Key benchmark indices edged lower in choppy trade on concerns geopolitical tension in the Middle East and Ukraine could push oil prices higher. Weakness in European stocks also dampened sentiment. The barometer index, the S&P BSE Sensex and the 50-unit CNX Nifty, both, had scaled record high at the onset of the trading session. The Sensex was provisionally down 182.74 points or 0.7%, up about 80 points from the day's low and off close to 210 points from the day's high. The market breadth indicating the overall health of the market was weak. The BSE Small-Cap index was off 1.94%. The BSE Mid-Cap index was off 1.28%.
Wipro dropped after the company reported a muted 1.2% growth in IT services revenue on sequential basis in Q1 June 2014. Metal and mining stocks declined. Steel Authority of India (Sail) dropped after Finance Minister Arun Jaitley reportedly said today, 25 July 2014, that the government plans to stocks dropped. FMCG stocks rose on revival of monsoon rains. Shares of Tata Motors tumbled on reports that its British luxury car unit Jaguar Land Rover (JLR) has announced a reduction in prices for three of its models selling in China.
As per provisional figures, the S&P BSE Sensex was down 182.74 points or 0.7% to 26,089.11. The index dropped 264.54 points at the day's low of 26,007.31 in mid-afternoon trade, its lowest level since 23 July 2014. The index rose 28.32 points at the day's high of 26,300.17 in early trade, a record high for the index.
The CNX Nifty was down 46.60 points or 0.6% to 7,784, as per provisional figures. The index hit a low of 7,748.60 in intraday trade, its lowest level since 22 July 2014. The index hit a high of 7,840.95 in intraday trade, a record high for the index.
The total turnover on BSE amounted to Rs 3563 crore, higher than Rs 3109.87 crore on Thursday, 24 July 2014.
The market breadth indicating the overall health of the market was weak. On BSE, 1,940 shares fell and 972 shares rose. A total of 92 shares were unchanged.
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The BSE Mid-Cap index was down 118.91 points or 1.28% at 9,174.55. The BSE Small-Cap index was down 197.97 points or 1.94% at 10,031.36. Both these indices underperformed the Sensex.
Shares of Tata Motors tumbled on reports that its British luxury car unit Jaguar Land Rover (JLR) has announced a reduction in prices for three of its models selling in China. The stock slumped 5.85%. The cut, uniform at 200,000 yuan for each of the three models V8 SC Autobiography Black, V8 Jaguar Sports and its F-TYPE Convertibles will be effective starting 2 August 2014. The price cut came after China's top economic decision making body, the NDRC, launched investigations into corporate price rigging and market monopoly practices earlier this year, according to reports.
FMCG stocks rose on revival of monsoon rains. Hindustan Unielever (HUL( (up 2.88%, Marico (up 2.65%), Dabur India (up 2.23%) and Godrej Consumer Products (up 2.24%) gained. FMCG firms derive substantial revenue from rural India.
Index heavyweight and cigarette maker ITC rose 0.38% to Rs 357.60. The stock hit high of Rs 358 and low of Rs 352.45.
Punjab National Bank (PNB) dropped 0.4% to Rs 925 after announcing Q1 result. The stock hit high of Rs 935 and low of Rs 907.80. The bank's net profit rose 10.17% to Rs 1405.12 crore in 9.18% rise in total income to Rs 12825.13 crore in Q1 June 2014 over Q1 June 2013. The result was announced during market hours.
Punjab National Bank's (PNB) ratio of net non-performing assets (NPAs) to net advances stood at 3.02% as on 30 June 2014, compared with 2.85% as on 31 March 2014 and 2.98% as on 30 June 2013.
The bank's ratio of gross NPAs to gross advances stood at 5.48% as on 30 June 2014, compared with 5.25% as on 31 March 2014 and 4.84% as on 30 June 2013.
Provisions and contingencies fell 13.02% to Rs 927.61 crore in Q1 June 2014 over Q1 June 2013. The provisioning coverage ratio as on 30 June 2014 stood at 60%.
