Key benchmark indices extended losses and hit fresh intraday low in mid-afternoon trade. The 50-unit CNX Nifty hit one-week low. The market breadth, indicating the overall health of the market was negative. The barometer index, the S&P BSE Sensex, was down 131.57 points or 0.58%, off close to 155 points from the day's high and up about 20 points from the day's low. Weakness in European and Asian stocks hit sentiment on the domestic bourses adversely.
Realty stocks edged lower. Lupin edged lower in volatile trade after announcing strong Q4 results.
The market edged lower amid initial volatility. Key benchmark indices trimmed losses after hitting fresh intraday low in morning trade. The Sensex extended losses and hit fresh intraday low in mid-morning trade. The Sensex further extended losses and hit fresh intraday low in early afternoon trade. Key benchmark indices extended losses and hit fresh intraday low in mid-afternoon trade. The 50-unit CNX Nifty hit one-week low.
Foreign institutional investors (FIIs) bought shares worth a net Rs 45.93 crore on Tuesday, 6 May 2014, as per provisional data from the stock exchanges.
At 14:20 IST, the S&P BSE Sensex was down 131.57 points or 0.58% to 22,376.85. The index fell 148.60 points at the day's low of 22,359.82 in mid-afternoon trade, its lowest level since 5 May 2014. The index rose 24.40 points at the day's high of 22,532.82 in early trade.
The CNX Nifty was down 42.75 points or 0.64% to 6672.55. The index hit a low of 6,667.85 in intraday trade, its lowest level since 30 April 2014. The index hit a high of 6,718.75 in intraday trade.
The BSE Mid-Cap index was up 19.69 points or 0.27% at 7,390.38. The BSE Small-Cap index was up 21.37 points or 0.28% at 7,554.20. Both these indices outperformed the Sensex.
The market breadth, indicating the overall health of the market was negative. On BSE, 1,365 shares fell and 1,208 shares rose. A total of 154 shares were unchanged.
Among the 30-share Sensex pack, 20 stocks declined and rest of them rose. Infosys (down 3.45%), Wipro (down 2.57%), and TCS (down 2.5%), edged lower from the Sensex pack.
Realty stocks edged lower. D B Realty (down 2.82%), Housing Development & Infrastructure (HDIL) (down 1.31%), Parsvnath Developers (down 0.64%) and Unitech (down 0.95%) dropped. DLF rose 0.25%.
Lupin fell 0.29% to Rs 999.20 after announcing Q4 results. The stock was volatile. The stock hit high of Rs 1,022 and low of Rs 993.90 so far during the day. The company's consolidated net profit jumped 35.5% to Rs 553 crore on 20.3% increase in net sales to Rs 3051.50 crore in Q4 March 2014 over Q4 March 2013. Lupin's operating profit jumped 33.2% to Rs 876.90 crore in Q4 March 2014 over Q4 March 2013. The operating profit margin (OPM) edged up to 28.7% in Q4 March 2014, from 26% in Q4 March 2013. The result hit the market during trading hours today, 7 May 2014.
Revenue expenditure on R&D for Q4 March 2014 amounted to Rs 245.60 crore or 8% of net sales, as against Rs 199.90 crore or 7.9% to net sales in Q4 March 2013. Revenue expenditure on R&D amounted to Rs 929.40 crore or 8.4% of net sales in the year ended 31 March 2014 (FY 2014), as against Rs 709.80 crore or 7.5% of net sales in the year ended 31 March 2013 (FY 2013).
Operating working capital increased to Rs. 2815.80 crore as on 31 March 2014, as against Rs 2769.50 crore as on 31 December, 2013. The working capital number of days stood at 92 days as on 31 March 2014, as against 94 days on 31 December 2013. Lupin remains a debt-free company.
Commenting on the results, Mr. Nilesh Gupta, Managing Director, Lupin said: "We have had another remarkable year fuelled by strong growth in key markets like the US, Europe, South Africa and in our API business. Importantly, we were able to improve operational efficiencies substantially. The year also marked our entry into high growth markets like Mexico and acquiring technology research capabilities that would help us address niche segments like Complex Injectables and Inhalation".
