Key benchmark indices extended intraday losses and hit fresh intraday low in mid-afternoon trade as European stocks declined and as trading in US index futures indicated a lower opening of US stocks later in the global day as US lawmakers failed to come up with a longer-term solution for the country's finances after sealing a last-minute deal on Wednesday, 16 October 2013, to temporarily raise the nation's debt ceiling and reopen government after a 16-day shutdown. The barometer index, the S&P BSE Sensex, hit its lowest level in nearly a week. The 50-unit CNX Nifty hit one-week low. The market breadth, indicating the overall health of the market, turned negative from positive in mid-afternoon trade. The Sensex was down 112.44 points or 0.55%, off 194.62 points from the day's high and up 31.02 points from the day's low.
Index heavyweight Reliance Industries (RIL) pared intraday gain. Bajaj Auto rose on high volumes after the company on Wednesday, 16 October 2013, reported better-than-expected Q2 results. Axis Bank fell in volatile trade as the private sector bank's gross non-performing assets rose in Q2 September 2013.
The market slipped into the red after a positive start triggered by higher Asian stocks. A bout of volatility was witnessed as key benchmark indices recouped entire initial losses in morning trade. Intraday volatility continued as key benchmark indices trimmed gains after hitting fresh intraday high in mid-morning trade. Key benchmark indices alternately swung between positive and negative zone near the flat line in early afternoon trade. Key benchmark indices extended intraday losses and hit fresh intraday low in mid-afternoon trade as European stocks declined and as trading in US index futures indicated a lower opening of US stocks later in the global day as US lawmakers failed to come up with a longer-term solution for the country's finances after sealing a last-minute deal on Wednesday, 16 October 2013, to temporarily raise the nation's debt ceiling and reopen government after a 16-day shutdown.
Foreign institutional investors (FIIs) bought shares worth a net Rs 1136.23 crore on Tuesday, 15 October 2013, as per provisional data from the stock exchanges.
At 14:16 IST, the S&P BSE Sensex was down 112.44 points or 0.55% to 20,435.18. The index gained 82.18 points at the day's high of 20,629.80 in mid-morning trade. The index declined 143.46 points at the day's low of 20,404.16 in mid-afternoon trade, its lowest level since 11 October 2013.
The CNX Nifty was down 38.75 points or 0.64% to 6,050.30. The index hit a low of 6,040.65 in intraday trade, its lowest level since 10 October 2013. The index hit a high of 6,110.75 in intraday trade.
The market breadth, indicating the overall health of the market, turned negative from positive in mid-afternoon trade. On BSE, 1,212 shares declined and 1,186 shares gained. A total of 137 shares were unchanged.
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The total turnover on BSE amounted to Rs 1469 crore by 14:20 IST compared to Rs 1196 crore by 13:20 IST.
TCS (down 4.24%), Tata Motors (down 4.02%) and L&T (down 3.21%) dropped.
Index heavyweight Reliance Industries (RIL) rose 1.57% to Rs 880.50. The stock hit high of Rs 887.70 and low of Rs 865.25. The company early this week reported 1.5% growth in net profit to Rs 5490 crore on 14.2% growth in turnover to a record Rs 106523 crore in Q2 September 2013 over Q2 September 2012. Net profit rose 2.6% on 17.6% growth in turnover in Q2 September 2013 over Q1 June 2013.
RIL's gross refining margin (GRM) declined to $7.7 per barrel in Q2 September 2013, from $8.4 a barrel in Q1 June 2013 and $9.5 a barrel in Q2 September 2012.
Bajaj Auto gained 2.56% to Rs 2,178.60 on high volume of 11.91 lakh shares, sharply higher than an average daily volume of 28,236 shares in the past one quarter. Three block deals were executed on the counter at Rs 2,175 per share on BSE today, 17 October 2013. A block deal of 1.37 lakh shares was struck at 10:21 IST. Another block deal of 3.62 lakh shares was executed at 10:21 IST. Third block deal of 5 lakh shares was hit at 10:38 IST.
Bajaj Auto's net profit rose 13% to Rs 837 crore on 3% rise in turnover to Rs 5299 crore in Q2 September 2013 over Q2 September 2012. The company announced Q2 result on Wednesday, 16 October 2013. The net profit of Rs 837 crore is the highest ever quarterly profit recorded by the firm so far. The company recorded an all time high operating EBITDA (earnings before interest, taxation, depreciation and amortization) of Rs 1204 crore in Q2 September 2013. The EBITDA is calculated before taking into account mark-to-market foreign exchange loss, Bajaj Auto said. EBITDA margin edged up to 23.1% in Q2 September 2013 from 21.3% in Q1 June 2013 and 18.7% in Q2 September 2012.
After payment of dividend and cash theron amounting to Rs 1518 crore during Q2 September 2013, as on 30 September 2013, surplus cash and cash and cash equivalents stood at Rs 6516 crore. As on 30 June 2013, surplus cash and cash and cash equivalents stood at Rs 6391 crore.
The company said that the outperformance in margins can be attributed to factors including transforming itself into an Indian multi national company with international business contributing 40% of total revenue. Over the last five years, strategic initiatives taken in order to enter into difficult markets like Africa is yielding rich dividends. The benefits are now further enhanced with rupee depreciation, it said. The company has focused on high margin products with 75% of Bajaj Auto's revenue generated by business verticles which operate on EBITDA margins in excess of 20%. The company also said that it operates on an essentially variable cost structure with fixed cost, including depreciation, interest and even employee cost was under 8%. This protects the company from any slowdown in demand as being witnessed in the domestic market over last few quarters.
