Key benchmark indices trimmed gains in late trade. Fall in world stocks on rising geopolitical tension after news on Thursday, 17 July 2014 of a downed Malaysian airlines jet at the Ukraine-Russia border capped gains on the domestic bourses. The barometer index, the S&P BSE Sensex, was provisionally up 83.22 points or 0.33%, off 69.02 points from the day's high and up 203.14 points from the day's low. The market breadth, indicating the overall health of the market, was negative.
IT stocks were in demand on good Q1 earnings from Tata Consultancy Services (TCS) and weakness in rupee against the dollar. TCS surged after the company after trading hours on Thursday, 17 July 2014, reported good Q1 June 2014 result. Wipro gained after the company before market hours today, 18 July 2014 announced that it has entered into a strategic alliance with Alberta-based ATCO, one of Canada's premier corporations. Zee Entertainment Enterprises (Zee) declined after reporting fall in Q1 consolidated net profit during market hours today, 18 July 2014.
The sentiment was positive after provisional data showed that foreign portfolio investors made substantial purchases of Indian stocks on Thursday, 17 July 2014. Foreign portfolio investors (FPIs) bought shares worth a net Rs 1912.42 crore on Thursday, 17 July 2014, as per provisional data from the stock exchanges.
As per provisional closing, the S&P BSE Sensex was up 83.22 points or 0.33% to 25,644.38. The index gained 152.24 points at the day's high of 25,713.40 in late trade, its highest level since 10 July 2014. The index fell 119.92 points at the day's low of 25,441.24 in morning trade, its lowest level since 16 July 2014.
The CNX Nifty was up 20.55 points or 0.27% to 7,661. The index hit a high of 7,685 in intraday trade, its highest level since 10 July 2014. The index hit a low of 7,595.50 in intraday trade, its lowest level since 16 July 2014.
The market breadth, indicating the overall health of the market, was negative. On BSE, 1,510 shares declined and 1,436 shares rose. A total of 104 shares were unchanged.
The BSE Mid-Cap index fell 38.89 points or 0.42% to 9,252.80. The BSE Small-Cap index fell 12.28 points or 0.12% to 10,180.84. Both these indices underperformed the Sensex.
Among the 30-share Sensex pack, 16 stocks gained and rest of them declined.
Hero MotoCorp (up 2.97%), Axis Bank (up 2.26%) and ICICI Bank (up 2.09%) edged higher from the Sensex pack.
IT stocks were in demand on good Q1 earnings from Tata Consultancy Services (TCS). Weakness in rupee against the dollar also boosted IT stocks. A weak rupee boosts revenue of IT firms in rupee terms as the sector derives a lion's share of revenue from exports.
Tech Mahindra (up 1.17%), Polaris Financial Technology (up 1.23%), Hexaware Technologies (up 1.33%), HCL Technologies (up 2.1%) and Infosys (up 0.26%) gained.
TCS surged 2.6%. TCS after trading hours on Thursday, 17 July 2014, reported 3.9% growth in consolidated net profit to Rs 5568 crore on 2.6% growth in revenue to Rs 22111 crore in Q1 June 2014 over Q4 March 2014. The bottom line was boosted by an exceptional item viz. a write back of depreciation charge of Rs 489.75 crore (net) due to a change in deprecation policy. Operating profit dropped 6% to Rs 5935 crore in Q1 June 2014 over Q4 March 2014.
TCS said that the company added five new $50 million plus clients during the quarter. TCS Chief Executive Officer and Managing Director N Chandrasekaran said that the company has a strong demand pipeline in place. TCS Chief Financial Officer Rajesh Gopinathan said that the company's disciplined stance in operations helped it mitigate the impact of multiple headwinds like currency movements, accelerated depreciation norms and wage hikes during the quarter. He said that the company will continue to maintain operating margins in the desired band by operating efficiently.
Wipro gained 1.7%. Wipro before market hours today, 18 July 2014 announced that it has entered into a strategic alliance with Alberta-based ATCO, one of Canada's premier corporations. As part of this alliance, Wipro will provide total outsourcing solutions to ATCO in Canada and Australia. Wipro and ATCO have signed a series of Master Services Agreements under which Wipro will provide the complete suite of IT services to ATCO. The arrangement is projected to result in revenues of over CAD 120 million ($112 million) to Wipro annually, for the next ten years, up to December 2024.
Wipro's IT services delivery model will be further strengthened in North America and Australia by ATCO I-Tek, a subsidiary of ATCO with a presence in both these geographies, which will now become a part of Wipro for an all-cash consideration of CAD 210 million ($195 million). ATCO I-Tek has been providing IT Services to ATCO for the past 15 years, the company said in a statement.
MindTree rose 0.48% after net profit surged 31.5% to Rs 129.40 crore on 2.4% growth in revenue to Rs 843.50 crore in Q1 June 2014 over Q4 March 2014. The Q1 result was announced after market hours on Thursday, 17 July 2014.
Commenting on the company's Q1 performance, Krishnakumar Natarajan, CEO & MD, MindTree said, "Our expertise-led strategy continues to deliver stellar results for our clients and for MindTree. We are seeing good traction with clients through multi-year, multi-million dollar deals. Apart from strong demand across the traditional service lines, we are now getting picked up as the lead partner for digital by many Fortune 100 customers".
Zee Entertainment Enterprises dropped 2.58% after consolidated net profit declined 6.26% to Rs 210.57 crore on 7.57% growth in total income to Rs 1124.65 crore in Q1 June 2014 over Q1 June 2013. The Q1 result was announced during market hours today, 18 July 2014.