Metal and mining stocks declined. Sesa Sterlite (down 2.23%), JSW Steel (down 3.74%), Hindalco Industries (down 3.01%), NMDC (down 1.12%), Jindal Steel & Power (down 3.74%), Hindustan Zinc (down 3.8%), and Hindustan Copper (down 0.66%) declined. National Aluminum Company rose 1.48%.
Steel Authority of India (Sail) dropped after Finance Minister Arun Jaitley reportedly said today, 25 July 2014, that the government plans to sell 5% stake in the steel major in the current fiscal year. The stock was off 2.94% at Rs 87.55. The government currently owns 80% stake in Sail.
Tata Steel declined 1.73% to Rs 557.25. The stock was volatile. The stock hit high of Rs 573.90 and low of Rs 552. The company announced before trading hours a successful dual tranche Reg S issuance of $1.5 billion of unsecured bonds in the international markets. The issue comprises $500 million 4.85% Unsecured Bonds due on 31 January 2020 and $1 billion 5.95% Unsecured Bonds due on 31 July 2024 by Abja Investment Co Pte, a wholly owned subsidiary of Tata Steel incorporated in Singapore. The issue is guaranteed by Tata Steel. The bonds are rated BB+ by Fitch and BB by S&P and will be listed on the Frankfurt Stock Exchange.
Tata Steel said that a tremendous response for the offering enabled the issue to be priced about 50 basis points (bps) tighter than the initial price thoughts on the both the tranches. Tata Steel said that the proceeds of the bond offering will be deployed as per the strategic plan of the company, including off shore investment. The successful bond issue enables the company to diversify the investor base, lengthen maturity profile and optimise the financing and capital structure, the steel major said.
Wipro dropped after the company reported a muted 1.2% growth in IT services revenue on sequential basis in Q1 June 2014. The stock was off 4.7% at Rs 549.70. The stock hit high of Rs 554.95 and low of Rs 525. The company's consolidated net profit as per International Financial Reporting Standards (IFRS) jumped 30% to Rs 2100 crore on 14% growth in total revenue to Rs 11140 crore in Q1 June 2014 over Q1 June 2013. The result was announced after trading hours yesterday, 24 July 2014.
IT services revenue was $1.74 billion in Q1 June 2014, a sequential increase of 1.2% and year on year (YoY) increase of 9.6%. IT services revenues in rupee terms was Rs 10510 crore in Q1 June 2014, an increase of 18% YoY. IT services earnings before interest and tax (EBIT) was Rs 2400 crore in Q1 June 2014, an increase of 35% YoY. Non-GAAP constant currency IT services revenue in dollar terms was $1.725 billion in Q1 June 2014, which was within the company's guidance range of $1.715 billion to $1.755 billion. Wipro expects revenue from IT services business to be in the range of $1.77 billion to $1.81 billion in Q2 September 2014.
T K Kurien, Executive Director & Chief Executive Officer, Wipro, said that the company continues to win large deals, particularly in the application and infrastructure space. These wins demonstrate confidence of clients in Wipro's transformational capabilities, he said. Suresh Senapaty, Executive Director & Chief Financial Officer, Wipro said that Wipro's operating margins for Q1 June 2014 was on expected lines, impacted largely due to wage hikes.
The Sensex and the 50-unit CNX Nifty, both, hit record high amid initial volatility. Key benchmark indices lost ground in morning trade. Key benchmark indices extended losses and hit fresh intraday low in mid-morning trade. A bout of volatility was witnessed as key benchmark indices hit fresh intraday low in early afternoon trade. Key benchmark indices extended losses and hit fresh intraday low in afternoon trade. Key benchmark indices trimmed losses in mid-afternoon trade. Volatility ruled the roost in late trade as key benchmark indices weakened once again after trimming losses.
Indian stocks snapped eight-day winning streak today, 25 July 2014.
