Stocks
Nifty, Sensex break the uptrend on low volumes – Wednesday closing report
We had mentioned in Tuesday’s closing report that Nifty, Sensex were still on an uptrend. However, the major indices of the Indian stock markets suffered a sharp correction on Wednesday and closed over 1% lower than Tuesday’s close. The trends of the major indices in the course of Wednesday’s trading are given in the table below:
 
 
 
 
Profit booking, along with negative global cues and caution over upcoming quarterly results, dragged the Indian equity markets lower during the late-afternoon trade session on Wednesday. Heavy selling pressure was witnessed in automobile, banking and healthcare stocks. The BSE market breadth was skewed in favour of the bears -- with 1,896 declines and 832 advances. On the NSE, on Wednesday, there were 335 advances, 1,116 declines and 48 unchanged.
 
Most banking and pharma stocks traded down, while IT (information technology) and auto stocks also faced resistance at higher levels. Aviation stocks traded with sideways to firm sentiments on higher crude oil prices. Indian markets continued to trade with weakness and underperformed its global peers.
 
Pharma exports in the first quarter of fiscal 2016-17 have come down by 4%-5%, causing concern among Pharmaceutical Export Promotion Council of India (Pharmexcil) and ministry of commerce and industry, which have convened two meetings this month with top exporters. "In the first three months the growth has not been on expected lines and the ministry is disturbed," Pharmexcil Director General Appaji told news agencies. The council, which works under the ministry, has called one meeting in Hyderabad on Wednesday and another in Mumbai later this month to look into issues faced by the exporters. The joint secretary in the ministry will interact with CEOs of pharma industries to know what is going wrong and to discuss how to address the problems. Appaji believes many factors led to the drop in exports, including foreign currency shortages in countries like Venezuela, Nigeria and Angola. 
 
JK Tyre & Industries (JKTIL) on Tuesday reported a consolidated net profit of Rs100.26 crore for the quarter ended June 30, 2016. According to the company, its consolidated net profit for the corresponding period of last fiscal stood at Rs117.07 crore. "Consolidated financial results published, as opted by the company, include working of Cavendish Industries Ltd., acquired on April 13, 2016 which restarted its operations in mid-May, 2016," the company said in a regulatory filing to the BSE. "Therefore, results of the quarter are not comparable with previous period." The company's total income during the quarter under review stood at Rs1,786.77 crore from Rs1,771.06 crore earned during the corresponding period of 2015-16. “JK Tyre continues to make deeper inroads in the Indian market with higher sales of both truck/bus radials and passenger radials in volume terms. The company has recorded higher operating profit for the quarter on consolidated basis," said Raghupati Singhania, Chairman and Managing Director of JK Tyre & Industries. The shares of the company closed at Rs102.20, down 2.76% on the BSE on Wednesday.
 
The Lok Sabha on Tuesday passed The Employees Compensation (Amendment) Bill, 2016, as Union Labour Minister Bandaru Dattatreya said a large number of workforce in the organised sector will benefit. The bill provides for higher compensation in case an employee is injured in industrial accident and has a provision for hefty penalty in case of violation by employers, officials said. "A large number of organised workforce will be benefited by it.... Labour is a big component in the nation-building activity as their participation is very high. India has got a huge human resource. That is why labourers or workers play a significant role in building the nation," the minister said while piloting the draft legislation in the lower house of Parliament. At the end of the debate which saw participation of several members, Dattatreya said the new legislation provides for payment of compensation of Rs50,000 to Rs1 lakh to employees and their dependents in case of injury in industrial accidents and also occupational diseases. Besides, Rs50,000 compensation, there will be "penalty for failure to display the Act" by the employers. This is likely to push up quality and also costs in the corporate sector and where the additional costs cannot be passed on to the customers, through higher prices, corporate earnings are likely to be adversely affected to that extent.
 
The top gainers and top losers of the major indices are given in the table below:
 
 
The closing values of the major Asian indices are given in the table below:
 

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Nifty, Sensex still on an uptrend – Tuesday closing report
We had mentioned in Monday’s closing report that Nifty, Sensex uptrend was continuing. The major indices of the Indian stock markets were range-bound on Tuesday and closed with small losses over Monday’s close. The trends of the major indices in the course of Tuesday’s trading are given in the table below:
 
 
Profit booking, along with lower crude oil prices and a weak rupee, dented the Indian equity markets during the mid-afternoon trade on Tuesday. Selling pressure was seen in automobiles, fast moving consumer goods (FMCG) and metal stocks. The BSE market breadth was skewed in favour of the bears -- with 1,569 declines and 1,185 advances.  On the NSE, there were 542 advances, 912 declines and 58 unchanged. According to market analysts, consolidation and profit booking in the absence of any fresh positive development dragged the equity markets lower. Most IT (information technology) stocks traded down, while banking and pharma stocks traded with mixed sentiments. Auto and aviation sector stocks faced selling pressure. Most FMCG stocks traded down due to profit booking.
 
