Key benchmark indices trimmed gains in mid-afternoon trade. The market breadth, indicating the overall health of the market turned negative from positive. The barometer index, the S&P BSE Sensex, was up 78.47 points or 0.39%, off close to 75 points from the day's high and up about 10 points from the day's low.
Metal stocks were mixed. Tata Steel fell on weak sequential Q3 results. BPCL edged higher in volatile trade after the company reported a massive loss for Q3 December 2013.
The market edged higher in early trade on firm Asian stocks. The Sensex extended initial gains and hit fresh intraday high in morning trade. The Sensex hit its highest level in more than 1-1/2 weeks. The 50-unit CNX Nifty scaled two-week high. Key benchmark indices retained positive terrain in afternoon trade after Railway Minister Mallikarjun Kharge kept passenger fares and freight rates unchanged in the Interim Railway Budget for the first four months of the 2014/15 presented in the Lok Sabha today, 12 February 2014, and said that investment in railways is being stepped up by partnership with the private sector and that a proposal is under consideration of the government to enable Foreign Direct Investment (FDI) to foster creation of world class rail infrastructure. The Sensex trimmed gains in mid-afternoon trade.
At 14:20 IST, the S&P BSE Sensex was up 78.47 points or 0.39% to 20,441.84. The index jumped 153.23 points at the day's high of 20,516.60 in mid-morning trade, its highest level since 31 January 2014. The index rose 66.46 points at the day's low of 20,429.83 in morning trade.
The CNX Nifty was up 18.20 points or 0.3% to 6,080.90. The index hit a high of 6,106.60 in intraday trade, its highest level since 29 January 2014. The index hit a low of 6,077.95 in intraday trade.
The BSE Small-Cap index was off 1.24 points or 0.02% at 6,345.29. The BSE Mid-Cap index was up 6.78 points or 0.11% at 6,364.35. Both these indices underperformed the Sensex.
The market breadth, indicating the overall health of the market turned negative from positive in mid-afternoon trade. On BSE, 1,255 shares fell and 1,198 shares rose. A total of 164 shares were unchanged.
Among the 30-share Sensex pack, 18 stocks rose and rest fell. GAIL (India) (up 2.07%), ONGC (up 2.06%) and ICICI Bank (up 2.72%), edged higher from the Sensex pack.
Metal stocks were mixed. Sesa Sterlite (down 1.55%), JSW Steel (down 1.69%), Sail (down 2.34%), Hindalco Industries (down 1.25%) and Hindustan Zinc (down 0.24%), declined. Bhushan Steel (up 0.3%), Jindal Steel & Power (up 0.28%), National Aluminum Company (up 0.46%) and Hindustan Copper (up 0.81%) gained.
Tata Steel lost 3.96% on weak sequential Q3 results. The company's consolidated net profit dropped 45.1% to Rs 503.24 crore on 0.25% fall in total income to Rs 36754.38 crore in Q3 December 2013 over Q2 September 2013. The Q3 result was announced after market hours on Tuesday, 11 February 2014.
Tata Steel reported a consolidated net profit of Rs 503.24 crore in Q3 December 2013 as compared to a net loss of Rs 763.06 crore in Q3 December 2012. Total income rose 14.3% to Rs 36754.38 crore in Q3 December 2013 over Q3 December 2012. The improved and steady performance of operations across geographies led to this significantly improved group performance, Tata Steel said.
Tata Steel's earnings before interest, taxation, depreciation and amortization (EBITDA) increased to Rs 3921 crore in Q3 December 2013 from Rs 3784 crore in Q2 September 2013 and rose significantly from Rs 2252 crore in Q3 December 2012. Cash and cash equivalents as on 31 December 2013 was Rs 6371 crore and net debt was Rs 70129 crore.
Tata Steel said that Indian operations maintained the steady performance despite weak macroeconomic environment and maintenance shutdowns at Jamshedpur. The operational improvement continued in Europe as the upgraded asset base produced the largest volume of liquid steel on a like-for-like basis for more than five years. The South East Asian operations were partly affected by the political instability at Thailand. However, the operations stabilised in Singapore while the facilities in China were ramped up, the company said.
Mr T V Narendran, Managing Director of Tata Steel India and South East Asia, said: Indian steel markets continued to remain weak during the quarter with the economy and most of the steel consuming sectors facing severe headwinds. Against this macro backdrop, Tata Steel continued to post steady growth in sales volume for the quarter and the year to date. In fact, sales would have been higher if not for production constraints due to planned shut downs for maintenance. We continue to work closely with our OE customers while enhancing our product portfolio and spreading our reach across India for sale of branded products in retail. We are hopeful that the sentiment improves in the seasonally strong fourth quarter and with the shutdowns now behind us, Tata Steel should achieve robust operational improvement. The underlying performance of the South East Asian operations remains strong though there has been some impact of the political instability in Thailand.
