Key benchmark edged higher as Asian and European stocks rose after China's short-term interest rates fell after China's central bank pumped in an usually large amount of funds into the money markets to pre-empt a potential liquidity crisis, as demand for cash rises ahead of the Lunar New Year holiday. The barometer index, the S&P BSE Sensex, was provisionally up 49.81 points or 0.23%, off close to 50 points from the day's high and up about 65 points from the day's low. The market breadth, indicating the overall health of the market, was positive.
Indian stocks edged higher for the second day in a row today, 21 January 2014.
Bank stocks rose on renewed buying. But, Kotak Mahindra Bank fell on weak Q3 results. Tata Motors rose after the company on Monday, 20 January 2014, announced the launch of the REVOTRON Series -- the next generation petrol engine family that will power its future models in the passenger vehicle market.
Foreign institutional investors (FIIs) bought shares worth a net Rs 384.89 crore on Monday, 20 January 2014, as per provisional data from the stock exchanges.
As per provisional figures, the S&P BSE Sensex was up 49.81 points or 0.23% to 21,254.86. The index jumped 97.47 points at the day's high of 21,302.52 in mid-morning trade, its highest level since 16 January 2014. The index fell 15.85 points at the day's low of 21,189.20 in early afternoon trade.
The CNX Nifty was up 13.20 points or 0.21% to 6,317.15, as per provisional figures. The index hit a high of 6,330.30 in intraday trade, its highest level since 16 January 2014. The index hit a low of 6,297.90 in intraday trade.
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The total turnover on BSE amounted to Rs 1877 crore, higher than Rs 1831.60 crore on Monday, 20 January 2014.
The market breadth, indicating the overall health of the market, was positive. On BSE, 1,374 shares gained and 1,256 shares fell. A total of 153 shares were unchanged.
Tata Steel (up 2.78%), Sesa Sterlite (up 1.61%) and Maruti Suzuki India (up 1.45%) edged higher from the Sensex pack.
Tata Motors rose 2.56%. The company on Monday, 20 January 2014, announced the launch of the REVOTRON Series -- the next generation petrol engine family that will power its future models in the passenger vehicle market. The company unveiled the first petrol engine from its REVOTRON series - the Turbocharged Intercooled Multi-point Fuel Injected (MPFi) Petrol Engine, REVOTRON 1.2T. Tata Motors said that the REVOTRON Series has been designed based on extensive feedback from car owners, car enthusiasts and expert drivers from across the globe; observing their driving habits followed by extensive testing in gruelling climatic conditions in India as well as in countries like the UK and Korea.
The REVOTRON Series has been developed by Tata Motors with inputs from renowned global players in the area of combustion, boosting, friction and calibration, to deliver class-leading performance, the company said in a statement. Tata Motors also worked closely with global engine consultant AVL (Austria) and key technology partners like Bosch, Honeywell, Mahle and INA to bring in the latest technology for the new engine series. REVOTRON 1.2T has been tested for global standards along with a testing car by TEnergy of Korea to ensure that the engine performance is best-in-class, Tata Motors said. The engine has been manufactured to be light on weight and low on friction, delivering high performance and fuel economy. The REVOTRON series will include 3-and 4-cylinder petrol engines to offer superior performance as well as high fuel efficiency to our customers, Tata Motors said.
Announcing the launch, Mr. Ranjit Yadav, President, Passenger Vehicle Business Unit, Tata Motors said: "With the launch of REVOTRON 1.2T, Tata Motors passenger vehicles business is making a strategic shift towards a more complete portfolio. The name itself, an amalgamation of Revolution and the French word "tronel", meaning "balance", conveys the essence of this engine brand that uses key technological advances to revolutionize and balance great driving manoeuvrability, without compromising on power or fuel efficiency. We are enhancing our portfolio with the next generation petrol engines - REVOTRON series".
The REVOTRON 1.2T has been engineered to deliver optimum balance of power, performance and fuel economy, Tata Motors said. Developed using a range of eco-friendly and future-oriented technologies, the next-generation petrol engine incorporates latest know-how like multi-drive modes, allowing the best of economy and driving pleasure. The Advance Engine Management Systems (AMS) provides a digitally precise control for vehicle performance and emissions and offers the design of reciprocating components to ensure the best out of every drop of fuel. With enhanced customer benefits for the best driving experience, the REVOTRON series is therefore positioned to be a revolution in Performance, Refinement and Economy, the three pillars of the REVOTRON series, Tata Motors said.
Bank stocks edged higher on renewed buying. ICICI Bank rose 3.41%.
AXIS Bank rose 2.56%. AXIS Bank's net profit increased 19.06% to Rs 1604.11 crore on 9.94% increase in total income to Rs 9433.55 crore in Q3 December 2013 over Q3 December 2012. The result was announced on 16 January 2014.
