Losses for index heavyweight Reliance Industries (RIL) and oil sector stocks outweighed gains for bank stocks and index heavyweight Infosys, with key benchmark indices registering modest losses. The barometer index, the S&P BSE Sensex, fell 99.83 points or 0.41% to settle at 23,962.21. The 50-unit Nifty 50 index shed 32.50 points or 0.44% to settle at 7,276.80. The Sensex fell below the psychological 24,000 mark and hit its lowest closing level in more than 20 months. The Nifty hit its lowest closing level in more than 19 months.
Idea Cellular dropped ahead of the announcement of its third quarter results. Shares of oil exploration and production firms declined as crude oil prices edged lower. Shares of PSU OMCs edged lower on media reports that the government is proposing to levy a 0.5% Swachh Bharat cess on petrol and diesel. Axis Bank surged after reporting good third quarter numbers. Tata Motors edged lower, with the stock extending its recent losses triggered by concerns about China's economic slowdown. Car maker Maruti Suzuki India dropped, with the stock extending its recent losses triggered by a foreign brokerage raising concerns about the company's profit margins.
In overseas stock markets, European stocks rose as investors looked to the European Central Bank's (ECB) monthly policy meeting, hoping for some reassurance from President Mario Draghi as global markets remain extremely volatile. Earlier during the global day, modest early gains in Asian markets were wiped out as bearish sentiment took hold later as interest rates in Hong Kong climbed and Bank of Japan Governor Haruhiko Kuroda said the bank isn't considering using negative interest rate policy to help the country's economy. In mainland China, Shanghai Composite ended 3.23% lower after extending losses towards the close of the trading session. In Hong Kong, the Hang Seng index fell 1.82%. In Japan, the Nikkei 225 Average ended 2.43% lower.
US stocks ended a wild session sharply lower yesterday, 20 January 2016, but trimmed heavier losses scored earlier in the session as a modest bounce off session lows by crude-oil prices provided some relief.
The Sensex fell 99.83 points or 0.41% to settle at 23,962.21, its lowest closing level since 15 May 2014. The index fell 200.04 points or 0.83% at the day's low of 23,862. The index jumped 289.79 points or 1.2% at the day's high of 24,351.83.
The Nifty shed 32.50 points or 0.44% to settle at 7,276.80, its lowest closing level since 30 May 2014. The index fell 59.30 points or 0.81% at the day's low of 7,250. The index rose 89.40 points or 1.22% at the day's high of 7,398.70.
The market breadth indicating the overall health of the market was positive. On BSE, 1,328 shares gained and 1,261 shares declined. A total of 182 shares were unchanged.
The BSE Mid-Cap index dropped 0.3%. The fall in this index was lower than the Sensex's decline in percentage terms. The BSE Small-Cap index rose 0.53%, outperforming the Sensex.
The total turnover on BSE amounted to Rs 2999 crore, lower than turnover of Rs 3088.57 crore registered during the previous trading session.
Idea Cellular dropped 3.02%. The company's consolidated net profit fell 0.37% to Rs 764.21 crore on 10.92% rise in total income to Rs 9040.48 crore in Q3 December 2015 over Q3 December 2014. The result was announced after market hours today, 21 January 2016. The net profit was dragged down by sharp fall in other income to Rs 30.79 crore in Q3 December 2015 from Rs 132.62 crore in Q3 December 2014. The EBITDA (earnings before interest, taxation, depreciation and amortization) margin improved 0.4% on year-on-year basis at 34.7% in Q3 December 2015.
Index heavyweight and software major Infosys advanced 1.46% to Rs 1,138. The stock hit high of Rs 1,142.50 and low of Rs 1,122.50 in intraday trade.
Cement stocks gained. Ambuja Cements (up 4.28%), ACC (up 1.63%), UltraTech Cement (up 2.66%) gained. Shree Cement fell 2.33%.
Grasim Industries was almost unchanged at Rs 3,465. Grasim has exposure to the cement sector through its holding in UltraTech Cement.
Shares of oil exploration and production firms declined as crude oil prices edged lower. ONGC (down 2.58%), Reliance Industries (RIL) (down 1.94%), Cairn India (down 0.81%) and Oil India (down 1.98%) edged lower. Lower crude oil prices would result in lower realization from crude sales for oil exploration firms.
