Intraday volatility continued as key benchmark indices trimmed gains in mid-afternoon trade. The barometer index, the S&P BSE Sensex, was currently below the psychological 28,000 level, having alternately moved above and below that level in intraday trade so far. The Sensex was currently up 42.25 points or 0.15% at 27,982.89. The market breadth indicating the overall health of the market was positive.
Global crude oil prices extended yesterday's steep slide. Indian government's decision last month to decontrol diesel prices and a sharp decline in global crude oil prices recently would reduce the government's fuel subsidy burden and help contain its fiscal deficit. The steep slide in global crude oil prices will also help India in containing its current account deficit and fuel price inflation. India imports 80% of its crude oil requirement.
Foreign portfolio investors bought shares worth a net Rs 690.61 crore yesterday, 13 November 2014, as per provisional data.
IT stocks edged higher on weak rupee. State Bank of India (SBI) edged higher in volatile trade after announcing strong Q2 results. DLF advanced after decent Q2 numbers. Tata Power Company declined after reverse turnaround in Q2.
In overseas markets, European stocks edged higher after the latest data showed Germany and France returned to growth in the third quarter. Asian stocks were mixed. US stocks eked out small gains yesterday, 13 November 2014.
In the foreign exchange market, the rupee edged lower against the dollar.
Brent crude futures edged lower amid concerns over excess supply.
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At 14:16 IST, the S&P BSE Sensex was up 42.25 points or 0.15% at 27,982.89. The index jumped 104.17 points at the day's high of 28,044.81 in early afternoon trade. The index lost 27.74 points at the day's low of 27,912.90 in early trade.
The CNX Nifty was up 14.15 points or 0.17% at 8,372. The index hit a high of 8,389.70 in intraday trade. The index hit a low of 8,346.80 in intraday trade.
The BSE Mid-Cap index was up 64.03 points or 0.63% at 10,166.20. The BSE Small-Cap index was up 76.10 points or 0.68% at 11,235.64. Both these indices outperformed the Sensex.
The market breadth indicating the overall health of the market was positive. On BSE, 1,569 shares gained and 1,310 shares fell. A total of 105 shares were unchanged.
IT stocks advanced on weak rupee. A weak rupee boosts revenue of IT firms in rupee terms as the sector derives a lion's share of revenue from exports. Oracle Financial Services Software (up 2.22%), Wipro (up 0.7%), MphasiS (up 0.45%), and TCS (up 0.38%) gained.
Infosys rose 0.31% at Rs 4,193.90. The company after market hours yesterday, 13 November 2014, said that media reports indicating that the company is in race to acquire Airbus unit CIMPA are speculative.
State Bank of India (SBI) was up 1.99% at Rs 2,773.30. The stock was volatile. The stock hit high of Rs 2,806.45 and low of Rs 2,721.40 so far during the day. SBI's net profit rose 30.54% to Rs 3100.41 crore on 12.46% increase in total income to Rs 41833.36 crore in Q2 September 2014 over Q2 September 2013. The bank announced Q2 September 2014 results during trading hours today, 14 November 2014.
SBI's ratio of net non-performing assets (NPAs) to net advances stood at 2.73% as on 30 September 2014, compared with 2.66% as on 30 June 2014 and 2.91% as on 30 September 2013. The bank's ratio of gross NPAs to gross advances stood at 4.89% as on 30 September 2014, compared with 4.90% as on 30 June 2014 and 5.64% as on 30 September 2013.
The provisioning coverage ratio as on 30 September 2014 stood at 63.18%.
On consolidated basis, SBI's net profit rose 30.95% to Rs 4023.84 crore on 15.02% increase in total income to Rs 61098.67 crore in Q2 September 2014 over Q2 September 2013.
