A bout of volatility was witnessed as key benchmark indices pared gains after hitting fresh intraday high in afternoon trade. The Sensex was up 26.01 points or 0.12%, off close to 35 points from the day's high and up about 110 points from the day's low. The market breadth, indicating the overall health of the market, was positive.
Pharma stocks edged higher. Sun Pharmaceutical Industries extended intraday gains. HDFC retained positive zone after reporting a decent growth in bottom line in Q3 December 2013. Zee Entertainment Enterprises rose after the company's chairman Subhash Chandra said at the time of announcement of the company's Q3 results that while the overall economic environment stays challenging, Zee continues to growth its business at a healthy pace.
The Sensex edged lower amid initial volatility after a Reserve Bank of India panel recommended that the central bank should start using a consumer-price inflation target to determine monetary policy. High volatility was witnessed as key benchmark indices alternately swung between gains and losses in morning trade. Key benchmark indices moved into positive zone from negative zone in mid-morning trade as Asian stocks rose. Key benchmark indices gave away a lion's portion of intraday gains in early afternoon trade. Key benchmark indices extended intraday gains in afternoon trade. The Sensex, and the 50-unit CNX Nifty, both, hit their highest level in nearly a week. The Sensex pared gains in mid-afternoon trade.
Foreign institutional investors (FIIs) sold shares worth a net Rs 43.74 crore on Tuesday, 21 January 2014, as per provisional data from the stock exchanges.
At 14:20 IST, the S&P BSE Sensex was up 26.01 points or 0.12% to 21,277.13. The index rose 61.05 points at the day's high of 21,312.17 in afternoon trade, its highest level since 16 January 2014. The index dropped 82.69 points at the day's low of 21,168.43 in early trade, its lowest level since 20 January 2014.
The CNX Nifty was up 7.45 points or 0.12% to 6,321.25. The index hit a high of 6,330.60 in intraday trade, its highest level since 16 January 2014. The index hit a low of 6,287.45 in intraday trade, its lowest level since 20 January 2014.
The market breadth, indicating the overall health of the market, was positive. On BSE, 1,273 shares gained and 1,243 shares fell. A total of 159 shares were unchanged.
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Among the 30-share Sensex pack, 18 stocks rose and rest fell. Tata Steel (up 2.07%), Hindalco Industries (up 1.45%) and NTPC (up 1.45%) edged higher from the Sensex pack.
HDFC rose 0.2% on good Q3 result. The lender's net profit rose 12.06% to Rs 1277.71 crore on 14.87% increase in total income to Rs 6030.93 crore in Q3 December 2013 over Q3 December 2012. The company announced the result during trading hours today, 22 January 2014. As on 31 December 2013, HDFC's loan book stood at Rs 192266 crore, compared with Rs 160941 crore in the corresponding period of the previous year. This is after considering the loans sold during the preceding 12 months amounting to Rs 3263 crore.
On a consolidated basis, HDFC's net profit rose 13.42% to Rs 1934.85 crore on 13.30% increase in total income to Rs 10052.98 crore in Q3 December 2013 over Q3 December 2012.
Zee Entertainment Enterprises rose after the company's chairman Subhash Chandra said at the time of announcement of the company's Q3 results that while the overall economic environment stays challenging, Zee continues to growth its business at a healthy pace. The stock was up 1.37%. The company's consolidated net profit rose 10.03% to Rs 213.59 crore on 25.8% growth in total income to Rs 1226.40 crore in Q3 December 2013 over Q3 December 2012. The Q3 result was announced during market hours today, 22 January 2014.
Zee Entertainment Enterprises' advertising revenue rose 34.3% to Rs 684.30 crore in Q3 December 2013 over Q3 December 2012. Subscription revenue rose 11.4% to Rs 456.50 crore in Q3 December 2013 over Q3 December 2012.
Zee Entertainment Enterprises' consolidated operating revenue rose 26.6% to Rs 1188.40 crore in Q3 December 2013 over Q3 December 2012. Earnings before interest, taxation, depreciation and amortization (EBITDA) rose 11.3% to Rs 290.70 crore in Q3 December 2013 over Q3 December 2012. EBITDA margin contracted to 24.5% in Q3 December 2013, from 27.8% in Q3 December 2012. The company said that the contraction in EBITDA margin was due to higher losses in the sports business due to a heavy event calendar. Excluding sports business, EBITDA margin expanded to 39.6% in Q3 December 2013, from 32.5% in Q3 December 2012.
