Key benchmark indices wrapped the trading week with moderate losses as sentiment was subdued after domestic data showed that industrial production contracted in February and consumer price inflation edged up in March. Weak global cues also weighed on market sentiment. The barometer index, the S&P BSE Sensex, shed 182.03 points or 0.61% to settle at 29,461.45. The Nifty 50 index dropped 52.65 points or 0.57% at 9,150.80. The market declined for the second day in a row today, 13 April 2017.
The Sensex and the Nifty, both, hit their two-week closing lows. Infosys declined after announcing Q4 results. Other IT stocks also declined post Infosys' Q4 results. Shares of private sector banks rose. Pubic sector banks were mixed. Metal stocks dropped.
Key indices extended losses as the day's trade progressed after hovering within a narrow range in negative terrain till early afternoon trade.
The Sensex shed 182.03 points or 0.61% to settle at 29,461.45, its lowest closing level since 28 March 2017. The index lost 201.22 points or 0.67% at the day's low of 29,442.26. It rose 17 points or 0.05% at the day's high of 29,660.48.
The Nifty 50 index dropped 52.65 points or 0.57% at 9,150.80, its lowest closing level since 29 March 2017. The Nifty lost 58.50 points or 0.63% at the day's low of 9,144.95. It fell 0.8 points at the day's high of 9,202.65.
The BSE Mid-Cap index rose 0.03%. The BSE Small-Cap index gained 0.19%. Both these indices outperformed the Sensex.
The breadth, indicating the overall health of the market, was positive. On the BSE, 1,459 shares rose and 1,441 shares fell. A total of 148 shares were unchanged.
The market remains close tomorrow, 14 April 2017 on account of holiday.
The total turnover on BSE amounted to Rs 3256.25 crore, lower than turnover of Rs 4129.54 crore registered during the previous trading session.
Shares of public sector banks were mixed. UCO Bank (down 0.66%), Punjab National Bank (down 1.86%), Corporation Bank (down 3.51%), and Union Bank of India (down 0.7%) declined. Allahabad Bank (up 0.14%), Bank of Baroda (up 1.8%), Canara Bank (up 0.48%), and Bank of India (up 1.36%) gained. United Bank of India was unchanged.
Central Bank of India rose 1.18% to Rs 102.95 after the bank's board of directors approved raising of equity capital by issuance and allotment of 5.59 crore equity shares at Rs 104.15 per share aggregating to Rs 583 crore to the government on a preferential basis. The announcement was made after market hours yesterday, 12 April 2017.
State Bank of India rose 0.31%. The bank has clarified with respect to news titled SBI branch opened 2,000 accounts to channelise black money”, that all the new accounts during the period of demonetisation were opened after complying with the KYC guidelines. The bank said that news report claims are false.
Shares of private sector banks rose. Axis Bank (up 0.2%), HDFC Bank (up 0.03%), ICICI Bank (up 0.39%), Kotak Mahindra Bank (up 0.35%), Federal Bank (up 0.16%), and IndusInd Bank (up 0.1%) edged higher. Yes Bank declined 0.91%.
Metal and mining stocks dropped. Jindal Steel & Power (down 3.55%), Vedanta (down 5.5%), Tata Steel (down 2.92%), NMDC (down 3.06%), Hindalco Industries (down 4.97%), Hindustan Zinc (down 0.28%), Steel Authority of India (down 2.97%), JSW Steel (down 2.7%), and National Aluminium Company (down 1.16%) edged lower. Bhushan Steel rose 3.21%.
IT major Infosys fell 3.86% after the company reported weak Q4 March 2017 results before market hours today, 13 April 2017. Infosys' consolidated net profit fell 2.8% to Rs 3603 crore on 0.9% decline in revenues to Rs 17120 crore in Q4 March 2017 over Q3 December 2016. Consolidated operating profit fell 2.8% to Rs 4212 crore in Q4 March 2017 over Q3 December 2016.
The company said its consolidated revenue is expected to grow 6.5%-8.5% in constant currency terms in the fiscal year ending 31 March 2018, under IFRS.
The company said its revenue is expected to grow 2.5%-4.5% in Rupee terms in the fiscal year ending 31 March 2018, under IFRS, based on the exchange rates as of 31 March 2017.
The company said its revenue is expected to grow 6.1%-8.1% in Dollar terms in the fiscal year ending 31 March 2018, under IFRS, based on the exchange rates as of 31 March 2017.
Infosys' CEO, Dr. Vishal Sikka, said that unanticipated execution challenges and distractions in a seasonally soft quarter affected the company's overall performance. At the same time, Infosys continued to see many positive signs of its strategy execution; its software-led offerings continued to show strong momentum and client success, with continued adoption of Mana, AI platform; Zero Distance marked its 2-year anniversary as a grassroots cultural movement for innovation with IFRS - INR strong client resonance, and the company's employee engagement continued to drive down attrition, especially with top performers.
