Intraday volatility continued as key benchmark indices trimmed losses after hitting fresh intraday low in mid-afternoon trade. The market breadth, indicating the overall health of the market, was negative. The barometer index, the S&P BSE Sensex, and the 50-unit CNX Nifty, both, hit 1-1/2-week low. The Sensex was down 170.75 points or 0.82%, up about 50 points from the day's low and off close to 170 points from the day's high. Weakness in European and Asian stocks hit sentiment adversely on the domestic bourses.
Bank stocks edged lower. Punjab National Bank (PNB) tumbled after weak Q2 results. Shares of state-run UCO Bank jumped after strong Q2 results. Shares of two-wheeler makers dropped. Sun TV Network dropped after the television broadcaster reported decline in EBITDA margin in Q2 September 2013.
Asian stocks fell on Friday, 8 November 2013, after faster US economic growth fueled concern the Federal Reserve may reduce monetary stimulus for the US economy sooner than expected. The US central bank currently buys bonds worth $85 billion a month in a bid to hold interest rates low and encourage economic growth in the world's biggest economy. Fed's bond-buying program has been a source of liquidity for most Asian and emerging markets this year. European stocks dropped after Standard & Poor's cut France's credit rating.
A bout of volatility was witnessed as key benchmark indices trimmed initial losses triggered by weakness in Asian stocks. The Sensex and the 50-unit CNX Nifty, both, hit 1-1/2-week low. Weakness continued on the bourses in morning trade. The Sensex hovered in negative terrain in mid-morning trade. Weakness continued on the bourses in early afternoon trade. A bout of volatility was witnessed as key benchmark indices trimmed losses after hitting fresh intraday low in afternoon trade. Intraday volatility continued as key benchmark indices trimmed losses after hitting fresh intraday low in mid-afternoon trade.
At 14:20 IST, the S&P BSE Sensex was down 170.75 points or 0.82% to 20,652.02. The index lost 221.87 points at the day's low of 20,600.90 in mid-afternoon trade, its lowest level since 29 October 2013. The index fell 1.76 points at the day's high of 20,821.01 in morning trade.
The CNX Nifty was down 55.85 points or 0.9% to 6,131.40. The index hit a low of 6,120.95 in intraday trade, its lowest level since 29 October 2013. The index hit a high of 6,185.15 in intraday trade.
The market breadth, indicating the overall health of the market, was negative. On BSE, 1,316 shares dropped and 983 shares rose. A total of 163 shares were unchanged.
Among the 30-share Sensex pack, 22 stocks fell and rest of them rose. HDFC (down 3.82%), Maruti Suzuki India (down 3.2%) and ONGC (down 1.89%), edged lower from the Sensex pack.
Shares of two-wheeler makers dropped. Hero MotoCorp (down 1.22%) and Bajaj Auto (down 0.79%), declined.
Bank stocks edged lower. ICICI Bank declined 0.37%.
HDFC Bank shed 2.54%.
Among PSU bank stocks, State Bank of India, Union Bank of India, Bank of India, and Bank of Baroda dropped by 0.64% to 1.67%.
Global credit rating agency Fitch Ratings today, 8 November 2013, said that the Reserve Bank of India's (RBI) recent steps aimed at subsidiarisation of domestic foreign banks recognizes the need for greater foreign participation in a growing Indian economy. These rules are unlikely to alter the banking sector's competitive landscape by itself, but does signal the prospect of further reforms in India's banking sector, the global rating agency said.
State-run Canara Bank shed 1.73% after the bank today, 8 November 2013, said it has raised interest rates on retail term deposits across maturities. Interest rate on deposits of less than Rs 1 crore on the maturity bucket of 270 days to less than one year has been raised to 8.25% from earlier 8%. For maturity bucket of above 1 year to less than 2 years, the interest rate has been hiked to 9.05% from earlier 8.75%. Canara Bank has also tweaked interest rates on bulk deposits of Rs 1 crore and above.
Punjab National Bank (PNB) fell 4.31% on weak Q2 result. The bank's net profit fell 52.56% to Rs 505.49 crore on 2.62% increase in total income to Rs 11632.84 crore in Q2 September 2013 over Q2 September 2012. The result was announced during trading hours today, 8 November 2013.
Punjab National Bank's ratio of net non-performing assets (NPAs) to net advances stood at 3.07% as on 30 September 2013, compared with 2.98% as on 30 June 2013 and 2.69% as on 30 September 2012. The bank's ratio of gross NPAs to gross advances stood at 5.14% as on 30 September 2013, compared with 4.84% as on 30 June 2013 and 4.66% as on 30 September 2012.
Provisions and contingencies surged 76.82% to Rs 1898.73 crore in Q2 September 2013 over Q2 September 2012. The provisioning coverage ratio as on 30 September 2013 stood at 55.27%.
Government of India holds 57.87% stake in Punjab National Bank (as on 30 September 2013).
In a separate announcement, Punjab National Bank said it has decided to realign the interest rates with the prevailing market rates with effect from 11 November 2013. The rate of interest on single domestic term deposit of less than Rs 1 crore has been increased by 25 basis points (bps) i.e. from 6.75% to 7% in maturity bucket of 91 days to 179 days and by 50 bps from 7.5% to 8% in the bucket of 271 days to less than one year period. In case of maturity period of one year and above up to ten years, uniform interest rates of 9% shall be applicable, the bank said.
