May 16, 2018 10:04 AM IST | Source: Moneycontrol.com
Market Live: Nifty extends losses, Sensex falls over 250 pts; Bank index dips 1%
The rupee crossed 68 against the US dollar, but the RBI intervention helped it to recover sharply from lows of 68.13 a dollar.
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Buzzing: Share price of Cyient gained 3.5 percent intraday as the company signed definitive agreement to acquire the remaining stake in its subsidiary company.
The company signed definitive agreement to acquire the remaining 49 percent stake in its subsidiary Cyient Insights to take the overall stake to 100 percent.
The consideration is paid in cash and said acquisition is likely to close in seven days and is subject to customary closing conditions.
Earnings Reaction: Public sector lender Syndicate Bank share price dropped nearly 6 percent after it reported a net loss of Rs 2,195.12 crore in the last quarter ended March 31, due to high bad loans that required higher provisioning.
The bank had posted a net profit of Rs 103.84 crore in the corresponding January-March quarter of 2016-17. In December quarter, there was a net loss of Rs 869.77 crore.
The bank's provisioning requirement for bad assets were raised by nearly three times during the March quarter to Rs 3,544.68 crore as against Rs 1,192.54 crore in the same period previous fiscal, it said in a regulatory filing.
Market Update: The market extended losses, with the Sensex falling more than 250 points on correction in banks stocks after disappointing earnings by PNB.
The Nifty Bank index is down more than 300 points while the Nifty Midcap slipped a percent.
Technology stocks outperformed as the rupee hit 68 against the US dollar, though RBI intervention helped it to recover sharply from lows of 68.13 a dollar.
The 30-share BSE Sensex was down 281.37 points at 35,262.57 and the 50-share NSE Nifty fell 92.90 points to 10,709.
About three shares declined for every share rising on the BSE.
Japanese Economy Shrinks: Japan's economy shrank for the first time in two years in the first quarter of the year amid weak consumption, official data showed.
The world's third-largest economy contracted by 0.2 percent quarter-on-quarter in the January-March period, compared with growth of 0.1 percent at the end of 2017, the Cabinet Office said.
Private consumption was flat after an uptick of 0.2 percent in the final quarter of last year. Private residential investment plunged another 2.1 percent after a 2.7 percent fall in the previous quarter.
Market Update: Benchmark indices extended losses in morning, with the Sensex falling 238.81 points to 35,305.13 and the Nifty declining 77.80 points to 10,724.10.
More than two shares declined for every share rising on the BSE.
Buzzing: Shares of Punjab National Bank (PNB) touched 52-week low of Rs 76.10, falling 12 percent in the early trade post weak numbers posted by the company for the quarter ended March 2018.
The company has reported a net loss of Rs 13,416.91 crore for the fourth quarter ending March 2018.
The profit was dragged by a three-fold surge in provisions towards bad loans, which was taken upfront during the quarter.
In the same quarter a year ago, the bank had turned around due to write-back in pension provisions to report a profit of Rs 261.9 crore as against a massive loss of Rs 5,367.1 crore in March-end quarter 2016.
Total hit to PNB on account of the Nirav Modi-scam is Rs 14,356.84 crore. This includes unauthorised letters of undertaking and domestic loan.
Due to high provisions, the capital adequacy ratio (CAR) dipped to 9.2 percent, below the minimum of 11.5 percent laid down by Basel-III norms.
The banks total net worth fell below the amount of non-performing loans.
Results Today: ITC, Tata Steel, Hindalco, TVS Motor, Aarti Drugs, NIIT, Alembic Pharma, Balkrishna Paper Mills, Brigade Enterprises, Welspun India, Century Plyboards, DB Corp and Praj Industries will announce their quarterly earnings today.
Buzzing: Indiabulls Real Estate share price gained more than 6 percent ahead of board meeting to consider share buyback proposal.
The real estate company informed exchanges that a meeting of the board of directors will be held on May 18 to consider the proposal of buyback of equity shares.
It further said in terms of SEBI regulations and Code of Conduct for Prevention of Insider Trading of the company, the trading window for dealing in securities of the company has been closed and will remain closed till May 20, 2018.
Market Opening: Benchmark indices opened sharply lower, following weak trend in global stocks and uncertainty over formation of government in Karnataka.
