44% decline in total income to Rs 15390.96 crore in Q3 December 2015 over Q3 December 2014. The result was announced after market hours today, 29 January 2016.

Titan Company surged 7.47% after net profit rose 18.12% to Rs 225.29 crore on 17.24% increase in total income to Rs 3439.88 crore in Q3 December 2015 over Q3 December 2014. The result was announced during trading hours today, 29 January 2016. Titan Company said total income rose due to pick up in retail sales in the festive season.

IRB Infrastructure Developers rose 3.89% after consolidated net profit rose 27.95% to Rs 169.60 crore on 37.44% increase in total income to Rs 1364.81 crore in Q3 December 2015 over Q3 December 2014. The result was announced during trading hours today, 29 January 2016. IRB Infrastructure Developers' earnings before interest, taxes, depreciation and amortization (EBITDA) rose 23% to Rs 718 crore in Q3 December 2015 over Q3 December 2014.

In overseas stock markets, Japanese and Chinese stocks led gains in Asian markets after the Bank of Japan (BOJ) surprised investors by introducing a negative interest-rate policy and China's central bank pumped an additional 100 billion yuan ($15.21 billion) into the financial system via an extra money-market operation. In mainland China, the Shanghai Composite index settled 3.09% higher. In Hong Kong, the Hang Seng index settled 2.51% higher.

In Japan, the Nikkei 225 Average ended 2.8% higher. The BOJ said after the conclusion of a two-day monetary policy review that it has cut the deposit rate it pays on cash parked at the BOJ by commercial banks in excess of legally required reserves, to minus 0.1% from the previous plus 0.1%. The goal is to push down borrowing costs across a broad time spectrum to stimulate inflation, the bank said.

European stocks edged higher, joining in a global rally after the BOJ said it would adopt a negative interest rate policy for the first time. US stock futures indicated gains for US stocks at the opening bell. Trading in US index futures indicated that the Dow Jones Industrial Average could gain 114 points at the opening bell today, 29 January 2016.

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First Published: Fri, January 29 2016. 16:56 IST
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