Key benchmark indices moved in a narrow range in negative zone in early afternoon trade. The market breadth indicating the overall health of the market was negative. The barometer index, the S&P BSE Sensex, was down 40.97 points or 0.16% at 25,950.76. There has been a narrow movement for the key benchmark indices so far during the day after a mixed batch of latest corporate earnings. Bharti Airtel surged after reporting strong Q1 results. Shares of other telecom companies rose after Bharti Airtel's Q1 results. Escorts fell after weak Q1 results.
At 12:20 IST, the S&P BSE Sensex was down 40.97 points or 0.16% to 25,950.76. The index fell 65.87 points at the day's low of 25,925.36 in mid-morning trade. The index rose 55.08 points at the day's high of 26,022.62 in early trade.
The CNX Nifty was down 18.90 points or 0.14% to 7,729.80. The index hit a low of 7,729.25 in intraday trade. The index hit a high of 7,756.85 in intraday trade.
The market breadth indicating the overall health of the market was negative. On BSE, 1,368 shares fell and 1,033 shares rose. A total of 112 shares were unchanged.
The BSE Mid-Cap index was down 26.80 points or 0.29% at 9,412.42. The BSE Small-Cap index was down 33.77 points or 0.34% at 9,932.87. Both these indices underperformed the Sensex.
Tata Motors (down 1.8%), Tata Power Company (down 1.73%) and State Bank of India (SBI) (down 1.34%) edged lower from the Sensex pack.
Bharti Airtel jumped 5.05% to Rs 372.25 on strong Q1 results. The stock hit high of Rs 373.90 and low of Rs 358.50 so far during the day. Bharti Airtel's consolidated net profit rose 60.91% to Rs 1108.50 crore on 13.33% increase in total revenue to Rs 22962 crore in Q1 June 2014 over Q1 June 2013. Net profit was boosted by improved operational efficiency and lower forex and derivative losses, the company said in a statement.
Bharti Airtel's consolidated EBITDA (earnings before interest, taxes, depreciation and amortization) jumped 18% to Rs 7720 crore in Q1 June 2014 over Q1 June 2013. The EBITDA margin edged up to 33.6% in Q1 June 2014, from 32.3% in Q1 June 2013. The company's consolidated net debt has reduced to $9.609 billion, resulting in the net debt to EBITDA ratio (LTM) improving to 2.04 times as compared to 2.20 times at the end of the previous quarter.
Mr. Gopal Vittal, MD and CEO, India & South Asia operations of Bharti Airtel said: "The industry awaits more 3G spectrum being made available even as we look forward to the implementation of policies relating to spectrum sharing and trading. These have become essential to deliver sustained broadband growth and high quality service.
In a statement, Mr. Christian de Faria, MD and CEO, of Africa operations of Bharti Airtel said that that the company's investments in licences, networks and marketing in Africa are directed towards sustaining double-digit revenue growth.
Shares of other telecom companies rose after Bharti Airtel's Q1 results. Idea Cellular (up 2.89%), MTNL (up 2.11%) and Reliance Communications (up 0.9%) gained. Tata Teleservices (Maharashtra) dropped 0.68%.
Escorts fell 3.57% on weak Q1 results. The company after net profit declined 41.49% to Rs 34.11 crore on 4.33% decline in net sales to Rs 1122.11 crore in Q1 June 2014 over Q1 June 2013. The Q1 result was announced on Tuesday, 29 July 2014, when stock market was closed on account of Ramzan ID. Escorts' EBITDA (earnings before interest, taxes, depreciation and amortization) margin rose to 5% in Q1 June 2014, from 4.7% in Q4 March 2014.
The market may remain volatile in the near future as traders roll over positions in the futures & options (F&O) segment from the near month July 2014 series to August 2014 series. The near-month July 2014 F&O contracts expire tomorrow, 31 July 2014..
In the foreign exchange market, the rupee was almost unchanged against the dollar. The partially convertible rupee was hovering at 60.1475, compared with its close of 60.14 on Monday, 28 July 2014.
Asian stocks rose for a fourth day today, 30 July 2014, before the Federal Reserve updates markets on monetary policy later in the global day today, 30 July 2014. Key benchmark indices in Japan, Hong Kong, South Korea, and Taiwan rose by 0.18% to 1%. Key benchmark indices in China and Singapore fell by 0.02% to 0.11%.
Trading in US index futures indicated that the Dow could gain 23 points at the opening bell on Wednesday, 30 July 2014. US stocks fell on Tuesday, 29 July 2014, after US President Barack Obama announced new sanctions against Russia and warned its actions in Ukraine are "setting back decades of progress".
The US sanctioned three Russian banks and a state-owned shipbuilder that serves Russia's navy and oil and gas industry, joining with the European Union in escalating penalties for action in Ukraine. The EU curbed Russia's access to bank financing and advanced technology in its widest-ranging sanctions yet over President Vladimir Putin's backing of rebels in eastern Ukraine.
Economic reports yesterday showed improving US consumer sentiment while the housing market remains in a slowdown. The Conference Board's consumer confidence index rose to 90.9, the highest reading since October 2007. Residential real-estate prices advanced 9.3% in the 12 months ended May, the slowest pace in more than a year, according to the S&P/Case-Shiller index of property values in 20 cities.
Expectations are that the Federal Reserve's Federal Open Market Committee (FOMC) will announce reduction of another $10 billion from its monthly asset purchases, or quantitative easing (QE) program after its two-day policy meeting which concludes later in the global day today, 30 July 2014. So far in 2014, the FOMC has been consistently trimming its quantitative easing at each meeting by $10 billion per month. This is the purchase of Treasury and mortgage-backed securities meant to push down long-term interest rates. As the Fed approaches the end of its QE program, Fed watchers are looking for a signal on when the central bank will raise interest rates.
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