Nifty, Sensex look weak – Wednesday closing report
We had mentioned in Tuesday’s closing report that Nifty, Sensex were losing momentum. The major indices of the Indian stock markets suffered a sharp correction on Wednesday and closed with losses of 0.88%-0.91% over Tuesday’s close. NSE trading volumes were on the higher side underlining the magnitude of the correction. The trends of the major indices in the course of Wednesday’s trading are given in the table below:
 
 
 
Disappointing quarterly earnings results, combined with caution over the rise in non-performing asset (NPAs) of the banking sector and negative global cues dragged the Indian equity markets lower during the mid-afternoon trade session on Wednesday. Besides, lower global crude oil prices and anxiety over the upcoming F&O (futures and options) expiry dented investors' sentiments. The BSE market breadth was firmly in favour of the bears -- with 1,5920 declines and 1,180 advances. On the NSE, there were 469 advances, 1,006 declines and 45 unchanged. Hang Seng and Straits Times indices had also closed in the red earlier in the day.
 
Lower crude oil prices and negative Asian and European markets too dragged the key domestic indices lower, pointed out market analysts. IT (information technology), banking, pharma and FMCG (fast moving consumer goods) continue to trade lower on profit booking. Auto and oil-gas stocks witnessed recovery from lower levels on buying support.
 
Deficit monsoon rain has affected Kharif production in 25 of the 30 districts across Karnataka, resulting in an estimated crop loss worth Rs 11,000 crore in this fiscal (2016-17), said an official on Tuesday. "Of the 71.67-lakh hectares of farm lands where sowing was completed in June-July, 30.82-lakh hectares were affected due to deficit rains in August and September in 25 districts across the state," said Agriculture Director B.Y. Srinivas. The state government has declared 110 taluks (local bodies) in 25 districts as drought-hit due to below normal and deficit rainfall and affected cropping on 25.54-lakh hectares. "Barring in northern and coastal districts, rainfall was erratic and scattered in the state's central and southern districts resulting in prolonged dry conditions during the second half of the monsoon season," lamented Srinivas. Though normal rains in Kalaburgi district helped in harvesting a bumper crop, especially pulses (tur dal), heavy rains in mid-September in Bidar district damaged soyabean crop in several hectares of farm lands. In contrast, of the 64-lakh hectares of agriculture lands where seeds for various crops were sown last fiscal (2015-16), 32.72-lakh hectares were affected due to deficit rains and drought situation. Bad news from the agriculture sector around the festive season is likely to affect the major indices of the stock markets adversely, due to fall in aggregate demand from the farmers.
 
India's banking sector majors on Tuesday reported mixed earnings results for the second quarter of the current fiscal. On a standlaone basis, lenders like HDFC Bank, Kotak Mahindra and IDFC Bank came out with healthy quarterly numbers, while Axis Bank and IDBI Bank reported disappointing figures. In a regulatory filing made to the BSE, HDFC Bank reported a rise of 20.4 per cent in its net profit for the quarter ended September 30 2016. The bank's Q2 net profit increased to Rs 3,455.33 crore from Rs 2,869.45 crore. The banking major's net interest income went up by 19.6 per cent to Rs 7,993.6 crore. However, Axis Bank posted a decline of 83 per cent in its net profit to Rs 319.08 crore from Rs 1,915.64 crore. In contrast, the bank's net interest income for the period under review edged-up by 11.12 per cent to Rs 4,513.87 crore from Rs 4,062.09 crore. Besides, Kotak Mahindra Bank posted an increase of 43 per cent in its net profit which edged-up to Rs 813 crore from Rs 570 crore. The bank's net interest income went up by 19 per cent to Rs 1,995 crore. Private sector lender IDFC Bank reported an exponential rise in its Q2 net profit to Rs 387.76 crore from Rs 59.63 crore. On the other hand, IDBI Bank reported a 53.33 per cent decline in its net profit for the quarter under review to Rs 56 crore from Rs 120 crore. The Bank Nifty closed at 19,483.60, down 1.77%.
 
Telecom major Bhrati Aritel on Tuesday reported Rs 1,461-crore consolidated net profit for the second quarter (July-September) of fiscal 2016-17, registering a 4.9 per cent decline from Rs 1,536 crore in the like period a year ago. In a regulatory filing to the stock exchanges, the city-based company said consolidated income from operations grew 3.4 per cent to Rs 24,672 crore for the quarter under review (Q2) from Rs 23,852 crore in the same period a year ago. Sequentially, though the net profit was flat from Rs 1,462 crore in the first quarter (April-June), the company income declined 3.5 per cent from Rs 25,573 crore in the previous quarter. "India revenue increased 10 per cent year-on-year (YoY) while growth in Africa was 4.7 per cent YoY on underlying basis," said the largest telecom services provider later in a statement. The company’s shares closed at Rs318.05, up 2.25% on the BSE.
 
