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Market edges higher on positive Asian cues

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Capital Market
Last Updated : Jan 19 2015 | 11:15 AM IST

Key benchmark indices edged higher in early trade tracking strength in Asian market. The barometer index, the S&P BSE Sensex was currently up 120.59 points or 0.43% at 28,242.48. The market breadth indicating the overall health of the market was strong.

Foreign portfolio investors (FPIs) bought shares worth a net Rs 1099.93 crore on Friday, 16 January 2015, as per provisional data.

Among global markets, Asian stocks were mostly higher. China's stock market, however, plummeted as brokerages' shares tanked. On Friday, 16 January 2015, US stocks ended higher on signs the US economy was on track for solid growth with consumer sentiment hitting an 11-year high. US gasoline prices fell again in December, leading consumer prices to post their biggest decline in six years, while a gauge of underlying inflation was flat. The data could make the Federal Reserve cautious about raising interest rates.

At 9:25 IST, the S&P BSE Sensex was up 120.59 points or 0.43% at 28,242.48. The index rose 174.17 points at the day's high of 28296.06 in early trade. The index rose 107.15 points at the day's low of 28,229.04 in early trade.

The CNX Nifty was up 34.70 points or 0.41% at 8,548.50. The index hit a high of 8,558.15 in intraday trade. The index hit a low of 8,542.95 in intraday trade.

The BSE Mid-Cap index was up 62.12 points or 0.58% at 10,695.23. The BSE Small-Cap index was up 62.45 points or 0.55% at 11,372.38. Both these indices outperformed the Sensex.

The market breadth indicating the overall health of the market was strong. On BSE, 906 shares advanced and 242 shares declined. A total of 36 shares were unchanged.

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Reliance Industries' (RIL) fell 0.94%. the company's consolidated net profit fell 4.5% to Rs 5256 crore on 20.4% decline in revenue to Rs 96330 crore in Q3 December 2014 over Q3 December 2013. The result hit the market after market hours on Friday, 16 January 2015.

RIL attributed the decline in revenue in Q3 December 2014 to a sharp 30% fall in benchmark oil price. Exports from India declined 21.5% to Rs 58507 crore in Q3 December 2014 over Q3 December 2013. Operating profit before other income and depreciation rose 0.4% to Rs 8689 crore in Q3 December 2014 over Q3 December 2013. The company's gross refining margin (GRM) dropped to $7.3 a barrel in Q3 December 2014 from $8.3 a barrel in Q2 September 2014 and from $7.6 a barrel in Q3 December 2013.

RIL said that Q3 December 2014 witnessed heightened volatility across the hydrocarbon business. Benchmark crude oil prices declined by around 40% through the quarter, with consequent impact on petrochemical feedstock and product prices, the company said. While headline deltas were strong, declining feedstock prices impacted buying sentiment across product categories, it said. Downstream converters ran down inventories, operating at minimal stock levels, the company added. RIL, in line with its operating strategy, aggressively sold down stocks to maintain optimal levels of inventory, which impacted realized deltas and margins for products, the company said in a statement. This coupled with lower holding value of closing-stock impacted performance of refining and petrochemicals businesses, RIL said in a statement.

Commenting on the company's Q3 results, Mukesh D. Ambani, Chairman and Managing Director, RIL said, "Our focus on operational efficiency and the superior configuration of assets helped us deliver an industry-leading performance in the refining and petrochemicals business despite sharp decline in crude and feedstock prices. The performance also highlights the robustness of our risk management and proficiency of people and processes across the integrated chain. We continued to advance our refining and petrochemicals business capital investments, which will come to fruition over the next 4-6 quarters. These investments demonstrate our commitment to creating value through business cycles. During the quarter, Reliance Retail registered YoY growth of 19% in turnover with improved margins and profitability".

RIL's outstanding debt as on 31 December 2014 was at Rs 150007 crore compared to Rs 138761 crore as on 31 March 2014. Cash and cash equivalents as on 31 December 2014 were at Rs 78691 crore. These were in bank deposits, mutual funds, CDs and Government securities/bonds, RIL said in a statement.

Wipro rose 5.62%. The company's consolidated net profit rose 9% to Rs 2190 crore on 6% growth in total revenue to Rs 11990 crore in Q3 December 2014 over Q3 December 2013. The resutl hit the market after market hours on Friday, 16 January 2015. The results are as per International Financial Reporting Standards (IFRS).