State Bank of India's board of directors at its meeting held today, 14 November 2014, has accorded its approval to the bank for raising funds by issue of equity shares from the market or Government of India, by way of Preferential Issue/QIP/FPO/Rights Issue/GDR/ADR and/or any other mode(s) or a combination(s) thereof during FY 2015 and FY 2016. The board also authorized the Committee of Directors for Capital Raising to decide on number of tranches and timing of issue(s) and the quantum thereof to raise the additional Non-Equity capital, by way of AT-1 and/or Tier II bonds in USD/INR considered as regulatory capital under Basel III guidelines, to be issued to Indian and/or overseas investors, in one or more tranches, during FY 2015 and FY 2016 through a Public offer and/or Private placement.
DLF rose 1.76% at Rs 141.35 after consolidated net profit rose 9% to Rs 109.06 crore on 4% decline in total income to Rs 2135.59 crore in Q2 September 2014 over Q2 September 2013. The result was announced after market hours yesterday, 13 November 2014. DLF's earnings before interest, taxation, depreciation and amortization (EBITDA) rose 6.4% to Rs 918 crore in Q2 September 2014 over Q2 September 2013.
In a statement, DLF said that the company sees early signs of green shoots of demand emerging, especially in its luxury development-Camellias in DLF 5, Gurgaon. The company sold approx 0.20 msf of the project in Q2 September 2014 at an average realization of Rs 33,156 per sq. ft. DLF said that the company is fully geared up to ride the up-cycle with its inventory of finished valued in excess of about Rs 4000 crore, unsold inventory of launched projects under construction worth about Rs 13000 crore and future pipeline of projects worth about Rs 7000 crore, for which all approvals are in place.
Despite tough market conditions for the sector since the global financial crisis, the company has been able to create very valuable rental assets with current run rate of annuity incomes above Rs 2100, DLF said. Given the recent notifications on the REITs, it has become incumbent upon the company to re-evaluate its strategic path and options to drive sustainable, long term growth and development of the rental business. Various options are being reviewed to harness the maximum potential, DLF said. The company is committed to create one or more sizeable REIT platform either independently or in partnership with strategic/financials partners not only to harness the growth in the market but also to unlock/part monetise the company's investment, DLF said. DLF also said that the company is gearing up for the second round of its CMBS offering, for which indicative ratings are in place. This large offering will help in improving the debt profile by reduction in interest costs and terming out the liabilities, DLF said.
The company has filed an appeal with Securities Appellate Tribunal (SAT), against the order passed by the Securities and Exchange Board of India (Sebi). SAT has provided an interim relief to the company for redeeming mutual funds to the tune of Rs 1806 crore. The next hearing is scheduled for 10 December 2014, DLF said. The company said it will defend itself to the fullest extent against any adverse findings and measures contained in the Sebi order and it has full faith in the judicial process and is confident of vindication of its stand in the near future.
Tata Power Company lost 1.41% at Rs 87.50. The company reported a consolidated net loss of Rs 78 crore in Q2 September 2014, compared with net profit of Rs 75 crore in Q2 September 2013. Revenue declined 4.23% to Rs 8394 crore in Q2 September 2014 over Q2 September 2013. The result was announced after market hours yesterday, 13 November 2014.
Commenting on the company's performance,Mr. Anil Sardana,CEO & Managing Director, Tata Power said: "During the second quarter of FY15, the company reported robust operational performance by its businesses maximizing shareholder value. In this quarter, we have successfully received the distribution and transmission license for Mumbai for the next 25 years. This would help us to continue to empower the Mumbaikars with their 'Right to choose' the best service provider while helping us set consumer service and cost efficiency benchmarks in the power distribution business. We are working on additional roll-out plan for customer acquisition across Mumbai.
In the foreign exchange market, the rupee edged lower against the dollar. The partially convertible rupee was hovering at 61.6425, compared with its closing of 61.57 during the previous trading session.
Brent crude futures edged lower amid concerns over excess supply. Brent for January settlement was off 17 cents at $77.32 a barrel. The contract had lost $3.63 a barrel to settle at $77.49 a barrel yesterday, 13 November 2014.
