Gravity gripped bourses in second half of the day's trading session after a positive first half with weakness in European and Asian stocks impacting sentiment. Intraday volatility was immense. Investors were also worried that the Reserve Bank of India (RBI) may further hike policy rates in its next policy meet after the latest data showed consumer price inflation quickened in October. The S&P BSE Sensex settled at its lowest level in over five weeks. The 50-unit CNX Nifty shut shop below the psychological 6,000 mark, an over five week low. The Sensex was down 87.51 points or 0.43%, up 32.76 points from the day's low and off 171.19 points from the day's high. The market breadth, indicating the overall health of the market, was negative.
Index heavyweight and cigarette major ITC dropped. Banking giant State Bank of India (SBI) gained in volatile trade after declaring Q2 result. Realty stocks declined on concerns the central bank may further hike policy rates after the latest data showed consumer price inflation quickened in October. M&M rose on decent Q2 result. BPCL dropped on weak Q2 result. Shares of two-wheeler makers dropped. Reliance Communications (RCom) gained on strong Q2 result. Other telecom stocks were mixed.
Indian stocks declined for the seventh day in a row today, 13 November 2013. The Sensex has fallen 1,044.96 points or 4.92% in seven trading sessions from a record closing high of 21,239.36 which it had attained during the special Diwali Muhurat trading session held on Sunday, 3 November 2013. The index has fallen 970.12 points or 4.58% in November so far (till 13 November 2013). The Sensex has garnered 767.69 points or 3.95% in calendar 2013 so far (till 13 November 2013). From a 52-week low of 17,448.71 on 28 August 2013, the Sensex has risen 2,745.69 points or 15.74%. From a record high of 21,321.53 on 3 November 2013, the Sensex has fallen 1,127.13 points or 5.29%.
The market regained positive terrain after opening lower. The S&P BSE Sensex and the 50-unit CNX Nifty, both, recovered after hitting their lowest level in nearly five weeks. It alternately hovered between gains and losses in morning trade. It slipped into the red after hitting fresh intraday high in mid-morning trade. It once again regained positive terrain in early afternoon trade. Key benchmark indices extended gains to hit fresh intraday high in afternoon trade. It weakened and hit fresh intraday low in mid-afternoon trade. It weakened once again after trimming intraday losses in late trade.
The domestic bourses will remain shut tomorrow, 14 November 2013, on account of Moharram.
The S&P BSE Sensex was down 87.51 points or 0.43% to 20,194.40, its lowest closing level since 8 October 2013. The index fell 120.27 points at the day's low of 20,161.64 in mid-afternoon trade, its lowest level since 10 October 2013. The index rose 83.68 points at the day's high of 20,365.59 in afternoon trade.
The CNX Nifty was down 28.45 points or 0.47% to 5,989.60, its lowest closing level since 8 October 2013. The index hit a low of 5,972.45 in intraday trade, its lowest level since 9 October 2013. The index hit a high of 6,042.25 in intraday trade.
The total turnover on BSE amounted to Rs 1901 crore, lower than Rs 1969.70 crore on Tuesday, 12 November 2013.
The market breadth, indicating the overall health of the market, was negative. On BSE, 1,388 shares fell and 1,051 shares rose. A total of 158 shares were unchanged.
Among the 30-share Sensex pack, 17 stocks fell and rest of them rose.
Index heavyweight and cigarette major ITC dropped 1.5%.
Another index heavyweight Reliance Industries fell 0.96%.
Sun Pharmaceutical Industries rose 1.91% ahead of its Q2 results today, 13 November 2013.
Cipla fell 2.54% ahead of its Q2 results today, 13 November 2013.
Coal India rose 0.81% ahead of its Q2 results today, 13 November 2013.
Tata Steel surged 3.04% ahead of its Q2 results today, 13 November 2013.
ONGC gained 1.11%. The company after market hours today, 13 November 2013 reported 2.84% rise in net profit to Rs 6063.86 crore on 9.69% rise in total income to Rs 23897.64 crore in Q2 September 2013 over Q2 September 2012.
