Sensex snaps six-day winning streak
Losses for capital goods sector stocks and index heavyweights Reliance Industries and Infosys led the decline for the two key benchmark indices. The barometer index, the S&P BSE Sensex lost 170.62 points or 0.69% to settle at 24,623.34. The 50-unit Nifty 50 index lost 45.65 points or 0.61% to settle at 7,486.15. The Sensex hit one-week closing low.
Bank stocks edged lower. Index heavyweight and IT major Infosys declined after the company's promoter group entities sold a total of 75 lakh shares of the company via block deals through stock exchanges mechanism today, 10 March 2016. Bharat Heavy Electricals (Bhel) dropped after ratings agency CRISIL in a report dated 9 March 2016, downgraded its rating on the long-term bank facilities of Bhel to CRISIL AA+/Negative from CRISIL AAA/Negative. HDFC rose after the company announced that it intends to raise Rs 525 crore through private placement of senior secured redeemable non-convertible debentures.
In overseas stock markets, European shares edged lower in volatile trade ahead of a European Central Bank (ECB) meeting later in the global day today, 10 March 2016, which is expected to unveil more stimulus measures. Asian markets were mixed as investors digested another round of Chinese economic data and a surprise interest rate cut by the New Zealand central bank. In mainland China, the Shanghai Composite closed 2.02% lower. Hong Kong's Hang Seng index closed 0.06% lower. In Japan, the Nikkei 225 Average closed 1.26% higher. US stocks closed modestly higher yesterday, 9 March 2016, as a rally in oil prices and sharp advances in energy and tech stocks kept the main indexes buoyant.
The Sensex lost 170.62 points or 0.69% to settle at 24,623.34, its lowest closing level since 3 March 2016. The index fell 322.57 points or 1.3% at the day's low of 24,471.39. The index rose 23.52 points or 0.09% at the day's high of 24,817.48.
The Nifty lost 45.65 points or 0.61% to settle at 7,486.15, its lowest closing level since 8 March 2016. The index fell 84.40 points, or 1.12% at the day's low of 7,447.40. The index rose 15.30 points or 0.2% at the day's high of 7,547.10.
The BSE Mid-Cap index fell 0.32%. The BSE Small-Cap index fell 0.18%. The losses for both these indices were lower in percentage terms than those for the Sensex.
The market breadth indicating the overall health of the market was negative. On BSE, 1,400 shares declined and 1,195 shares rose. A total of 153 shares were unchanged.
Among the sectoral indices on BSE, the S&P BSE Energy index (down 1.56%), the BSE IT index (down 1.33%), the BSE Capital Goods index (down 1.7%), the BSE Oil & Gas index (down 1.05%) and the BSE Realty index (down 1.04%) underperformed the Sensex. The S&P BSE Basic Materials index (up 0.3%), the BSE Healthcare index (down 0.01%), the BSE Telecom index (down 0.16%) and the BSE Metal index (up 0.36%) outperformed the Sensex.
Bank stocks edged lower. Among public sector banks, IDBI Bank (down 3.01%), Bank of Baroda (down 2.55%), Union Bank of India (down 1.9%), State Bank of India (down 1.53%), Punjab National Bank (down 1.21%) and Bank of India (down 0.58%) declined. United Bank of India (up 0.51%) and Indian Bank (up 0.39%) rose.
Among private sector banks, Axis Bank (down 0.94%), IndusInd Bank (down 0.92%), HDFC Bank (down 0.51%) and ICICI Bank (down 0.39%) declined. Yes Bank (up 0.38%) rose.
Kotak Mahindra Bank (KMBL) fell 0.8% at Rs 654.45. The Reserve Bank of India (RBI) has announced removal of restrictions placed on the purchase of shares of KMBL by foreign investors. The RBI said that the aggregate share holdings by foreign investors in the private sector bank has gone below the prescribed limit stipulated under the prevailing foreign direct investment (FDI) policy and hence the restrictions are removed. The RBI made the announcement after trading hours yesterday, 9 March 2016.
Capital goods stocks edged lower. Alstom T&D India (down 2.62%), ABB India (down 2.4%), BEML (down 1.89%), Bharat Electronics (down 1.18%), Havells India (down 0.88%), Siemens (down 0.75%), Crompton Greaves (down 0.63%) and Praj Industries (down 0.24%) declined. Thermax (up 0.24%) edged higher.
Shares of L&T fell 2.22% at Rs 1,186. The stock hit a high of Rs 1,221.60 and a low of Rs 1,182.60 in intraday trade.