With regard to future business outlook, Punit Goenka, Manaing Director and Chief Executive Officer, Zee Entertainment Enterprises said: "The rollout of digitization, even though with some delays, is a very good development for the industry and will provide new growth opportunities. Digitization will lead to fragmentation of audiences. At Zee, we believe this presents a huge opportunity to create new products for specific segments. Barring short-term impact of reduction in inventory, advertising spends on television are expected to grow in healthy double digits over next many years. Rollout of BARC is expected to give it a positive fillip. We continue to make investments in creating excellent quality content for our existing channels. We also continue to explore growth opportunities in domestic markets, international markets and in new media space".
Pharma stocks edged higher. Cipla (up 1.13%), Dr Reddy's Laboratories (up 0.18%), Lupin (up 1.57%), Ranbaxy Laboratories (up 0.25%) gained.
Sun Pharmaceutical Industries rose 2.01%, with the stock extending intraday gains.
Suven Life Sciences jumped 6.11% after the company said its facility in Pashamylaram near Hyderabad received approval from the US Food and Drug Administration. The company made the announcement during trading hours today, 22 January 2014. Suven Life Sciences said it underwent US Food and Drug Administration (USFDA) renewal inspection at its facility in Pashamylaram near Hyderabad for the manufacture and supply of active pharmaceutical ingredients (bulk drugs), intermediates and formulations under cGMP.
Based on the inspection and the review thereafter, USFDA has classified the Pashamylaram facility as acceptable for manufacture and supply of active pharmaceutical ingredients, intermediates and formulations, the company said in a statement.
So far, Suven Life Sciences has filed 29 Drug Master Files (DMFs) and 1 Abbreviated New Drug Application (ANDA) from this facility, which is FDA compliant under current good manufacturing practices (cGMP) and continued after renewal inspection.
Torrent Pharmaceuticals jumped 8.13% after consolidated net profit rose 41.1% to Rs 158 crore on 28.9% increase in net sales to Rs 990 crore in Q3 December 2013 over Q3 December 2012. The company announced the results after trading hours on Tuesday, 21 January 2014.
Torrent Pharmaceuticals said its domestic formulation business revenues grew 15% to Rs 297 crore in Q3 December 2013 over Q3 December 2012. As per AIOCD, Torrent grew at 12% during the quarter compared to covered market growth of 5% and Indian Pharmaceutical growth of 5%.
International revenues grew by 41% to 637 crore in Q3 December 2013 over Q3 December 2012. In the international operations, US business reported growth of 61%, Europe (incl.Heumann) 59%, Brazil growth 26% and Rest of the World, including Russia, CIS, Mexico & Canada 9%.
In Q3 December 2013, the company acquired Indian branded formulations business of Elder for a consideration of Rs 2004 crore. The transaction is subject to conditions precedent including shareholder approval and applicable regulatory approvals and is expected to close in the first half of 2014, Torrent Pharmaceuticals said in a statement.
Ashok Leyland edged higher in choppy trade as the company is optimistic about Q4 March 2014 after reporting dismal Q3 December 2013 results on Tuesday, 21 January 2014. The stock was up 2.68%.The company reported a net loss of Rs 167.20 crore in Q3 December 2013, compared with a net profit of Rs 74.14 crore in Q3 December 2012. Total income fell 18.67% to Rs 1968.62 crore in Q3 December 2013 over Q3 December 2012. The company announced result after market hours on Tuesday, 21 January 2014.
Ashok Leyland said that the company gained market share in the trucks business buoyed by the success of the ICV truck BOSS in every market where it has been launched. In line with the company's policy of ensuring fiscal prudence, the company is working to lower costs, reduce debt and divest non-core assets. There has been a significant reduction in operating costs and lowered working capital; including a VRS for about 500 executives, Ashok Leyland said in a statement.
"We look forward to the general optimism associated with Q4. Our latest offering, the CAPTAIN range of heavy trucks, brings an altogether different level of trucking experience to Indian roads and we are sure to reap its benefits. We hope orders under JNNURM will commence in Q4," said Vinod K. Dasari, Managing Director, Ashok Leyland.
The company continues to invest in network expansion with over 600 customer touch points, including retail parts stores and containerized workshops, across the country, Ashok Leyland said.
GMR Infrastructure dropped after the company after trading hours on Tuesday, 21 January 2014, said that a meeting of the board of directors of the company will be held on Friday, 24 January 2014, inter-alia, to consider raising funds through Foreign Currency Convertible Bonds or any other securities. The stock was off 1.47% at Rs 23.40.
Bond prices dropped after a Reserve Bank of India panel recommended that the central bank should start using a consumer-price inflation target to determine monetary policy. The panel's recommendations if accepted by the central bank may result in increase in interest rates to achieve the panel's 4% consumer-price inflation target by 2016. The yield on 10-year benchmark federal paper, 8.83% GS 2023, was hovering at 8.6407%, higher than its close of 8.5531% on Tuesday, 21 January 2014. Bond yield and bond prices move in opposite direction.
