Equity

Benchmarks decline for 2nd straight session
(11-Feb-2019, 16:35 Hours IST)  

Key equity indices declined for second straight session due to selling pressure in index pivotals. Investors worried over global uncertainties amid lingering fears over US-China trade talks and global growth.

The Sensex fell 151.45 points or 0.41% to settle at 36,395.03, its lowest closing level since 31 January 2019. The index rose 41.93 points, or 0.11% at the day's high of 36,588.41. The index fell 246 points, or 0.67% at the day's low of 36,300.48.

The Nifty 50 index fell 54.80 points or 0.50% to settle at 10,888.80, its lowest closing level since 31 January 2019. The index fell 12.70 points, or 0.12% at the day's high of 10,930.90. The index fell 86.50 points, or 0.79% at the day's low of 10,857.10.

Domestic stocks drifted lower in early trade as most Asian stocks declined. Key benchmark indices extended losses and hit intraday low in morning trade. Stocks cut losses in mid-morning trade. Key indices recovered further ground in early afternoon trade. Indices traded near day's low in afternoon trade. Key equity indices hovered in negative zone in mid-afternoon trade.

The market breadth, indicating the overall health of the market, was weak. On the BSE, 835 shares rose and 1714 shares fell. A total of 163 shares were unchanged.

Broader market tumbled. The S&P BSE Mid-Cap index fell 1.47%. The S&P BSE Small-Cap index fell 1.51%.

Among the sectoral indices on BSE, the S&P BSE Healthcare index (down 1.88%), the S&P BSE Energy index (down 1.53%) and the S&P BSE Capital Goods index (down 1.46%), underperformed the Sensex. The S&P BSE Teck index (up 0.25%), the S&P BSE IT index (up 0.2%) and the S&P BSE FMCG index (down 0.37%), outperformed the Sensex.

Mahindra & Mahindra (down 5.31%), ONGC (down 3.14%), Bajaj Finance (down 1.92%), State Bank of India (down 1.84%) and Hero MotoCorp (down 1.68%), were the major Sensex losers.

Power Grid Corporation of India (up 1.36%), HCL Technologies (up 0.95%), Tata Motors (up 0.76%), Kotak Mahindra Bank (up 0.71%) and IndusInd Bank (up 0.62%), were the major Sensex gainers.

Tata Steel rose 2.31% after consolidated net profit rose 54.33% to Rs 1753.07 crore on 22.33% rise in net sales to Rs 40457.11 crore in Q3 December 2018 over Q3 December 2017. Consolidated adjusted earnings before interest, tax, depreciation and amortization (EBITDA) rose 27% to Rs 7,225 crore in Q3 December 2018 over Q3 December 2017. The result was announced after market hours on Friday, 8 February 2019.

Commenting on the results, CEO & managing director TV Narendran said despite a sharp drop in international steel prices, Tata Steel was able to maintain its overall realizations and increase its volumes significantly in India. The integration of Tata Steel BSL continues and its 5 MTPA expansion at Tata Steel Kalinganagar is also making good progress. The company is also looking forward to enhancing its long products and downstream capability through the acquisition of the 1 mtpa steel business of Usha Martin.

The phase II review of the TSE ThyssenKrupp JV is ongoing and the company is closely working with the European Commission to facilitate the same. In line with the company's strategy of divesting non-core assets and focusing on India, the firm has announced a divestment of a 70% stake in its SEA business and it continues to work on exploring similar opportunities across its portfolio.

Dr Reddy's Laboratories dropped 5.60%. Dr Reddy's Laboratories announced that the audit of its formulations manufacturing plant - 3 at Bachupally, Hyderabad by the US Food and Drug Administration (USFDA) completed on 8 February 2019. The company has been issued a Form 483 with 11 observations. The company said it will address them comprehensively within the stipulated timeline. The announcement was made after market hours on Friday, 8 February 2019.