Syndicate Bank lost 4.82% after net profit declined 30.9% to Rs 409.30 crore on 12.06% growth in total income to Rs 5357.40 crore in Q4 March 2014 over Q4 March 2013. The Q4 result was announced during trading hours today, 7 May 2014.
Syndicate Bank attributed decline in net profit in Q4 March 2014 to non availability of MAT credit of Rs 114 crore accounted in Q4 March 2013 and increase in NPA provisions.
Domestic current and savings accounts (CASA) deposits rose 7.67% to Rs 55911 crore as on 31 March 2014, from Rs 51926 crore as on 31 March 2013. Domestic CASA deposits stood at Rs 29.9% of total domestic deposits as at 31 March 2014. Bank has taken various steps, campaigns to increase CASA performance, Syndicate Bank said in a statement.
Gross NPA ratio stood at 2.62% as on 31 March 2014 as against 1.99% as on 31 March 2013. Despite the stress in the economy and more NPAs in the industry, Syndicate Bank is able to maintain the gross NPA level below 3%, it said. However, compared to preceding quarter, it has come down from 2.8% and this is one of the lowest, the bank said in a statement.
Net NPA ratio stood at 1.56% as on 31 March 2014 as against 0.76% as on 31 March 2013. However, compared to preceding quarter, it has come down from 1.66% and this is one of the lowest, Syndicate Bank said in a statement.
Provision coverage ratio stood at 70.02% in Q4 March 2014 as against 83.41% in Q4 March 2013. However, this is one of the best in the industry, Syndicate Bank said in a statement.
Global net interest margin (NIM) stood at 2.79% in FY 2014 as against 3.19% in FY 2013. This is on account of the stress in the economy and more NPAs in the industry as well as in Syndicate Bank. Domestic NIM stood at 3.21% in FY 2014 as compared to 3.52% in FY 2013.
Syndicate Bank's net profit declined 14.61% to Rs 1711.46 crore on 9.01% growth in total income to Rs 19945.21 crore in the year ended 31 March 2014 (FY 2014) over the year ended 31 March 2013 (FY 2013).
Voltamp Transformers lost 1.34% after net profit fell 36.2% to Rs 9.52 crore on 17.4% decline in net sales to Rs 144.49 crore in Q4 March 2014 over Q4 March 2013. The Q4 result was announced after market hours on Tuesday, 6 May 2014.
Voltamp Transformers' net profit fell 20.1% to Rs 26.29 crore on 13.7% decline in net sales to Rs 444.78 crore in the year ended 31 March 2014 (FY 2014) over the year ended 31 March 2013 (FY 2013).
Voltamp Transformers' board of directors at its meeting held on Tuesday, 6 May 2014, recommended dividend of Rs 10 per share for FY 2014.
In the foreign exchange market, the rupee edged higher against the dollar on speculation Federal Reserve Chair Janet Yellen will reiterate a pledge to keep US interest rates low in testimony later in the global day today, 7 May 2014. The partially convertible rupee was hovering at 60.07, compared with its close of 60.11/12 on Tuesday, 6 May 2014.
The Reserve Bank of India (RBI) next undertakes monetary policy review on 3 June 2014. The RBI left its main lending rate viz. the repo rate unchanged at 8% after a monetary policy review on 1 April 2014, as consumer-price inflation eased to a two-year low and as the rupee firmed up against the dollar.
A major near term trigger for the stock market is the outcome of the ongoing Lok Sabha elections. The 36 days long voting process began on 7 April 2014 and will conclude on 12 May 2014. The results will be declared on 16 May 2014 after which India will get a new government. The term of the current Lok Sabha expires on 1 June and the new House has to be constituted by 31 May.
Investors are hoping that a stable government which will complete its full term five years in office comes to power after the elections. Investors are expecting measures for revival of the Indian economy, business-friendly policies and better governance from the new government that comes to power after the elections. Investors expect policy measures from the new government to put India on a high-growth path on a sustainable basis.
European markets edged lower on Wednesday, 7 May 2014, as the US said Ukraine should proceed with its presidential election this month, ignoring Russia's calls to postpone the vote. Key benchmark indices in UK and France were off 0.13% to 0.32%. Germany's DAX index was up 0.04%.