Zee Entertainment Enterprises (Zee)'s consolidated operating revenue rose 11.6% to Rs 1085.70 crore in Q1 June 2014 over Q1 June 2013. Operating profit (EBITDA) rose 6.1% to Rs 309.20 crore in Q1 June 2014 over Q1 June 2013.
Zee's advertising revenue rose 17.4% to Rs 622.10 crore in Q1 June 2014 over Q1 June 2013. Once again, Zee has outperformed the industry growth rate which is in low double digits, the company said in a statement.
Mr. Subhash Chandra, Chairman, Zee said that the company expects television media industry to continue on its double-digit growth plan as industry witnessed a positive rub-off effect of election spending on the TV ad spends.
Mr. Chandra added that the company's performance during the quarter reflects the investments that Zee is making to grow its business and market share. This has been accompanied by a strong improvement in the operating performance of the existing businesses, he added.
Mr. Punit Goenka, MD and CEO, Zee said that the company continues to maintain healthy EBITDA margins in its businesses. EBITDA margins in its existing businesses have expanded, even as the company continues to invest in new businesses, Goenka added.
Speaking about the outlook for the business, Mr. Goenka said that the rollout of digitization, even though with some delays, is a positive development for the industry and will provide new growth opportunities throughout the television media value chain. Advertising spends on television are expected to grow in healthy double digits over next many years, Goenka said. Rollout of BARC and change in advertising currency from CPRP to CPT is expected to give it a positive fillip, he added. Development and effective monetization of newer avenues to reach the consumer is one of the company's focus areas, he further said. Creation and acquisition of excellent quality content remains core to the company's business and it continues to channelize investments to strengthen this core, Mr. Goenka said.
The Securities and Exchange Board of India (Sebi) on Thursday, 17 July 2014 put out draft regulations for infrastructure investment trusts that were announced in Union Budget 2014-15 on 10 July 2014 to provide easier financing options to developers of public works. Such trusts will be able to invest in infrastructure projects only directly or through special purpose vehicles (SPVs), the market regulator said. For public-private partnership (PPP) projects, investments can be routed only through an SPV, Sebi said.
The Reserve Bank of India (RBI) on Thursday, 17 July 2014 issued draft guidelines for those seeking a license to set up a payments bank or a small bank. The minimum paid up capital required for both categories of bank licenses would be Rs 100 crore of which the promoter would have to contribute at least 40% initially, the RBI said. Payments banks can accept deposits and remittances of funds but cannot provide loans. Small banks can lend, but have more limited areas of operations than a full-fledged commercial lender. Both, payments banks and small banks are niche or differentiated banks with the common objective of furthering financial inclusion, the RBI said.
The entities eligible to set up a payments bank include existing non-bank Pre-paid Instrument Issuers (PPIs), Non-Banking Finance Companies (NBFCs), corporate BCs, mobile telephone companies, super-market chains, companies, real sector cooperatives, and public sector entities. The entities eligible to set up a small bank include resident individuals with ten years of experience in banking and finance, companies and societies, NBFCs, Micro Finance Institutions and Local Area Banks, the RBI said.
Volatility struck bourses in early trade as the key benchmark indices slipped in negative zone after reversing an initial decline triggered by negative Asian stocks. Key benchmark indices cut losses after hitting fresh intraday low in morning trade. Key benchmark indices extended recovery in mid-morning trade and hovered near the flat line. Key benchmark indices reversed intraday fall and hit fresh intraday high in early afternoon trade. The barometer index, the S&P BSE Sensex, and the 50-unit CNX Nifty, both hit their highest level in over one week. Key benchmark indices trimmed intraday gains in afternoon trade. Key benchmark indices extended gains to hover near intraday high in mid-afternoon trade.
In the foreign exchange market, the rupee edged lower against the dollar in choppy trade. The partially convertible rupee was hovering at 60.3475, compared with its close of 60.18 on Thursday, 17 July 2014.
European stocks edged lower today, 18 July 2014, tracking weak Asian stocks and Russian markets plunged after a Malaysian airliner was shot down over Ukraine and Israeli troops moved into Gaza. Key benchmark indices in France, Germany and UK shed 0.25% to 0.87%.
Most Asian stocks edged lower today, 18 July 2014, on rising geopolitical tension after news on Thursday, 17 July 2014 of a downed Malaysian airlines jet at the Ukraine-Russia border. Key benchmark indices in Hong Kong, Taiwan, Japan and South Korea fell by 0.07% to 1.01%. Key benchmark indices in Singapore, China and Indonesia rose 0.09% to 0.31%.
Trading in US index futures indicated that the Dow could fall 17 points at the opening bell on Friday, 18 July 2014. US markets dropped on Thursday, 17 July 2014 on the news that a Malaysian Airlines passenger jet had crashed near the Ukraine-Russia border.
Geopolitical tensions escalated after Boeing Co. 777 crashed en route to Kuala Lumpur from Amsterdam in the main battleground of Ukraine's civil war, threatening to escalate tensions in Europe's worst geopolitical crisis since the end of the cold war.
Meanwhile, Russian President Vladimir Putin said Ukraine's government bore responsibility for the crash because it wouldn't have occurred without the current strife. Putin has repeatedly denied Russian involvement in the fighting in Ukraine's east, which erupted in the wake of former president Viktor Yanukovych's ouster earlier this year.
Meanwhile, Israel's movement of troops and tanks into the coastal enclave marks the first significant ground operation in Gaza since 2009.
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