Key benchmark indices extended initial gains and hit fresh intraday high in morning trade. The barometer index, the S&P BSE Sensex, was up 75.69 points or 0.36%, up about 75 points from the day's low and off close to 5 points from the day's high. The market breadth, indicating the overall health of the market, was strong. Gains in Asian stocks boosted sentiment on the domestic bourses. The market sentiment was also boosted by data showing that foreign funds were net buyers of Indian stocks on Monday, 20 January 2014. Foreign institutional investors (FIIs) bought shares worth a net Rs 384.89 crore on Monday, 20 January 2014, as per provisional data from the stock exchanges.
Among IT stocks, HCL Technologies scaled record high. Capital goods stocks edged higher. Most power distribution firms rose while power generation firms were mixed after Maharashtra state government on Monday, 20 January 2014, announced a 20% reduction in power tariff in the state, excluding the financial capital Mumbai. Among FMCG stocks, Emami rose on strong Q3 result.
The market edged higher in early trade on firm Asian stocks. The Sensex extended initial gains and hit fresh intraday high in morning trade.
Asian stocks edged higher on Tuesday, 21 January 2014, as China's money-market rates dropped after the central bank pumped funds into the financial system.
At 10:20 IST, the S&P BSE Sensex was up 75.69 points or 0.36% to 21,280.74. The index rose 81.48 points at the day's high of 21,286.53 in morning trade, its highest level since 16 January 2014. The index fell 0.23 points at the day's low of 21,204.82 in early trade.
The CNX Nifty was up 21.60 points or 0.34% to 6,325.65. The index hit a high of 6,328.80 in intraday trade, its highest level since 16 January 2014. The index hit a low of 6,304.50 in intraday trade.
The market breadth, indicating the overall health of the market, was strong. On BSE, 1,047 shares gained and 607 shares fell. A total of 104 shares were unchanged.
Among the 30-share Sensex pack, 17 stocks rose and rest fell. Tata Motors (up 2.38%), Sesa Sterlite (up 2.09%) and Tata Steel (up 2.09%) edged higher from the Sensex pack.
HCL Technologies rose 0.91% to Rs 1,444.50, after hitting a record high of Rs 1445 in intraday trade. The company's consolidated net profit rose 5.7% to Rs 1496 crore on 2.8% increase in revenue to Rs 8184 crore in Q2 December 2013 over Q1 September 2013. The results are as per US Generally Accepted Accounting Principles (US GAAP). The company announced Q3 results on 16 January 2014.
Earnings before interest, taxation, depreciation and amortization (EBITDA) rose 1.6% to Rs 2126 crore in Q2 December 2013 over Q1 September 2013. EBITDA margin declined to 26% in Q2 December 2013, from 26.3% in Q1 September 2013.
HCL Technologies' consolidated net profit as per US GAAP rose 7.1% to $241.6 million on 4% growth in revenue at $1.3213 billion in Q2 December 2013 over Q1 September 2013. EBITDA rose 2.8% to $343.3 million in Q2 December 2013 over Q1 September 2013. EBITDA margin edged lower to 26% in Q2 December 2013, from 26.3% in Q1 September 2013.
Capital goods stocks edged higher. ABB (up 0.98%), BEML (up 1.37%), L&T (up 1.49%) and Punj Lloyd (up 0.71%) gained. But, Bhel fell 0.49%.
Most power distribution firms rose while power generation firms were mixed after Maharashtra state government on Monday, 20 January 2014, announced a 20% reduction in power tariff in the state, excluding the financial capital Mumbai. Among power generation firms, Adani Power, JSW Energy and Reliance Power rose 0.07% to 1.09%. Torrent Power, NTPC and GVK Power & Infra shed 0.19% to 0.41%.
Among power distribution firms, Tata Power Company, and Reliance Infrastructure rose 0.13% to 0.56%. But, Power Grid Corporation of India shed 0.15%.
In a populist move before the Lok Sabha and assembly elections, Maharashtra state government has decided to slash power tariffs by 20% for consumers across categories like domestic, commercial, industrial and agriculture. Arvind Kejriwal-led Delhi government had recently slashed power tariffs and the Maharashtra state government had appointed a committee under industries minister Narayan Rane to look into rate cuts considering the burden on industrial consumers.
This state cabinet's move on Monday will cover around 90% of power consumers in Maharashtra serviced by the state electricity distribution utility. It will involve a cost of around Rs 8500 crore to the state exchequer including Rs 606 crore per month by the state and Rs 100 crore by the generation and transmission companies.
The Maharashtra cabinet is also likely to take up the reduction in electricity tariffs in Mumbai, which is serviced by three distribution companies, of which two are private.
Federal Bank rose 1.81%. The Cabinet Committee on Economic Affairs on Monday, 20 January 2014, approved the proposal of Federal Bank for increase in foreign investment ceiling in the bank to 74% of the bank's equity, subject to the aggregate foreign institutional investors' (FIIs) shareholding not exceeding 49% of the paid up equity share capital of the bank. The approval would result in foreign investment of approximately Rs 1400 crore in the country, a government statement said.
It may be recalled that the Reserve Bank of India (RBI) had in August last year banned further purchases of shares of Federal Bank by FIIs after aggregate foreign share holding in the private sector bank crossed the overall limit of 49% of the bank's paid-up capital. Total FII holding in Federal Bank was 42.27% as on 31 December 2013.
Emami rose 3.63% on strong Q3 result. The company's consolidated net profit rose 31.1% to Rs 150.68 crore on 6.6% increase in net sales to Rs 584.67 crore in Q3 December 2013 over Q3 December 2012. The result was announced after market hours on Monday, 21 January 2014.
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.
Asian stocks edged higher on Tuesday, 21 January 2014, as China's money-market rates dropped after the central bank pumped funds into the financial system. Key benchmark indices in China, Japan, Singapore, Hong Kong, Taiwan, Indonesia, and South Korea were up 0.02% to 1.45%.
The People's Bank of China yesterday added funds and expanded access to a lending facility as rising demand for cash before the Lunar New Year drove the biggest jump in money-market rates in seven months. Small- and medium-sized Chinese banks will also be able to tap the PBOC's Standing Lending Facility for loans of up to two weeks on a trial basis after the seven-day repurchase rate, a gauge of interbank funding availability, jumped 153 basis points yesterday to 6.32%.
The Bank of Japan's two-day monetary policy meeting began today, 21 January 2014.
Trading in US index futures indicated that the Dow could advance 76 points at the opening bell on Tuesday, 21 January 2014. The US stock market was closed on Monday, 20 January 2014, for a holiday commemorating civil rights leader Martin Luther King Jr.
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.
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