Key benchmark indices slumped in early trade tracking weakness in Asian stocks and overnight losses in US stocks. The barometer index, the S&P BSE Sensex, was currently down 153.57 points or 0.59% at 25,741.40. The market breadth indicating the overall health of the market was weak. Reliance Industries (RIL) dropped after the company said that there is no such proposal under consideration of 30% stake sale by the company in telecom unit Reliance Jio Infocomm. Tech Mahindra dropped after the company reported a marginal rise profitability In Q1 results. DLF declined on weak Q1 results.
The market sentiment was also affected adversely after provisional data showed that foreign investors made heavy selling during the previous trading session.
Asian stocks dropped today, 1 August 2014, extending the biggest global rout in six months that saw the Dow Jones Industrial Average wipe out this year's gains in one session yesterday amid weaker earnings and credit-market concerns.
At 9:35 IST, the S&P BSE Sensex was down 153.57 points or 0.59% to 25,741.40. The index slumped 215.51 points at the day's low of 25,679.46 in early trade. The index declined 137.14 points at the day's high of 25,757.83 in early trade.
The CNX Nifty was down 59.50 points or 0.77% to 7,661.80. The index hit a low of 7,649.75 in intraday trade. The index hit a high of 7,675.10 in intraday trade.
The market breadth indicating the overall health of the market was weak. On BSE, 910 shares fell and 464 shares rose. A total of 44 shares were unchanged.
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The BSE Mid-Cap index was down 64.67 points or 0.7% at 9,123.52. The BSE Small-Cap index was down 62.43 points or 0.62% at 9.926.99. Both these indices underperformed the Sensex.
DLF declined 2.95% to Rs 191.55 on weak Q1 results. The stock hit high of Rs 194.50 and low of Rs 190.20 so far during the day. The company's consolidated net profit fell 29.48% to Rs 127.77 crore on 24.52% fall in total income to Rs 1851.60 crore in Q1 June 2014 over Q1 June 2013. The result was announced after market hours on Thursday, 31 July 2014.
EBITDA (earnings before interest, taxes, depreciation and amortization) fell 18% to Rs 863 crore in Q1 June 2014 over Q1 June 2013.
Recognizing that the real estate/housing sector is a key contributor to the growth of GDP and employment, the Government has announced a slew of measures in the Budget that will result in stimulus to the real estate industry in the medium term. Additional tax exemptions for consumers, categorization of 'affordable' housing an infrastructure status, and tax benefits to the REITs will go a long way in the revival of the industry, DLF said in a statement.
The company said it expects the market conditions to be challenging and demanding in the short term. Whilst the company believes that the slowdown is bottoming out, it will take a couple of quarters for the ground situation to improve, it said.
DLF said it remains committed to its medium term strategy of continuing with its execution run rate thereby creating more stock which can result in better and faster realizations as the cycle turns. Additionally, it will continue to invest to improve the quality of land through payment of government charges and infrastructural improvements. The company also remains focused to improve the quality and pricing of debt through instruments such as CMBSs, DLF said.
Reliance Industries (RIL) dropped 0.99% after the company said after market hours on Thursday, 31 July 2014 that there is no such proposal of 30% stake sale by the company in telecom unit Reliance Jio Infocomm under consideration and there is no merit in the said news floating in the market. Reliance issued this clarification with regard to the report captioned "Reliance Open to 30% stake sale in Jio". Reliance Jio Infocomm is a wholly owned subsidiary of Reliance Industries. The report had said RIL is open to offloading up to 30% stake in its telecom venture, Reliance Jio, to a global strategic partner in a move to unlock value.
Tech Mahindra dropped 3.42% after the company reported a marginal rise profitability In Q1 results. The company reported 2.7% growth in consolidated profit after tax at Rs 631 crore on 1.3% growth in revenue to Rs 5122 crore in Q1 June 2014 over Q4 March 2014. Operating profit (EBITDA) declined 13.4% to Rs 928 crore in Q1 June 2014 over Q4 March 2014. The result was announced after market hours on Thursday, 31 July 2014.
The company's cash and cash equivalents as on 30 June 2014 stood at Rs 3669 crore.
