Nifty, Sensex May be Under Pressure – Weekly closing report

We had mentioned in last week’s closing report that Nifty, Sensex might rally if global markets remained steady. The major indices of the Indian stock markets were range-bound during the week and closed on Friday with small weekly gains over last Friday’s close. The trends of the major indices in the course of the week’s trading are given in the table below:

 

 
The major indices of the Indian stock markets were range-bound on Monday and closed with gains over Friday’s close. On the NSE, there were 876 advances, 862 declines and 347 unchanged.
 
The Sensex advanced on Monday following Asian markets on signs of an easing trade tensions. Talks between US and China are scheduled to be held on Monday and Tuesday. Barring the healthcare sector, all the other sectorial stocks traded comfortably in the green on both the NSE and the BSE.
 
The Indian currency, however, was trading flat at Rs69.73 per US dollar from its previous close of 69.72.
 
Cash-strapped state-run Hindustan Aeronautics Ltd (HAL) on Sunday said it had taken an overdraft of Rs962 crore. "With anticipated collection up to March, the cash position is expected to improve. Orders for LCA (Light Combat Aircraft) Mark 1A 83 and LCH (Light Combat Helicopter) 15 are in advanced stages," said HAL in a tweet from its official Twitter account. The defence aerospace major, however, did not mention from whom or which bank the overdraft was taken and for what purpose. The company's clarification on its cash crunch is the wake of a media report in a national newspaper on Friday that it had borrowed nearly Rs1,000 crore "to pay salaries to its 29,000 employees". 
 
The major indices of the Indian stock markets were range-bound on Tuesday and closed with small gains over Monday’s close. On the NSE, there were 829 advances, 896 declines and 341 unchanged.
 
Caution ahead of the outcome of ongoing US-China trade talks and Q3 corporate earning session kept the major indices in a short range on Tuesday. Sensex and Nifty logged marginal gains during the afternoon session. The US-China trade talks assume special significance as analysts say both sides face a resumption of tariffs in March if they don't strike a deal. The two economic giants agreed on a 90-day trade truce in early December. Also, Q3 corporate earning session starting this week kept the investors from taking position. On the domestic front, RBI Governor Shaktikanta Das will meet representatives of Non-Banking Financial Companies (NBFC) on Tuesday pushing the banking stocks 0.82% higher. In contrast, consumer durable and power sectors traded lower but the finance stocks managed to stay in the green.
 
Most of the central government offices, banks, port trusts and other state government departments wore a deserted look on Tuesday as employees launched a two-day nationwide trade strike, a top organiser said here in Mumbai.
 
The Delhi High Court set aside a Central government notification restricting the manufacture, sale and distribution of an anti-inflammatory medicine Ace Proxyvon manufactured by pharma company Wockhardt Ltd. Ace Proxyvon, which combines the dosage of aceclofenac, paracetamol and rabeprazole, is used to get relief from pain and inflammation associated with rheumatoid arthritis, osteoarthritis and ankylosing spondylitis. The high court observed that the Centre's decision to ban the drug had been taken without application of mind and order was passed without following certain procedures.
 
The major indices of the Indian stock markets were range-bound on Wednesday and closed with gains over Tuesday’s close. On the NSE, there were 701 advances, 1,009 declines and 356 unchanged.
 
Sensex gained during Wednesday afternoon's trade session over signs of easing US-China trade tensions and expectation of healthy Q3 corporate results. The third quarter results session will start with the earning announcement of Tata Consultancy Services. The IT (information technology) major is scheduled to announce its results on Thursday. Globally, investors awaited the outcome of US-China trade talks which has been extended. Sector-wise, metal, oil and gas stocks lost over 1% but key finance and banking stocks traded in the green.
 
State-owned NMDC announced a buyback of 3.23% equity shares at a price of Rs98 per stock for a consideration not exceeding Rs1,000 crore. The buyback decision was taken by the company's Board in its meeting held on Tuesday. The company's regulatory filing to the BSE said that its Board has "approved the proposal to buyback of not exceeding 10,20,40,815 equity shares at a price of Rs98 per equity share payable in cash for an aggregate consideration not exceeding Rs1,000 crore representing 4.11% of the aggregate of the fully paid-up equity share capital and free reserves."
 
