Sensex tanks 238 points after Yeddyurappa announces farm loan waivers in Karnataka; ITC, Bharti Airtel top losers
Markets at Close
The Sensex and Nifty slipped on Thursday, hurt by financials, while doubts whether the Bharatiya Janata Party (BJP) could prove its majority in the southern state of Karnataka weighed on investor sentiment. State BJP president B S Yeddyurappa was sworn in as chief minister on Thursday morning even though his party fell short of an outright majority. He has now 15 days to prove his majority in the state legislative assembly.
The state election had a temporary effect on the markets, but macro-economic factors such as the rise in crude oil prices and inflation will have a bigger say in the medium term, said analysts. The Brent crude surged above $80 for the first time since November 2014.
Reacting to this, the Sensex ended at 35,149, down 238.76 points, while the broader Nifty50 closed at 10,682, down 58.40 points.
The recent drubbing Punjab National Bank share price has received has pushed its market value down so much that it quotes below the market capitalisation of its subsidiary PNB Housing Finance. PNB's market cap has halved since it was hit by a massive banking fraud allegedly carried out by diamantaire Nirav Modi and his uncle Mehul Choksi. The market capitalisation of PNB Housing Finance stood at Rs 21,199.07 crore. The m-cap of Punjab National Bank was at Rs 20,842.33 crore. With this, PNB Housing Finance has become more valuable than its parent company PNB.
Hindustan Unilever and ITC both are out with their March quarter results, and their respective stocks have reacted to their earnings. The effect has been more positive for HUL than ITC as the former is inching closer to the market capitalisation of latter to become the fourth largest company on Dalal Street. Just last month, HUL entered the top five club, beating HDFC and Maruti Suzuki. It now looks set to overtake ITC too.
Yeddyurappa Takes Oath
BJP leader BS Yeddyurappa took the oath as the Chief Minister of Karnataka this morning at Raj Bhavan. The Supreme Court early on Thursday after a midnight hearing refused to stall the swearing-in of Yeddyurappa as Karnataka's new Chief Minister. The court, however, sought the communications which Yeddyurappa had written to Karnataka Governor informing him his election as BJP legislature party. The next hearing will take place tomorrow at 10 am.
Asian markets today
Asian shares held steady on Thursday, while the euro struggled near five-month lows set a day earlier following a report that Italian populist parties trying to form a coalition could ask the European Central Bank to forgive 250 billion euros of debt. In equity markets, MSCI’s broadest index of Asia-Pacific shares outside Japan was little changed, while Japan’s Nikkei gained 0.4 percent and South Korea’s KOSPI rose 0.4 percent. Italian stocks tumbled 2.3 percent while Italy’s10-year bond yield jumped nearly 19 basis points to 2.13 percent.
Wall Street on Wednesday
Retail and technology stocks led Wall Street higher on Wednesday and the small-cap Russell 2000 hit a record peak, even as a rise in U.S. bond yields to an almost seven-year high suggested more competition for equities and investors fretted over geopolitics. The Dow Jones Industrial Average rose 62.52 points, or 0.25 percent, to 24,768.93, the S&P 500 gained 11.01 points, or 0.41 percent, to 2,722.46, and the Nasdaq Composite added 46.67 points, or 0.63 percent, to 7,398.30.
1) JK Lakshmi Cement (Buy)
Target: Rs 395
Stoploss: Rs 380
- Profit comes in at Rs 32.7 crore from Rs 19.7 crore
- Income increased from Rs 897 crore to Rs 807 crore
- EBITDA at Rs 127 crore from Rs 98 crore
- EBITDA margin at 14.2 per cent from 12.1 per cent
- Approval to raise Rs 500 crore funds
The Sensex and Nifty stayed on the back foot for the second straight session today as post-poll uncertainty in Karnataka and flaring up of tensions on the Korean peninsula sapped investor optimism. Banking stocks were battered after scam-scarred Punjab National Bank posted a record loss for the March quarter amid the government tightening the screws on some senior public sector bankers.
The Sensex closed at 35,387.88, down by 156.06 points, or 0.44 per cent. The Nifty settled 60.75 points, or 0.56 per cent lower at 10,741.10.
Foreign portfolio investors (FPIs), who have been net sellers in the past few sessions, sold shares worth a net Rs 518.47 crore, while domestic institutional investors (DIIs) bought shares worth Rs 531.33 crore yesterday, according to provisional data.