On Tuesday, Reserve Bank of India (RBI) Governor Raghuram Rajan kept key policy rates unchanged in his last monetary policy review with little elbow room on account of the country's retail inflation inching closer to the upper tolerance level of 6%. Accordingly, the repurchase (repo) rate or the interest commercial banks pay the central bank for short-term loans remains unchanged at 6.5%. The cash reserve ratio (CRR) that scheduled banks have to keep in the form of liquid funds also remains unaltered at 4% of deposits. In the previous policy update, too, conducted on June 7, the policy rates were left unaltered.
 
The RBI’s decision to leave the policy interest rates untouched was in line with the predictable and transparent monetary policy, said global credit rating agency Moody's Investors Service. The central bank's decision to leave policy interest rates unchanged on Tuesday was no surprise to market participants. "In the next few months, we expect continuity in the RBI's policymaking. In particular, the government's notification of the inflation target at 4% plus or minus  2% through to 2021 denotes ongoing commitment to keeping inflation at moderate levels," Marie Diron, senior vice president, Sovereign Risk Group was quoted as saying in a statement issued by Moody's. "Meanwhile, the formation of a monetary policy committee is in line with common practice in many central banks around the world. We do not expect the RBI's shift to such a structure to have any significant implications for the conduct of monetary policy," Diron added. According to Diron, the larger than average monsoon rainfall will help maintain moderate food price inflation to keep the headline inflation rate within or close to target this year. In the medium-term, the inflation will remain moderate. With greater focus on inflation control rather than GDP growth, RBI has mildly controlled the bulls in the Indian stock markets.
 
Automobile major Tata Motors Group on Monday reported a rise of 20% in its global wholesales, including Jaguar Land Rover for July. The company said that its global wholesales for the month under review stood at 88,159 units. "Global wholesales of all Tata Motors' commercial vehicles and Tata Daewoo range in July 2016 was flat at 30,363 compared to July 2015," the company said in a statement. "Global wholesales of all passenger vehicles in July 2016 were at 57,796 nos., higher by 34%, compared to July 2015." On Tuesday, the company’s shares closed at Rs513.70, down 0.05% on the BSE.
 
The base price and the quantum of airwaves on offer make the next round of spectrum auctions the largest ever. But the high reserve price, notably for the 700 MHz band, and time still for the expiry of existing holdings could make the response muted, analysts warn. The views of six top brokerages and consultancies is that service providers will cherry-pick the bands they need, putting a question mark over how much of the 2,354.55 MHz on offer across seven bands will be sought and what quantum of the $84 billion reserve price be realised. "Since no spectrum is up for renewal for any of Bharti, Vodafone India and Idea Cellular, we do not expect aggressive bidding," said a Goldman Sachs Global Investment Research said in its report, predicting no major surprises. "The upcoming auction is crucial for Idea and Vodafone in our view, as they still have large amount of 3G and 4G gaps and will look to fill those. Bharti and (Reliance) Jio have very few circles without 3G and 4G, and will try to bolster their data spectrum holding," it said. The government has put on block 2,354.55 MHz of airwaves for sale in seven bands -- 700 MHz, 800 MHz, 900 MHz, 1,800 MHz, 2,100 MHz, 2,300 MHz and 2,500 MHz -- with a reserve price of $84 billion -- against 470.75 MHz in the previous round that saw bids worth $17 billion. Bharti Airtel shares closed at Rs348.85, down 0.87% on the BSE.
 
Idea Cellular standalone net profit for the first quarter of 2016-17 dropped 36.1%, a company statement said on Monday. The company posted net profit of Rs497.1 crore for the April-June quarter compared to Rs777.8 crore posted during the corresponding quarter in 2015-16. The total revenue of the company stood at Rs9,486.6 crore for the quarter under review compared to Rs8,791.5 crore it posted during the corresponding period in 2015-16. As on June 30, the company has over 1.8 million active customers in 4G services. Idea shares closed at Rs97.15, down 5.77% on the BSE, on Tuesday.
 
The top gainers and top losers of the major indices are given in the table below:
 
 
The closing values of the major Asian indices are given in the table below:
 

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COMMENTS

Anil Singh

1 year ago

Today's equity volume in NSE is 111.70 crores shares/contracts and traded values is ₹22,298.89. But you are saying that NSE turnover was 109.63 crore. I am unable to locate where am I missing this data?

Returns at a Time of Global Warming of Stock Markets
In this global warming of financial markets, we soon run out of ideas to chase. Every stock we like or that has the attributes of being ‘high quality’ (HQ), becomes expensive and well known. Soon, they do not seem interesting enough. HQ stocks even start to underperform when the market is in its phase of summer madness. The implication of markets getting overheated and indices shooting up...
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