Key benchmark indices edged lower in what was a volatile trading session as investors remained cautious ahead of consumer inflation and industrial output data, which are scheduled for announcement by the government after market hours. Weakness in European stocks also weighed adversely on sentiment. The rupee further weakened against the dollar. Rupee depreciation fuels inflation, increases import bill and current account deficit. It also increases the government's spending on fuel subsidies, potentially widening the fiscal deficit. The S&P BSE Sensex and the 50-unit CNX Nifty, both, hit their lowest level in nearly five weeks in late trade. The Sensex was provisionally down 223.51 points or 1.09%, off close to 315 points from the day's high and up about 5 points from the day's low. The market breadth, indicating the overall health of the market, was negative.
Most auto stocks declined. Metal stocks dropped. Hindalco Industries edged lower after the company reported net profit declined slightly in Q2 September 2013. Bank stocks declined.
Indian stocks fell for the sixth day in a row today, 12 November 2013.
The market edged higher in early trade. It regained positive terrain after slipping into the red and hitting fresh intraday low in morning trade. It weakened and hit fresh intraday low in mid-morning trade. It recovered and hovered between positive and negative terrain after hitting fresh intraday low in early afternoon trade. Key benchmark indices once again weakened in afternoon trade amid volatility. It hit fresh intraday low in mid-afternoon trade. It further weakened and hit fresh intraday low in late trade.
In the foreign exchange market, the rupee edged lower against the dollar as investors remained cautious ahead of consumer inflation and industrial output data. The partially convertible rupee was hovering at 63.76, compared with its close of 63.24 on Monday, 11 November 2013.
As per provisional figures, the S&P BSE Sensex was down 223.51 points or 1.09% to 20,267.45. The index dropped 228.74 points at the day's low of 20,262.22 in late trade, its lowest level since 10 October 2013. The index rose 93.26 points at the day's high of 20,584.22 in early trade.
The CNX Nifty was down 67 points or 1.1% to 6,011.80, as per provisional figures. The index hit a low of 6,011.75 in intraday trade, its lowest level since 10 October 2013. The index hit a high of 6,108.70 in intraday trade.
The total turnover on BSE amounted to Rs 1888 crore, lower than Rs 1897.72 crore on Monday, 11 November 2013.
The market breadth, indicating the overall health of the market, was negative. On BSE, 1,471 shares declined and 989 shares gained. A total of 130 shares were unchanged.
Among the 30-share Sensex pack, 26 stocks fell and rest of them rose.
Most auto stocks declined. Tata Motors declined 4.08%. Car major Maruti Suzuki India shed 0.23%. But, M&M rose 0.71%.
Shares of two-wheeler makers dropped. Hero MotoCorp (down 0.6%) and Bajaj Auto (down 0.88%), declined.
Oil India rose 0.29%. The company during market hours reported 5.33% fall in net profit to Rs 903.64 crore on 9.27% rise in total income to Rs 3183.78 crore in Q2 September 2013 over Q2 September 2013 over Q2 September 2012.
Metal stocks dropped. Jindal Steel & Power (down 0.34%), Bhushan Steel (down 0.87%), JSW Steel (down 2.63%), Tata Steel (down 1.82%), Sail (down 1.7%), and Hindustan Zinc (down 1.81%), declined.
Sesa Sterlite shed 2.27%. The Supreme Court gave the go-ahead on Monday for the auction of around 11.46 million tonnes of iron ore already mined in Goa state, potentially doubling the country's exports this year to top market China if overseas sales are allowed.
However, the Supreme Court has maintained a 14-month ban on iron ore mining in top producing state Goa. Sesa, India's top private-sector mining company, would be the biggest beneficiary if mining resumed in Goa, as it is the largest producer in the state.
The leading foreign bank said there is limited upside potential for the company from the apex court order as the decision reiterates concerns that mining resumption in Goa is likely to take time, and could be significantly lower than before ban.
