Weakness during the latter part of the trading session pulled key benchmark indices lower as traders rolled over positions in the futures & options (F&O) segment from July 2014 series to August 2014 series. The near-month July 2014 F&O contracts expired today, 31 July 2014. The market breadth indicating the overall health of the market turned negative from positive in late trade. The barometer index, the S&P BSE Sensex, fell below the psychological 26,000 mark as concerns about the health of Europe's banking sector pulled European stocks lower and as US index futures indicated a weak start for US stocks later in the global day. The Sensex lost 192.45 points or 0.74% at 25,894.97. Banking and cement stocks led the decline. The Sensex and the 50-unit CNX Nifty, both, hit their lowest closing level in more than a week.
ICICI Bank fell in choppy trade as the bank's net non-performing assets ratio rose in Q1 June 2014. Maruti Suzuki India edged lower in volatile trade after announcing strong Q1 results. HCL Technologies dropped on profit taking as the company's EBITDA declined on sequential basis in Q4 June 2014. NTPC dropped on weak Q1 results.
The market sentiment was affected adversely after data showed foreign investors were net sellers of Indian stocks during the previous trading session on Wednesday, 30 July 2014. Foreign portfolio investors (FPIs) sold shares worth a net Rs 284.50 crore into the secondary equity markets on Wednesday, 30 July 2014, as per data from Securities & Exchange Board of India (Sebi).
The slide in key benchmark indices during the latter part of the trading session came after a relatively narrow range until afternoon trade.
The S&P BSE Sensex shed 192.45 points or 0.74% to settle at 25,894.97, its lowest closing level since 21 July 2014. The index fell 233.73 points at the day's low of 25,853.69 in late trade. The index rose 31.46 points at the day's high of 26,118.88 in mid-morning trade, its highest level since 28 July 2014.
The CNX Nifty lost 70.10 points or 0.9% to settle at 7,721.30, its lowest closing level since 21 July 2014. The index hit a low of 7,711.15 in intraday trade. The index hit a high of 7,791.85 in intraday trade.
The market breadth indicating the overall health of the market turned negative from positive in late trade. On BSE, 1,492 shares fell and 1,431 shares rose. A total of 116 shares were unchanged.
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The BSE Mid-Cap index garnered 16.68 points or 0.18% to settle at 9,188.19. The BSE Small-Cap index garnered 24.49 points or 0.25% to settle at 9,989.42. Both these indices outperformed the Sensex.
The BSE Bankex (down 1.18%), BSE Capital Goods index (down 0.84%), BSE Power index (down 1.35%) and BSE Consumer Durables index (down 0.98%) underperformed the Sensex.
The BSE Realty index (up 0.24%), BSE Metal index (up 0.05%), BSE Healthcare index (up 0.17%), BSE Auto index (down 0.62%), BSE Teck index (down 0.44%), BSE IT index (down 0.6%) and BSE FMCG index (down 0.55%) outperformed the Sensex. The BSE Oil & Gas index ended almost unchanged for the day, outperforming the Sensex.
Tech Mahindra fell 0.33% at Rs 2,150.30. The company after market hours reported 2.7% growth in consolidated profit after tax at Rs 631 crore on 1.3% growth in revenue to Rs 5122 crore in Q1 June 2014 over Q4 March 2014. Operating profit (EBITDA) declined 13.4% to Rs 928 crore in Q1 June 2014 over Q4 March 2014.
The company's cash and cash equivalents as on 30 June 2014 stood at Rs 3669 crore.
Vineet Nayyar, Executive Vice Chairman, Tech Mahindra said: "The growth momentum for Tech Mahindra continues to be powered by strategic investments and capability building. Our agility to perform in rapidly changing economic conditions speaks volumes about the trust shown by our customers in us. The results are aligned favorably towards us becoming a 'partner of choice' for developing transformational solutions and making enterprises future ready".