A Reserve Bank of India panel has recommended that the central bank should start using a consumer-price inflation target to determine monetary policy. The panelset up soon after former International Monetary Fund chief economist Raghuram Rajan took over as RBI governor last yearwas created to come up with ways to make the country's monetary policy more transparent and predictable. In a 130-page report released on Tuesday, 21 January 2014, the panel recommended using a well-defined range of consumer-price index inflation to set monetary policy. The report suggested a CPI inflation rate target within two percentage points above or below 4%. The RBI panel said the central bank should move to lower India's consumer inflation, which has been close to 10% in recent months, to 8% within the next 12 months and to 6% in 24 months, before adopting the target. "This transition path should be clearly communicated to the public," the report said.
If accepted, the report's recommendation would bring India in line with global norms by placing less emphasis on wholesale price inflation, which India has used until now as its main indicator of price movements. The wholesale price inflation measure, which excludes the massive service sector, has typically been much lower than consumer prices. The consumer price index is currently hovering near 10%, compared with about 6% for wholesale prices.
Historically, the Indian central bank has followed a multifocus approach to monetary policy, setting interest rates based on how it sees inflation, growth and currency stability. It usually didn't have an official inflation target, which often left markets surprised by its moves.
The panel also suggested monetary policy be decided by a committee headed by the governor with final decisions through a vote of the committee members, as is the practice in some developed countries like the UK. Right now in India monetary policy decisions are made by the RBI governor alone, though he gets input from an advisory committee.
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 followed Asian stocks higher on Wednesday, 22 January 2014, as Chinese shares advanced the most in two months on falling money-market rates. Key benchmark indices in France, Germany and UK rose 0.33% to 0.6%.
The Bank of England will publish the minutes of the Monetary Policy Committee's January meeting today, 22 January 2014. Central bank officials at the meeting left the country's benchmark interest rate at a record low of 0.5 percent and kept its asset-purchase target at 375 billion pounds ($618 billion).
Asian stocks edged higher on Wednesday, 22 January 2014, after the Bank of Japan pledged to maintain economic stimulus and the International Monetary Fund raised its global growth forecast. Key benchmark indices in Japan, Singapore, South Korea, Indonesia, China, Taiwan and Hong Kong were up 0.01% to 2.16%.
The Bank of Japan (BOJ) today, 22 January 2014, pledged to maintain economic stimulus after a two-day monetary policy review. The BOJ said it will keep plans to increase the monetary base annually by 60 trillion to 70 trillion yen and maintained its inflation target for 2015.
The Thai government declared a state of emergency in its capital in response to antigovernment protests that have paralyzed the city and stirred up increasingly violent attacks. Over the past week, unknown assailants have launched attacks on the protesters, killing one and injuring dozens. The unrest is also dragging on the economy, with Japanese auto companies, some of Thailand's most important investors, raising a red flag that future investment could be affected.
Trading in US index futures indicated that the Dow could drop 13 points at the opening bell on Wednesday, 22 January 2014. US stocks closed mostly higher on Tuesday, 21 January 2014, though disappointing earnings results from Verizon Communications Inc and the Travelers Cos. Inc. weighed on the Dow. The S&P 500's cyclical sectors energy and natural resources were among the biggest gainers after the People's Bank of China on Tuesday, 21 January 2014, said it provided emergency funding support for commercial banks as they gear up to meet demands for cash ahead of the Lunar New Year.
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.
The International Monetary Fund raised its forecast for global growth this year as expansions in the US and UK accelerate, and urged advanced economies to maintain monetary accommodation to strengthen the recovery. The global economy will grow 3.7% this year, compared with an October estimate of 3.6%, the IMF said in revisions to its World Economic Outlook released in Washington.
US gross domestic product will expand 2.8%, compared with 2.6%; Japan will gain 1.7% versus 1.2%; and the UK will increase 2.4% from 1.9%, the report showed. "In advanced economies, output gaps generally remain large and, given the risks, the monetary policy stance should stay accommodative while fiscal consolidation continues," the Washington-based organization said in the report. "In many emerging market and developing economies, stronger external demand from advanced economies will lift growth, although domestic weaknesses remain a concern." Central banks in the US, Japan and the euro area face inflation levels under their targets while trying to accelerate growth with policies including benchmark interest rates near zero and bond-buying programs. While it raised the outlook for advanced nations, the IMF said "downside risks remain," including financial-market volatility in emerging markets.
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