Key benchmark indices reversed initial gains and hit fresh intraday low in morning trade. The market breadth, indicating the overall health of the market, turned negative from positive. The barometer index, the S&P BSE Sensex, was down 18.24 points or 0.09%, off close to 110 points from the day's high and up about 10 points from the day's low.
Telecom stocks tumbled as the surprise decision of Reliance Industries (RIL) to join the bidding for upcoming telecom spectrum auction slated for 3 February 2014 raised concerns of aggressive bidding in the auction which in turn could have an adverse impact on balance sheet of telecom firms. Capital goods stocks rose on renewed buying. L&T rose after the company said that it has recently secured new orders of Rs 1000 crore from the domestic market in its offshore and onshore hydrocarbon business segment. Index heavyweight and cigarette maker ITC declined. DCB Bank rose on strong Q3 result.
A bout of volatility was witnessed in initial trade as key benchmark indices pared gains after a firm start triggered by higher Asian stocks. The Sensex hit its highest level in more than five weeks at the onset of the trading session. The 50-unit CNX Nifty hit 2-week high at the onset of the trading session. Key benchmark indices reversed initial gains and hit fresh intraday low in morning trade.
Foreign institutional investors (FIIs) bought shares worth a net Rs 713.29 crore on Wednesday, 15 January 2014, as per provisional data from the stock exchanges.
At 10:20 IST, the S&P BSE Sensex was down 18.24 points or 0.09% to 21,271.25. The index fell 31.64 points at the day's low of 21,257.85 in morning trade. The index rose 89.80 points at the day's high of 21,379.29 in early trade, its highest level since 9 December 2013.
The CNX Nifty was down 4.65 points or 0.07% to 6,316.25. The index hit a low of 6,313.20 in intraday trade. The index hit a high of 6,346.50 in intraday trade, its highest level since 2 January 2014.
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The market breadth, indicating the overall health of the market, turned negative from positive in morning trade. On BSE, 940 shares dropped and 852 shares rose. A total of 116 shares were unchanged.
Among the 30-share Sensex pack, 20 stocks rose and rest fell. Tata Steel (up 2%), Sesa Sterlite (up 1.47%) and HDFC (up 1.33%) edged higher from the Sensex pack.
Telecom stocks tumbled as the surprise decision of Reliance Industries (RIL) to join the bidding for upcoming telecom spectrum auction slated for 3 February 2014 raised concerns of aggressive bidding in the auction which in turn could have an adverse impact on balance sheet of telecom firms. Idea Cellular, Bharti Airtel and Reliance Communications were off 2.8% to 5.4%. Shares of RIL were up 0.25% at Rs 887.65.
RIL will join Bharti Airtel, Idea Cellular as well as the local units of Vodafone Group PLC and Telenor ASA in bidding for bandwidth in the auction in February. The government aims to raise at least Rs 11000 crore through two sets of auctions, one for a national service and another for a portion of bandwidth in Delhi, Mumbai or Kolkata, collectively home to over 32 million Indians.
RIL will bid to operate both nationally and in the three cities. A successful bid would mark the company's re-entry into the phone business after spinning-off its cellphone unit Reliance Communications in 2005, to brother Anil Ambani, as part of the division of the business empire built by their late father, Dhirubhai Ambani.
The auctions are crucial for Bharti and Vodafone India, whose bandwidth usage rights are set to expire in Delhi, Mumbai and Kolkata. Reliance Communications also has permits up for renewal in some regions in November this year. The companies will have to bid successfully in the upcoming auction to continue operations. The rights to use bandwidth last for 20 years. Idea Cellular and the Indian unit of Telenor, are also bidding in the hopes of expanding their services.
The Department of Telecommunications, which will conduct the auctions, will scrutinize the bids and announce the final list of bidders on 20 January 2014.
Index heavyweight and cigarette maker ITC declined 0.56% to Rs 326.50. The stock hit high of Rs 330.50 and low of Rs 325.75 so far during the day.
Capital goods stocks rose on renewed buying. ABB (up1.01%), and BEML (up 1.6%) gained.