Dr Karl-Ulrich Kler, MD & CEO of Tata Steel in Europe, said: The asset base we restored and upgraded last year has been running at stable rates, which has led to the continued year-on-year turnaround in financial performance. The work to enhance our product and service profile and our focus on cost and cash flow continued, supporting the year-on-year improvement in EBITDA, despite lower margins. With European economic indicators improving, these efforts will better enable us to benefit from any growth in European steel demand, which remains at historically low levels.
BPCL edged higher in volatile trade after the company reported a massive loss for Q3 December 2013. The stock was up 0.15% at Rs 360. The stock hit high of Rs 370.95 and low of Rs 356.40 so far during the day. The company reported a net loss of Rs 1088.94 crore in Q3 December 2013 as compared with a net profit of Rs 1647.57 crore in Q3 December 2012. The company's total income rose 3.58% to Rs 65018.42 crore in Q3 December 2013 over Q3 December 2012. The Q3 result was announced during trading hours today, 12 February 2014.
Oil India rose 0.98%. The company's net profit declined 3.97% to Rs 902.96 crore on 5.37% growth in total income to Rs 3052.37 crore in Q3 December 2013 over Q3 December 2012. The Q3 result was announced during trading hours today, 12 February 2014.
The impact on Oil India's net sales due to price discounts allowed to downstream oil companies stood at Rs 2173.48 crore in Q3 December 2013, up from Rs 1948.76 crore in Q3 December 2012.
Oil India said that recoverability of dues of Rs 105.13 crore as on 31 December 2013 from Suntera Nigeria 205 in which the company is having 25% interest in equity along with Suntera Resources (50%) and India Oil Corporation (25%) is dependent upon its ability to continue as a going concern with the support of its shareholding companies. This loan is however due for repayment on 31 December 2014 only, Oil India said. Accordingly, no provision has been created in accounts as on 31 December 2013, the company added.
Kanoria Chemicals & Industries surged 7.19% after the company reported a net profit of Rs 10.19 crore in Q3 December 2013 as against net loss of Rs 2.48 crore in Q3 December 2012. The Q3 result was announced after market hours on Tuesday, 11 February 2014. Kanoria Chemicals & Industries' net sales rose 42.2% to Rs 83 crore in Q3 December 2013 over Q3 December 2012.
Shares of companies whose fortunes are linked to orders from Indian Railways were mixed after Rail minister Mallikarjun Kharge said at the time of presenting the Interim Railway Budget for the first four months of the 2014/15 in Lok Sabha that investment in railways is being stepped up by partnership with the private sector and that a proposal is under consideration of the government to enable Foreign Direct Investment (FDI) to foster creation of world class rail infrastructure. Transformers & Rectifiers India (down 0.67%), Container Corporation of India (down 0.46%), Texmaco (down 0.01%), Titagarh Wagons (down 1.71%), Kalindee Rail Nirman (Engineers) (down 3.39%), Kernex Microsystems (India) (down 4.85%) and Hind Rectifiers (down 6.25%), edged lower.
Zicom Electronic Security Systems (up 2.18%), NELCO (up 1.44%), Bhel (up 1.39%), Simplex Casting (up 0.31%), Stone India (up 029%), and BEML (up 0.73%) edged higher.
No increase in rail fare and freight has been proposed in the interim Rail Budget for the year ending March 2015. Presenting the Budget in Parliament today, the Minister of Railways Mallikarjun Kharge announced 72 new trains, extension of three trains and increase in frequency of three trains. The Budget presented today, 12 February 2014, envisaged investment of Rs 64305 crore as against revised estimates for the year ending March 2014 of Rs 59359 crore. Anticipating a healthier growth of economy, the freight traffic target is proposed at 1,101 million tonnes, an increment of 49.7 million tonnes over the current years' revised target of about 1052 million tonnes. The Gross Traffic Receipts have been projected at Rs 160775 crore. Working Expenses have been proposed at Rs 110649 crore, which is Rs 13589 crore higher than the Revised Estimates for the current year.
Railways Minister said given the promising trend of loading, the target has been scaled up to about 1052 million tonnes from the budget target of 1047 million tonnes and freight earnings targets revised to Rs 94000 crore. He announced that an independent Rail Tariff Authority is being set-up to advise the Government on fixing of fares and freight.
Briefing about Railways efforts for moderation of its network Mr. Kharge said a joint Feasibility Study for Mumbai-Ahmedabad High Speed corridor, started in December 2013, will be completed in 18 months. Besides the High Speed project, Indian Railways also intend to explore low cost options for raising speeds to 160-200 kmph on existing select routes like Delhi-Agra and Delhi-Chandigarh.
The Minister said that Investment in Railways is being stepped up by partnership with the private sector. PPP projects related to rolling stock manufacturing units, modernisation of railway stations, multi-functional complexes, logistics parks, private freight terminal, freight train operations, liberalised wagon investment schemes and Dedicated Freight Corridors are in the pipeline. Apart from attracting private investments from domestic investors in rail sector, a proposal is under consideration of the Government to enable Foreign Direct Investment (FDI) to foster creation of world class rail infrastructure.
