After extending losses in mid-afternoon trade, key benchmark indices recovered from lower level. At 14:15 IST, the barometer index, the S&P BSE Sensex, was off 144.97 points or 0.54% at 26,894.79. The 50-unit CNX Nifty was off 43 points or 0.53% at 8,128.20. The Sensex continued to trade below the psychological 27,000 mark after falling below that level earlier during the trading session. The Sensex hit two-week low when it fell 200.58 points or 0.74% at the day's low of 26,839.18 in mid-afternoon trade. The Nifty hit its lowest level in more than two weeks when it fell 60 points, or 0.73% at the day's low of 8,111.20 in mid-afternoon trade.
Weakness in global stocks weighed on sentiment on the domestic bourses. European stocks edged lower in choppy trade after the US Federal Reserve left the door open to an interest-rate hike later this calendar year. Asian stocks edged lower after the US Federal Reserve signalled after the conclusion of a regular two-day monetary policy review yesterday, 28 October 2015, that it may increase its policy rates at the next meeting in December 2015. After a hawkish statement from the Fed, the Fed-funds futures market is now pricing in 43% probability of an increase in US benchmark interest rate in December 2015, compared with a 34% chance before the announcement. The Fed kept its benchmark interest rate unchanged near zero after the latest policy review.
Investors in emerging markets, including India are worried that once the Fed starts raising interest rates, it will drain liquidity from global emerging markets and redirect it to developed economies. The Fed has held its benchmark short-term interest rate near zero since December 2008. The ultra-loose monetary policy in the US has encouraged heavy investment in higher-yielding emerging markets.
Indian stocks may remain volatile during the last one hour or so of the trading session as traders roll over positions in the futures & options (F&O) segment from the near month October 2015 series to November 2015 series. The October 2015 derivatives contracts are set to expire today, 29 October 2015.
The market breadth indicating the overall health of the market was negative. On BSE, 1,297 shares fell and 1,216 shares rose. A total of 197 shares were unchanged. The BSE Mid-Cap index was currently off 0.1%. The BSE Small-Cap index was currently off 0.03%. The fall in both these indices in percentage terms was lower than the Sensex's decline.
Shares of state-run banks witnessed a mixed trend. State Bank of India (SBI) (down 1.22%), Punjab National Bank (down 0.38%), Canara Bank (down 0.11%) and Union Bank of India (down 1.13%) dropped. IDBI Bank (up 2.37%), Vijaya Bank (up 0.69%), Bank of Baroda (up 0.12%) and Bank of India (up 0.37%) rose.
Stocks of private banks were mostly in red. HDFC Bank (down 0.61%), Kotak Mahindra Bank (down 0.45%), IndusInd Bank (down 0.81%) declined. ICICI Bank rose 0.55%.
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Axis Bank extended steep losses registered yesterday, 28 October 2015, triggered by concerns regarding the private sector bank's slippages in Q2 September 2015. The stock lost 2.32% to Rs 471.80. The stock had dropped 7.36% to settle at Rs 482.95 yesterday, 28 October 2015. The stock had ended almost unchanged after seeing intraday volatility on Tuesday, 27 October 2015, in the wake of the announcement of the bank's second quarter results. According to a post earnings research report of a domestic brokerage, Axis Bank sold loans aggregating about Rs 1820 crore to asset reconstruction companies (ARCs) for net consideration of about Rs 650 crore in Q2 September 2015. Axis Bank's gross slippages were Rs 589 crore or 1% of loans in Q2 September 2015 which was lower than gross slippages of Rs 1190 crore or 2.1% of loans in Q1 June 2015. However, adjusted for Rs 1820-crore sale to ARCs, gross slippages were about Rs 2400 crore or 4% of loans in Q2 September 2015, according to the brokerage.
Yes Bank edged higher in choppy trade after reporting strong Q2 September 2015 results. The stock was currently up 2.19% at Rs 745.25. The stock hit a high of Rs 746.90 and a low of Rs 708.65 so far during the day. The bank's net profit rose 26.49% to Rs 610.41 crore on 19.69% rise in total income to Rs 3995.34 crore in Q2 September 2015 over Q2 September 2014.
Yes Bank's ratio of gross non-performing assets (NPAs) to gross advances stood at 0.61% as on 30 September 2015 as against 0.46% as on 30 June 2015 and 0.36% as on 30 September 2014. The ratio of net NPAs to net advances stood at 0.2% as on 30 September 2015 as against 0.13% as on 30 June 2015 and 0.09% as on 30 September 2014. On absolute basis, bank's gross NPAs stood at Rs 491.35 crore as on 30 September 2015, compared with Rs 368.30 crore as on 30 June 2015 and Rs 222.36 crore as on 30 September 2014. The provisioning coverage ratio as on 30 September 2015 stood at 67.7%.
Power generation stocks were mixed. Tata Power Company (down 0.72%), CESC (down 3.23%) and NHPC (down 0.56%) fell. Reliance Infrastructure (up 0.3%), Reliance Power (up 0.41%), Jaiprakash Power Ventures (up 1.17%), Adani Power (up 4%), JSW Energy (up 2.79%) edged higher.
Torrent Power jumped 4.42% after the consolidated net profit surged 962.8% to Rs 245.19 crore on 16.18% rise in total income to Rs 3221.45 crore in Q2 September 2015 over Q2 September 2014. The result was announced by the company after market hours yesterday, 28 October 2015.
NTPC trimmed losses after reporting strong Q2 September 2015 results. The stock was currently off 0.31% at Rs 129.20. The stock hit a high of Rs 130.55 and a low of Rs 127.30 so far during the day. The company's net profit rose 39.9% to Rs 2898.28 crore on 5.25% rise in total income to Rs 18173.90 crore in Q2 September 2015 over Q2 September 2014.
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