Hindalco Industries fell 0.49% after the company's net profit declined slightly in Q2 September 2013. The company during market hours reported 0.49% fall in net profit to Rs 357.11 crore on 4.58% rise in total income to Rs 6584.67 crore in Q2 September 2013 over Q2 September 2013 over Q2 September 2012.
Hindalco's EBITDA (earnings before interest taxes depreciation and amortization) rose 4.85% to Rs 540 crore in Q2 September 2013 over Q2 September 2012.
Hindalco said that the Q2 result included a non-recurring income of Rs 61 crore and a dividend income of Rs 100 crore from subsidiary companies.
Other income surged 111.39% to Rs 279.82 crore in Q2 September 2013 over Q2 September 2012. It slumped 34.61% over Q1 June 2013. The company said that other income was impacted by lower treasury yield due to liquidity tightening.
Finance costs surged 557.47% to Rs 183.17 crore in Q2 September 2013 over Q2 September 2012. It jumped 23.16% over Q1 June 2013. Hindalco said that finance costs were higher, given higher average borrowing.
The average Aluminium LME in Q2 September 2013 dropped by around 3% and 7% respectively from the levels seen in Q1 June 2013 and in Q2 September 2012. The decline was offset by the depreciating rupee. The performance of copper business has improved significantly compared to Q1 June 2013, the company said in a statement.
In its outlook, Hindalco said the long spell of subdued LME has adversely affected the global aluminium industry and its margins and production levels significantly. Greenfield projects are ramping up as planned, however, EBITDA streams will take time to scale up with delayed access to captive coal. With improving TcRc, copper business is expected to have a stable outlook despite a sharp drop in by-product realization, the company said.
Novelis, the US subsidiary of Hindalco Industries on Monday, 11 November 2013 reported net income attributable to its common shareholder of $23 million for the second quarter of fiscal 2014. Excluding certain tax-effected items, net income was $37 million for the quarter.
Adjusted EBITDA for the second quarter of fiscal 2014 was $228 million compared to $277 million reported for the same period a year ago. Sequentially, adjusted EBITDA improved 12% compared to the $204 million reported in the first quarter of fiscal 2014, in part due to initial success from the company's rolling expansion in South America. Excellent project execution allowed Novelis to meet strong market demand and puts the South America region on track to achieve record shipments this fiscal year.
"We are nearing an inflection point in the transition of our business from investment to growth," said Phil Martens, President and Chief Executive Officer for Novelis. "We have invested heavily in expanding our rolling, recycling and automotive finishing assets over the last three years to solidify our leadership position ahead of the strong market growth we expect, and we are beginning to see these results materialize. In fact, with the contribution from our expansions in South America and Asia, we expect results in the second half of fiscal 2014 to be stronger than the first half."
Martens also highlighted the company's stable business performance in North America, despite the challenging dynamics related to overcapacity in the North American can market which affected year-over-year results. "The reallocation of some hot mill capacity towards high-growth, high-margin automotive sheet in this region is not only a key piece of our growth strategy, it also will help rebalance the North American can market," said Martens. "We are aggressively increasing finishing capacity globally to support strong growth in the automotive flat rolled products market. Our two North American finishing lines are on track to produce commercial product by the end of this fiscal year and we are already evaluating additional investments."
Shipments of aluminum rolled products totaled 713 kilotonnes for the second quarter of fiscal 2014, down one percent compared to 719 kilotonnes for the same period last year but up one percent from the first quarter. Net sales for the second quarter of fiscal 2014 were $2.4 billion, flat compared to both the prior year and prior quarter.
For the second quarter of fiscal 2014, Novelis reported liquidity of $843 million. Free cash flow was $178 million for the second quarter of fiscal 2014 and capital expenditures totaled $184 million. "As expected, we generated positive free cash flow in the second quarter despite meaningful investments in growth, primarily due to significant improvements in working capital," said Steve Fisher, Chief Financial Officer for Novelis. "We will continue this diligent focus on cash generation and expect to drive positive free cash flow in the second half of this fiscal year as a result of working capital efficiencies and other cash improvement actions."
