Key benchmark indices trimmed losses after hiting fresh intraday low mid-morning trade. The market breadth indicating the overall health of the market was negative. The barometer index, the S&P BSE Sensex, was down 39.74 points or 0.15% at 25,951.49. There has been a narrow movement for the key indices so far during the day. Metal and mining major Sesa Sterlite extended initial post-result losses. Other metal and mining stocks were mixed. Tata Global Beverages fell on weak Q1 results.
At 11:20 IST, the S&P BSE Sensex was down 39.74 points or 0.15% to 25,951.49. The index fell 65.87 points at the day's low of 25,925.36 in mid-morning trade. The index rose 55.08 points at the day's high of 26,022.62 in early trade.
The CNX Nifty was down 12.05 points or 0.16% to 7,736.65. The index hit a low of 7,729.25 in intraday trade. The index hit a high of 7,756.85 in intraday trade.
The market breadth indicating the overall health of the market was negative. On BSE, 1,221 shares fell and 960 shares rose. A total of 111 shares were unchanged.
The BSE Mid-Cap index was down 14.25 points or 0.16% at 9,124.97. The BSE Small-Cap index was down 32.20 points or 0.32% at 9,934.44. Both these indices underperformed the Sensex.
Sesa Sterlite dropped 2.48% to Rs 283, with the stock extending initial losses. The stock hit high of Rs 286.25 and low of Rs 281.60 so far during the day. The company's consolidated profit after tax (PAT) dropped 9.35% to Rs 375.56 crore on 4706.58% growth in total income to Rs 18466.88 crore in Q1 June 2014 over Q1 June 2013. The Sesa Sterlite merger and the Vedanta Group consolidation was completed in August 2013. Therefore, the results for Q1 June 2014 are not comparable with the results of Q1 June 2013. The Q1 result was announced on Tuesday, 29 July 2014, when the stock market was closed for a public holiday.
In a press release, Sesa Sterlite issued adjusted proforma numbers for Q1 June 2013 which are more representative of the performance during the period. Based on these adjusted figures, 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 increase was primarily due to Sterlite Copper which was under temporary closure in Q1 June 2013. Cairn India also witnessed increase in revenue due to higher average oil prices though offset partially by higher profit petroleum. Revenue of the aluminium business was higher on better premium, partially offset by a weaker market and lower realisations in the power business. Operations at the Australian copper mines were suspended since January 2014 and the mine has been put under care and maintenance in July 2014. Other businesses were almost flat compared to Q1 June 2013.
Earnings before interest, taxation, deprecation and amortization (EBITDA) rose 3.5% to Rs 5670 crore in Q1 June 2014 over Q1 June 2013. While favourable oil prices, LME, premiums, and currency depreciation helped increase EBITDA, lower volumes in zinc and power, higher cost of production, higher profit petroleum, and Australian mines closure resulted in a modest EBITDA increase of 3.5%. EBITDA margin, excluding custom smelting operations of copper and zinc in India, remained strong at 47% in Q1 June 2014, higher than 45% in Q1 June 2013.
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The company said it has a strong balance sheet with cash and cash equivalents of over Rs 47500 crore.
Mr. Navin Agarwal, Chairman, Sesa Sterlite said: "The outlook for the natural resources sector and for Sesa Sterlite is positive as the government is looking at formulating forward looking policies which will help harness production and grow the potential of the company's businesses. The natural gas development project pursued by Cairn India is a good example of the company's focus as a key growth area for the future."
Sesa Sterlite said that iron ore operations at its mines in Goa continue to remain suspended. The Goa state government is working towards formulation of its mining policy following the Supreme Court order of March 2014. Sesa Sterlite expects to resume mining operations at Goa in the second half of the current financial year after obtaining the necessary approvals.
Sesa Sterlite said that its alumina refinery expansion project at Lanjigarh is on hold. The company said its fresh application for environmental clearance for this project is under process and the public hearing is scheduled on 30 July 2014.
Shares other metal and mining companies were mixed. JSW Steel (down 1.13%), NMDC (down 0.52%), Jindal Steel & Power (down 0.89%), Tata Steel (down 0.75%), National Aluminum Company (down 0.74%) and Hindustan Copper (down 1.15%) declined.
Hindalco Industries (up 0.27%), Hindustan Zinc (up 0.91%), Bhushan Steel (up 0.23%), and Steel Authority of India (Sail) (up 0.86%), gained.
Tata Global Beverages fell 1.48% on weak Q1 results. The company's consolidated net profit declined 12.9% to Rs 97.23 crore on 4.2% growth in total income to Rs 1931.10 crore in Q1 June 2014 over Q1 June 2013. The result was announced after market hours on Monday, 28 July 2014. The stock market was closed on Tuesday, 29 July 2014 on account of Ramzan ID. Tata Global Beverages' income from operations rose 5% to Rs 1913 crore in Q1 June 2014 over Q1 June 2013. Profit before exceptional items declined 4% to Rs 169 crore in Q1 June 2014 over Q1 June 2013. While branded business performed well, profitability was impacted by lower crop available for sale in the plantation business and investment in new ventures, Tata Global Beverages said in a statement. During the quarter, Tata Global Beverages continued to focus on strengthening its brands across tea, coffee and water, the company said in a statement.
Akzo Nobel India tumbled 8.92% after the stock turned ex-dividend today, 30 July 2014, for total dividend of Rs 75 per share.
The market may remain volatile in the near future as traders roll over positions in the futures & options (F&O) segment from the near month July 2014 series to August 2014 series. The near-month July 2014 F&O contracts expire tomorrow, 31 July 2014..
In the foreign exchange market, the rupee edged lower against the dollar. The partially convertible rupee was hovering at 60.1725, compared with its close of 60.14 on Monday, 28 July 2014.
Asian stocks rose for a fourth day today, 30 July 2014, before the Federal Reserve updates markets on monetary policy later in the global day today, 30 July 2014. Key benchmark indices in Japan, Hong Kong, South Korea, and Taiwan rose by 0.11% to 1.05%. Key benchmark indices in China and Singapore fell by 0.04% to 0.08%.
Trading in US index futures indicated that the Dow could gain 22 points at the opening bell on Wednesday, 30 July 2014. US stocks fell on Tuesday, 29 July 2014, as President Barack Obama announced new sanctions against Russia and warned its actions in Ukraine are "setting back decades of progress".
The US sanctioned three Russian banks and a state-owned shipbuilder that serves Russia's navy and oil and gas industry, joining with the European Union in escalating penalties for action in Ukraine. The EU curbed Russia's access to bank financing and advanced technology in its widest-ranging sanctions yet over President Vladimir Putin's backing of rebels in eastern Ukraine.
Economic reports yesterday showed improving US consumer sentiment while the housing market remains in a slowdown. The Conference Board's consumer confidence index rose to 90.9, the highest reading since October 2007. Residential real-estate prices advanced 9.3% in the 12 months ended May, the slowest pace in more than a year, according to the S&P/Case-Shiller index of property values in 20 cities.
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