BPCL fell 1.46% after net profit slumped 81.51% to Rs 931.13 crore on 8.54% rise in total income to Rs 62241.32 crore in Q2 September 2013 over Q2 September 2012. The result was announced during trading hours today, 13 November 2013.
BPCL received a discount of Rs 7852.99 crore in the half year ended September 2013 on purchase of crude oil/products from ONGC/GAIL/NRL, compared with a discount of Rs 7280.30 crore in the half year ended September 2012.
The government advised a compensation of Rs 6317.97 crore to the company by way of subsidy for the half year ended September 2013 as against Rs 7239.40 crore accounted in the half year ended September 2012.
Consequent to non-revision in retail selling prices corresponding to the international prices and applicable foreign exchange rates prevailing during the half year, BPCL absorbed net under-recovery of Rs 760.33 crore in the half year ended September 2013, compared with Rs 6133.39 crore in the half year ended September 2012, on sale of sensitive petroleum products.
Public sector oil marketing companies (PSU OMCs) -- BPCL, HPCL and Indian Oil Corporation -- suffer revenue loss on domestic sale of diesel, LPG and kerosene at a controlled price (The government decontrolled pricing of petrol in 2010). The government compensates these state-run oil marketing firms for their under-recoveries through oil subsidies. The rest of the cost-price gap is borne by three state-run oil firms -- GAIL (India), ONGC and Oil India.
State Bank of India (SBI) rose 1.41% to Rs 1699, with the stock shrugging off weak Q2 result. The stock was volatile. It high a high of Rs 1735 and low of Rs 1653.40. The bank's net profit fell 35.08% to Rs 2375.01 crore on 12.89% increase in total income to Rs 37,199.92 crore in Q2 September 2013 over Q2 September 2012. The result was announced during trading hours today, 13 November 2013.
State Bank of India's ratio of net non-performing assets (NPA) to net advances stood at 2.91% as on 30 September 2013, compared with 2.83% as on 30 June 2013 and 2.44% as on 30 September 2012.
The bank's ratio of gross NPA to gross advances stood at 5.64% as on 30 September 2013, compared with 5.56% as on 30 June 2013 and 5.15% as on 30 September 2012.
Provisions and contingencies rose 65.90% to Rs 3028.74 crore in Q2 September 2013 over Q2 September 2012. The provisioning coverage ratio as on 30 September 2013 stood at 60.16%.
The bank's Capital Adequacy Ratio (CAR) as per Basel III norms stood at 11.69% as on 30 September 2013, compared with 11.85% as on 30 June 2013.
Reliance Capital fell 0.07%. The company's consolidated net profit jumped 201% to Rs 181 crore on 20% growth in total income to Rs 1869 crore in Q2 September 2013 over Q2 September 2012. The result was announced after market hours on Tuesday, 12 November 2013.
The consolidated profit after tax (PAT) in Q2 September 2013 is after excluding one-time capital gains on stake-sale in RCAM last year.
As on 30 September 2013, the networth of the company stood at Rs 12373 crore.
As on 30 September 2013, the total assets of Reliance Capital stood at Rs 41721 crore. The company has not raised any fixed deposits from the public.
REC shed 0.26%. The company after market hours reported 16.43% rise in net profit to Rs 1110.67 crore on 27.48% rise in total income to Rs 4224.25 crore in Q2 September 2013 over Q2 September 2012.
M&M rose 1.68% after the company announced good Q2 September 2013 results during trading hours today, 13 November 2013. The gross revenues and other income of Mahindra & Mahindra (M&M) and Mahindra Vehicle Manufacturers (MVML) (entity), fell 8.34% to Rs 9887.6 crore in Q2 September 2013 over Q2 September 2012. The net profit before tax fell 1.78% to Rs 1303.6 crore in Q2 September 2013 over Q2 September 2012. After providing for tax, the profit rose 5.06% to Rs 1027.6 crore Q2 September 2013 over Q2 September 2012. The operating margin of the entity rose to 14.5% in Q2 September 2013 from 13.8% in Q2 September 2012.