NMDC rose 0.15%, NMDC during market hours today, 17 October 2013, said that its total iron-ore sales rose 8.09% to 13.75 million tonnes during the period April-September 2013 over the corresponding previous year period. Production rose 5.31% to 12.89 million tonnes during the period April-September 2013 over the corresponding previous year period.
Axis Bank fell 0.94% to Rs 1072.40, with the stock turning volatile after declaring Q2 result during market hours today, 17 October 2013. The stock hit a high of Rs 1,108 and low of Rs 1,067 so far during the day. The bank's net profit rose 21.25% to Rs 1362.31 crore on 13.22% growth in total income to Rs 9375.08 crore in Q2 September 2013 over Q2 September 2012.
Axis Bank's other income which includes fee income and other related sources of revenue, rose 10.86% to Rs 1766.09 crore in Q2 September 2013 over Q2 September 2012. Axis Bank said that other income for Q2 September 2013 includes gain of Rs 281.62 crore on repatriation of accumulated profits of overseas operations and a loss of Rs 114.25 crore on transfer of government securities with book value of Rs 7566.36 crore from Available for Sale category to Held to Maturity category at a value of Rs 7452.11 crore in according with the Reserve Bank of India (RBI) guidelines.
Axis Bank's provisions and contingencies jumped 34.95% to Rs 687.49 crore in Q2 September 2013 over Q2 September 2012. Provisions and contingencies dropped 3.47% in Q2 September 2013 over Q1 June 2013.
Axis Bank's gross non-performing assets (NPA) stood at Rs 2734.47 crore as on 30 September 2013, higher than Rs 2489.68 crore as on 30 June 2013 and Rs 2191.01 crore as on 30 September 2012. The ratio of gross NPA to gross advances stood at 1.19% as on 30 September 2013, higher than 1.1% each as on 30 June 2013 and as on 30 September 2012. The ratio of net NPA to net advances stood at 0.37% as on 30 September 2013, higher than 0.35% as on 30 June 2013 and 0.33% as on 30 September 2012.
The bank's Capital Adequacy Ratio (CAR) as per Basel III norms stood at 15.85% as on 30 September 2013, compared with 15.87% as on 30 June 2013.
In the foreign exchange market, the rupee edged higher against the dollar on speculation the budget debate that threatened a US default will prompt the US Federal Reserve to postpone slowing stimulus. The partially convertible rupee was hovering at 61.45, stronger than its close of 61.835/845 on Tuesday, 15 October 2013. Indian financial markets were closed on Wednesday, 16 October 2013, on account of Bakri Id.
Reserve Bank of India Governor Raghuram Rajan on Tuesday, 15 October 2013, said that the economy will pick up by the year-end thanks to the start-up of billions of dollars worth of stalled resource projects and a good monsoon season that will bolster agricultural production. He said about half of the $115 billion worth of stalled projects had been cleared. Rajan also said that the question of using interest rates to address inflation is more complicated in India than in the United States. "In the US you know there is a large interest rate-sensitive sector that is going to be affected when you raise interest rates ... But what if you have a large part of the country that is not connected directly to the financial system?" he said, referring to India's massive rural population.
The World Bank on Wednesday, 16 October 2013, sharply lowered its forecast for India's economic growth to 4.7% from 6.1% for the current fiscal year, citing a sharp slowdown in manufacturing and investment as well as negative business confidence. In a report released on Wednesday, the World Bank said that high headline inflation, an elevated current account deficit and rising pressure on fiscal balances from the depreciation of the rupee could impede the country's growth. Economic activity is expected to pick up in the second half of FY 2014, although the speed of economic recovery could be impacted by the country's present vulnerabilities, the World Bank said in its India Development Update report. The latest report forecasts economic growth to pick up to 6.2% in the 2014/15 fiscal year that begins next April.
European stocks edged lower on Thursday, 17 October 2013, as US lawmakers failed to come up with a longer-term solution for the country's finances after sealing a last-minute deal on Wednesday, 16 October 2013, to temporarily raise the nation's debt ceiling and reopen government after a 16-day shutdown. Key benchmark indices in UK, France and Germany were down 0.35% to 0.67%.
Most Asian stocks rose on Thursday, 17 October 2013, as investors heaved a sigh of relief after the US lawmakers on Wednesday, 16 October 2013, voted to reopen the US government and raise the nation's debt ceiling, avoiding a default. Key benchmark indices in Indonesia, South Korea, Japan and Taiwan rose 0.29% to 0.83%. Key benchmark indices in China and Hong Kong fell 0.21% to 0.57%.
Trading in US index futures indicated that the Dow could fall 56 points at the opening bell on Thursday, 17 October 2013. US stocks rose on Wednesday after US lawmakers came to an apparent deal to lift the debt ceiling and reopen government operations.
The US House of Representatives and the US Senate on Wednesday, 16 October 2013, voted to restore federal operations, funding the government through Jan. 15, and to raise the debt ceiling until Feb. 7. The House passed the Senate-crafted bill by a 285-to-144 margin. US President Barack Obama said he will sign the legislation immediately, and federal workers are expected to return to work Thursday. Investors worldwide had been concerned that the US could default on its debt obligations, resulting in a disruption of business activity and long-running efforts to encourage global economic growth.
The widely watched monthly US jobs report for September 2013 is among the data that weren't released during the 16-day government shutdown.
The Federal Open Market Committee (FOMC) holds a two-day policy meeting on 29-30 October 2013. On 18 September 2013, the Fed surprised economists and investors with its decision to delay scaling back its stimulus amid concerns about the strength of the economic recovery.
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