Key benchmark indices gave away a lion's portion of intraday gains in early afternoon trade. The barometer index, the S&P BSE Sensex, was up 8.06 points or 0.04%, off close to 40 points from the day's high and up about 90 points from the day's low. The market breadth, indicating the overall health of the market, was positive.
Pharma stocks edged higher. Shares of private sector banks reversed initial losses.
The Sensex edged lower amid initial volatility after a Reserve Bank of India panel recommended that the central bank should start using a consumer-price inflation target to determine monetary policy. High volatility was witnessed as key benchmark indices alternately swung between gains and losses in morning trade. Key benchmark indices moved into positive zone from negative zone in mid-morning trade as Asian stocks rose. Key benchmark indices gave away a lion's portion of intraday gains in early afternoon trade.
Foreign institutional investors (FIIs) sold shares worth a net Rs 43.74 crore on Tuesday, 21 January 2014, as per provisional data from the stock exchanges.
At 12:20 IST, the S&P BSE Sensex was up 8.06 points or 0.04% to 21,259.18. The index rose 49.78 points at the day's high of 21,300.90 in mid-morning trade. The index dropped 82.69 points at the day's low of 21,168.43 in early trade, its lowest level since 20 January 2014.
The CNX Nifty was up 1.9 points or 0.03% to 6,315.10. The index hit a high of 6,326.70 in intraday trade. The index hit a low of 6,287.45 in intraday trade, its lowest level since 20 January 2014.
The market breadth, indicating the overall health of the market, was positive. On BSE, 1,170 shares gained and 1,089 shares fell. A total of 119 shares were unchanged.
Among the 30-share Sensex pack, 19 stocks rose and rest fell. Bharti Airtel (up 1.74%), NTPC (up 1.45%) and Tata Steel (up 1.41%) edged higher from the Sensex pack.
Shares of private banks rose. ICICI Bank rose 0.34%.
AXIS Bank rose 0.77%. AXIS Bank's net profit increased 19.06% to Rs 1604.11 crore on 9.94% increase in total income to Rs 9433.55 crore in Q3 December 2013 over Q3 December 2012. The result was announced on 16 January 2014.
HDFC Bank gained 0.95%. The bank's net profit rose 25.1% to Rs 2325.70 crore on 17.75% growth in total income to Rs 12738.95 crore in Q3 December 2013 over Q3 December 2012. The bank announced Q3 results on 17 January 2014.
Kotak Mahindra Bank gained 0.68%. The bank's net profit fell 5.99% to Rs 339.98 crore on 3.85% increase in total income to Rs 2492.01 crore in Q3 December 2013 over Q3 December 2012. The bank's consolidated net profit rose 2.43% to Rs 591.25 crore on 6.43% growth in total income to Rs 4424.50 crore in Q3 December 2013 over Q3 December 2012. The result was announced during trading hours on Tuesday, 21 January 2014.
The bank's gross non-performing assets edged up to Rs 1076.18 crore as on 31 December 2013, from Rs 1005.97 crore on 31 September 2013 and Rs 740.02 crore as on 31 December 2012. The ratio of gross non-performing assets (NPA) to gross advances stood at 2.01% as on 31 December 2013, higher than 1.97% as on 30 September 2013 and 1.46% as on 31 December 2012. The ratio of net non-performing assets to net advances stood at 1.1% as on 31 December 2013, higher than 0.96% as on 30 September 2013 and 0.64% as on 31 December 2012.
SBI fell 0.65%.
Pharma stocks edged higher. Cipla (up 1.62%), Dr Reddy's Laboratories (up 0.54%), Lupin (up 2.57%), Ranbaxy Laboratories (up 0.48%) and Sun Pharmaceutical Industries (up 0.71%) gained.
Suven Life Sciences jumped 5.31% after the company said its facility in Pashamylaram near Hyderabad received approval from the US Food and Drug Administration. The company made the announcement during trading hours today, 22 January 2014. Suven Life Sciences said it underwent US Food and Drug Administration (USFDA) renewal inspection at its facility in Pashamylaram near Hyderabad for the manufacture and supply of active pharmaceutical ingredients (bulk drugs), intermediates and formulations under cGMP.
Based on the inspection and the review thereafter, USFDA has classified the Pashamylaram facility as acceptable for manufacture and supply of active pharmaceutical ingredients, intermediates and formulations, the company said in a statement.
So far, Suven Life Sciences has filed 29 Drug Master Files (DMFs) and 1 Abbreviated New Drug Application (ANDA) from this facility, which is FDA compliant under current good manufacturing practices (cGMP) and continued after renewal inspection.
Torrent Pharmaceuticals jumped 8.21% after consolidated net profit rose 41.1% to Rs 158 crore on 28.9% increase in net sales to Rs 990 crore in Q3 December 2013 over Q3 December 2012. The company announced the results after trading hours on Tuesday, 21 January 2014.
Torrent Pharmaceuticals said its domestic formulation business revenues grew 15% to Rs 297 crore in Q3 December 2013 over Q3 December 2012. As per AIOCD, Torrent grew at 12% during the quarter compared to covered market growth of 5% and Indian Pharmaceutical growth of 5%.
International revenues grew by 41% to 637 crore in Q3 December 2013 over Q3 December 2012. In the international operations, US business reported growth of 61%, Europe (incl.Heumann) 59%, Brazil growth 26% and Rest of the World, including Russia, CIS, Mexico & Canada 9%.
In Q3 December 2013, the company acquired Indian branded formulations business of Elder for a consideration of Rs 2004 crore. The transaction is subject to conditions precedent including shareholder approval and applicable regulatory approvals and is expected to close in the first half of 2014, Torrent Pharmaceuticals said in a statement.