The government yesterday, 13 November 2014, announced increase in excise duty on petrol and diesel by Rs 1.50 per litre each. The hike in excise duty on the two transportation fuels will help boost government's revenue. The government's decision last month to decontrol diesel prices and a sharp decline in global crude oil prices recently would reduce the government's fuel subsidy burden and help contain its fiscal deficit. The steep slide in global crude oil prices will also help India in containing its current account deficit and fuel price inflation. India imports 80% of its crude oil requirement. However, a weakness in rupee against the dollar will restrict the benefit of falling global crude oil prices to that extent. A weak rupee raises the cost of imports.
The annual rate of inflation based on wholesale price index (WPI) eased to 1.77% in October from 2.38% in September 2014, data released from the government today, 14 November 2014, showed. Meanwhile, the rate of WPI inflation for August 2014 was revised upwards to 3.85% from 3.74% reported earlier.
The easing of WPI inflation comes close on the heels of another data which showed easing of consumer price inflation. The annual rate of inflation based on the combined consumer price indices (CPI) for urban and rural India eased to 5.52% in October 2014, from 6.46% in September 2014, data released by the government on 12 November 2014 showed. The Reserve Bank of India (RBI) aims to limit consumer-price gains to 8% by January 2015 and 6% by January 2016. Over the longer term, the RBI aims to limit consumer-price gains to 4%, within a 2% band.
European stocks edged higher today, 14 November 2014, after latest data showed Germany and France returned to growth in the third quarter, signaling that a slow recovery has taken hold in the region. Key indices in Germany and France were up 0.15% to 0.31%. In London, the FTSE 100 index was off 0.16%.
German gross domestic product rose 0.1% in the three month through September after shrinking a revised 0.1% in the second quarter, the Federal Statistics Office in Wiesbaden said today, 14 November 2014. The French economy grew 0.3% after contracting 0.1% in the April-June period.
According to survey of economic forecasters released yesterday, 13 November 2014, by the European Central Bank (ECB), inflation in the eurozone is expected to remain super low for the remainder of this year and accelerate only gradually in the next two years, according to a survey of economic forecasters. According to the quarterly survey, consumer prices are expected to grow just 0.5% this year, down from the August forecast of a 0.7% rise. Next year, the inflation rate is expected to come in at 1% followed by 1.4% in 2016. These rates are far below the ECB's inflation target of just below 2% over the medium term. Over a longer five-year horizon, the inflation rate is expected to be closer to the ECB's objective, at 1.8%. That compares with a 1.9% rate forecast in the previous survey.
Forecasters surveyed by the ECB also marked down their projections for economic growth over the next two years. Economists expect gross domestic product growth of 0.8% this year, down from 1% in the August round of forecasts. GDP is expected to expand 1.2% next year and 1.5% in 2016, which were also below the August projections.
Asian stocks were mixed today, 14 November 2014. Key indices in Hong Kong, Japan, Taiwan and Singapore were up 0.02% to 0.56%. Key indices in China, South Korea and Indonesia were off 0.17% to 0.78%.
China's industrial output growth in October unexpectedly dropped, reflecting the continued headwinds faced by the Chinese economy, official data showed yesterday 13 November 2014.
Trading in US index futures indicated that the Dow could gain 21 points at the opening bell today 14 November 2014. US stocks eked out small gains yesterday, 13 November 2014. The Dow Jones Industrial Average gyrated between gains and losses, but ended the session at a fresh record high -- recording its 25th record closing high this year.
In US, more workers quit their jobs in September as hires reached their highest level in nearly seven years, the Labor Department said yesterday, 13 November 2014. Hires increased to a seasonally adjusted 5 million, a level last seen in December 2007. Quits rose to a seasonally adjusted 2.8 million in September from 2.5 million in the previous month, data showed.
Federal Reserve Chair Janet Yellen yesterday, 13 November 2014, said that the growing globalization of financial markets requires the Federal Reserve to understand how economic developments in other nations may affect the US economy. Yellen said the Fed needs better insights into things such as global capital flows to achieve its domestic objectives of maximum employment and price stability. Yellen's remarks came at the start of a two-day conference sponsored by the Fed, the European Central Bank and the Federal Reserve Bank of New York.
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