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Indian Indices End Flat
Wed, 1 Jun Closing

After witnessing buying interest in the post-noon trading session, the Indian equity markets registered some losses and closed the day on a flattish note. Stocks from sectors such as IT, telecom, realty and FMCG were leading the gains, while banking stocks witnessed maximum selling pressure.

The BSE Sensex closed higher by about 46 points (up 0.2%). The NSE-Nifty ended higher by about 20 points (up 0.2%). The BSE Mid Cap ended lower by 0.3%, while the BSE Small Cap ended higher by 0.2%.

On the global front, most of the Asian indices closed the day on a negative note. Hong Kong's Hang Seng ended lower by 0.26%, while Japan's Nikkei 225 ended lower by 1.62%. The European indices also witnessed selling pressure. The FTSE 100 was down 0.72%, France's CAC 40 was down 0.83% and Germany's DAX was down 0.7%. The rupee was trading at Rs 67.45 to the dollar at the time of writing.

As per a leading financial daily, ONGC Videsh, a wholly owned subsidiary of Oil and Natural Gas Corporation (ONGC), has completed acquisition of 15% equity from Rosneft Oil Company, in JSC Vankorneft.

The deal was initially signed in September 2015. Back then, ONGC Videsh and Rosneft had signed agreement for ONGC Videsh to acquire not less than 15% shares in JSC Vankorneft, for a consideration of US$ 1,268 million.

Vankorneft is a company organized under the law of Russian Federation, which is the owner of Vankor Field and North Vankor license. Vankor is Rosneft's second largest field by production and accounts for 4% of Russian crude oil production. The daily peak production from the field is around 4,42,000 barrels of oil per day (bpd). With 15% shareholding, ONGC's share of daily oil production is said to be at about 66,000 bpd.

The above transaction is said to strengthen ONGC's presence in Russia and is consistent with its stated strategic objective of adding high quality international assets to its existing E&P portfolio.

ONGC is India's largest government-run corporation and produces about 70% of India's crude oil and natural gas. The company recorded an increase in crude oil production for the second consecutive year in 2015-16. The company produced 22.37 million tonnes (MT) of crude oil in FY16, marginally higher than 22.26 MT recorded in the previous fiscal. Also, the company last month announced that it is planning to explore as many as 17 shale gas and oil wells on both the east and west coasts. The company is going to invest around Rs 7 billion for the same.

The stock of ONGC closed the day lower by 0.2%.

Moving on to news from the banking space. As per an article in a leading financial daily, the Reserve Bank of India (RBI) has raised the cap on foreign shareholding in Axis Bank. RBI has raised foreign shareholding to 62%, from the earlier limit of 49%.

Reportedly, foreign institutional investors (FIIs) and registered foreign portfolio investors (RFPIs) can now invest up to 62% of the paid-up capital of Axis Bank under the Portfolio Investment Scheme (PIS).

This was moved by the board and was approved by the shareholders through a special resolution.

Axis Bank is the third largest bank in India. In its results for the fourth quarter ended March 2016, the bank reported 18.3% YoY and 11.8% YoY growth in net interest income and net profits respectively in FY16. Both the gross and net non-performing asset levels were higher in March 2016. The provision coverage ratio was at 72% at the end of March 2016 (82% before accumulated write-offs). The restructured advances were 2.3% of total loan book. To know our view on the stock of Axis Bank, you can read our detailed result analysis (subscription required).

The stock of Axis Bank closed the day down by 0.4%.

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May 14, 2021 03:37 PM