MVML, located at Chakan near Pune, was set up as a 100% subsidiary of the company with a view to sourcing contemporary products for expanding the market offerings of the company.
M&M said that the deceleration in the gross revenues in Q2 September 2013 is due to the challenging times the Indian auto industry, with volumes shrinking by 4% during Q2 September 2013, is currently passing through. Despite this, the entity could deliver a growth in the profits in the quarter due to a strong sales performance by its farm equipment sector and a tight control on material costs and all expenses.
In the passenger utility vehicle segment, the entity sold 47,388 vehicles in Q2 September 2013 with a market share of 39.6%. In the cars segment, the entity sold 2,879 Verito and Verito Vibe Cars. The entity also exported 8,059 vehicles in Q2 September 2013, M&M said.
In the wake of a good monsoon, the domestic tractor industry continued to show robust growth with tractors sales rising 21.2% to 141,171 tractors in Q2 September 2013 over Q2 September 2012. In this period, the company's domestic sales rose 22.3% to 57,549 tractors in Q2 September 2013 over Q2 September 2012. The company's market share rose to 40.5% in Q2 September 2013 as against 40.2% in Q2 September 2012. Mahindra Powerol posted net revenue of Rs 171.1 crore in Q2 September 2013 as against Rs 217.7 crore in Q2 September 2012.
On a standalone basis, M&M's gross revenues and other income fell 9.19% to Rs 9890.6 crore in Q2 September 2013 over Q2 September 2012. The net profit after tax rose 9.72% to Rs 989.5 crore in Q2 September 2013 over Q2 September 2012.
M&M group's consolidated gross revenues and other income of the rose 3.9% to Rs 18675.6 crore in Q2 September 2013 over Q2 September 2012. On account of a change in the status of Tech Mahindra from a joint venture to an associate effective 31 August 2012, the revenues reported above include M&M's share of Tech Mahindra revenue for two months only in Q2 September 2013. On a like to like basis the growth in the consolidated revenues is 6.6% in Q2 September 2013 over Q2 September 2012. The consolidated profit after tax before minority interest rose 17.8% to Rs 927.4 crore in Q2 September 2013 over Q2 September 2012. After deducting minority interest, the profit after tax rose 4.63% to Rs 835.7 crore in Q2 September 2013 over Q2 September 2012.
M&M said the group's recent acquisition Ssangyong Motor Company, South Korea, which had broken even in Q1 June 2013, continued its profitable ways with a 20% growth in consolidated revenues and a 114% growth in results in Q2 September 2013. The performance of Tech Mahindra with a 39% growth in consolidated revenues and a 58% increase in profits and that of Mahindra Finance with a 32% growth in consolidated revenues and a 21% growth in profits in the latest concluded quarter, were particularly noteworthy, M&M said.
In its outlook, M&M said that the Indian economy continues to struggle. With domestic demand weakening and manufacturing activity stagnating, growth in the first quarter of F2014 dropped to 4.4% and is likely to see only marginal improvement, if at all, in the second quarter. At the same time, inflation remains high and rising, limiting the space for growth supportive monetary policy action.
Nevertheless, we expect the economy to perform better in the second half of this fiscal, M&M said. First, as a result of both domestic policy actions and the US Fed maintaining status quo, near term balance of payments risks facing the Indian economy have eased, stabilizing the rupee and thus limiting cost-push inflationary pressures on the economy. Second, the robust agricultural harvest expected in the coming months is likely to dampen inflation while simultaneously boosting rural output, incomes & demand and thereby, productive activity in other segments of the economy.
Finally, with the advanced economies recovering, and the rupee no longer over-valued, exports should pick up speed in the coming quarters. Given these encouraging pointers, our current outlook on the economy is one of cautious optimism, M&M said.
Shares of two-wheeler makers dropped. Hero MotoCorp (down 1.85%) and Bajaj Auto (down 0.12%), declined.