US Secretary of State John Kerry said yesterday, 6 May 2014, that plans by pro-Russian separatists in Ukraine's Donetsk region to hold a May 11 referendum on secession were illegal and contrived. He said his country is ready to impose sanctions should Russia fail to withdraw its support for separatists.
Ukraine's acting Interior Minister Arsen Avakov said this week that four soldiers and about 30 pro-Russian separatists were killed in a May 5 clash. His government began an assault against pro-Russian rebels in Donetsk on April 13, after gunmen seized buildings and took several dozen captives.
German factory orders unexpectedly fell in March, signaling that growth in Europe's largest economy remains uneven. Orders, adjusted for seasonal swings and inflation, fell 2.8% from February, when they increased a revised 0.9%, the Federal Statistics Office in Wiesbaden said today, 7 May 2014.
A monthly meeting of the Monetary Policy Committee of the Bank of England's (BoE) for monetary policy review is scheduled tomorrow, 8 May 2014.
The European Central Bank (ECB) will hold monetary policy meeting tomorrow, 8 May 2014, in Brussels, Belgium.
Asian shares fell on Wednesday, 7 May 2014, amid mounting concern China's economy is slowing after the result of a survey released by HSBC Holdings Plc and Markit Economics showed that services index for China declined in April from March. Key benchmark indices in Japan, Hong Kong, China, Singapore, South Korea and Taiwan were down 0.22% to 2.93%. Indonesia's Jakarta Composite rose 0.66%.
A services index in China from HSBC Holdings Plc and Markit Economics dropped to 51.4 in April from 51.9 in the previous month.
Most members of the Bank of Japan agreed to keep easing monetary policy until inflation stabilizes at 2%, according to minutes of the April 7-8 policy meeting released today, 7 May 2014.
Trading in US index futures indicated a flat opening of US stocks on Wednesday, 7 May 2014. US stocks dropped broadly on Tuesday, 6 May 2014, closing at session lows, with AIG pulling financial shares lower after disappointing earnings and as a slide in Twitter took down other names in the technology and internet space.
The US trade deficit narrowed in March as exports grew by the most in nine months, the Commerce Department reported yesterday, 6 May 2014.
US Federal Reserve Chairwoman Janet Yellen is scheduled to testify before the congressional Joint Economic Committee today, 7 May 2014, and the Senate Budget Committee tomorrow, 8 May 2014.
The Federal Open Market Committee (FOMC) next undertakes monetary policy review at a two-day meeting on 17-18 June 2014. The Fed on 30 April 2014 said after a monetary policy review that it will keep the benchmark interest-rate target at almost zero for a "considerable time" after its bond-buying program ends. The FOMC also reduced monthly debt purchases to $45 billion, its fourth straight $10 billion cut, and said further reductions are likely in "measured steps" if the economy continues to improve.
The global economy will strengthen over the coming two years, but urgent action is still required to further reduce unemployment and address other legacies from the crisis, according to the OECD's latest Economic Outlook.
"Advanced economies are gaining momentum and driving the pick-up in global growth, while once-stalled cylinders of the economic engine, like investment and trade, are starting to fire again," OECD Secretary-General Angel Gurr said while launching the Outlook during the Organisation's annual Ministerial Council Meeting and Forum in Paris.
GDP growth across the 34-member OECD is projected to accelerate to a 2.2% rate in 2014 and 2.8% in 2015, according to the Outlook. The world economy will grow at a 3.4% rate in 2014 and 3.9% in 2015.
Among the major advanced economies, recovery is best established in the United States, which is projected to grow by 2.6% in 2014 and 3.5% in 2015. The euro area will see a return of positive growth after three years of contraction: 1.2% in 2014 and 1.7% in 2015. In Japan, growth will be dented by the launch of much-needed fiscal consolidation measures, and is expected to hover at 1.2% in 2014 and 2015.
The BRICS (Brazil, China, India, Indonesia, Russia and South Africa) are projected to see GDP growth of 5.3% this year on average and 5.7% in 2015. China will again have the fastest growth among these countries, with rates just below 7.5% in 2014 and 2015.
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