Wipro's IT services segment revenue in rupee terms rose 10% to Rs 11340 crore in Q3 December 2014 over Q3 December 2013.

IT services revenue rose 7% to $1.795 billion in Q3 December 2014 over Q3 December 2013. Non-GAAP constant currency IT services revenue in dollar terms rose 3.7% to $1.836 billion, within the company's earlier guidance range of $1.808 billion to $1.842 billion.

Wipro expects its revenue from IT services business at between $1.814 billion to $1.85 billion in Q4 March 2015.

Commenting on the company's Q3 performance, Azim Premji, Chairman of Wipro said, "Developments in the Global currency and commodity markets are affecting major economies unevenly even as India anticipates growth led by next-generation of economic reforms".

T K Kurien, Executive Director & CEO of Wipro said, "We had a very satisfying quarter in terms of sequential revenue growth. We continue to see strong deal momentum as we are seen as the partner of choice for customers seeking to differentiate by using digital technologies as well as save costs in the traditional business".

Suresh Senapaty, Executive Director & CFO of Wipro said, "During the quarter, we saw all round growth led by growth in our Healthcare & Life Sciences business and Global Infrastructure Services. The share of fixed price contracts increased to over 55% of engagements - a reflection of the maturity of Wipro's customer engagement model".

Meanwhile, Wipro on Friday, 16 January 2015, announced that Suresh Senapaty, the current Chief Financial Officer (CFO) and Executive Director (ED) will retire on attaining the age of superannuation on 31 March 2015 after completing a distinguished career spanning over three decades with the company. Jatin Dalal, Senior Vice President - Finance will take over the role of CFO, effective 1 April 2015, Wipro said.

Coal India rose 0.22%. The Union Finance Minister Arun Jaitley, on 17 January 2015, assured the representatives of various Trade Unions that the Government has no intention to privatise either railways or Coal India. He said that focus of his Government is to create more jobs and employment opportunities beside safeguarding the existing jobs and give better environment for ease of living for the common man. The Finance Minister said that's why we need more money for investment in infrastructure sector in order to create more job opportunities for our youth. He said that the Government wants to create better social security system for the labour force working both in organized and unorganized sector.

NTPC fell 0.14%. The company after market hours on Friday, 16 January 2015 said that it has signed a term loan agreement for Rs 10000 crore with State Bank of India. The loan has a door to door tenure of 15 years and will be utilized to part finance the capital expenditure of NTPC.

Tata Steel rose 0.63%. Tayo Rolls said after market hours on Friday, 16 January 2015 that the Committee of the board of directors of the company at their meeting held on 16 January 2015, have allotted 5 lakh 8.50% non-cumulative redeemable preference shares of Rs 100 each to Tata Steel on preferential basis.

GAIL (India) fell 0.12%. The company after market hours on Friday, 16 January 2015 said that there was an incident of fire on the DESU - Maruti pipeline of GAIL (India) near Venkateswara College, Dhaulakuan, New Delhi on 16 January 2015. The incident occurred due to a third party drilling activity without prior permission taken by the agency from GAIL, in spite of the pipeline warning markers located in close proximity to the site, the company said. Immediately on receiving the information, GAIL's pipeline sectionizing valves were closed by remote operation from the regional control room. With the support of Delhi Fire services and IGL Fire Tenders, the fire was extinguished, the company said. The Army Supply Corps located in the vicinity also rendered support. There have been no casualties, GAIL (India) said. However, the fire damaged a couple of vehicles parked nearby. Because of the incident, some CNG stations of IGL may get affected temporarily and efforts are being made to restore gas supply at the earliest. Restoration work of the pipeline has already started, GAIL (India) said.

Asian stocks were mostly higher. Key benchmark indices in Indonesia, Japan, Singapore, South Korea and Taiwan were up by 0.16% to 0.86%. Key benchmark index in Hong Kong was off 1.15%.

China's stock market plummeted 6.20%, erasing all year-to-date gains as brokerages' shares tanked. Brokerage shares slumped after China's securities regulator last week banned three brokerages from opening new margin trading accounts, putting a temporary halt on what has proved a major engine of the market's super-bull rally.

On Friday, 16 January 2015, US stocks ended higher on signs the US economy was on track for solid growth with consumer sentiment hitting an 11-year high. US gasoline prices fell again in December, leading consumer prices to post their biggest decline in six years, while a gauge of underlying inflation was flat. The data could make the Federal Reserve cautious about raising interest rates.

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First Published: Jan 19 2015 | 9:16 AM IST

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