In case of single domestic term deposits of Rs 1 crore to Rs 10 crore, the rate of interest has been cut to 8% from 8.25% for maturity period of 180 days to 270 days.
Shares of state-run UCO Bank jumped after strong Q2 results. The stock was up 4.83%. The bank's net profit jumped 285.88% to Rs 400.20 crore on 5.55% increase in total income to Rs 4653.30 crore in Q2 September 2013 over Q2 September 2012. The result hit the market during trading hours.
Sun TV Network dropped after the television broadcaster reported decline in EBITDA margin in Q2 September 2013. The stock was off 5.94%. The company's net profit rose 11.54% to Rs 169.16 crore on 7.63% growth in revenue at Rs 466.41 crore in Q2 September 2013 over Q2 September 2012. Total income rose 13.83% to Rs 504.21 crore in Q2 September 2013 over Q2 September 2012. Earnings before interest, taxation, depreciation and amortization (EBITDA) rose 2.64% to Rs 337.68 crore in Q2 September 2013 over Q2 September 2012. EBITDA margin declined sharply to 72.39% in Q2 September 2013, from 75.92% in Q2 September 2012.
In the foreign exchange market, the rupee edged lower against the dollar as faster US economic growth fueled concern the Federal Reserve may reduce monetary stimulus for the US economy sooner than expected. The partially convertible rupee was hovering at 62.65, compared with its close of 62.41/42 on Thursday, 7 November 2013.
Indian government bond prices dropped as faster US economic growth fueled concern the Federal Reserve may reduce monetary stimulus for the US economy sooner than expected. The yield on 10-year benchmark government paper -- 7.16% GS 2023 -- was hovering at 8.9052%, higher than its close of 8.8492% on Thursday, 7 November 2013. Bond yield and bond prices are inversely related.
India plans to launch bonds linked to consumer price inflation for retail investors in the next 7-10 days, Arvind Mayaram, the economic affairs secretary at the finance ministry, said on the sidelines of an event today, 8 November 2013. The Reserve Bank of India said in its policy statement last month that inflation-indexed securities for retail investors of 10-year tenor would be linked to the new (combined) consumer price index. The rate of interest on these securities would comprise a fixed rate plus inflation. Interest would be compounded half-yearly and paid cumulatively at redemption, the RBI statement said.
European stocks dropped on Friday, 8 November 2013, as Standard & Poor's cut France's credit rating and investors awaited data on American jobs. Key benchmark indices in France, Germany and UK dropped 0.52% to 0.84%.
Global ratings agency Standard and Poor's cut France's sovereign credit rating by one notch to AA from AA+ on Friday, citing lack of progress in government reforms of the country's economy. In a statement, S&P said that it had lowered France's rating because it believed the French government's reforms to taxation, as well as to product, services, and labor markets, "will not substantially raise France's medium-term growth prospects, and that ongoing high unemployment is weakening support for further significant fiscal and structural policy measures". "Furthermore, we believe lower economic growth is constraining the government's ability to consolidate public finances," the agency said. S&P's outlook on France is stable, reflecting its view that the probability it will raise or lower France's rating over the next two years "is less than one-in-three."
The European Central Bank (ECB) on Thursday cut its benchmark interest rate to a record low after a drop in inflation to the slowest pace in four years threatened its mission to keep prices stable. Policy makers meeting in Frankfurt on Thursday reduced the main refinancing rate by a quarter point to 0.25%.
The Bank of England kept its benchmark rate at a record-low 0.5% in London on Thursday, while its bond-purchase plan stayed at 375 billion pounds ($603 billion).
Asian stocks fell on Friday, 8 November 2013, after faster US economic growth fueled concern the Federal Reserve may reduce monetary stimulus for the US economy sooner than expected. Key benchmark indices in Singapore, China, Japan, Hong Kong, Taiwan, Indonesia and South Korea shed 0.6% to 1.09%.
China's trade surplus expanded more than forecast to $31.1 billion last month from $15.21 billion in September. Exports grew 5.6% after contracting last month. Among the other October data, imports rose 7.6% in October 2013.
China is due to issue a heavy slate of other October data, including industrial production, consumer inflation and retail sales tomorrow, 9 November 2013.
China's leaders will meet in Beijing on November 9-12 to map out economic policies as the country heads for its slowest annual growth in more than two decades.
Trading in US index futures indicated that the Dow could advance 19 points at the opening bell on Friday, 8 November 2013. US stocks tumbled on Thursday, 7 November 2013, as speculation the Federal Reserve may scale back stimulus amid faster-than-estimated economic growth overshadowed a move by the European Central Bank to cut a key interest rate.
Data yesterday showed growth in the world's biggest economy accelerated to a 2.8% annualized rate last quarter, faster than the 2% median market estimates. Fewer Americans filed applications for unemployment benefits last week, indicating firings haven't picked up following the partial government shutdown. Jobless claims decreased by 9,000 to 336,000 in the week ended Nov. 2 from 345,000 the prior period, the Labor Department reported in Washington.
The US government will today, 8 November 2013, release nonfarm payrolls figures for October 2013. The job data is a key economic indicator that has been watched closely in recent months to see whether the US Federal Reserve will roll back its bond-buying program.
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