Key benchmark indices extended losses and hit fresh intraday low in afternoon trade. Weakness in Asian stocks dampened investors' sentiment. The barometer index, the S&P BSE Sensex and the 50-unit CNX Nifty, both, hit their lowest level in a week. The Sensex was down 160.93 points or 0.79%, off close to 216 points from the day's high and up about 9 points from the day's low. The market breadth, indicating the overall health of the market, turned weak.
Most metal shares were trading higher. Shares of three credit rating agencies rose after Credit Analysis and Research (CARE) announced that a consortium led by IDBI Bank, which holds a little over 45% shares in CARE, is in talks with potential buyers to exit the company. Asian Paints fell after announcing that Berger International has been delisted from Singapore Exchange Securities Trading. Tata Communications slipped after weak Q3 earnings. United Breweries rose after strong Q3 earnings.
The market edged higher in early trade. It slipped into the red and hit fresh intraday low in morning trade. It extended losses and hit fresh intraday low in mid-morning trade. It further weakened and hit fresh intraday low in early afternoon trade.
At 13:15 IST, the S&P BSE Sensex was down 160.93 points or 0.79% to 20,287.56. The index dropped 169.73 points at the day's low of 20,278.76 in afternoon trade, its lowest level since 6 February 2014. The index gained 55.37 points at the day's high of 20,503.86 in early trade.
The CNX Nifty was down 51.75 points or 0.85% to 6,032.25. The index hit a low of 6,027.10 in intraday trade, its lowest level since 6 February 2014. The index hit a high of 6,094.40 in intraday trade.
The BSE Mid-Cap index was down 26.08 points or 0.41% to 6,331.67. The BSE Small-Cap index was down 36.30 points or 0.57% at 6,312.79. Both these indices outperformed the Sensex.
The market breadth, indicating the overall health of the market, turned weak. On BSE, 1,459 shares fell and 833 shares rose. A total of 112 shares were unchanged.
Among the 30-share Sensex pack, 22 stocks fell and rest rose. Cipla (down 6.30%), Coal India (down 3.19%), ONGC (down 2.28%), Bhel (down 2.03%), Bharti Airtel (down 2%), Tata Power (down 1.86%), HDFC (down 1.66%), State Bank of India (down 1.61%), Wipro (down 1.50%), HDFC Bank (down 1.46%) and Dr Reddy's Laboratories (down 1.32%), edged lower from the Sensex pack.
Sesa Sterlite (up 1.47%), M&M (up 1.09%), Tata Motors (up 1.09%), TCS (up 0.57%), Sun Pharmaceutical Industries (up 0.48%), Hindalco Industries (up 0.39%) and Hero MotoCorp (up 0.31%), edged higher from the Sensex pack.
Shares of three credit rating agencies rose after Credit Analysis and Research (CARE) announced that a consortium led by IDBI Bank, which holds a little over 45% shares in CARE, is in talks with potential buyers to exit the company.
CRISIL (up 6.42%), CARE (up 4.39%) and ICRA (up 2.33%), edged higher.
In an announcement during trading hours today, CARE said IDBI has informed the company that it, and four other shareholders of the company, all of who hold more than 45% shares in the company, are in the process of identifying a buyer for a potential sale of 1.11 crore shares in the company.
CARE said it is apprised that shortlisted bidders have been asked to submit their bids by 25 February 2014. However, the company also understands that the sellers have reserved the right to modify or abort the sale process at any stage and that the sale is subject to execution of a mutually agreed contract and to necessary approvals, it added.
In a separate filing with the stock exchanges before trading hours today, CARE said its board at the meeting held on 12 February 2014, has given its consent, subject to the approval of the members of the company, for increasing the limit of investment by Foreign Institutional Investors (FIIs) including their sub-accounts in the shares or convertible debentures of the company by subscription or acquisition up to 74% of the paid up equity share capital or paid up value of each series of convertible debentures of the company as may be applicable.
As at 31 December 2013, FIIs held 15.43% stake in CARE.
Asian Paints fell 1.18% to Rs 471.75. With reference to the earlier announcement dated 21 August 2013, wherein the company had informed about the voluntary unconditional cash offer for the shares of Berger International (BIL), Singapore by Asian Paints (International) (APIL), Mauritius, a wholly owned subsidiary of the company. Further, APIL had also announced their intention to make BIL a wholly-owned subsidiary and delist from Singapore Exchange Securities Trading (SGX-ST).
In this regard, Asian Paints Ltd has now informed BSE that BIL has been delisted from SGX-ST with effect from 11 February 2014. Further, APIL said it owns and holds approximately 96.69%, of the total number of issued shares as at the date of this announcement, the company said in a statement. Asian Paints made the announcement during trading hours today, 13 February 2014.
Most metal shares were trading higher. Sesa Sterlite (up 1.68%), Hindustan Zinc (up 0.56%), Tata Steel (up 0.27%), Bhushan Steel (up 0.24%), Hindalco Industries (up 0.24%) and NMDC (up 0.10%), edged higher.