Bharat Heavy Electricals (Bhel) was off 3.07% at Rs 104.35 after ratings agency CRISIL in a report dated 9 March 2016, downgraded its rating on the long-term bank facilities of Bhel to CRISIL AA+/Negative from CRISIL AAA/Negative. CRISIL has reaffirmed its ratings on the company's short-term bank facilities at CRISIL A1+. The downgrade reflects CRISIL's belief that Bhel's business risk profile will remain constrained over the medium term by continued weak profitability and stretch in working capital cycle. CRISIL expects Bhel's profitability to remain under pressure, and its working capital stretched over the medium term on account of the challenging operating environment in the power sector. The rating may be further downgraded if project execution is slower than expected and costs remain high, leading to continued losses and a high receivable position, CRISIL said. Conversely, the outlook may be revised to stable if profitability improves, backed by a structural revival in the power sector, translating into faster project execution, and improvement in working capital position, CRISIL said.
Meanwhile, Bhel during market hours today, 10 March 2016, announced that it has successfully commissioned the second 500 megawatts (MW) thermal unit at Anpara-D Thermal Power Plant (TPP) in Sonbhadra district of Uttar Pradesh.
IT stocks edged lower on strong rupee. Oracle Financial Services Software (down 1.89%), Wipro (down 0.27%) and TCS (down 0.35%) edged lower. Tech Mahindra (up 0.41%), HCL Technologies (up 0.21%) edged higher. A firm rupee adversely affects operating profit margins of IT firms as the sector derives a lion's share of revenue from exports.
In the foreign exchange market, the partially convertible rupee was hovering at 67.0725, compared with closing of 67.215 during the previous trading session.
Index heavyweight and IT major Infosys lost 2.76% at Rs 1,145.95 after the company's promoter group entities sold a total of 75 lakh shares of the company via block deals through stock exchanges mechanism today, 10 March 2016. S Gopalakrishnan sold 50 lakh shares representing 0.21% stake in the company. SD Shibulal sold 10 lakh shares representing 0.0435% stake in the company. Shruti Shibulal sold 10 lakh shares of the company. Kumari Shibulal sold 5 lakh shares representing 0.0217% stake in the company.
Index heavyweight and housing finance major HDFC rose 1.91% at Rs 1,152.60 after the company announced after market hours yesterday, 9 March 2016, that it intends to raise Rs 525 crore through private placement of senior secured redeemable non-convertible debentures. The coupon rate of debentures is 8.72% per annum with a tenor of 3 years 35 days. The issue opens and closes on the same day tomorrow, 11 March 2016. The object of the issue is to augment the long-term resources of the company. The proceeds of the issue would be utilized for financing/refinancing the housing finance business requirements of the company.
Index heavyweight Reliance Industries fell 2.87% at Rs 1,012. The stock hit a high of Rs 1,045 and a low of Rs 1,009 in intraday trade.
Container Corporation of India declined 2.71% at Rs 1,163.15. Bidding data on BSE showed that the offer for sale (OFS) for divestment of Government of India's (GoI) 5% stake in the company received strong response from both non-retail investors and retail investors categories. The OFS received bids for a total of 35.86 lakh shares from retail investors today, 10 March 2016, as against 19.48 lakh shares offered to this category. Retail investors will be allocated shares in OFS at a discount of 5% to the cut off price. The OFS received strong response from non-retail investors. The OFS was spread over two trading sessions starting yesterday, 9 March 2016. The floor price for the OFS was fixed at Rs 1,195 per share. Government of India (GoI) sold up to 97.48 lakh equity shares, constituting 5% of the total paid up equity share capital of the company via the stock exchanges mechanism. Bidding for the shares in the OFS by non-retail investors took place in a single trading session called ‘T' day yesterday, 9 March 2016. Those non-retail investors who had placed their bids on T day and have chosen to carry forward their bids to T+1 day were allowed to revise their bids on T+1 day i.e. today, 10 March 2016. Bidding by retail investors took place in a single trading session called T+1 day today, 10 March 2016.
The Sensex snapped six-day winning streak. The Sensex had surged 1,791.96 points or 7.79% in six trading days to settle at 24,793.96 yesterday, 9 March 2016, from its close of 23,002 on 29 February 2016. The Sensex has fallen 1,494.20 points or 5.72% in calendar year 2016 so far (till 10 March 2016). From a 52-week low of 22,494.61 hit on 29 February 2016, the Sensex has risen 2,128.73 points or 9.46%. The Sensex is off 5,401.40 points or 17.98% from a record high of 30,024.74 hit on 4 March 2015.