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Market settles on a flat note

Date : 19 May 2017 - 16:45

 

A divergent trend was witnessed as the barometer index, the S&P BSE Sensex, settled with small gains while the Nifty 50 index settled a tad lower. The barometer index, the S&P BSE Sensex, rose 30.13 points or 0.1% to settle at 30,464.92. The Nifty 50 index fell 1.55 points or 0.02% to settle at 9,427.90. Gains triggered by the GST Council finalising rates for goods and services tax (GST) and positive global stocks were mostly offset by profit booking.

Domestic stocks saw a gap-up opening boosted by the goods and services tax (GST) Council finalising rates and backed the 1 July 2017 deadline for rolling out the unified indirect tax. Key indices extended early gains and hit fresh intraday high with Sensex scaling record high in morning trade. Stocks slipped into the red in early afternoon trade after trimming gains in mid-morning trade. Market moved in a small range near the flat line thereafter.

The Sensex rose 30.13 points or 0.1% to settle at 30,464.92, its highest closing level since 17 May 2017. The Sensex rose 277.56 points or 0.91% at the day`s high of 30,712.35 in morning trade, a record high. The index fell 96.27 points or 0.31% at the day`s low of 30,338.52 in early afternoon trade, its lowest level since 15 May 2017.

The Nifty 50 index fell 1.55 points or 0.02% to settle at 9,427.90, its lowest closing level since 12 May 2017. The Nifty rose 76.30 points or 0.8% at the day`s high of 9,505.75 in morning trade, its highest level since 17 May 2017. The index fell 38.70 points or 0.41% at the day`s low of 9,390.75 in early afternoon trade, its lowest level since 12 May 2017.

The S&P BSE Mid-Cap index fell 0.72%. The S&P BSE Small-Cap index fell 0.88%. Both these indices underperformed the Sensex.

The market breadth, indicating the overall health of the market, was weak. On the BSE, 1,789 shares fell and 957 shares rose. A total of 165 shares were unchanged.

The total turnover on BSE amounted to Rs 4132.40 crore, lower than the turnover of Rs 4311.27 crore registered during the previous trading session.

Amomg the sectoral indices on BSE, the S&P BSE Consumer Durables index (down 1.04%), the S&P BSE Consumer Discretionary Goods & Services index (down 0.94%), the S&P BSE Oil & Gas index (down 0.8%), the S&P BSE IT index (down 0.7%), the S&P BSE Energy index (down 0.65%), the S&P BSE Auto index (down 0.59%), the S&P BSE Basic Materials index (down 0.59%), the S&P BSE Teck index (down 0.56%), the S&P BSE Industrials index (down 0.43%), the S&P BSE Healthcare index (down 0.31%), the S&P BSE Finance index (down 0.27%), the S&P BSE Capital Goods index (down 0.18%), the S&P BSE Metal index (down 0.04%) and the S&P BSE Utilities index (down 0.01%), underperformed the Sensex.

The S&P BSE Power index (up 0.18%), the S&P BSE Telecom index (up 0.28%), the S&P BSE Bankex (up 0.39%) and the S&P BSE FMCG index (up 1.86%), outperformed the Sensex. The S&P BSE Realty index rose 0.1%, matching the Sensex`s gains in percentage terms.

Index heavyweight and cigarette major ITC jumped 2.82% to Rs 285.90. The stock had hit a high of Rs 295.50 in intraday trade, which is also a record high. The stock had hit a low of Rs 280.35 in intraday trade.

Many FMCG stocks gained on optimism the new goods and services tax (GST) rates reportedly announced by the government will reduce the tax incidence from the current level.

Hindustan Unilever (up 2.04%), Britannia Industries (up 0.95%), Colgate-Palmolive (India) (up 3.59%), Dabur India (up 1.12%), Godrej Consumer Products (up 1.51%), Marico (up 1.32%), Nestle India (up 0.04%) and Tata Global Beverages (up 1.53%) rose.

Procter & Gamble Hygiene and Health Care (down 0.51%), Jyothy Laboratories (down 1.49%), Bajaj Corp (down 0.67%) and GlaxoSmithkline Consumer Healthcare (down 0.23%) fell.

Most private bank stocks saw rose. Yes Bank (up 2.03%), HDFC Bank (up 0.1%), RBL Bank (up 0.75%), ICICI Bank (up 0.03%) and Axis Bank (up 1.83%) rose. Kotak Mahindra Bank (down 0.59%) and IndusInd Bank (down 0.69%) declined.

Most PSU bank stocks declined. Syndicate Bank (down 2.19%), Corporation Bank (down 2.5%), UCO Bank (down 2.11%), Punjab National Bank (down 2.02%), IDBI Bank (down 1.57%), Andhra Bank (down 1.06%), Canara Bank (down 0.22%), Bank of India (down 0.28%) and Union Bank of India (down 0.43%) dropped. Bank of Baroda (up 0.43%) rose.

State Bank of India rose 1.72% after net profit rose 122.72% to Rs 2814.82 crore on 7.83% increase in total income to Rs 57720.10 crore in Q4 March 2017 over Q4 March 2016. The result was announced during trading hours today, 19 May 2017.

Gross non-performing assets (NPAs) stood at Rs 112342.99 crore as on 31 March 2017 as against Rs 108172.32 crore as on 30 December 2016 and Rs 98172.80 crore as on 31 March 2016.

The ratio of gross NPAs to gross advances stood at 6.9% as on 31 March 2017 as against 7.23% as on 31 December 2016 and 6.5% as on 31 March 2016. The ratio of net NPAs to net advances stood at 3.71% as on 31 March 2017 as against 4.24% as on 31 December 2016 and 3.81% as on 31 March 2016.