However, Jindal Steel & Power (down 2.7%), Steel Authority of India (SAIL) (down 1.52%) and JSW Steel (down 0.94%), edged lower.
Tata Communications lost 2.46% to Rs 295 after consolidated net profit declined 54.56% to Rs 36.51 crore on 0.02% growth in net sales to Rs 4953.65 crore in Q3 December 2013 over Q2 September 2013. The Q3 result was announced after market hours on Wednesday, 12 February 2014.
Tata Communications reported a consolidated net profit of Rs 36.51 crore in Q3 December 2013 compared to net loss of Rs 201.01 crore in Q3 December 2012. Net sales rose 11.7% to Rs 4953.65 crore in Q3 December 2013 over Q3 December 2012.
Tata Communications said that growth in Q3 December 2013 was mainly driven by the global data solutions (GDS) business which sustained growth momentum across regions. Ethernet, VPN solutions and managed services continued to be the forerunners and helped global data solutions grow significantly, the company said. The Global wholesale voice business delivered stable performance in-line with its long-term vision of sustainable performance, Tata Communications said in a statement.
The start-up business, comprising primarily of Neotel, contributed to an 8% rise in revenues at Rs 519.60 crore in Q3 December 2013 compared to Rs 481 crore in Q3 December 2012. The start-up business EBITDA margins stood at 31.1% during the quarter, sharply up from 10.3% in Q3 December 2012, Tata Communications said in a statement.
Commenting on the company's Q3 performance, Vinod Kumar, MD and CEO, Tata Communications said, "Tata Communications continues to deliver sustained and profitable growth on the back of investments into innovative services and brand, as well as prudent cost management. Our business mix is favourably trending towards a higher proportion of managed services and consumption by Enterprise customers".
Sanjay Baweja, CFO, Tata Communications said, "Operationally, we are hitting the right milestones across our businesses. As envisaged, while voice margins have normalised during the quarter the overall margin profile has remained robust and is being complemented by the data business delivering sustainable margins at 20%. Enhancing operational efficiency at every level of the business and driving free cash generation remain our two key focus areas".
United Breweries gained 2.84% to Rs 810.50 after net profit surged 65.6% to Rs 55.51 crore on 13.68% increase in total income to Rs 956.8 crore in Q3 December 2013 over Q3 December 2012. The Q3 result was announced after market hours on Wednesday, 12 February 2014.
United Breweries said in a press release that the industry showed a modest growth again in the third quarter, which resulted in a stable overall figure for the nine month period ending December 2013. The Maharashtra market sentiment remained negative on account of higher end consumer prices. Tamil Nadu continues to suffer from unfavorable ordering pattern of TASMAC.
The company posted good volume growth in key markets resulting in growth of revenue and profit. Double digit volume growth is witnessed in Karnataka, West Bengal, Uttar Pradesh and Rajasthan, United Breweries said.
During the first nine months the company has increased its market share by 40 basis points and is in the region of 51% despite the degrowth in Tamil Nadu. It has increased its market share in key markets at a time when pressure from competition has been at its peak, and inspite of the difficult times the industry has been going through, the company said.
The current quarter shows a growth in United Breweries' volumes of over 4% as against an Industry growth of less than 1%. With volumes also growing in key profitable markets and a continuing strict control on costs, profitability levels have strongly improved compared to previous and last year's comparable quarter.
Reversal of the Maharashtra State Government policy on the use of second hand bottles in October 2013 helped the company to control input costs and improve profitability in this key State, the company said in a statement.
In the foreign exchange market, the rupee edged lower against the dollar. The partially convertible rupee was hovering at 62.2450, lower than its close of 62.10 on Wednesday, 12 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.
Inflation based on the combined consumer price index (CPI) for urban and rural India for January 2014 eased to 24-month low level at 8.79% (y-o-y), marking an deceleration from 9.87% (y-o-y) seen in previous month. Moreover, the index for December decreased to 0.43% (m-o-m) from 1% (m-o-m) seen previous month. The fall in index of food category, especially vegetables helped the CPI inflation to ease. The falling vegetable prices helped the combined CPI to record single digit growth. The data was announced after market hours on Wednesday, 12 February 2014.
Industrial output fell 0.6% in December 2013 over December 2012 after contracting a revised 1.3% in November. The indices of industrial production for the Mining, Manufacturing and Electricity sectors for the month of December 2013 were 0.4%, - 1.6% and 7.5% respectively. The data was announced after market hours on Wednesday, 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 tomorrow, 14 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.
Asian stocks dropped on Thursday after the recent advances. Key benchmark indices in China, Japan, Hong Kong, South Korea, Indonesia and Taiwan fell by 0.23% to 1.79%. Singapore's Straits Times rose 0.11%.
Trading in US index futures indicated that the Dow could fall 66 points at the opening bell on Thursday, 13 February 2014. US stocks were mostly lower on Wednesday on weak earnings from tobacco company Lorillard and household products maker Procter & Gamble.
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.
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