Key benchmark indices surged as the Reserve Bank of India (RBI) after a monetary policy review raised its main lending rate viz. the repo rate by 25 basis points as expected and decided to infuse liquidity into the banking system. The S&P BSE Sensex was provisionally up 346.40 points or 1.68%, up about 420 points from the day's low and off close to 40 points from the day's high. The market breadth, indicating the overall health of the market, was positive. The market sentiment was boosted by data showing that foreign funds remained net buyers of Indian stocks on Monday, 28 October 2013. Gains in Asian and European stocks also underpinned sentiment on the domestic bourses.
Indian stocks snapped five-day losing streak today, 29 October 2013.
Banking stocks were in demand after the Reserve Bank of India (RBI) after a monetary policy review raised its main lending rate viz. the repo rate by 25 basis points as expected and decided to infuse liquidity into the banking system. Metal and mining stocks edged higher. Car major Maruti Suzuki India jumped on strong Q2 result.
The market slipped into the red after opening higher. A bout of volatility was witnessed as key benchmark indices trimmed losses soon after hitting fresh intraday low in morning trade. The S&P BSE Sensex and the 50-unit CNX Nifty, both, hit 1-1/2-week low. Volatility ruled the roost as key benchmark indices reversed intraday losses after the Reserve Bank of India (RBI) after a monetary policy review raised its main lending rate viz. the repo rate by 25 basis points as expected and decided to infuse liquidity into the banking system. The Sensex trimmed gains after hitting fresh intraday high in mid-morning trade. Key benchmark indices surged to hit an intraday high in afternoon trade. The Sensex extended gains and hit fresh intraday high in mid-afternoon trade. It hit fresh intraday high in late trade.
The market may remain volatile this week as traders roll over positions in the futures & options (F&O) segment from the near month October 2013 series to November 2013 series. The near month October 2013 derivatives contract expire on Thursday, 31 October 2013.
The market sentiment was boosted by data showing that foreign funds remained net buyers of Indian stocks on Monday, 28 October 2013. Foreign institutional investors (FIIs) bought shares worth a net Rs 636.78 crore on Monday, 28 October 2013, as per provisional data from the stock exchanges.
As per provisional figures, the S&P BSE Sensex was up 346.40 points or 1.68% to 20,916.68. The index jumped 382.27 points at the day's high of 20,952.55 in late trade, its highest level since 24 October 2013. The index fell 76.62 points at the day's low of 20,493.66 in morning trade, its lowest level since 18 October 2013.
The CNX Nifty was up 118.80 points or 1.95% to 6,219.90, as per provisional figures. The index hit a high of 6,228.05 in intraday trade, its highest level since 24 October 2013. The index hit a low of 6,079.20 in intraday trade, its lowest level since 18 October 2013.
The total turnover on BSE amounted to Rs 2223 crore, higher than Rs 1685.30 crore on Monday, 28 October 2013.
The market breadth, indicating the overall health of the market, was positive. On BSE, 1,297 shares rose and 1,096 shares fell. A total of 164 shares were unchanged.
Among the 30-share Sensex pack, 29 stocks rose and only one fell.
Car major Maruti Suzuki India jumped 8.85 on strong Q2 result. The company after trading hours on Monday, 28 October 2013, said its net profit jumped 194.7% to Rs 670.20 crore on 26.5% growth in net sales to Rs 10211.80 crore in Q2 September 2013 over Q2 September 2012. The company said that base effect aided strong growth in bottomline in Q2 September 2013 -- the company's performance in Q2 September 2012 was adversely impacted by labour problems at its Manesar plant. Higher localization and cost reduction initiatives by the company also contributed significantly to bottomline growth in Q2 September 2013, Maruti said. The overall impact of foreign exchange was positive during the quarter, Maruti said.
Maruti said that the company's new diesel engine facility at Gurgaon and the third assembly facility at Manesar went on stream during Q2 September 2013. With this, the company's total capacity for vehicle assembly has risen to 1.5 million vehicles per annum.
Banking stocks were in demand after the Reserve Bank of India (RBI) after a monetary policy review raised its main lending rate viz. the repo rate by 25 basis points as expected and decided to infuse liquidity into the banking system. HDFC Bank (up 2.7%) and ICICI Bank (up 6.35%), gained.
Among PSU bank stocks, State Bank of India (SBI), Canara Bank, Union Bank of India, Bank of India, Bank of Baroda and Punjab National Bank gained 2.32% to 4.97%.
The Reserve Bank of India today, 29 October 2013, said it has decided to give banks the option to pay interest on savings deposits and term deposits at intervals shorter than quarterly intervals.
Shriram Transport Finance Company rose 3.05% after Q2 result. The company's consolidated net profit declined 2.93% to Rs 351.93 crore on 23.14% rise in total income to Rs 2103.67 crore in Q2 September 2013 over Q2 September 2012. The company announced result during market hours.