National Aluminium Company rose 4.08% on strong Q2 result. The company's net profit surged 3648.33% to Rs 179.17 crore on 6.50% increase in total income to Rs 1861.07 crore in Q2 September 2013 over Q2 September 2012. The company announced the result after market hours on Monday, 11 November 2013.
Bank stocks declined. ICICI Bank dropped 2.66%. HDFC Bank declined 1.3%.
State Bank of India fell 1.94%.
But, Canara Bank rose 1.64% after the board of directors of the bank at its meeting held today, 12 November 2013, has approved the proposal regarding raising of capital by way of preferential allotment of equity shares in favour of Government of India amounting to Rs 500 crore.
Further, the board has delegated the authority to the Chairman & Managing Director of the bank to do all the necessary / relevant acts/things and to decide on the matters connected with or incidental thereto.
The state-run bank during market hours reported 5.3% fall in net profit to Rs 625.94 crore on 13.3% rise in total income to Rs 10427.48 crore in Q2 September 2013 over Q2 September 2013 over Q2 September 2012.
Canara Bank's asset quality improved during Q2 September 2013 from Q1 June 2013. Gross non performing assets (NPA) declined to 2.64% in Q2 September 2013 from 2.91% in Q1 June 2013, but rose marginally from 2.58% in Q2 September 2012. Net NPA ratio reduced to 2.3% in Q2 September 2013 from 2.48% in Q1 June 2013, but rose from 2.12% in Q2 September 2012.
Provisions and contingencies rose 60.06% to Rs 674.03 crore in Q2 September 2013 over Q2 September 2012. However, it declined 26.43% to Rs 674.03 crore in Q2 September 2013 over Q1 June 2013.
On macro front, the government will unveil industrial production data for September 2013 today, 12 November 2013. Industrial output is projected to jump 3.7% in September 2013, as per the median estimate of the poll carried out by Capital Market. Index of industrial production (IIP) rose 0.6% in August 2013, showing moderation in growth from 2.8% growth recorded in July 2013.
Data on inflation based on the consumer price index (CPI) for October 2013 will also be unveiled today, 12 November 2013. The headline CPI inflation (combined) is projected to increase to 10% in October 2013, as per the median estimate of the poll carried out by Capital Market. The headline CPI inflation (combined) for September 2013 was placed at 9.84% (y-o-y), which came in higher than 9.52% (y-o-y) seen in August 2013.
European stocks edged lower on Tuesday after equities yesterday extended a five-week rally, as investors weighed corporate earnings reports. Key benchmark indices in France and UK and Germany shed 0.15% to 0.2%.
Most Asian stocks edged higher on Tuesday. Key benchmark indices in China, Singapore, Taiwan, Japan and South Korea rose 0.16% to 2.23%. Key benchmark indices in Hong Kong and Indonesia shed 0.2% to 1.38%.
President Xi Jinping and Chinese Communist Party leaders today, 12 November 2013 conclude a four-day gathering aimed at mapping out a blueprint for reform, after data yesterday showed the nation's broadest measure of new credit fell by more than estimated in October.
Indonesia's central bank unexpectedly raised its benchmark interest rate as policy makers intensify efforts to narrow a current-account deficit that has weighed on the rupiah. Governor Agus Martowardojo and his board increased the reference rate by 25 basis points to 7.5%, the central bank said in Jakarta today.
Trading in US index futures indicated that the Dow could fall 20 points at the opening bell on Tuesday, 12 November 2013. US stocks rose on Monday, with the Dow Jones Industrial Average extending a record, as investors awaited retailer earnings reports to gauge the strength of consumer demand and the likelihood of cuts to monetary stimulus.
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