Tata Sons, the holding company of the Tata Group, on Tuesday said two new members have been inducted in the company's board as additional directors. According to a statement from Tata Sons, Ralf Speth, Chief Executive Officer of Jaguar Land Rover, and N. Chandrasekaran, Chief Executive Officer and Managing Director of Tata Consultancy Services (TCS), have been appointed as Additional Directors on the company's Board. "This is in recognition of their exemplary leadership in their companies," Ratan N. Tata, Interim Chairman of Tata Sons, was quoted as saying in the statement.  The development comes a day after the industrial conglomerate replaced Cyrus P. Mistry as its Chairman and named Ratan Tata as the interim chairman of the company. Tata Steel shares closed at Rs398.85, down 4.01% on the BSE.
 
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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Picking Stocks: Marrying Momentum with Fundamentals
“Momentum is the center stage anomaly of recent years… an anomaly that is above suspicion… the premier market anomaly.” — Eugene Fama & Kenneth French, 2008
 
On 15 August 2008, Richard Roll, a top financial economist, was interviewing Eugene Fama, Nobel Laureate in economics, often referred to as ‘The Father of Finance’, best known for his work on portfolio theory, asset pricing...
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Nifty, Sensex losing momentum – Tuesday closing report
We had mentioned in Monday’s closing report that Nifty, Sensex might give up recent gains. The major indices of the Indian stock markets were range-bound on Tuesday and closed with small losses over Monday’s close. 
 
 
Negative global cues and a weakened rupee depressed the Indian equity markets during the mid-afternoon trade session on Tuesday. Besides, scrips of Tata Group's subsidiaries pared some of their initial losses during the mid-afternoon trade session, but still traded in the red, a day after Cyrus P Mistry was removed as the Chairman of Tata Sons. The BSE market breadth was firmly in favour of the bears -- with 1,439 declines and 1,351 advances. On the NSE, there were 694 advances, 925 declines, 266 unchanged.
 
CNX Nifty traded with bearish sentiments due to profit booking. IT, banking, auto and oil-gas stocks faced profit booking at higher levels, pointed out market analysts. However, pharma, textile, aviation and media entertainment stocks traded firm on buying support from traders. Broadly negative Asian markets and an appreciation in the US dollar, as well as lower than expected quarterly results, lent a weak bias, observed market analysts.
Tata Sons is the holding company of the Tata Group. Shares of various subsidiaries of the industrial conglomerate fell in a range of about 1%-4% during the initial part of the Tuesday's trade. At the BSE, shares of major firms like Tata Motors and Tata Steel pared some of their initial losses, but still traded in the red. Tata Steel shares closed at Rs414.75, down 2.65% on the BSE.
 
The Supreme Court on Tuesday told liquor baron Vijay Mallya to disclose in full the assets he holds overseas including the details of the $40 million he got from Diageo in February. Such strictness in dealing with promoters is likely to help the public sector banks in general on their own NPAs (non-performing assets). Bank Nifty closed at 19,834.90, up 0.14% on Tuesday. The government expects the entire Insolvency and Bankruptcy Law to become operational by end-December, Economic Affairs Secretary Shaktikanta Das said on Tuesday. 
 
Telecom tower firm Bharti Infratel on Monday reported close to 31% jump in its consolidated net profit to Rs773.80 crore for the quarter ended September 30 compared with Rs591.60 crore for the same period a year ago. The company's income from operations grew nine per cent year-on-year to Rs1,496.30 crore during the second quarter of this fiscal from Rs1,372.60 crore in the same period last fiscal, according to a BSE filing. The company, in a release, said its consolidated revenues for the quarter stood at Rs3,292 crore, which grew by 8% over the corresponding period last year. The company’s shares closed at Rs377.40, up 2.04% on the BSE on Tuesday.
 
US stocks traded higher on Monday as Wall Street digested a batch of generally positive earnings reports. The Dow Jones Industrial Average rose 91.60 points, or 0.50%, to 18,237.31. The S&P 500 gained 9.92 points, or 0.46%, to 2,151.08. The Nasdaq Composite Index increased 45.56 points, or 0.87%, to 5,302.96. Shares of T-Mobile surged over 7% around mid-day on Monday after the company posted better-than-expected quarterly results. The US wireless carrier announced Monday net income of $366 million, or 42 cents per share, for the third quarter of 2016, compared with $138 million, or 15 cents a share, during the same quarter last year. The latest data from Thomson Reuters showed that the S&P 500 companies' blended earnings in the third quarter of 2016 are expected to rise 1.1% year on year, while the revenues are forecast to increase 2.5%. US economic data also came out positive. Adjusted for seasonal influences, the Markit Flash US Manufacturing Purchasing Managers' Index rebounded from a three-month low of 51.5 in September to 53.2 in October, beating market consensus of 51.2. On Friday, US stocks closed mixed after wavering in a tight range.
 
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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