In a path breaking decision, an independent Rail Tariff Authority is being set-up to advise the government on fixing of fares and freight of railways, Mr. Kharge said. The Rail Tariff Authority will not only consider the requirements of the railways but also engage with all stake-holders to usher in a new pricing regime through a transparent process. This would lead to an era of rationalisation of fares and freight structures for improving the fare-freight ratio and gradually bringing down cross subsidization between different segments. It is expected that this would go a long way towards improving the financial health of the Railways, lead to growth to match expectations of the nation and provide stability by minimizing volatility of revenue streams, Mr. Kharge said.
The full-fledged Railway Budget for 2014/15 will be presented by the new government which comes to power after the Lok Sabha polls in April-May 2014.
In the foreign exchange market, the rupee edged higher against the dollar on global risk-on sentiment. The partially convertible rupee was hovering at 62.16, compared with its close of 62.22/23 on Tuesday, 11 February 2014.
Finance Minister P Chidambaram will present the Vote-on-Account or interim budget on 17 February 2014. The objective of a Vote-on-Account is to get Parliament's nod for expenditure to be incurred in the months prior to elections. The next full-fledged budget will be presented by the new government which comes to power after the Lok Sabha polls in April-May 2014.
Consumer price inflation is seen easing a bit in January 2014. Inflation based on the combined consumer price index (CPI) for urban and rural India is seen easing to 9.4% in January 2014 from 9.87% in December 2013, as per the median estimate of a poll of economists carried out by Capital Market. The government will unveil data on inflation based on the combined consumer price index (CPI) for urban and rural India for January 2014 at 17:30 IST today, 12 February 2014.
Inflation based on the wholesale price index (WPI) is also expected to ease in January 2014. WPI inflation is seen easing to 5.9% in January 2014 from 6.16% in December 2013, as per the median estimate of a poll of economists carried out by Capital Market. The government will unveil data on inflation based on the wholesale price index (WPI) for January 2014 at 12 noon on Friday, 14 February 2014.
Industrial production is expected to remain in contraction mode in December 2013. Industrial output is expected to decline 1% in December 2013, as per the median estimate of a poll of economists carried out by Capital Market. India's industrial production declined 2.1% in November 2013, recording decline for second consecutive month after 1.6% dip in October 2013. The data will be announced at 17:30 IST today, 12 February 2014.
The Reserve Bank of India next undertakes monetary policy review on 1 April 2014. Sighting elevated consumer price inflation, the Reserve Bank of India raised its key lending rates by 25 basis points after Third Quarter Review of Monetary Policy for 2013-14 on 28 January 2014.
European stocks edged higher on Wednesday, 12 February 2014, as a report showed Chinese exports surged last month and companies from ING Groep NV (INGA) to Societe Generale SA posted profit that beat estimates. Key benchmark indices in France, Germany and UK were up 0.1% to 0.48%.
In the UK, the Bank of England (BoE) publishes its quarterly economic outlook, with new forecasts for growth and inflation today, 12 February 2014. Data last month showed the UK's jobless rate slid to 7.1% in the three months through November, nearing the 7% threshold at which Governor Mark Carney has said policy makers will consider increasing interest rates. Monetary Policy Committee members said last month they "saw no immediate need to raise bank rate even if the 7% unemployment threshold were to be reached in the near future".
Asian shares edged higher on Wednesday, 12 February 2014, as upbeat trade data from China and an optimistic economic outlook from Federal Reserve Chair Janet Yellen whetted investors' appetite for risk. Key benchmark indices in China, Japan, South Korea, Singapore, Indonesia, Hong Kong and Taiwan were up 0.20% to 1.47%.
Chinese exports jumped 10.6% in January from a year earlier, eclipsing an estimate for a 0.1% gain, while imports rose 10% and the country's trade surplus widened to $31.86 billion.
Trading in US index futures indicated that the Dow could advance 25 points at the opening bell on Wednesday, 12 February 2014. US stocks surged on Tuesday as Federal Reserve Chairwoman Janet Yellen pledged to keep interest rates low and to continue to taper the pace of bond purchases if the economy keeps improving. US economic growth has picked up and the Federal Reserve will continue to scale back stimulus in "measured steps", Yellen said. Yellen said the Fed will continue to follow its low-interest-rate policy course during a hearing before the House Financial Services Committee. "Let me emphasize that I expect a great deal of continuity in the Federal Open Market Committee's approach to monetary policy," she said. "I am committed to achieving both parts of our dual mandate: helping the economy return to full employment and returning inflation to 2% while ensuring that it does not run persistently above or below that level," she said.
Yellen will testify before the Senate Banking Committee tomorrow, 13 February 2014.
The Federal Open Market Committee (FOMC) next undertakes monetary policy review on 18-19 March 2014. After a monetary policy review, the FOMC on 29 January 2014 announced it will reduce monthly bond purchases by another $10 billion to $65 billion. The Fed also signaled that it is likely to keep reducing bond purchases in the coming months, citing a pickup in US economic activity and improvement in the US labor market.
The House of Representatives voted on Tuesday, 12 February 2014, to suspend the US debt limit until March 2015, giving a win to President Barack Obama and Democrats in Congress who insisted that the ceiling be lifted without conditions.
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