Bank of Maharashtra fell 2.61% on poor Q2 result. The company's net profit slumped 71.78% to Rs 46.85 crore on 31.32% increase in total income to Rs 3196.56 crore in Q2 September 2013 over Q2 September 2012. The result was announced during trading hours today, 29 October 2013. Bank of Maharashtra's ratio of net non-performing assets (NPA) to net advances stood at 1.76% as on 30 September 2013, compared with 0.80% as on 30 June 2013 and 0.88% as on 30 September 2012.
The bank's ratio of gross NPA to gross advances stood at 2.77% as on 30 September 2013, compared with 1.80% as on 30 June 2013 and 2% as on 30 September 2012.
Provisions and contingencies rose 45.25% to Rs 323.23 crore in Q2 September 2013 over Q2 September 2012. The NPA provisioning coverage ratio as on 30 September 2013 stood at 58.91% as against 83.68% as on 31 March 2013.
The bank's Capital Adequacy Ratio (CAR) as per Basel III norms stood at 10.71% as on 30 September 2013, compared with 10.76% as on 30 June 2013.
Metal and mining stocks edged higher. Bhushan Steel (up 0.05%), Sesa Sterlite (up 2.76%), Tata Steel (up 4.67%), Jindal Steel & Power (up 1.09%), NMDC (up 0.19%), Sail (up 3.69%), and Hindalco Industries (up 3.13%), gained.
JSW Steel rose 0.54% after Q2 result. The company reported a consolidated net loss of Rs 115.55 crore in Q2 September 2013 as against net profit of Rs 691.25 crore in Q2 September 2012. The Q2 result was announced during trading hours today, 29 October 2013.
JSW Steel's consolidated gross sales rose 35% to a record Rs 13866 crore in Q2 September 2013 over Q2 September 2012. The company reported a record operating EBITDA (earnings before interest, taxation, depreciation and amortization) of Rs 2348 crore in Q2 September 2013.
Total saleable steel volumes jumped 44% to 3.13 million tonnes in Q2 September 2013 over Q2 September 2012. Crude steel production rose 37% to 2.98 million tonnes in Q2 September 2013 over Q2 September 2012.
The Q2 September 2013 results include the results of JSW ISPAT Steel which was merged with the company with effect from 1 June 2013.
With regard to the future business outlook, JSW Steel said that higher rural spending on the back of a good monsoon and an expected uptick in investment cycle due to the CCI (Cabinet Committee on Investment) driven push is likely to drive an improvement in steel demand growth in second half of FY 2014.
Jindal Stainless was flat. The company reported net loss of Rs 411.97 crore in Q2 September 2013, higher than net loss of Rs 152.26 crore in Q2 September 2012. The Q2 result was announced after market hours on Monday, 28 October 2013. Jindal Stainless' net sales rose 23.4% to Rs 3032.47 crore in Q2 September 2013 over Q2 September 2012.
DCM Shriram Consolidated slumped 13.79% on weak Q2 result. The company's consolidated net profit declined 95.1% to Rs 1.41 crore on 25.8% growth in net sales to Rs 1684.22 crore in Q2 September 2013 over Q2 September 2012. The Q2 result was announced after market hours on Monday, 28 October 2013.
DCM Shriram Consolidated's profit before interest and tax (PBIT) before exceptional items stood at Rs 40.90 crore in Q2 September 2013 as compared to Rs 71 crore in Q2 September 2012.
Commenting on the performance for the quarter, in a joint statement, Mr. Ajay Shriram, Chairman & Senior Managing Director, and Mr. Vikram Shriram, Vice Chairman & Managing Director, DCM Shriram Consolidated said, "The overall performance of the company for the quarter has been significantly affected due to losses in Sugar Business. The Sugar profits have swung from positive Rs 31.3 crore to negative Rs 24.7 crore, corresponding to the swing in sugar margins from positive Rs 449 per quintal to negative Rs 249 per quintal. The operating environment for the Sugar business particularly in UP is very challenging with State Government fixing very high Cane prices without any linkage with Sugar prices. The resulting high cost structure has made the industry uncompetitive vis-a-vis other States and imports. The Chloro-Vinyl business continues to deliver strong performance. This is a result of our continuous focus on innovative cost reduction measures and firm realizations in Vinyl business. The Agri input businesses continue to hold strong promise and delivered stable earnings. Shriram Farm Solutions' efforts on growing the value-added input segment are yielding results. While our Bioseeds business in India delivered stable growth, higher sales return in the international markets subdued earnings. We believe that these businesses will deliver healthy growth rates in the medium term given strong research program and healthy pipeline of products. In Fenesta, increased retail penetration and cost control over the last one year is translating to better performance. At Hariyali Kisaan Bazaar, the efforts of rationalization are demonstrating results in line with plan. We maintain our view that our business model is strong and efficient and we will deliver noticeably better result, particularly if the Sugar operating structure improves. Besides, with focus on conserving internal cash generation, we are well poised to strengthen our financial positioning going forward".
In the foreign exchange market, the rupee reversed initial losses against the dollar after the Reserve Bank of India (RBI) after a monetary policy review raised its main lending rate viz. the repo rate by 25 basis points as expected and decided to infuse liquidity into the banking system. The partially convertible rupee was hovering at 61.43, compared with its close of 61.52/53 on Monday, 28 October 2013.