Realty stocks declined on concerns the central bank may further hike policy rates after the latest data showed consumer price inflation quickened in October. DLF (down 1.18%), HDIL (down 2.12%), Sobha Developers (down 2.6%) and Unitech (down 1.53%), declined.
Gujarat Gas Company rose 2.79% on good Q2 result. The company's consolidated net profit rose 19.70% to Rs 119.08 crore on 0.23% fall in net sales to Rs 828.30 crore in Q3 September 2013 over Q3 September 2012. The result was announced after market hours on Tuesday, 12 November 2013.
Gujarat Gas Company (GGCL) said total volume of gas sold during the quarter was 247 million metric standard cubic metre (mmscm) compared with 239 mmscm in Q2 June 2013.
The company connected more than 7,600 new residential customers during the quarter, taking the total residential connections to more than 36,000 in nine months till date in the year 2013, higher than 34,600 connections made in the twelve months of 2012. The company also commissioned more than 67,500 standard cubic meters per day (scmd) of new volumes in the industrial sector during the quarter.
Speaking on the occasion of the results, Mr. Sugata Sircar, managing director, said "Our endeavour has been to anticipate movements in input costs to the extent possible and to prepare for the same through pricing and volume optimisation. This is showing results. Quarterly variations remain due to variability in certain factors. The results for the nine months ended 30 September 2013 also show a positive trend. The Board, considering the performance, cash balances and capital expenditure plans, declared an interim dividend of Rs 9 per equity share."
Reliance Communications (RCom) jumped 2.48% on strong Q2 result. The company's consolidated net profit spurted 562% to Rs 675 crore on 3.7% growth in operating revenue to Rs 5394 crore in Q2 September 2013 over Q2 September 2012. The result was announced after market hours on Tuesday, 12 November 2013.
RCom's consolidated profit after tax (PAT) excluding provision write-back surged 129.4% to Rs 234 crore in Q2 September 2013 over Q2 September 2012. There was a provision write-back of Rs 441 crore in Q2 September 2013.
RCom's operating EBITDA (earnings before interest, taxation, depreciation and amortization) rose 15.2% to Rs 1887 crore in Q2 September 2013 over Q2 September 2012. Total EBITDA rose 42.1% to Rs 2328 crore.
RCom's revenue from India operations grew 5.4% to Rs 4624 crore in Q2 September 2013 over Q2 September 2012. EBITDA rose 15.1% to Rs 1640 crore.
The company's revenue from global operations declined 0.3% to Rs 1139 crore in Q2 September 2013 over Q2 September 2012. EBITDA grew 15.5% to Rs 246 crore.
RCom said it has generated operational cash flow (EBITDA) of Rs 2328 crore in Q2 September 2013, paid net finance charges of Rs 676 crore and invested Rs 364 crore on capex during the quarter. It remains free cash flow (FCF) positive and this is expected to continue, the company said in a statement.
Other telecom stocks were mixed. Bharti Airtel fell 1.63%. Idea Cellular gained 2.81%.
Bata India rose 1.91% after parent company Bata BN BV bought shares from open market on Tuesday, 12 November 2013. On Tuesday, 12 November 2013, Bata BN BV bought 6.08 lakh shares of Bata India at Rs 888.05, while ICICI Brokerage Services sold 6.27 lakh shares at Rs 888.35 on the BSE.
As on 30 September 2013, Bata BN BV held 3.34 crore shares, or 52.01% stake, in Bata India.
GMR Infrastructure fell 5.91% after the net loss widened in Q2 September 2013. The company posted a consolidated net loss of Rs 393.05 crore in Q2 September 2013, higher than the consolidated net loss of Rs 179.30 crore in Q2 September 2012. The result was announced after market hours on Tuesday, 12 November 2013.
GMR Infrastructure's consolidated total income increased 0.86% to Rs 2500.34 crore in Q2 September 2013 over Q2 September 2012.
In a separate announcement after market hours on Tuesday, 12 November 2013, GMR Infrastructure said that the group is establishing 3x350 megawatts (MW) coal-based thermal power plant at Kamalanga in Odisha's Dhenkanal District. The first unit of 350 MW commenced generation on 30 April 2013. The second 350 MW unit of GMR Kamalanga Energy (GKEL) was declared commercially operational on 11 November 2013.