Just a week after lowering its revenue estimate for the first quarter of fiscal 2019, Apple is cutting its current production plan for new iPhones by about 10% for the January-March quarter, the Nikkei Asian Review reported on Wednesday. Apple, being a market leader, is conservative on growth and consequently, equity analysts are conservative about capital appreciation in 2019 in the US stock market as a whole.
 
The major indices of the Indian stock markets were range-bound on Thursday and closed with small losses over Wednesday’s close. On the NSE, there were 846 advances, 860 declines and 359 unchanged.
 
Sensex and Nifty traded lower on Thursday over a sharp rise in crude oil prices and decline in financial stocks. Brent crude futures on Thursday surpassed the $60-a-barrel mark. Also, investors awaited Q3 corporate results, set to start on Thursday, and more clarity regarding US-China trade talks. It is observed that crude price rise would have an adverse effect on the Indian rupee. In addition, the supply cut by OPEC and other major oil producers came into effect from January 1. Lately, excess US oil has pushed down prices. Accordingly, the Indian currency weakened to Rs70.57 per dollar from its previous close of 70.46.
 
On Friday, the major indices of the Indian stock markets were range-bound and closed with small losses over Thursday’s close. On the NSE, there were 707 advances, 1,000 declines and 358 unchanged.
 
A continuous rise in global crude oil prices, along with caution ahead of key micro-economic data to be released later in the day, dragged the Indian equity market into the red on Friday. The benchmark Brent crude prices rose over 0.5% to cross the $62 a-barrel-mark. Stocks of IT (information technology), banking and finance sectors were heavily sold. Realty sector stocks also ended 1.43% lower after Finance Minister Arun Jaitley said at Thursday's GST Council Meeting that owing to diverse opinions, a decision on the much-expected rate reduction for under-construction homes would be taken at a later meeting.
 
Bandhan Bank reported a 10.3% increase in its net profit for the third quarter (Q3) of 2018-19. Its net profit during the quarter under review rose to Rs331 crore from Rs300 crore in the corresponding period of last fiscal. "Net Interest Income (NII) for the quarter grew by 53.5% at Rs1,124 crore as against Rs732 crore in the corresponding quarter of the previous year," the bank said in a statement. According to the lender, its net NPA (non-performing asset) as on December 31, 2018 stood at to 0.7% as against 0.8% on December 31, 2017. "Gross NPAs as on 31 December 2018 at 2.4% against 1.3% as on 30 September 2018 and 1.7% as on 31 December, 2017," the statement said. In addition, the bank, without naming the IL&FS Group, said that it has made provision of Rs384.95 crore in respect of an exposure "to a borrower from Infrastructure development and finance sector, which was classified as non-performing asset and fully provided for during the quarter". Bandhan Bank shares closed at Rs452.45, down 4.05% on the NSE.
 
Indian IT (information technology) bellwether Tata Consultancy Services (TCS) posted robust net profit and revenue growth for the third quarter of this fiscal (2018-19), beating estimates by analysts and a weaker rupee. The city-based Tata Group's flagship company reported Rs8,121 crore consolidated net profit for the quarter (Q3) under review, registering 24% annual growth from Rs6,545 crore in the same period a year ago. Similarly, consolidated revenue for the quarter grew 21% year-on-year (YoY) to Rs37,338 crore from Rs30,904 crore in the like period a year ago. Sequentially, net profit, however, rose 2.5% from Rs7,927 crore but revenue remained flat (0.1%) from Rs36,854 crore a quarter ago. Under the International Financial Reporting Standard (IFRS), net income grew 12% YoY to $1,140 million from $1,014 million in the same period a year ago and gross revenue rose 9.7% YoY to $5,250 million from $4,787 million in the like period a year ago. Sequentially, net income grew 1.9% from $1,119 million and gross income remained flat (0.7%) from $5,215 million a quarter ago. Profit before tax grew 24% YoY to Rs10,727 crore from Rs8,651 crore in the same period year ago and 2.2% sequentially from Rs10,501 crore a quarter ago. Operating margin for the quarter at 25.6% remained flat (0.4%) YoY. Accounting for 30% of the revenue, digital business grew a whopping 53% YoY during the quarter. Geographically, it grew in Britain 25% YoY and in Europe 17.6% YoY. "The board has recommended Rs4 or a whopping 400% dividend per share of Re1 face value," said the company in a statement here later. TCS shares closed at Rs1,842.55, down 2.39% on the NSE.
 