CP Gurnani, MD & CEO, Tech Mahindra said: "Our robust performance during the quarter sets the tone for rest of the year. Our customers have shown a remarkable appetite for the "connectedness revolution" and are readying themselves for the disruptions in future. Tech Mahindra with telecom as a horizontal differentiator augurs well with the customers in this potentially disruptive landscape".
Maruti Suzuki India shed 1.07% to Rs 2,524.50 after announcing Q1 results. The stock hit high of Rs 2.589 and low of Rs 2,513. The company's net profit rose 20.7% to Rs 762.30 crore on 10.8% rise in net sales (net of excise) to Rs 11073.50 crore in Q1 June 2014 over Q1 June 2013. The car major said that cost reduction and localization initiatives, growth in volumes and favourable foreign exchange helped improve the bottom line during the quarter. The result was announced during market hours.
Maruti Suzuki India said that the company's cost reduction and localization initiatives, growth in volumes and favourable foreign exchange helped improve the bottomline during Q1 June 2014.
HCL Technologies dropped 2.66% to Rs 1,554.90 after announcing its Q4 results. The stock hit high of Rs 1,597 and low of Rs 1,541.10. The company's consolidated net profit as per US GAAP rose 12.9% to Rs 1834 crore on 0.9% growth rise in revenue to Rs 8424 crore in Q4 June 2014 over Q3 March 2014. EBITDA (earnings before interest, taxes, depreciation and amortization) fell 0.7% to Rs 2216 crore in revenue to Rs 8424 crore in Q4 June 2014 over Q3 March 2014. EBITDA margin declined to 26.3% in Q4 June 2014, from 26.7% in Q3 March 2014. The result was announced before market hours.
NTPC dropped 3.01% to Rs 145 on weak Q1 results. The stock hit high of Rs 149.80 and low of Rs 144.35. The company's net profit fell 12.89% to Rs 2201.20 crore on 15.21% rise in total income to Rs 1885.14 crore in Q1 June 2014 over Q1 June 2013. The company announced results during market hours.
ICICI Bank fell 1.11% to Rs 1,473 after the bank at the time of announcing Q1 results said its net non-performing assets rose in Q1 June 2014. The stock hit high of Rs 1,505 and low of Rs 1,465.40. The bank's net profit rose 16.75% to Rs 2655.30 crore on 13.26% rise in total income to Rs 14,616.71 crore in Q1 June 2014 over Q1 June 2013. The net non-performing assets ratio was 0.87% as on 30 June 2014, higher than 0.82% as on 31 March 2014 and 0.69% as on 30 June 2013. The result was announced during market hours.
The bank's provision coverage ratio, computed in accordance with RBI guidelines, was 68.4% at 30 June 2014. Net loans to companies whose facilities have been restructured stood at Rs 11265 crore as on 30 June 2014, compared to Rs 10558 crore as on 31 March 2014 and Rs 5915 crore as on 30 June 2013.
The bank's net interest income increased 18% to Rs 4492 crore in Q1 June 2014 over Q1 June 2013. Non-interest income increased by 15% to Rs 2850 crore in Q1 June 2014 over Q1 June 2013. Cost-to-income ratio reduced to 38.4% in Q1 June 2014 from 39.4% in Q1 June 2013. Provisions and contingencies rose 22.40% to Rs 726.08 crore in Q1 June 2014 over Q1 June 2013.
Many other bank stocks declined after ICICI Bank's Q1 results. Among private sector banks, IndusInd Bank (down 0.29%), HDFC Bank (down 0.61%), Yes Bank (down 0.13%), and Axis Bank (down 2.52%) declined. Kotak Mahindra Bank dropped 1.95% to Rs 955.60. The stock reversed direction after hitting record high of Rs 979.35 in intraday trade.
Among PSU bank stocks, State Bank of India (SBI) (down 1.26%), Canara Bank (down 0.4%), Union Bank of India (down 0.93%), Bank of Baroda (down 1.75%) and Punjab National Bank (down 1.93%) declined.
