An announcement from the finance ministry that it is seeking the views of foreign portfolio investors (FPIs) on measures to simplify the procedures and documentation for registration of FPIs in India triggered further gains for key benchmark indices. At 13:16 IST, the barometer index, the S&P BSE Sensex, was up 166.44 points or 0.61% at 27,381.04. The gains for the Sensex were higher in percentage terms than those for the 50-unit CNX Nifty index. The Nifty was currently up 39.70 points or 0.48% at 8,277.85. The Sensex hit its highest level in more than eight weeks when it jumped 171.59 points or 0.63% at the day's high of 27,386.19 in afternoon trade. The Nifty also hit its highest level in more than eight weeks when it rose 41.60 points or 0.5% at the day's high of 8,279.75 in intraday trade.
Shares of Reliance Industries (RIL) surged after stronger-than-expected Q2 September 2015 results.
The market breadth indicating the overall health of the market was strong. On BSE, 1,512 shares rose and 958 shares fell. A total of 153 shares were unchanged. The BSE Mid-Cap index was up 0.45%. The BSE Small-Cap index was up 0.62%. Both these indices underperformed the Sensex.
The Department of Economic Affairs, Ministry of Finance has organized a meeting with the representatives of the FPIs tomorrow, 20 October 2015, to seek their views on measures to simplify the procedures and documentation for registration of FPIs in India and deepening of corporate bond market. Separately, the Department of Economic Affairs will hold a meeting with domestic financial market participants on 21 October 2015 to seek their views on integration of various segments of the market, increasing retail participation and deepening of corporate bond market.
In overseas stock markets, European stocks reversed initial losses triggered by the latest data showing a slowdown in China's economy in the third quarter. Asian stocks were mixed after the latest data showed China's GDP growth slowed to 6.9% in Q3 September 2015, slipping below 7% for the first time since 2009. US stocks edged higher during the previous trading session on Friday, 16 October 2015, as investors appeared to shrug off lackluster corporate earnings and mixed economic data.
Shares of public sector oil marketing companies (PSU OMCs) edged higher after strong showing by Reliance Industries' refining business in Q2 September 2015. BPCL (up 1.1%), HPCL (up 1.67%) and Indian Oil Corporation (up 0.31%) edged higher.
Meanwhile, in the global commodities markets, Brent for December settlement was currently off 32 cents at $50.14 a barrel. The contract had risen 73 cents or 1.46% to settle at $50.46 a barrel during the previous trading session.
RIL surged after stronger-than-expected Q2 September 2015 results. The stock was currently up 4.74% at Rs 955.45. RIL's consolidated net profit rose 12.52% to Rs 6720 crore on 33.8% decline in turnover to Rs 75117 crore in Q2 September 2015 over Q2 September 2014. The result was announced after market hours on Friday, 16 October 2015. A strong showing of the refinery business and increase in profit margins of the petrochemicals business led to a stronger-than-expected growth in RIL's bottom line in Q2 September 2015. RIL's gross refining margins (GRM) hit a seven year high of $10.6 per barrel in Q2 September 2015. The GRM was $8.3 per barrel in Q2 September 2014. The profitability of the petrochemicals business improved due to a combination of strong volume growth, product mix improvement and lower energy costs.
RIL's bottom line was also boosted by exceptional one-time gain of Rs 252 crore in Q2 September 2015. This was a net impact of gains of Rs 2911 crore (net of taxes) on sale of investment in EFS Midstream LLC and provision for impairment in US shale gas assets amounting to Rs 2659 crore (net of tax). It may be recalled that Reliance Holding USA, Inc, a subsidiary of RIL concluded the sale of its interest in EFS Midstream LLC to an affiliate of Enterprise Products Partners L.P. in July 2015. EFS Midstream provides natural gas gathering, treating, compression and condensate processing services in the Eagle Ford Shale.
According to RIL, the near term outlook for the US shale gas business remains challenging due to weak macro environment. The long term outlook for the business remains promising.
With regard to the progress of the roll out of the broadband business, RIL said that the network roll-out across the country is substantially complete. RIL's subsidiary Reliance Jio Infocomm (RJIL) is implementing the ambitious broadband project. FY 2017 (year ending 31 March 2017) will be the first full year of commercial operations of RJIL.
Meanwhile, RIL also announced in its Q2 September 2015 investor presentation that RJIL and Reliance Communication (RCom) have decided to share spectrum in 800 MHz band in 7 telecom circles.
Shares of RCom were currently up 0.43% at Rs 81.90. The stock hit high of Rs 82.40 and low of Rs 81.20 so far during the trading session.
Telecom stocks gained. Bharti Airtel (up 4.19%), Idea Cellular (up 1.1%) and Mahanagar Telephone Nigam (up 0.55%) edged higher. Tata Teleservices (Maharashtra) (down 0.96%) edged lower.
Mahindra & Mahindra (M&M) was down 0.31% at Rs 1,285.15. The company during market hours today, 19 October 2015, announced that its agri business has launched Tur Dal under the brand NuPro Tur Dal for the health conscious Indian consumer. M&M claims that its NuPro Tur Dal takes up to 50% less time to cook as compared to most other Tur Dal currently available in the market. M&M plans to launch other branded pulses under the NuPro brand in the future, M&M said in a statement
Essar Oil rose 0.76% at Rs 193.30 after the company said that its Vadinar refinery in Gujarat has commenced operations on 17 October 2015 after the successful completion of planned shutdown. The announcement was made during market hours today, 19 October 2015. It may be recalled that Essar Oil had on 16 September 2015 informed about a planned shutdown to be undertaken by the company at its Vadinar refinery in Gujarat for a period of 30 days from 18 September 2015 to 17 October 2015.
Meanwhile, Reserve Bank of India Governor Raghuram Rajan reportedly said at an event in Mumbai today, 19 October 2015, that the government needs to put in place conditions for sustainable growth of the economy without resorting to populist policies.
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