The 30-share BSE Sensex was down 166.25 points at 35,377.69 and the 50-share NSE Nifty declined 54.20 points to 10,747.70.
Nifty Bank fell 184 points as PNB plunged 10 percent.
Lupin, Power Grid, Tata Steel, Tata Motors, TCS and Tech Mahindra were early gainers.
Titan Company, Bajaj Finserv, ICICI Bank, Axis Bank, Cipla, HPCL and SBI were under pressure.
Nifty Midcap was down 83 points. Reliance Communications, Jaypee Infratech, MRPL, Shakti Pumps, PI Industries, Syndicate Bank, Allahabad Bank, Karnataka Bank, Bajaj Hindusthan and IDBI Bank were down up to 8 percent.
Endurance, Crompton Consumer, Indiabulls Real Estate, Bhushan Steel, IRB Infrastructure and Ashok Leyland gained up to 7 percent.
Rupee Update: The Indian rupee recovered sharply after opening 7 paise lower, trading higher by 18 paise at 67.89 against the US dollar.
Market Outlook: Abhinav Gupta , President, Capital Markets, Share India Securities said index seems to be at the cross roads as Tuesday's intraday reversal could be beginning of further corrective action. Besides, weaker global cues and sluggish rupee added to the subdued sentiments on the bourses. Brace up for more volatility ahead. Below 10,780, Nifty would test sup of 10,720-10,680. Resistance is at 10,880.
Rupee Update: The Indian rupee slipped further on Wednesday. It has opened lower by 7 paise at 68.14 per dollar.
In the previous session rupee ended at 68.07 (down 56 paise from Monday's close), a lowest level since January 2017 post BJP fell short of clear majority in Karnataka.
Anand James, Chief Market Strategist at Geojit Financial Services said, "With food and fuel prices pushing CPI higher, rupee’s weakness has hastened, sinking to 16-month low. Political uncertainty after the Karnataka elections also did not help."
"RBI’s recent minutes had also revealed a hawkish bias, and the firm inflation now agrees with the same. To this end, oil’s trajectory for the rest of the month and trade balance figures for April would be crucial as market weighs RBI’s take on the rates," he added.
PNB's NPAs are now more than its net worth: The country’s second-largest state-owned lender Punjab National Bank achieved a dubious distinction. It became the first major bank in the country whose net worth fell below the amount of non-performing loans on its books.
As on March 31, the bank had net non-performing loans totaling over Rs 48,000 crore on its books, against a net worth of around Rs 41,000 crore.
To be sure, PNB is not the first bank in the country to have witnessed this kind of misfortune. Smaller public sector banks like Oriental Bank of Commerce, Dena Bank, Union Bank of India and UCO Bank, among others, have already crossed that bridge.
But the fact that a lender the size of PNB, which has loans of around Rs 4.33 lakh crore on its books, has deteriorated to such an extent that it has more bad loans than it is worth is a point of concern.
Markets@Moneycontrol: Nifty likely to open lower; ITC, JSW Steel, Tata Steel to be in focus
The market is likely to open sharply lower on Wednesday, tracking global weakness. The Nifty50 closed down 4.70 points at 10,801.90 on Tuesday.
Moneycontrol News
Benchmark indices were mildly lower in pre-opening trade, tracking weakness in global stocks and following trend in SGX Nifty futures.
The 30-share BSE Sensex was down 78.53 points at 35,465.41 and the 50-share NSE Nifty fell 35.70 points to 10,766.20.
Eicher Motors, Allahabad Bank, PNB and Andhra Bank were under pressure.
The SGX Nifty futures indicated weak opening for the market as it was trading down 67.50 points at 10,758 on the Singaporean Stock Exchange.
Most Asian stocks traded lower following a down day for Wall Street as the US 10-year Treasury yield rose to 3.09 percent overnight.
US stocks dropped sharply on Tuesday after Home Depot reported quarterly sales that fell short of Wall Street's expectations and interest rates breached new highs, reports CNBC.
The Dow Jones industrial average fell 193 points to close at 24,706.41 while the S&P 500 declined 0.7 percent to 2,711.45 and the Nasdaq composite dropped 0.8 percent to 7,351.63.