Intraday volatility continued as key benchmark indices trimmed gains after hitting fresh intraday high in mid-morning trade. The barometer index, the S&P BSE Sensex, was up 9.77 points or 0.05%, off close to 75 points from the day's high and up about 85 points from the day's low. The market breadth, indicating the overall health of the market, was positive.
Index heavyweight and cigarette maker ITC extended intraday gain. Another index heavyweight Reliance Industries (RIL) also extended intraday gain. Capital goods pivotals saw mixed trend. HDFC Bank extended Tuesday's losses triggered by the private sector bank reporting decline in net interest margin (NIM) in Q2 September 2013. Lubricant oil maker Castrol India rose on good Q2 result. Sugar stocks were in demand.
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.
In the foreign exchange market, the rupee edged higher against the dollar on global risk-on sentiment 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. The partially convertible rupee was hovering at 61.59, 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.
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 11:20 IST, the S&P BSE Sensex was up 9.77 points or 0.05% to 20,557.39. The index gained 82.18 points at the day's high of 20,629.80 in mid-morning trade. The index declined 76.37 points at the day's low of 20,471.25 in morning trade.
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The CNX Nifty was up 9.90 points or 0.16% to 6,098.95. The index hit a high of 6,110.75 in intraday trade. The index hit a low of 6,064.85 in intraday trade.
The market breadth, indicating the overall health of the market, was positive. On BSE, 1,104 shares gained and 813 shares fell. A total of 104 shares were unchanged.
Among the 30-share Sensex pack, 22 stocks rose and rest fell. Bajaj Auto (up 2.39%), Bharti Airtel (up 1.65%) and Tata Power Company (up 1.2%), gained.
ONGC rose 2.93%, with the stock extending intraday gain. ONGC and Finland's Chempolis on Tuesday, 15 October 2013, signed an initial pact to build a refinery in India using biomass as a feedstock. Further to the first biorefinery, Chempolis and ONGC are targeting at larger production of sustainable biofuels in India, which would reduce India's dependence on imported petroleum, Chempolis said in a statement. Chempolis is a Finland based biorefining technology corporation.
Index heavyweight and cigarette maker ITC rose 1.56%, with the stock extending intraday gain.
Reliance Industries (RIL) rose 1.82%, with the stock extending intraday gain. The company early this week reported 1.5% growth in net proifit 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.
Capital goods pivotals saw mixed trend. L&T fell 2.1% ahead of its Q2 result tomorrow, 18 October 2013. Bhel rose 0.17%.
HDFC Bank extended Tuesday's losses triggered by the private sector bank reporting decline in net interest margin (NIM) in Q2 September 2013. The scrip was off 0.45%. The bank's net profit rose 27.07% to Rs 1982.32 crore on 17.65% rise in total income to Rs 11937.69 crore in Q2 September 2013 over Q2 September 2012. HDFC Bank's net interest margin (NIM) declining to 4.3% in Q2 September 2013 from 4.4% in Q2 September 2012. The bank announced Q2 result during market hours on Tuesday, 15 October 2013.
HDFC Bank's ratio of net non-performing assets to net advances stood at 0.3% as on 30 September 2013, compared with 0.3% as on 30 June 2013 and 0.2% as on 30 September 2012. The bank's ratio of gross non-performing assets (NPA) to gross advances stood at 1.1% as on 30 September 2013, compared with 1% as on 30 June 2013 and 0.9% as on 30 September 2012.
Provisions and contingencies fell 1.02% to Rs 385.93 crore in Q2 September 2013 over Q2 September 2012. Provisions and contingencies dropped 26.78% in Q2 September 2013 over Q1 June 2013.
Sugar stocks were in demand. Bajaj Hindusthan (up 8.37%), Balrampur Chini Mills (up 2.66%) and Shree Renuka Sugars (up 4.24%), gained.
MindTree dropped 1.85% after consolidated net profit fell 4.9% to Rs 128.70 crore on 18.8% increase in revenue to Rs 769.60 crore in Q2 September 2013 over Q1 June 2013. The result was announced on Wednesday, 16 October 2013. MindTree said net profit declined in Q2 September 2013 due to higher forex gain in Q1 June 2013. The company reported a foreign exchange gain of Rs 20 crore in Q2 September 2013 compared with a gain of Rs 61.80 crore in Q1 June 2013.
Earnings before interest taxes depreciation and amortization (EBITDA) rose 34.2% to Rs 159.80 crore in Q2 September 2013 over Q1 June 2013. EBITDA margin was reported at 20.8% in Q2 September 2013 compared with 18.4% in Q1 June 2013.
"The relentless execution of our new strategies has delivered two consecutive quarters of strong revenue growth this year. We continue to invest in expertise-led solutions and attracting top quality industry talent. This drives positive business outcomes for our customers while achieving sustainable growth," said Krishnakumar Natarajan, CEO & Managing Director, Mindtree.
Lubricant oil maker Castrol India rose 0.76% on good Q2 result. The company's net profit jumped 21.9% to Rs 104.50 crore on 0.1% growth in income from operations to Rs 719.60 crore in Q3 September 2013 over Q3 September 2012. Castrol India announced the third quarter results on Wednesday, 16 October 2013. Commenting on the third quarter results, Ravi Kirpalani, Managing Director, Castrol India, said: "Despite the unfavorable economic scenario, including significant rupee depreciation, the third quarter results show improved gross margin on account of higher sales realisation, lower base oil prices and effective cost management strategy. The business environment continues to remain highly challenging. Continuing rupee depreciation, credit crunch and overall industry slowdown hampered economic growth. The B2B (business to business) and in particular, the building and construction segment, were under pressure and witnessed lower volumes during the quarter under review. This volume drop was partially offset by a strong performance in the personal mobility sector i.e. the passenger car and two wheeler engine oil segments".
With regard to the future business outlook, Castrol India said that continued economic headwinds, rupee volatility and high crude and base oil prices are likely to impact the company's growth and margins in the short term. In the longer run, however, the management is confident about the lubricant market and business growth. Castrol India said that the company is in a strong position to benefit from growth opportunities on account of its strong brands, enduring relationships with key stakeholders and continued commitment of its staff.
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.
Asian stocks rose 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 China, Indonesia, South Korea, Japan, Hong Kong and Taiwan rose 0.12% to 0.84%.
Trading in US index futures indicated that the Dow could fall 20 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 o 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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