Power produced from GKEL is being supplied to GRIDCO in Odisha in line with the long-term Power Purchase Agreement (PPA). Besides Odisha, GKEL would supply power to Haryana, Bihar and other parts of the country. GKEL secured coal linkage for all its 1050 MW capacity by signing Fuel Supply Agreements with Mahanadi Coalfields, GMR said in a statement.
With the commissioning of GKEL's second unit, the GMR Group's combined generation capacity has touched 2136 MW. Projects totalling 5038 MW are under implementation. Commissioning of GKEL's second unit follows close on the heels of the synchronization of the second unit of GMR's 2x300 MW EMCO Energy at Warora in Chandrapur District of Maharashtra on 27 August 2013. EMCO's first unit of 300 MW became commercially operational in March 2013, the company said.
Speaking on the occasion, GKEL's President & Director Mr. R.V. Sheshan, said, "GKEL is the largest investment made by the GMR Group in the energy sector. It is also one of the earliest private power projects to commence commercial operations in Odisha. GKEL is also making substantial efforts so that the quality of life of individuals in neighbouring communities is enriched by its transformational educational, health care, livelihood and grassroots infrastructure development focused CSR interventions."
Suven Life Sciences tumbled 13.58% on profit booking after surging 45.79% in prior nine trading sessions.
In the foreign exchange market, the rupee recovered against the dollar in choppy trade. The partially convertible rupee was hovering at 63.49, stronger compared with its close of 63.71 on Tuesday, 12 November 2013. The rupee was weak in early deals.
On macro front, index of industrial production (IIP) rose 2% in September 2013, showing increase in growth from 0.4% growth recorded in August 2013. The entire growth in IIP was mainly driven by 12.9% surge in electricity generation in September 2013. The mining output also witness rise in output, while the manufacturing sector output showed a marginal rise in September 2013. The industrial production growth for the month of August 2013 has been revised downwards to 0.4% from 0.6% reported earlier, while the growth for the month of June 2013 has undergone final revision, registering growth of (-1.8%). The data was announced after market hours on Tuesday.
The annual consumer price inflation quickened more than expected to 10.09% in October from 9.84% in September, driven by food prices, government data showed on Tuesday. Food prices for consumers last month rose 12.56% from a year earlier, faster than September's 11.44% rise. The data was announced after market hours on Tuesday.
European stocks retreated on Wednesday as investors weighed corporate earnings and awaited data that may show euro-area industrial output fell. Key benchmark indices in France, Germany and UK dropped 0.26% to 0.98%.
Asian stocks fell on Wednesday after China's leaders failed to outline steps to curb state dominance of the economy and amid bets the Federal Reserve may start reducing U.S. stimulus next month. Key benchmark indices in China, Taiwan, Japan, South Korea, Singapore, Hong Kong and Indonesia shed 0.15% to 1.91%.
China elevated the role of markets while maintaining the state's dominance in the nation's economic strategy, seeking to balance finding new sources of growth with sustaining the Communist Party's grip on power. The nation will make markets "decisive" in allocating resources, according to yesterday's communique from the third full meeting, or plenum, of the party's 18th Central Committee in Beijing, which stopped short of unveiling detailed policy shifts. The state will remain "dominant" in the economy, indicating limits on reducing government involvement. China will set up a party panel to coordinate and supervise policies under the updated principles and more specific measures may follow in the coming weeks or months. The communique also announced the party's determination to draw a red line to protect the environment, after years of economic expansion have polluted China's soil, water and air. China will also reform its judicial system to protect people's rights, it said.
Trading in US index futures indicated that the Dow could fall 18 points at the opening bell on Wednesday, 13 November 2013. US stocks fell on Tuesday, with the Dow Jones Industrial Average retreating from a record, as corporate earnings and an improving economy fueled speculation the Federal Reserve will reduce stimulus next month.
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