Bharat Heavy Electricals rose 1.62% to Rs 168.90, after a bulk deal was executed on the counter today, 16 January 2014. A bulk deal of 11.01 lakh shares was struck on the Bharat Heavy Electricals (Bhel) counter at Rs 166.75 per share at 09:24 IST on BSE today, 16 December 2014. The bulk deals saw 0.04% of Bhel's equity changing hands.
L&T rose after the company said that it has recently secured new orders of Rs 1000 crore from the domestic market in its offshore and onshore hydrocarbon business segment. The stock was up 1.3%.
DCB Bank rose 4.31% after the bank's net profit surged 35% to Rs 36 crore on 26% growth in total income to Rs 127 crore in Q3 December 2013 over Q3 December 2012. The Q3 result was announced after market hours on Wednesday, 15 January 2014.
DCB Bank's CASA ratio as on 31 December 2013 was at 24.8% as against 28.87% as on 31 December 2012.
Retail Deposits (Retail CASA and Retail Term Deposits) continued to provide a stable resource base to the bank. Retail deposits were at 77% of Total Deposits as on 31 December 2013.
The bank's net advances rose 23% YoY to Rs 7361 crore as on 31 December 2013.
DCB Bank's ratio of net non-performing assets (NPAs) to net advances stood at 0.77% as on 31 December 2013, compared with 0.86% as on 30 September 2013 and 0.73% as on 31 December 2012.
The bank's ratio of gross NPAs to gross advances stood at 2.77% as on 31 December 2013, compared with 3.43% as on 30 September 2013 and 3.8% as on 31 December 2012.
DCB Bank's provisions and contingencies surged 100% to Rs 10 crore in Q3 December 2013 over Q3 December 2012. Provision coverage ratio as on 31 December 2013 works out to 84.25%.
The bank's Capital Adequacy Ratio (CAR) as per Basel III norms stood at 12.86% as on 31 December 2013, compared with 13.84% as on 30 September 2013.
The bank's balance sheet grew 24% to Rs 11989 crore as on 31 December 2013, from Rs 9644 crore as on 31 December 2012.
Commenting on the results, Mr. Murali M. Natrajan, MD & CEO, DCB Bank said, "In a difficult market, so far, we have been able to contain NPAs. However, we need to continue to be watchful. We are expanding our branch network in a calibrated manner and we hope that the new branches will help us to continue to achieve a diversified portfolio and deposit growth".
The Reserve Bank of India's Third Quarter Review of Monetary Policy for 2013-14 is scheduled on 28 January 2014. The Reserve Bank of India 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.
Asian stocks edged higher on Thursday, 16 January 2014, as better-than-projected bank earnings boosted investor confidence and drove US stock gauges to record highs on Wednesday, 15 January 2014. Key benchmark indices in China, Hong Kong, South Korea and Taiwan were up 0.04% to 0.29%. Key benchmark indices in Indonesia, Japan and Singapore fell 0.01% to 0.12%.
Trading in US index futures indicated that the Dow could advance 11 points at the opening bell on Thursday, 16 January 2014. The S&P 500 index closed at a record high Wednesday, narrowly beating its previous peak reached on Dec. 31, as investors took upbeat manufacturing data, Bank of America Corp. earnings, and Apple Inc.'s China deal as signs economic growth was on solid ground.
The Federal Reserve said "moderate" growth across most of the US last month was buoyed by gains in holiday spending by consumers, an improving labor market and strength in manufacturing. "The economic outlook is positive in most districts, with some reports citing expectations of 'more of the same' and some expecting a pickup in growth," the Fed said yesterday in its Beige Book business survey, based on reports gathered on or before 6 January 2014.
The Federal Reserve Bank of New York said that its general business conditions index jumped to 12.51 in January from an upwardly revised 2.22 in December.
The US producer price index rose 0.4% in December, the biggest increase since June, recovering from a 0.1% decline in November and was 1.2% higher from a year earlier. Core PPI was up 0.3% in December and rose 1.4% on a year-over year basis, compared to expectations for a monthly increase of 0.1% and an annual gain of 1.3%.
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.
International Monetary Fund Managing Director Christine Lagarde said yesterday that momentum in the world economy in the second half of last year should continue in 2014. The Washington-based fund plans to raise its forecast for global growth when it releases a report later this month.
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