Shares of PSU OMCs edged lower on media reports that the government is proposing to levy a 0.5% Swachh Bharat cess on petrol and diesel. BPCL (down 1.19%), HPCL (down 1.56%) and Indian Oil Corporation (down 1.82%) declined.
Brent for March settlement was currently down 21 cents at $27.67 a barrel. The contract had fallen 88 cents or 3.05% to settle at $27.88 a barrel during the previous trading session.
Tata Motors dropped 3.7%, with the stock extending recent losses triggered by concerns about China's economic slowdown. China is a key market for Tata Motors' British luxury car unit maker Jaguar Land Rover. China posted the weakest annual pace of growth in a quarter century, with a 6.9% expansion last year, data showed on 19 January 2016.
Car maker Maruti Suzuki India shed 4.11%, with the stock extending recent losses triggered by a foreign brokerage raising concerns about the company's profit margins. The foreign brokerage has reportedly said in a research note that Maruti's recent price cuts on its premium crossover S-Cross by over Rs 2 lakh in order to gain traction in the market could adversely impact the company's profit margins.
Banks stocks advanced. Among PSU bank stocks, State Bank of India (SBI) (up 1.24%), Punjab National Bank (up 1.54%), Bank of Baroda (up 2.76%), Canara Bank (up 1.57%), IDBI Bank (up 4.07%), Bank of India (up 4.21%) and Union Bank of India (up 2.51%) advanced.
Among private bank stocks, HDFC Bank (up 0.63%), Kotak Mahindra Bank (up 0.13%), ICICI Bank (up 0.91%), IndusInd Bank (up 0.76%) and Yes Bank (up 1.44%) gained.
Axis Bank surged 5.21% after net profit rose 14.5% to Rs 2175.30 crore on 14.66% rise in total income to Rs 12531.11 crore in Q3 December 2015 over Q3 December 2014. The result was announced after market hours yesterday, 20 January 2016.
On absolute basis, Axis Bank's gross non-performing assets (NPAs) stood at Rs 5724.05 crore as on 31 December 2015, compared with Rs 4451.11 crore as on 30 September 2015 and Rs 3901.59 crore as on 31 December 2014. The ratio of gross NPAs to gross advances stood at 1.68% as on 31 December 2015 as against 1.38% as on 30 September 2015 and 1.34% as on 31 December 2014. The ratio of net NPAs to net advances stood at 0.75% as on 31 December 2015 as against 0.48% as on 30 September 2015 and 0.44% as on 31 December 2014.
The bank's provisions and contingencies rose 40.5% to Rs 712.59 crore in Q3 December 2015 over Q3 December 2014. As on 31 December 2015, the bank's provision coverage as a proportion of gross NPAs, including prudential write-offs was 72%. The provision coverage before accumulated write-offs was 82%, Axis Bank said in a statement.
Pharma stocks declined. Glenmark Pharmaceuticals (down 5.9%), Aurobindo Pharma (down 3.09%), Cipla (down 2%), Dr Reddy's Laboratories (down 3.86%), Cadila Healthcare (down 1.19%), Lupin (down 0.49%) and Sun Pharmaceutical Industries (down 2.59%) declined.
Meanwhile, Reserve Bank of India (RBI) Governor Raghuram Rajan has reportedly said that investors will look at stable emerging markets (EM), including India once the volatility in global markets subsides. On the RBI's monetary policy stance next month, Rajan reportedly said that the rest of the world is facing a deflationary environment and that will help India disinflate. The RBI's next monetary policy review is scheduled on 2 February 2016. On the recent sharp drop in the Indian rupee, Rajan was quoted as saying that the Indian currency has been relatively strong when compared to other EM currencies.
Key indices edged lower for the second day in a row. The Sensex has dropped 517.63 points or 2.11% in the preceding two trading sessions from its close of 24,479.84 on 19 January 2016. The Sensex has fallen 2,155.33 points or 8.25% in this month so far (till 21 January 2016). The Sensex is up 122.45 points or 0.51% from a 52-week low of 23,839.76 hit yesterday, 20 January 2016. The Sensex is off 6,062.53 points or 20.19% from a record high of 30,024.74 hit on 4 March 2015.
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