The bank`s provisions and contingencies fell 10.88% to Rs 11740.09 crore in Q4 March 2017 over Q4 March 2016. Of this, provisions for NPAs fell 9.44% to Rs 10992.92 crore in Q4 March 2017 over Q4 March 2016. Provision coverage ratio of the bank was at 65.95% as on 31 March 2017.

IT stocks declined. Infosys (down 0.4%), Wipro (down 0.82%), HCL Technologies (down 0.28%), Oracle Financial Services Software (down 2.36%), Tech Mahindra (down 1.41%), Hexaware Technologies (down 0.8%) declined.

TCS slipped 1.08%. TCS announced that it has collaborated with Qualcomm incorporated through its Qualcomm Wireless Reach initiative and FHI 360 to implement a digital solution that enriches lives of the fishing community in Senegal, leveraging the transformative power of wireless technologies. The announcement was made after market hours yesterday, 18 May 2017.

Grasim Industries fell 0.67% after consolidated profit before exceptional item rose 2.38% to Rs 775 crore on 5.43% increase in revenue to Rs 11140 crore in Q4 March 2017 over Q4 March 2016. The result was announced during trading hours today, 19 May 2017.

Grasim Industries` consolidated EBITDA (earnings before interest, taxes, depreciation and amortization) rose 4.44% to Rs 2142 in Q4 March 2017 over Q4 March 2016.

Shares of Housing and Urbanevelopment Corporation (HUDCO) settled at Rs 72.50 on BSE, a premium of 20.83% over the initial public offer price of Rs 60. The stock had debuted at Rs 73.45, a premium of 22.42% to the initial public offer (IPO) price. The stock had hit a high of Rs 77.80 and a low of Rs 70.55. On BSE, 3.02 crore shares were traded on the counter. HUDCO is a wholly owned public sector undertaking (PSU) company, providing loans for housing and urban infrastructure projects in India.

Motherson Sumi Systems rose 3.57% after consolidated net profit rose 12% to Rs 475 crore on 15% increase in revenue to Rs 11100 crore in Q4 March 2017 over Q4 March 2016. The result was announced during trading hours today, 19 May 2017.

Motherson Sumi Systems` consolidated EBITDA (earnings before interest, taxes, depreciation and amortization) rose 25% to Rs 1,241 crore in Q4 March 2017 over Q4 March 2016.

The company said its total order book stood at Rs 94900 crore as on 31 March 2017. Meanwhile, the company said that its board has recommended issuing 1 bonus shares against the 2 existing shares, subject to the approval of the shareholders.

Indian Hume Pipe Company rose 3.65% after net profit spurted 252.5% to Rs 33.24 crore on 64% increase in net sales to Rs 488.01 crore in Q4 March 2017 over Q4 March 2016. The result was announced after market hours yesterday, 18 May 2017.

Automotive Axles jumped 4.77% after net profit spurted 58.9% to Rs 17.27 crore on 12.6% increase in net sales to Rs 351.09 crore in Q4 March 2017 over Q4 March 2016. The result was announced after market hours yesterday, 18 May 2017.

Meanwhile, the Goods and Services Tax (GST) Council today, 19 May 2017 finalised tax rates for services under the GST regime, scheduled to kick-in from 1 July 2017. Healthcare and education would be exempt from GST. The tax rate on gold has not been finalised yet and will be finalised at the next meeting of the GST Council on 3 June 2017.

The highest tax rate of 28% will apply for luxury hotel services. Transport services will be taxed at 5%. Telecom services will be taxed at 18%. Banking and financial services will be taxed at 18%.

The GST Council in its meeting yesterday, 18 May 2017 broadly approved the GST rates for goods at nil rate, 5%, 12%, 18% and 28% to be levied on certain goods. The Council has also broadly approved the rates of GST Compensation Cess to be levied on certain goods.

Items such as cereals, which were taxed earlier at 5%, will now be zero-rated. Coffee, sugar, tea and edible oil will attract a lower GST rate of 5%. Capital goods, a key asset for the manufacturing sector, will be taxed at 28%. Several daily-use items such as hair oil, toothpaste and soap have been kept in the 18%-slab instead of at 28%.

Tax incidence on cars will remain the same. All cars will be taxed at 28% and a 1%, 3% or 15% cess is likely to be levied based on current tax incidence. Motorcycles above 350cc engine capacity will face a cess of 3%.

On 7 April 2017, it passed the five GST bills - Central GST, State GST, Integrated GST, Compensation Bill and the Union Territories GST.

Overseas, European stocks were trading higher as German producer prices posted their strongest annual gain in over five years in April, as higher metals prices drove up the costs for intermediate goods, Germany`s statistics office, Destatis, said. Producer prices jumped 3.4% from April last year, which marks the strongest increase since December 2011.

Asian stocks gained after a sluggish start on strong US economic data overnight as some risk appetite returned despite caution over political turbulence in the United States.

US stocks closed higher yesterday, 18 May 2017 following the previous session`s brutal selloff, as positive data offered a glimmer of optimism and technology provided an additional fillip to the market.

Investors were still watching Washington closely after reports the US President tried to interfere with an investigation into former National Security Adviser Michael Flynn`s ties with Russia. In one recent development, former FBI head Robert Mueller has now been named as special counsel to investigate potential collusion between the Trump campaign and Russia.

US economic data released yesterday, 18 May 2017 showed that initial jobless claims fell by 4,000 in the latest week, the second-lowest reading of the economic recovery, which began eight years ago. Continuing claims were at their lowest level since 1988. Separately, the Philadelphia Fed manufacturing index jumped to a reading of 38.8 in May from 22 in April.

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