Engineering and construction major L&T lost 1.33% at Rs 1,504.10, with the stock extending yesterday's steep post result slide. The company's consolidated profit after tax (PAT) jumped 111% to Rs 967 crore on 10% growth in gross revenue to Rs 19123 crore in Q1 June 2014 over Q1 June 2013. The sharp rise in PAT was on the back of divestment gains, L&T said. The recurring PAT jumped 68% to Rs 771 crore in Q1 June 2014 over Q1 June 2013. The growth in PAT, however, was restricted by a onetime loss of about Rs 942.14 crore at PBIT level from the hydrocarbon segment. The company provided for all foreseeable future losses of 5 projects in Middle East region during the quarter. The result hit the market after market hours on Monday, 28 July 2014.
L&T's order intake rose 11% to Rs 33408 crore in Q1 June 2014 over Q1 June 2013. The international order inflow at Rs 14754 crore in Q1 June 2014 grew more than 2 times on year-on-year (YoY) and constituted 44% of the total order inflow during the quarter. The consolidated order book of the group stood at Rs 195392 crore as on 30 June 2014, higher by 13% on YoY basis. International order book constituted 26% of the total order book.
Sesa Sterlite lost 0.43% at Rs 290.35. As per reports, the company on Wednesday, 30 July 2014, got nod from the local public to expand capacity of its Lanjigarh alumina refinery from one million tonnes per annum (mtpa) to six mtpa.
The company's consolidated attributable PAT before exceptional items more than doubled to Rs 1341 crore in Q1 June 2014, from Rs 600 crore in Q1 June 2013. Revenue jumped 19% to Rs 17056 crore in Q1 June 2014 over Q1 June 2013. The result was announced on Tuesday, 29 July 2014, when the stock market was closed for a public holiday. The company has a strong balance sheet, with cash and cash equivalents of over Rs 47500 crore.
Cement stocks dropped. UltraTech Cement (down 1.5%), Ambuja Cements (down 1.36%), and ACC (down 1.07) edged lower.
Grasim Industries declined 1.26% at Rs 3,220.90. Grasim has exposure to the cement sector through its subsidiary UltraTech Cement.
Grasim Industries said during market hours that the commercial production at the company's Greenfield Viscose Staple Fibre (VSF) plant at Vilayat in Gujarat has commenced with the commissioning of 2 lines with a capacity of 77,000 metric tonnes (MT) per annum of Grey/Dyed Fibre. The work on the remaining 2 lines to produce Modal/Micro Modal Fibre is at an advanced stage of commissioning. On completion, the capacity at Vilayat plant will increase to 1.2 lakh MT per annum.
Bharti Airtel fell 0.11% to Rs 372.60 on profit booking after Wednesday's rally triggered by strong Q1 results. The stock reversed direction after hitting 52-week high of Rs 375 in intraday trade. Bharti Airtel's consolidated net profit rose 60.91% to Rs 1108.50 crore on 13.33% increase in total revenue to Rs 22962 crore in Q1 June 2014 over Q1 June 2013. Net profit was boosted by improved operational efficiency and lower forex and derivative losses. The result was announced on Tuesday, 29 July 2014, when stock market was closed on account of Ramzan ID.
Heritage Foods fell 5.03% after consolidated net profit fell 63.9% to Rs 5.30 crore on 16.2% increase in net sales to Rs 496.80 crore in Q1 June 2014 over Q1 June 2013. The result was announced after market hours on Wednesday, 30 July 2014.
Pidilite Industries rose 3.31% after consolidated net profit rose 4.7% to Rs 168.52 crore on 19.4% increase in total income to Rs 1362.08 crore in Q1 June 2014 over Q1 June 2013. The result was announced after market hours on Wednesday, 30 July 2014.
IRB Infrastructure Developers jumped 7.79% after the company said it has strong order book position. IRB Infrastructure Developers' order book stands at approximately Rs 11350 crore, out of which Rs 9400 crore worth of order book is to be executed in the next three to four years. This construction order book gives IRB good visibility for the next three years, the company said in a statement.