Vineet Nayyar, Executive Vice Chairman, Tech Mahindra said: "The growth momentum for Tech Mahindra continues to be powered by strategic investments and capability building. Our agility to perform in rapidly changing economic conditions speaks volumes about the trust shown by our customers in us. The results are aligned favorably towards us becoming a 'partner of choice' for developing transformational solutions and making enterprises future ready".
CP Gurnani, MD & CEO, Tech Mahindra said: "Our robust performance during the quarter sets the tone for rest of the year. Our customers have shown a remarkable appetite for the "connectedness revolution" and are readying themselves for the disruptions in future. Tech Mahindra with telecom as a horizontal differentiator augurs well with the customers in this potentially disruptive landscape".
Housing Development Finance Corporation (HDFC) declined 1.68%. The housing finance major after market hours on Thursday, 31 July 2014, in a clarification with regard to news item titled "Standard Life may Infuse More into HDFC Life" said that in the recent Union Budget, Finance Minister Arun Jaitley had proposed an increase in the composite cap in the insurance sector to 49% from the current level of 26%, with full management and control, through the FIPB route. On 24 July 2014, the Cabinet Committee on Economic Affairs headed by the Prime Minister Narendra Modi has cleared the said proposal and it is expected that the proposal will be tabled in Parliament in the current session. HDFC said it is monitoring the progress on this front and look forward to the details emerging.
In the meanwhile these developments have led to considerable speculation on HDFC's shareholding in its subsidiary, HDFC Standard Life Insurance Company (HDFC Life), HDFC said. The company said that there has been no decision on the change in the shareholding.
At an appropriate stage after Parliament approves and notifies the proposed amendments, HDFC may consider a revision in the shareholding pattern of HDFC Life in consultation with its joint venture partner, Standard Life Plc, HDFC said.
The combined index of the Eight Core Industries rose 7.3% in June 2014 over June 2013. The Eight Core Industries have a combined weight of 37.9% in the Index of Industrial Production (IIP). The data was announced after market hours on Thursday, 31 July 2014.
Markit Economics will unveil the results of a monthly survey on India's manufacturing sector for July 2014 today, 1 August 2014. The seasonally adjusted HSBC India Purchasing Managers' Index (PMI) rose marginally to 51.5 in June from 51.4 in May.
The Fiscal Deficit for the first quarter of the fiscal year ending 31 March 2015 (FY 2015) was at Rs 297859 crore, which amounted to 56.1% of the budget estimates. The month of June 2014 saw a fiscal deficit of Rs 57022 crore, against a fiscal deficit of Rs 127383 crore seen previous month. The data was released after market hours on Thursday, 31 July 2014.
The market sentiment was also affected adversely after provisional data showed that foreign investors were heavy sellers during the previous trading session. Foreign portfolio investors (FPIs) sold shares worth a net Rs 1654.86 crore on Thursday, 31 July 2014, as per provisional data from the stock exchanges.
Asian stocks dropped today, 1 August 2014, extending the biggest global rout in six months that saw the Dow Jones Industrial Average wipe out this year's gains in one session yesterday amid weaker earnings and credit-market concerns. Key benchmark indices in Hong Kong, Singapore, Japan, South Korea and Taiwan were off 0.14% to 0.9%.
China's Shanghai Composite rose 0.07%. China's manufacturing purchasing managers' index increased to 51.7 in July from 51 the previous month, according to data released today by the National Bureau of Statistics and China Federation of Logistics. A private gauge of factory activity from HSBC Holdings Plc and Markit Economics rose to 51.7 last month from 50.7 in June. Levels of 50 or higher signal expansion.
Developments in Latin America will be closely watched as Argentina missed a deadline yesterday to pay $539 million in interest after two full days of negotiations in New York failed to produce an accord with creditors. S&P declaring Argentina in default melded with concern over Europe's debt position as Portugal's Banco Espirito Santo SA was told to raise capital.
Banco Espirito Santo SA plunged by the most on record and the bonds slumped on Thursday, 31 July 2014, after the Portuguese lender was ordered to raise capital following a 3.6 billion euro ($4.8 billion) first-half net loss.
US stocks joined a global selloff on Thursday, 31 July 2104, erasing the year's gains in the Dow Jones Industrial Average, as Exxon Mobil Corp. to Micron Technology Inc. tumbled amid weaker corporate results.
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