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Daily Market Commentary : 19th May 2016

Stock market in India extended losing streak to third consecutive trading session on 19th May 2016. After opening with a negative gap, indices kept losing ground gradually, the decline was led by capital goods, FMCG, energy, banking, metals and oil & gas stocks. Even the mid cap and small cap stocks were not spared. Selling aggravated as the day progressed, not a single sectoral index on the BSE ended in the green. Nifty closed with a loss of 87 points at 7,783 while Sensex ended with a loss of 305 points at 25,400.

Asian markets finished mixed as of the most recent closing prices. The Nikkei 225 gained 0.1%, while the Hang Seng led the Shanghai Composite lower. They fell 0.67% and 0.02% respectively. European markets are broadly lower today with shares in Germany off the most. The DAX is down 1.55%, while London’s FTSE 100 is off 1.38% and France’s CAC 40 is lower by 0.88%.

Most of the power stocks finished weak with Adani Power and Torrent Power leading the losses. Shares of Torrent Power nosedived 12% after the company’s net profit for the quarter ended March 2016went down by over 95%.

According to a leading financial daily, Tata Power’s100% subsidiary – Tata Power Renewable Energy (TPREL) has won two solar grid connected photovoltaic projects of 50 MW capacity each in Pavagada Solar Park in the Tumkur district of Karnataka.

The projects have been awarded through open category under the Jawaharlal Nehru National Solar Mission (JNNSM) Phase-II Batch-II Tranche-I under ‘State Specific Bundling Scheme’. TPREL has received the Letter Of Intent to develop the projects and will sign a 25 year Power Purchase Agreement with NTPC Vidyut Vyapar Nigam. Tata Power finished the day down by 2.1% on the BSE.

Meanwhile, shares of Power Grid Corporation of India finished the trading day on an optimistic note (up 0.6%) after it was reported that the company has operationalized its ultra-high voltage 1200 kV National Test Station (NTS) at Bina in Madhya Pradesh. This will help the company in increasing Power Carrying Capacity. Reportedly, the 1,200 kV station has five to six times more power carrying capacity than the 400 kV stations for transmission of power.

The power sector is going through troubled times. The State Electricity Boards (SEBs) that buy power from generators are reeling under huge losses and bloated debt. The government program ‘Ujwal Discom Assurance Yojana’ (UDAY) for SEBs holds hope to revitalize the power sector (Subscription Required). This is because unlike the previous bail-out packages that were provided for debt restructuring, the UDAY offers a framework for the long-term revamp of SEB operations.

USDINR trade today trading down 36 paise at 66.33 per US dollar

Out of 1,811 stocks traded on the NSE, 1,073 declined and 465 advanced today.

Top 5 Nifty Gainers: Lupin Ltd (1.43%), Wipro (0.70%), Tata Motors (0.70%), Maruti Suzuki (0.32%) and TCS (0.20%).

Top 5 Nifty Losers: Adani Ports & Sez (-6.14%), SBI (-4.05%), L&T (-3.24%), HDFC (-2.61%) and GAIL (-2.50%),

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Daily Market Commentary : 19th May 2016

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