Reliance Industries (RIL) fell 1.87%. RIL announced that Reliance Brands (RBL), a subsidiary of the company, has acquired a further stake of 2.5% in Future101 Design (Future101) on 7 February 2019, for a consideration of Rs. 1.99 crore, taking its total stake in Future101 to 15%.

Reliance Retail Ventures (RRVL), a subsidiary of the company has acquired a further stake of 9.44% on 7 February 2019 in Genesis Colors (GCL), for a consideration of Rs 45 crore taking its total stake in GCL to 29.07% on the enhanced capital of GCL. Consequently, the stake of RBL in GCL shall be 43.66% and the aggregate equity shareholding of RRVL and RBL in GCL stands at 72.73%.

The acquisitions will help the company to strengthen its footage in the retail industry and support its long term strategy to enhance its value in the retail industry. No regulatory approvals were required for the said acquisition of shares. The investment does not fall within related party transaction for the Company and none of RIL's promoter / promoter group / group companies have interest in the above entities. The announcement was made after market hours on Friday, 8 February 2019.

Tata Consultancy Services (TCS) rose 0.14%. TCS during market hours today announced a global partnership with JDA Software, the leading provider of end-to-end supply chain and retail solutions, to build next-generation cognitive solutions, and offer consulting and system integration services around digital technologies, to optimize supply chains for customers worldwide

Bharti Airtel shed 0.03%. The company announced the signing of an agreement by its subsidiary, Airtel Networks Kenya (Airtel Kenya) with Telkom Kenya (Telkom Kenya) for merging their respective mobile, enterprise and carrier services businesses in Kenya to operate as - 'Airtel- Telkom'. The finalisation and closure of the transaction is subject to approval by the relevant authorities.

As per the agreement, both the partners will combine their operations in Kenya and establish an entity with enhanced scale, operational efficiency and strategic brand presence. The entity will invest in networks to further accelerate roll out of future technologies. The enterprise and carrier services businesses should benefit from a larger fibre footprint and an increased number of enterprise customers - including both large corporations and SMEs who would have access to a diverse portfolio of world-class solutions. The announcement was made after market hours on Friday, 8 February 2019.

Bharat Petroleum Corporation (BPCL) fell 1.13%. BPCL's net profit declined 76.90% to Rs 495.14 crore on 30.59% rise in net sales to Rs 79168.84 crore in Q3 December 2018 over Q3 December 2017. The result was announced after market hours on Friday, 8 February 2019.

In the foreign exchange market, the rupee edged higher against the dollar. The partially convertible rupee was hovering at 71.1875, compared with its close of 71.31 during the previous trading session.

In the global commodities markets, Brent for April 2019 settlement was up 10 cents at $62.20 a barrel. The contract rose 42 cents, or 0.76% to settle at $62.10 a barrel during the previous trading session.

Overseas, European stocks were trading higher Monday, with market participants looking ahead to a fresh round of US-China trade talks this week. The latest set of trade talks will take place in Beijing from Monday. It comes after discussions in Washington last week concluded without a deal. Both sides are trying to secure a comprehensive trade agreement ahead of a March 1 deadline when U.S. tariffs on $200 billion worth of Chinese imports are scheduled to increase to 25% from 10%.

In Europe, with Brexit just 47 days away, the British government has reportedly asked lawmakers on Sunday to give Prime Minister Theresa May more time to rework her divorce deal with the European Union. Communities Secretary James Brokenshire said Parliament would get to pass judgment on May's Brexit plan no later than February 27. Britain is due to leave the EU on March 29, but Parliament has rejected May's divorce bill, leaving the prime minister to seek changes from the EU.

Asian stocks were mixed on Monday as concerns over global growth and US-China trade talks kept investors cautious. Markets in China and Taiwan, reopened after a weeklong Lunar New Year break. Japanese markets were closed for a holiday.

US stocks bounced off intraday lows to close mostly higher Friday as late afternoon buying offset pressure from lingering fears over U.S-China trade tensions.

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