On a consolidated basis, the company's net profit rose 11.76% to Rs 150.39 crore on 2.37% decline in total income to Rs 1036.71 crore in Q1 June 2014 over Q1 June 2013. EBITDA (earnings before interest, taxes, depreciation and amortization) rose 22% to Rs 589 crore in Q1 June 2014 over Q1 June 2013. The result was announced after market hours on Wednesday, 30 July 2014.
Force Motors jumped 7.97% to Rs 573.10 after 3.22% equity changed hands in a bulk deal on BSE today, 31 July 2014. A bulk deal of 4.24 lakh shares was executed on the Force Motors counter at Rs 549.95 per share at 09:19 IST on BSE today, 31 July 2014.
In the foreign exchange market, the rupee edged lower against the dollar. The partially convertible rupee was hovering at 60.54, compared with its close of 60.07 on Wednesday, 30 July 2014.
A group of World Trade Organization (WTO) members has reportedly informally discussed adopting a global overhaul of customs rules without India if New Delhi goes ahead with threats to block the deal. India has demanded the deal, which must be approved in Geneva today, 31 July 2014, be accompanied by a parallel agreement giving it more freedom to subsidise and stockpile food grains than currently allowed under WTO rules.
Finance Minister Arun Jaitley said on Wednesday, 30 July 2014, said that the government is yet to decide the implementation date of the general anti-avoidance rules (GAAR) and whether any changes are needed to the existing provisions of GAAR. GAAR is scheduled to come into effect from 1 April 2015 or assessment year 2016-17. GAAR announced by the previous government had sparked alarm among foreign investors because of provisions that included tightening rules on investments from countries that have double taxation treaties with India. The implementation of GAAR was deferred by two years until 1 April 2015.
European stocks edged lower today, 31 July 2014, as shares of Banco Espito Santo SA in Lisbon sank as much as 50% and as Adidas AG lowered its profit forecast. Key benchmark indices in UK, Germany and France were down 0.15% to 0.89%.
Concerns about the health of the region's banking sector weighed on European stocks, as shares of Banco Espito Santo SA in Lisbon sank as much as 50%. The shares had been suspended after the Portuguese lender reported a record second-quarter loss. The loss came as the bank's troubled parent company, Espirito Santo International, found ways to use the bank to raise funds that are largely unrecoverable.
Euro-area inflation unexpectedly slowed in July to the weakest in almost five years, underscoring the European Central Bank's concerns that the economy is too feeble to drive price growth. Inflation was 0.4% compared with 0.5 percent in June, the European Union's statistics office in Luxembourg said today.
The unemployment rate in the euro area fell in June as the currency bloc gradually shakes off the legacy of the region's debt crisis and longest-ever recession. The jobless rate dropped to 11.5% from 11.6% in May, the European Union's statistics office in Luxembourg said today.
German unemployment fell for the first time in three months in a sign that Europe's largest economy is gathering pace after a second-quarter slowdown. The number of people out of work dropped a seasonally adjusted 12,000 to 2.9 million in July, the Nuremberg-based Federal Labor Agency said today.
Asian stocks were mixed today, 31 July 2014, after global credit rating agency Standard & Poor's declared Argentina in default on its foreign-currency obligations after the government missed a deadline for paying interest on $13 billion of restructured bonds. Key benchmark indices in China, Hong Kong and Singapore were up 0.1% to 0.93%. Key benchmark indices in Japan, South Korea and Taiwan were off 0.16% to 1.39%.
A breakdown in talks between Argentina and US creditors late Wednesday has sent the country tumbling into its second default in 13 years.
Trading in US index futures indicated that the Dow could fall 82 points at the opening bell on Thursday, 31 July 2014.
The Federal Reserve after two-day policy meeting on Wednesday, 30 July, said it would reduce its purchases of mortgage and Treasury bonds by $10 billion to $25 billion monthly from $35 billion earlier, as widely expected. The Fed retained a dovish monetary policy stance. To support continued progress toward maximum employment and price stability, the Federal Open Market Committee (FOMC) reaffirmed its view that a highly accommodative stance of monetary policy remains appropriate, the FOMC said in a statement.
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