Bond prices rose after the Reserve Bank of India (RBI) after a monetary policy review raised its main lending rate viz. the repo rate by 25 basis points as expected and decided to infuse liquidity into the banking system. The yield on the federal benchmark paper 7.16% GS 2023 was hovering at 8.5996%, lower than its close of 8.6557% on Monday, 28 October 2013. Bond yield and bond prices are inversely related.
The Reserve Bank of India after a monetary policy review today, 29 October 2013, raised its main lending rate viz. the repo rate by 25 basis poinst to 7.75%. With the more recent upturn of inflation, and with inflation expectations remaining elevated anticipating the pass-through of exchange rate depreciation and ongoing adjustment in administered fuel prices, it is important to break the spiral of rising price pressures in order to curb the erosion of financial saving and strengthen the foundations of growth, the RBI said. It is in this context that the LAF repo rate has been increased by 25 basis points, the RBI said.
Keeping in view the need to infuse liquidity into the banking system to normalise liquidity conditions, the RBI has decided to increase the liquidity provided through term repos of 7-day and 14-day tenor from 0.25% of NDTL of the banking system to 0.5% with immediate effect. RBI has also reduced the marginal standing facility (MSF) rate by 25 basis points from 9% to 8.75% with immediate effect. With the reduction of the MSF rate and the increase in the repo rate in this review, the process of re-aligning the interest rate corridor to normal monetary policy operations is now complete, the RBI said. Going forward, however, the more durable strategy for mitigating mismatches between the supply of, and demand for, funds is for banks to step up efforts to mobilise deposits, the RBI said.
The policy stance and measures in this review are intended to curb mounting inflationary pressures and manage inflation expectations in a situation of weak growth, the RBI said. These will help strengthen the environment for growth by fostering macroeconomic and financial stability. The Reserve Bank of India will closely monitor inflation risk while being mindful of the evolving growth dynamics, the central bank said in a statement.
The pass-through of rupee depreciation into prices of manufactured products is acting, along with elevated food and fuel inflation, to offset possible disinflationary effects of low growth. While food price pressures may ease with the arrival of the kharif harvest and the usual seasonal moderation, overall WPI inflation is expected to remain higher than current levels through most of the remaining part of the year, warranting an appropriate policy response, the RBI said. Retail inflation measured by the consumer price index (CPI) has also risen sharply across food and non-food constituents, including services, keeping inflation expectations high. Notwithstanding the expected edging down of food inflation, retail inflation is likely to remain around or even above 9% in the months ahead, absent policy action, RBI said.
Headwinds to growth from domestic constraints continue to pose downside risks, and vulnerabilities to sudden shifts in the external environment remain, the RBI said. The revival of large stalled projects and the pipeline cleared by the Cabinet Committee on Investment may buoy investment and overall activity towards the close of the year.
The Reserve Bank of India said its developmental measures over the next few quarters will be built on five pillars viz. clarifying and strengthening the monetary policy framework, strengthening banking structure through new entry, branch expansion, encouraging new varieties of banks, and moving foreign banks into better regulated organisational forms, broadening and deepening financial markets and increasing their liquidity and resilience so that they can help absorb the risks entailed in financing India's growth, expanding access to finance to small and medium enterprises, the unorganised sector, the poor, and remote and underserved areas of the country through measures to foster financial inclusion and improving the system's ability to deal with corporate distress and financial institution distress by strengthening real and financial restructuring as well as debt recovery.
European stocks edged higher on Tuesday, 29 October 2013, after US economic data backed the case for the Federal Reserve to maintain stimulus to the US economy. Key benchmark indices in Germany, France and UK were up 0.08% to 0.37%.
Asian stocks edged higher in choppy trade on Tuesday, 29 October 2013, after US economic data backed the case for the Federal Reserve to maintain stimulus to the US economy. Key benchmark indices in Hong Kong, Taiwan, Singapore, and South Korea rose 0.03% to 0.18%. Key benchmark indices in China, Japan and Indonesia shed 0.23% to 0.6%.
The People's Bank of China conducted 13 billion yuan ($2.13 billion) of seven-day reverse-repurchase agreements today, 29 October 2013. That compares with the 102.5 billion yuan drained from the banking system in the last two weeks as existing contracts matured and the monetary authority suspended sales of new agreements as corporate tax payments fell due.
Trading in US index futures indicated a flat opening of US stocks on Tuesday, 29 October 2013. US stocks were little changed on Monday as investors found few catalysts to push equities higher. Economic data showed pending home sales slumped 5.6% in September, a rate that was far steeper than expected and the biggest drop in more than three years.
The Federal Open Market Committee (FOMC) holds a two-day policy meeting today, 29 October and tomorrow, 30 October 2013. On 18 September 2013, the Fed surprised economists and investors with its decision to delay scaling back its stimulus amid concerns about the strength of the economic recovery.
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