Finance Minister Arun Jaitley reportedly said today, 25 July 2014, that he is preparing to take a final decision on the controversial General Anti-Avoidance Rules (GAAR). GAAR is a tool to curb tax avoidance. 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.
Investors are keeping a close watch of crude oil prices amid fears geopolitical tension in the Middle East and Ukraine could push oil prices higher. India imports almost 80% of its crude oil requirements. Brent crude futures for September delivery were up 8 cents at $107.15 a barrel. The contract had closed 96 cents lower on Thursday, 24 July 2014.
The death toll in Gaza's fighting has continued to rise, with over 800 Palestinians and 33 Israelis killed since 8 July 2014, according to reports. At least 13 people were killed and more than 200 injured when a UN-run school used as a shelter came under fire in Gaza on Thursday, 24 July 2014, reports said. Israel launched its military offensive against Gaza on 8 July with the declared objective of stopping Hamas firing rockets into Israel.
Meanwhile, the US reportedly said on Thursday, 24 July 2014, that it has evidence that Russia has fired artillery across the border targeting Ukrainian military positions. Russia has frequently denied sending any rocket launchers into Ukraine. Russia is facing international pressure after Malaysia Airlines flight MH17 crashed in eastern Ukraine on 17 July, with pro-Russian rebels widely accused of shooting it down.
In the foreign exchange market, the rupee was almost unchanged against the dollar in choppy trading. The partially convertible rupee was hovering at 60.1075, unchanged from its close of 60.11 on Thursday, 24 July 2014.
The monsoon rains were reportedly 24% above average in the week ended July 23. The annual monsoon arrived over the southern Kerala coast on 6 June, and then covered the entire country on 17 July. Rains are vital to India's farm sector, which accounts for about 14% of the country's nearly $2 trillion economy. Two-thirds of its 1.2 billion population lives in rural areas.
European stocks declined today, 25 July 2014, as LVMH Moet Hennessy Louis Vuitton SA and Danone SA posted worse-than-expected financial results. Key benchmark indices in UK, France and Germany were down 0.01% to 0.62%.
The UK economy has completely recovered the output lost during the financial crisis after growth powered ahead for a sixth consecutive quarter. Gross domestic product expanded 0.8% between April and June, pushing output 0.2% above its previous peak in the first three months of 2008, the Office for National Statistics said today in London. The increase followed a 0.8% gain in the first quarter.
Asian stocks rose in choppy trade today, 25 July 2014. Key benchmark indices in China, Hong Kong, Japan and South Korea were up by 0.31% to 1.13%. Key benchmark indices in Indonesia, Singapore and Taiwan were off 0.11% to 0.93%.
Trading in US index futures indicated that the Dow could fall 17 points at the opening bell on Friday, 25 July 2014. US stocks finished a quiet session mostly flat on Thursday, 24 July 2014, as earnings painted a mixed picture of the economy, though the S&P 500 index set another record closing high.
The number of Americans filing applications for unemployment benefits dropped last week to the lowest level in more than eight years, reflecting what could be a pickup in auto making during a typically slow time of year. Jobless claims fell by 19,000 to 284,000 in the week ended July 19, the fewest since February 2006 and lower than forecast, a Labor Department report showed in Washington.
Fewer US new homes than forecast were sold in June and data for the prior month was revised down by a record, painting a troubling picture of a market struggling to gain traction. Sales declined 8.1% to a 406,000 annualized pace, the fewest since March and lower than forecast, Commerce Department figures showed in Washington. That followed a May rate of 442,000.
The International Monetary Fund yesterday, 24 July 2014, lowered its outlook for global growth this year as expansion rates from China to the US weaken and military conflicts from Ukraine to the Middle East raise the risk of a surge in oil prices. The world economy will expand 3.4% in 2014, the IMF said, less than its 3.6% prediction in April and stronger than last year's 3.2%. Next year, growth will be 4% compared with an April forecast for 3.9%, the fund said.
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