Global software major Infosys will buy back its shares again and pay special dividend to its shareholders for this fiscal (2018-19), said the company. "The company's Board of Directors will consider buyback of its paid-up equity shares, payment of special dividend and implementation of the Capital Allocation Policy at its meeting on January 11," said the city-based IT firm in a regulatory filing on the BSE. The board had approved the capital allocation policy at its meeting on April 13, 2018. Infosys on Friday reported Rs3,610 crore consolidated net profit for the third quarter of fiscal 2018-19, posting nearly 30% annual decline from Rs5,129 crore in the same period a year ago. In a regulatory filing on the BSE, the city-based IT behemoth said consolidated revenue for the quarter (Q3) under review, however, grew 20.3% annually to Rs21,400 crore from Rs17,794 crore in the like period a year ago. Sequentially too, net profit dipped 12% from Rs4,110 crore but revenue rose 3.8% from Rs20,609 crore a quarter ago. Under the International Financial Reporting Standards (IFRS), net income declined nearly 37% annually to $502 million in Q3 from $796 million a year ago and declined sequentially 13.6% from $581 million a quarter ago. Gross income under IFRS, however, grew 8.4% to $2,987 million in Q3 from $2,755 million in the like period a year ago and 2.2% sequentially from $2,921 million a quarter ago. Infosys shares closed at Rs683.50, up 0.68% on the NSE.

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Nifty, Sensex Directionless – Thursday closing report

We had mentioned in Wednesday’s closing report that Nifty, Sensex might log more gains. The major indices of the Indian stock markets were range-bound on Thursday and closed with small losses over Wednesday’s close. On the NSE, there were 846 advances, 860 declines and 359 unchanged. The trends of the major indices in the course of Thursday’s trading are given in the table below:

 

 
Sensex and Nifty traded lower on Thursday over a sharp rise in crude oil prices and decline in financial stocks. Brent crude futures on Thursday surpassed the $60-a-barrel mark. Also, investors awaited Q3 corporate results, set to start on Thursday, and more clarity regarding US-China trade talks. It is observed that crude price rise would have an adverse effect on the Indian rupee. In addition, the supply cut by OPEC and other major oil producers came into effect from January 1. Lately, excess US oil has pushed down prices. Accordingly, the Indian currency weakened to Rs70.57 per dollar from its previous close of 70.46.
 
Tata Power Delhi Distribution Ltd (TPDDL) has signed an agreement with Norwegian power technology company PIXII to explore the use of distributed pole-mounted storage to boost the strength of the distribution grid in the capital, a statement said on Thursday. The Delhi distribution company (discom) said the agreement, signed during Norwegian Prime Minister Erna Solberg's official visit earlier this week, was designed to explore the use of distributed pole-mounted storage for a resilient and sustainable distribution grid. Tata Power Company shares closed at Rs74.90, up 0.74% on the NSE.
 
US stocks closed higher after the summary of Federal Reserve's meeting held in December 2018 showed the central bank is patient on rate hikes. The Dow Jones Industrial Average on Wednesday increased 91.67 points, or 0.39%, to 23,879.12. The S&P 500 was up 10.55 points, or 0.41%, to 2,584.96. The Nasdaq Composite Index was up 60.08 points, or 0.87%, to 6,957.08. Fed officials acknowledged that the policy path ahead is "less clear" after approving an interest rate hike at their recent meeting. The minutes showed the rate hike came with reluctance from a few members who thought the lack of inflationary pressures argued against another increase. The minutes came after Fed chair Jerome Powell hinted at slower monetary tightening. He said Fed officials were keeping a close eye on the voices of financial market, and that Fed policy was flexible and clung to real-time economic developments. He added that the central bank would not hesitate to adjust its balance sheet reduction plan if it causes problems in the markets. US stocks were also found trading higher on Wednesday as trade talks between China and the US concluded favourably.
 
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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The market is always looking for unusual companies, especially those in emerging areas. Ganesha Ecosphere is one such company. Recycling is a huge emerging theme and Ganesha is among the few listed firms in the recycling business. It makes recycled polyester staple fibre (RPSF) from polyethylene terepthalate (PET) bottles. RPSF is used to make polyester spun yarn for woven textiles,...
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