Attrition declined during the quarter reflecting the company's focus on better employee engagement. Utilization during Q4 reached 82% which is the highest in Q4 over the past several years, said U. B. Pravin Rao, COO.
In FY2017, operating margins were steady as the company continued its sharp focus on operational efficiencies. Cash provided by operating activities during the year was robust and exceeded $2 billion, a new high, said M. D. Ranganath, CFO. The company's capital allocation policy is aimed at balancing the strategic and operational needs of the company as well as enhancing shareholder returns.
The board reviewed and approved a revised Capital Allocation Policy of the company after taking into consideration the strategic and operational cash requirements of the company in the medium term.
The key aspects of the Capital Allocation Policy are that the company's current policy is to pay dividends of up to 50% of post-tax profits of the financial year. Effective from financial year 2018, the company expects to payout up to 70% of the free cash flow of the corresponding financial year in such manner (including by way of dividend and/or share buyback) as may be decided by the board from time to time, subject to applicable laws and requisite approvals, if any.
In addition to the above, the board has identified an amount of upto Rs 13000 crore ($2 billion) to be paid out to shareholders during financial year 2018, in such manner (including by way of dividend and/or share buyback), to be decided by the board, subject to applicable laws and requisite approvals, if any.
The board appointed Ravi Venkatesan, Independent Director as Co-Chairman of the board.
Shares of other IT stocks also declined. HCL Technologies (down 2.42%), TCS (down 2.77%), Tech Mahindra (down 1.71%), and Wipro (down 1.2%) edged lower.
HealthCare Global Enterprises surged 10.33% to Rs 262.70 after a bulk deal of 2 lakh shares was executed on the scrip at Rs 240 per share in opening trade on BSE.
The market declined for the second straight day today, 13 April 2017. The Sensex shed 326.90 points or 1.09% in two trading sessions from its close of 29,788.35 on 31 March 2017. It has fallen 159.05 points or 0.53% in this month so far (till 13 April 2017). The barometer index has gained 2,834.99 points, or 10.64% in the calendar year 2017 (till 13 April 2017). From a 52-week low of 24,996.44 hit on 12 April 2016, the barometer index has risen 4,465.01 points or 17.86%. From a 52-week high of 30,007.48 hit on 5 April 2017, the barometer index is off 546.03 points or 1.81%. The Sensex is off 563.29 points or 1.87% from a record high of 30,024.74 hit on 4 March 2015.
On macroeconomic data front, industrial production declined 1.2% in February 2017 over February 2016, snapping 3.3% growth recorded in January 2017. The manufacturing sector's production dipped 2% in February 2017, mainly contributing to the dip in industrial production.
The inflation based on consumer price index (CPI) increased to 3.81% in March 2017 (new base 2012=100), compared with 3.65% in February 2017. The corresponding provisional inflation rate for rural area was 3.75% and urban area 3.88% in March 2017 as against 3.67% and 3.55% in February 2017. The core CPI inflation rose marginally to 4.79% in March 2017 from 4.75% in February 2017. The CPI and IIP data was announced after market hours yesterday, 12 April 2017.
Overseas, European stocks edged lower as investors digested US President Donald Trump's comments that he would prefer the Federal Reserve to keep interest rates low and suggested the dollar is too strong.
Meanwhile, Germany's inflation rate dropped notably in March, as expected, because of easing increases of energy and food prices. The annual inflation rate, measured by harmonized European Union standards, fell to 1.5% after hitting a 4 1/2-year high of 2.2% in February, the statistics office said.
Asian stocks were mixed. China's exports rose 14.8% in the first quarter from a year earlier in yuan terms, extending an 11% increase in the first two months, official data showed. Imports in the January to March period increased 31.1% in yuan terms from a year earlier, compared with a 34.2% rise in the first two months, the General Administration of Customs said in a release.
China's trade balance returned to a surplus in March, helped by renewed strength in exports after a surprise deficit in February. The balance between exports and imports came to a surplus of $23.93 billion in March, compared with a deficit of $9.15 billion in February, the General Administration of Customs said. Exports rose 16.4% in March from a year earlier, following a 1.3% drop in February. Imports continued to expand rapidly, growing 20.3% in March compared with February's 38.1% increase.
US stocks closed modestly lower yesterday, 12 April 2017 led by industrial and materials companies on another day of subdued trading ahead of the long Easter holiday weekend.
Meanwhile, US Secretary of State Rex Tillerson met with the Russian counterpart Sergei Lavrov to discuss the civil war in Syria and nuclear capabilities of North Korea. In recent days, the trading mood has been dented by heightened geopolitical tensions.
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