The bank's gross non-performing assets increased to Rs 3008.20 crore as on 31 December 2013, from Rs 2734.47 crore as on 30 September 2013 and Rs 2275.30 crore as on 31 December 2012. The ratio of net non-performing assets to net advances stood at 0.42% as on 31 December 2013, compared with 0.37% as on 30 September 2013 and 0.33% as on 31 December 2012. The ratio of gross non-performing assets (NPA) to gross advances stood at 1.25% as on 31 December 2013, compared with 1.19% as on 30 September 2013 and 1.10% as on 31 December 2012.
Provisions and contingencies fell 47.65% to Rs 202.49 crore in 31 December 2013 over Q3 December 2012. Provisions and contingencies declined 70.54% on sequential basis
HDFC Bank gained 1.22%. The bank's net profit rose 25.1% to Rs 2325.70 crore on 17.75% growth in total income to Rs 12738.95 crore in Q3 December 2013 over Q3 December 2012. The bank announced Q3 results on 17 January 2014.
HDFC Bank's net interest income (NII) rose 16.4% to Rs 4634.80 crore in Q3 December 2013 over Q3 December 2012. The net interest margin or NIM declined to 4.2% in Q3 December 2013, from 4.3% in Q3 December 2012. HDFC Bank's's non-interest income rose 11.4% to Rs 2148.30 crore in Q3 December 2013 over Q3 December 2012.
With asset quality remaining stable during the quarter, provisions and contingencies declined 4% to Rs 388.80 crore in Q3 December 2013 over Q3 December 2012, HDFC Bank said.
Total deposits rose 22.9% YoY to Rs 349215 crore as on 31 December 2013. Adjusted for foreign currency non-resident (FCNR) deposits raised during the quarter, the total deposits growth rate would have been 15.5% and CASA ratio would be 43.7%, HDFC Bank said.
Advances grew 22.9% YoY to Rs 296742 crore as of 31 December 2013. The domestic loan growth was contributed by both retail and wholesale segments, with retail loans growing by 13.6% and wholesale loans by 22.1%, resulting in a domestic loan mix between retail and wholesale of 54:46. Total advances in overseas branches as of 31 December 2013 were at 8% of the total advances as against 3.8% as of 31 December 2012, HDFC Bank said.
The bank's Capital Adequacy Ratio (CAR) as at 31 December 2013 as per Basel III guidelines stood at 14.7%, as against a regulatory requirement of 9%. Of this, Tier-I CAR was 9.9%. These CAR ratios are based on net worth numbers which do not take into account the profits for nine months ended 31 December 2013. Had the same been included, the total CAR and Tier-I CAR would have been 16.2% and 11.5% respectively, HDFC Bank said.
Kotak Mahindra Bank fell 3.08% on weak Q3 results. The bank's net profit fell 5.99% to Rs 339.98 crore on 3.85% increase in total income to Rs 2492.01 crore in Q3 December 2013 over Q3 December 2012. The bank's consolidated net profit rose 2.43% to Rs 591.25 crore on 6.43% growth in total income to Rs 4424.50 crore in Q3 December 2013 over Q3 December 2012. The result was announced during trading hours today, 21 January 2014.
The bank's gross non-performing assets edged up to Rs 1076.18 crore as on 31 December 2013, from Rs 1005.97 crore on 31 September 2013 and Rs 740.02 crore as on 31 December 2012. The ratio of gross non-performing assets (NPA) to gross advances stood at 2.01% as on 31 December 2013, higher than 1.97% as on 30 September 2013 and 1.46% as on 31 December 2012. The ratio of net non-performing assets to net advances stood at 1.1% as on 31 December 2013, higher than 0.96% as on 30 September 2013 and 0.64% as on 31 December 2012.
Provisions and contingencies jumped 64.63% to Rs 69.74 crore in 31 December 2013 over 31 December 2012.
Kotak Mahindra Bank's net interest income (NII) rose 11% to Rs 913 crore in Q3 December 2013 over Q3 December 2012.
Advances as on 31 December 2013 were up 6% year-on-year (YoY) to Rs 53149 crore as on 31 December 2013. The bank is cautiously slowing down on CECV lending. Without considering CECV, the growth in advances was 12% in Q3 December 2013 on YoY basis.
Restructured loans considered standard amounted to 0.08% of net advances as on 31 December 2013.
Savings deposits as on 31 December 2013 grew by 38% to Rs 9106 crore from Rs 6616 crore as on 31 December 2012. CASA ratio was 30%.
RBI vide circular dated 23 August 2013 on "Investment portfolio of banks - Classification, Valuation and Provisioning", as a one-time measure permitted banks to transfer SLR securities from Available For Sale (AFS)/Held For Trading (HFT) category to Held To Maturity (HTM) category at valuation rates prevailing on 15 July 2013, provided the transfer happened before 30 September 2013. Kotak Mahindra Bank has not transferred any SLR security from AFS/HFT category to HTM category. The bank's SLR securities in HTM category as on 31 December 2013 were 11.7% of net demand and time liabilities (NDTL). As permitted under the same circular, the Kotak Mahindra Bank has opted to distribute the net depreciation on the AFS and HFT portfolios in equal installments during the current financial year. Accordingly, of the net depreciation of Rs 196.95 crore as on 31 December 2013, the bank has amortised Rs 43.43 crore and Rs 131.30 crore in the Profit and Loss Account for the quarter and nine months ended 31 December 2013 respectively.