Zensar Technologies lost 6.25% after consolidated net profit fell 28.2% to Rs 50.71 crore on 4.5% fall in total income to Rs 588.38 crore in Q3 December 2013 over Q2 September 2013. The company announced the result after trading hours on Tuesday, 21 January 2014.
Zensar Technologies' foreign exchange loss stood at Rs 8.56 crore in Q3 December 2013 compared to foreign exchange gain of Rs 14.46 crore in Q2 September 2013.
Meanwhile, Zensar Technologies' board of directors at its meeting held on Tuesday, 21 January 2014, recommended interim dividend of Rs 4 per share for the financial year ending 31 March 2014. The company's board of directors have fixed 31 January 2014 as the record date for ascertaining shareholders entitlement for payment of interim dividend.
MphasiS lost 4.42% on turning ex-dividend today, 22 January 2014, for a final dividend of Rs 17 per share for the year ended 31 October 2013.
Bond prices dropped after a Reserve Bank of India panel recommended that the central bank should start using a consumer-price inflation target to determine monetary policy. The panel's recommendations if accepted by the central bank may result in increase in interest rates. The yield on 10-year benchmark federal paper, 8.83% GS 2023, was hovering at 8.6441%, higher than its close of 8.5531% on Tuesday, 21 January 2014. Bond yield and bond prices move in opposite direction.
A Reserve Bank of India panel has recommended that the central bank should start using a consumer-price inflation target to determine monetary policy. The panelset up soon after former International Monetary Fund chief economist Raghuram Rajan took over as RBI governor last yearwas created to come up with ways to make the country's monetary policy more transparent and predictable. In a 130-page report released on Tuesday, 21 January 2014, the panel recommended using a well-defined range of consumer-price index inflation to set monetary policy. The report suggested a CPI inflation rate target within two percentage points above or below 4%. The RBI panel said the central bank should move to lower India's consumer inflation, which has been close to 10% in recent months, to 8% within the next 12 months and to 6% in 24 months, before adopting the target. "This transition path should be clearly communicated to the public," the report said.
If accepted, the report's recommendation would bring India in line with global norms by placing less emphasis on wholesale price inflation, which India has used until now as its main indicator of price movements. The wholesale price inflation measure, which excludes the massive service sector, has typically been much lower than consumer prices. The consumer price index is currently hovering near 10%, compared with about 6% for wholesale prices.
Historically, the Indian central bank has followed a multifocus approach to monetary policy, setting interest rates based on how it sees inflation, growth and currency stability. It usually didn't have an official inflation target, which often left markets surprised by its moves.
The panel also suggested monetary policy be decided by a committee headed by the governor with final decisions through a vote of the committee members, as is the practice in some developed countries like the UK. Right now in India monetary policy decisions are made by the RBI governor alone, though he gets input from an advisory committee.
The Reserve Bank of India's Third Quarter Review of Monetary Policy for 2013-14 is scheduled on 28 January 2014. The RBI kept its main lending rate viz. the repo rate unchanged after its last policy review in December and said at that time that it expected inflation to ease in the following months.
Asian stocks edged higher on Wednesday, 22 January 2014, after the Bank of Japan pledged to maintain economic stimulus and the International Monetary Fund raised its global growth forecast. Key benchmark indices in Japan, Singapore, South Korea, China, Taiwan and Hong Kong were up 0.05% to 1.79%. Indonesia's Jakarta Composite fell 0.12%.
The Bank of Japan (BOJ) today, 22 January 2014, pledged to maintain economic stimulus after a two-day monetary policy review. The BOJ said it will keep plans to increase the monetary base annually by 60 trillion to 70 trillion yen and maintained its inflation target for 2015.
The Thai government declared a state of emergency in its capital in response to antigovernment protests that have paralyzed the city and stirred up increasingly violent attacks. Over the past week, unknown assailants have launched attacks on the protesters, killing one and injuring dozens. The unrest is also dragging on the economy, with Japanese auto companies, some of Thailand's most important investors, raising a red flag that future investment could be affected.
Trading in US index futures indicated that the Dow could advance 8 points at the opening bell on Wednesday, 22 January 2014. US stocks closed mostly higher on Tuesday, 21 January 2014, though disappointing earnings results from Verizon Communications Inc and the Travelers Cos. Inc. weighed on the Dow. The S&P 500's cyclical sectors energy and natural resources were among the biggest gainers after the People's Bank of China on Tuesday, 21 January 2014, said it provided emergency funding support for commercial banks as they gear up to meet demands for cash ahead of the Lunar New Year.
The Federal Open Market Committee (FOMC) holds a two-day monetary policy meeting on 28 and 29 January 2014. By a 9-to-1 vote, the Fed on 18 December 2013 decided to trim its asset-purchase program by $10 billion to $75 billion per month starting in January 2014.
The International Monetary Fund raised its forecast for global growth this year as expansions in the US and UK accelerate, and urged advanced economies to maintain monetary accommodation to strengthen the recovery. The global economy will grow 3.7% this year, compared with an October estimate of 3.6%, the IMF said in revisions to its World Economic Outlook released in Washington.
US gross domestic product will expand 2.8%, compared with 2.6%; Japan will gain 1.7% versus 1.2%; and the UK will increase 2.4% from 1.9%, the report showed. "In advanced economies, output gaps generally remain large and, given the risks, the monetary policy stance should stay accommodative while fiscal consolidation continues," the Washington-based organization said in the report. "In many emerging market and developing economies, stronger external demand from advanced economies will lift growth, although domestic weaknesses remain a concern." Central banks in the US, Japan and the euro area face inflation levels under their targets while trying to accelerate growth with policies including benchmark interest rates near zero and bond-buying programs. While it raised the outlook for advanced nations, the IMF said "downside risks remain," including financial-market volatility in emerging markets.
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