A bout of volatility was witnessed in early trade as key benchmark indices trimmed losses after slipping into the red after a positive opening. The barometer index, the S&P BSE Sensex, was down 3.57 points or 0.02%, off about 30 points from the day's high and up close to 115 points from the day's low. The market breadth, indicating the overall health of the market, was strong. Bank stocks gained. Hindalco Industries dropped as the stock turned ex-dividend today, 30 August 2013, for dividend of Rs 1.40 per share for the year ended March 2013.
At 9:30 IST, the S&P BSE Sensex was down 3.57 points or 0.02% to 18,397.47. The index rose 27.75 points at the day's high of 18,428.79 in opening trade. The index fell 117.30 points at the day's low of 18,283.74 in early trade.
The CNX Nifty was down 6.20 points or 0.11% to 5,402.85. The index hit a high of 5,408.80 in intraday trade. The index hit a low of 5,367.35 in intraday trade.
The market breadth, indicating the overall health of the market, was strong. On BSE, 466 shares rose and 298 shares fell. A total of 30 shares were unchanged.
Among the 30-share Sensex pack, 18 stocks fell and rest of them rose. Tata Steel (up 2.14%), HDFC (up 1.62%) and Wipro (up 1.35%), edged higher.
Bank stocks gained. HDFC Bank (up 1.44%) and ICICI Bank (up 0.64%), edged higher.
State Bank of India (SBI) rose 0.39%. The bank said after market hours on Thursday, 29 August 2013, that the interest rate for bulk deposits for the tenors 7 days to 60 days will be 9% per annum and for the tenor 61 days to less than one year will be 8.25% per annum with effect from 31 August 2013.
The Union Finance Minister Shri P. Chidambaram said on Thursday that banks must ensure flow of credit to every sector of industry. He said that bankers have been told to be sympathetic and have humane approach towards genuine defaulters. He said that this is time for hand holding of borrowers who are facing difficulties, especially industry. He said that genuine defaulters and willful defaulters need to be dealt with separately. We have to be strict with willful defaulters, he added. The Finance Minister was speaking at the Third Parliamentary Consultative Committee Meeting of his Ministry on Thursday. The subject matter for the discussion of the meeting was NPAs in Public Sector Banks (PSBs) and measures taken to contain them.
The Finance Minister said that banks need capitalization to meet their enhanced lendings, which is increasing every year. He said that this year the government has made provisions of Rs 14000 crore for bank recapitalization. He said that normally banks make their own arrangements to meet their capital requirements both through their own resources such as their profit etc. and the market. The Finance Minister said that all our Public Sector Banks (PSBs) are following Basel III norms and, in fact, our capital and provisioning requirements are stricter than Basel III norms.
Earlier, participating in the discussion, members of the Consultative Committee gave various suggestions with regard to recovery from willful/genuine defaulters and how to deal with different NPA cases. Some members raised the issue of softer approach by the bankers towards genuine defaulters such as farmers and promoters of MSMEs among others as they are vulnerable to external factors which are beyond their control. Some members raised the issue of misuse of CDR, down grading of banks, if any, by rating agencies due to NPAs or other factors, overall analysis of NPAs to find out who are genuine or willful defaulters and to take personal guarantees from industrialists if they have assets etc among others.
Jindal Steel & Power (JSPL) declined 0.08%. The board of directors of the company will meet today, 30 August, 2013, to consider a proposal for buy-back of equity shares of the company.
Sesa Goa shed 2.39%. The company said after market hours on Thursday, 29 August 2013, that the company has allotted equity shares to the shareholders of Sterlite Industries, The Madras Aluminium Company and Ekaterina pursuant to the Schemes of Amalgamation and Arrangement. After the allotment of equity shares, the paid up equity share capital of the company stands increased to Rs 296.46 crore from Rs 86.91 crore.
Sesa Goa said that the company will apply to the Bombay Stock Exchange and the National Stock Exchange in India for listing approval for the new Sesa Goa shares and expects to receive the final listing approval within three to four business days. Thereafter, Sesa Goa will apply to the stock exchanges for trading approval for the new Sesa Goa shares and expects to receive the trading approval within a further two to three business days. The new Sesa Goa shares are expected to begin trading on the on the bourses on the next business day in India after trading approval is received, Sesa Goa said.
Hindalco Industries dropped 0.14% as the stock turned ex-dividend today, 30 August 2013, for dividend of Rs 1.40 per share for the year ended March 2013.
NHPC declined 2.14% as the stock turned ex-dividend today, 30 August 2013, for a final dividend of Rs 0.60 per share for the year ended March 2013.
On the macro front, the Central Statistics Office (CSO) will unveil data on gross domestic product (GDP) for Q1 June 2013 at 17:30 IST today, 30 August 2013. The GDP growth is seen moderating further to 4.7% in Q1 June 2013, from 4.78% in Q4 March 2013, as per the median estimate of a poll of economists carried out by Capital Market. The GDP grew 5% in the year ended 31 March 2013, the weakest in a decade, as falling domestic and overseas demand, crumbling domestic infrastructure facilities, bureaucratic delays in approvals for industrial projects and high borrowing costs choked investments in the economy.
Most Asian stocks rose on Friday, 30 August 2013, following overnight gains in US stocks triggered by data showing that the US economy expanded more rapidly than previously thought in the second quarter. Key benchmark indices in South Korea, Indonesia, Taiwan and China rose by 0.25% to 1.05%. Key benchmark indices in Singapore, Hong Kong, and Japan fell by 0.06% to 0.48%.
Japan's consumer prices increased at the fastest pace since 2008 in July, adding to signs that Prime Minister Shinzo Abe is making progress in pulling the economy out of 15 years of deflation. Consumer prices excluding fresh food climbed 0.7% from a year earlier, the statistics bureau said today in Tokyo.
US stocks rose on Thursday, 29 August 2013, as data showed the economy expanded at a faster pace in the second quarter and concerns over Syria eased. Gross domestic product rose at a 2.5% annualized rate, up from an initial estimate of 1.7%, Commerce Department figures showed Thursday in Washington. Jobless claims in the week ended August 24 dropped 6,000 to 331,000 from a revised 337,000 the week before that was higher than initially reported, the Labor Department said
US markets remain closed on Monday, 2 September 2013, for the Labor Day holiday.
The prospect of imminent military strikes on Syria receded as the UK and France said they favor waiting for the results of a United Nations investigation into alleged use of chemical weapons. The UK Parliament has voted against the use of force in Syria. The US which says it has evidence that Syria's government was responsible, won't act without allies, Defense Secretary Chuck Hagel said. Meanwhile, the White House told US congressional leaders that a potential strike on Syria would focus on removing the regime's chemical-weapons capability.
Investors across the globe are eyeing the next policy meeting of the Federal Open Market Committee (FOMC) scheduled next month, with their focus squarely on the timing of tapering of Federal Reserve's bond purchases. The FOMC holds a two-day policy meeting on 17-18 September 2013 to decide on interest rates in the United States. The US central bank currently buys $85 billion a month in US debt and mortgage-backed securities in a bid to hold interest rates low and encourage economic growth. Federal Reserve Chairman Ben Bernanke has on several occasions stressed that the tapering process is dependent on an improvement in data. Fed's bond-buying program has kept global markets flush with liquidity in recent years.
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