Among PSU bank stocks, State Bank of India, Union Bank of India, Bank of India, Bank of Baroda and Punjab National Bank rose 0.82% to 2.34%.
Canara Bank rose 1.92% after the bank said after market hours on Monday, 20 January 2014 that the board of directors of the bank at its meeting held on 20 January 2014 has approved the payment of interim dividend of Rs 6.50 per share or 65% for the year ending 31 March 2014 and permitted the payout date of dividend as 31 January 2014 (i.e., the date of dividend warrant would be 31 January 2014).
Federal Bank was up 0.97% at Rs 83.45. The Cabinet Committee on Economic Affairs on Monday, 20 January 2014, approved the proposal of Federal Bank for increase in foreign investment ceiling in the bank to 74% of the bank's equity, subject to the aggregate foreign institutional investors' (FIIs) shareholding not exceeding 49% of the paid up equity share capital of the bank. The approval would result in foreign investment of approximately Rs 1400 crore in the country, a government statement said.
It may be recalled that the Reserve Bank of India (RBI) had in August last year banned further purchases of shares of Federal Bank by FIIs after aggregate foreign share holding in the private sector bank crossed the overall limit of 49% of the bank's paid-up capital. Total FII holding in Federal Bank was 42.27% as on 31 December 2013
The Reserve Bank of India (RBI) on Monday, 20 January 2014, said it has constituted an Expert Committee to review governance of boards of commercial bank in India. The terms of reference of the committee include review of the regulatory compliance requirements of banks' boards in India. The committee will judge what can be rationalised and where requirements need to be enhanced. The committee will examine the working of banks' boards, including whether adequate time is devoted to issues of strategy, growth, governance and risk management. The committee will review central bank regulatory guidelines on bank ownership, ownership concentration and representation in the board.
The committee will analyse the representation on banks' boards to see whether the boards have the appropriate mix of capabilities and the necessary independence to govern the institution, and to investigate possible conflicts of interest in board representation, including among owner representatives and regulators. In this regard, the committee will also assess and review the 'fit and proper' criteria for all categories of directors of banks, including tenor of directorship and it will examine board compensation guidelines and any other issue relevant to the functioning of banks' boards and the governance they exercise.
The committee is expected to submit its report within three months from the date of its first meeting, the RBI said.
The Reserve Bank of India's Third Quarter Review of Monetary Policy for 2013-14 is scheduled on 28 January 2014. The RBI kept its main lending rate viz. the repo rate unchanged after its last policy review in December and said at that time that it expected inflation to ease in the following months.
European stocks rose on Tuesday, 21 January 2014, after China's central bank added funds to the financial system. Key benchmark indices in France, Germany and UK rose 0.01% to 0.23%.
Asian stocks edged higher on Tuesday, 21 January 2014, as China's money-market rates dropped after the central bank pumped funds into the financial system. Key benchmark indices in China, Japan, Singapore, Hong Kong, Indonesia, and South Korea were up 0.16% to 0.99%. Taiwan's Taiwan Weighted fell 0.25%.
China's short-term interest rates fell on Tuesday, 21 January 2014, after the central bank pumped in an usually large amount of funds into the money markets to pre-empt a potential liquidity crisis, as demand for cash rises ahead of the Lunar New Year holiday. The relatively proactive move to calm the stress in the money markets is a departure from three liquidity crunches last year, when the central bank held off until the squeeze became much worse. The central bank offered 75 billion yuan ($12.39 billion) in seven-day reverse repurchase agreements, short-term loans to commercial lenders, as well as 180 billion yuan in 21-day reverse repos via its routine open-market operations on Tuesday. The PBOC's latest move came after it announced in a brief statement late Monday that it had offered funds to the nation's large banks, after money market rates spiked as a result of heavy demand for cash ahead of the Lunar New Year holiday and amid worries over the vast "shadow banking" sector.
The Bank of Japan's two-day monetary policy meeting began today, 21 January 2014.
Trading in US index futures indicated that the Dow could advance 46 points at the opening bell on Tuesday, 21 January 2014. The US stock market was closed on Monday, 20 January 2014, for a holiday commemorating civil rights leader Martin Luther King Jr.
The Federal Open Market Committee (FOMC) holds a two-day monetary policy meeting on 28 and 29 January 2014. By a 9-to-1 vote, the Fed on 18 December 2013 decided to trim its asset-purchase program by $10 billion to $75 billion per month starting in January 2014.
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