High volatility was witnessed as key benchmark indices slipped into the red after surging to hit fresh intraday high in mid-morning trade soon after the Reserve bank of India (RBI) held its key policy rates viz. the repo rate and cash reserve ratio unchanged after a monetary policy review. The S&P BSE Sensex was currently almost unchanged for the day at 19,593.25, off close to 80 points from the day's high and up about 40 points from the day's low. The market breadth, indicating the overall health of the market, was negative. Bank stocks were volatile. Some pharma stocks edged higher.
A bout of initial volatility was witnessed as key benchmark indices pared gains after moving into the positive terrain after opening lower. Volatility continued as key benchmark indices recovered after hitting fresh intraday low in morning trade. The S&P BSE Sensex and the 50- unit CNX Nifty, both, hit their lowest level in nearly three weeks. High volatility was witnessed as key benchmark indices slipped into the red after surging to hit fresh intraday high in mid-morning trade soon after the Reserve bank of India (RBI) held its key policy rates viz. the repo rate and cash reserve ratio unchanged after a monetary policy review.
After First Quarter Review of Monetary Policy 2013-14, the RBI today, 30 July 2013, kept the repo rate unchanged at 7.25%. The central bank also kept the cash reserve ratio (CRR) unchanged at 4%. RBI said that the macroeconomic outlook for 2013-14 is subject to a number of risks and it scaled down the GDP growth forecast for 2013-14 to 5.5%, from its earlier projection of 5.7% growth. The RBI said that it will endeavour to condition the evolution of inflation to a level of 5% by March 2014, using all instruments at its command.
The RBI said that keeping in view global and domestic macroeconomic conditions, outlook and risks, the policy stance in this review is guided by the need for continuous vigil and preparedness to pro-actively respond to risks to the economy from external developments, especially those stemming from global financial markets, while managing the trade-off posed by increased downside risks to growth and continuing risks to inflation and inflation expectations.
The central bank said that its recent liquidity tightening measures are aimed at checking undue volatility in the foreign exchange market and will be rolled back in a calibrated manner as stability is restored to the foreign exchange market, enabling monetary policy to revert to supporting growth with continuing vigil on inflation. It should be emphasised that the time available now should be used with alacrity to institute structural measures to bring the current account deficit (CAD) down to sustainable levels, the RBI said. The RBI said it stands ready to use all available instruments and measures at its command to respond proactively and swiftly to any adverse development.
At 11:20 IST, the S&P BSE Sensex was flat at 19,593.25. The index rose 79.44 points at the day's high of 19,672.72 in mid-morning trade. The index declined 40.01 points at the day's low of 19,553.27 in morning trade, its lowest level since 11 July 2013.
The CNX Nifty was down 2.90 points or 0.05% to 5,828.75. The index hit a high of 5,861.30 in intraday trade. The index hit a low of 5,822.55 in intraday trade, its lowest level since 10 July 2013.
The market breadth, indicating the overall health of the market, was negative. On BSE, 919 shares fell and 629 shares rose. A total of 99 shares were unchanged.
Among the 30-share Sensex pack, 15 stocks fell and rest of them rose. Jindal Steel & Power (up 3.66%), L&T (up 1.92%) and HDFC (up 1.35%), edged higher.
Some pharma stocks edged higher. Cipla rose 0.02%. Sun Pharmaceutical Industries gained 1.14%.
Dr Reddy's Laboratories advanced 0.47% ahead of its Q1 result today, 30 July 2013.
Bank stocks volatile after the Reserve bank of India (RBI) held its key policy rates viz. the repo rate and cash reserve ratio unchanged after first quarter review of the Monetary Policy 2013-14 announced today, 30 July 2013. ICICI Bank rose 0.14%. HDFC Bank fell 0.65%.
Among PSU bank stocks, State Bank of India, Canara Bank, Union Bank of India, Bank of India, Bank of Baroda and Punjab National Bank gained by 0.01% to 0.75%.
City Union Bank rose 2.69% on good Q1 result. The bank's net profit rose 22.19% to Rs 90.28 crore on 24.85% growth in total income to Rs 707.82 crore in Q1 June 2013 over Q1 June 2012. The result was announced after market hours on Monday, 29 July 2013. City Union Bank's ratio of net non-performing assets (NPA) to net advances stood at 0.63% as on 30 June 2013, compared with 0.63% as on 31 March 2013 and 0.50% as on 30 June 2012.
The ratio of gross NPA to gross advances increased to 1.25% as on 30 June 2013, from 1.13% as on 31 March 2013 and 1.07% as on 30 June 2012.
The bank's provisions and contingencies rose 15.59% to Rs 20.53 crore in Q1 June 2013 over Q1 June 2012. The provision coverage ratio as at 30 June 2013 stood at 71%.
City Union Bank's capital adequacy ratio (CAR) as per Basel II norms stood at 13.21% as on 30 June 2013, as against 13.98% as on 31 March 2013 and 12.01% as on 30 June 2012.
Total deposits of the bank increased by 20% to Rs 20516 crore as on 30 June 2013 from Rs 17062 crore as on 30 June 2012. Gross advances went up by 20% to Rs 15388 crore as on 30 June 2013 from Rs 12773 crore as on 30 June 2012.
The savings bank deposits recorded growth of 15% and growth in current and savings account (CASA) was 11% as on 30 June 2013. The bank's balance sheet size increased by 22% to Rs 23477 crore as on 30 June 2013 from Rs 19286 crore as on 30 June 2012.
Asian stocks rose on Tuesday, 30 July 2013, after China's central bank injected funds into money markets easing cash crunch worries. Key benchmark indices in China, Hong Kong, Japan, Singapore, South Korea, Indonesia and Taiwan rose by 0.2% to 1.28%.
China's central bank injected funds into money markets via open market operations on Tuesday for the first time since February, easing fears of another cash crunch ahead of the month end after a severe cash squeeze in June caused market panic.
Meanwhile, the results of two separate surveys on Chinese manufacturing activity in July are due on Thursday, 1 August 2013.
In Japan, data released on Tuesday, 30 July 2013, showed that Japan's industrial production unexpectedly fell a seasonally adjusted 3.3% in June from the level in May. Japanese household spending also declined, though the monthly unemployment rate eased to 3.9% from 4.1%.
Trading in US index futures indicated that the Dow could gain 17 points at the opening bell on Tuesday, 30 July 2013. US stocks edged lower on Monday, 29 July 2013, slipping after a decline in June home sales as investors look ahead to key data later in the week and the Federal Reserve's upcoming policy meeting. The National Association of Realtors said pending home sales fell 0.4% in June, with rising rates blamed for undercutting sales momentum.
The Federal Open Market Committee (FOMC) holds a two-day policy meeting today (30 July 2013) and tomorrow (31 July 2013), with expectations that it will offer further clues on how long it will maintain its bond purchases. In his two-day testimony to Congress, which concluded on 18 July 2013, Federal Reserve Chairman Ben Bernanke said plans to taper asset purchases were not on a preset path and stressed intentions to be very responsive to data. Additionally, Bernanke said recent data have been "mixed" and it was "way too early" to make a judgment on when the central bank will slow down the pace of its asset purchases. The Fed currently buys $85 billion a month in government and mortgage bonds in an effort to keep interest rates low and stimulate economic growth.
In Europe, the European Central Bank (ECB) and the Bank of England (BoE) will announce their policy decisions on Thursday, 1 August 2013.
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