Key benchmark indices hovered in negative zone in afternoon trade as a sharp slide in rupee against the dollar hitting investor sentiment adversely. European stocks opened lower as investors remained cautious ahead of the Federal Reserve's policy decision. The S&P BSE Sensex, was down 123.19 points or 0.64%, up 98.33 points from the day's low and off 100.24 points from the day's low. The market breadth, indicating the overall health of the market, was weak.
Index heavyweight and cigarette major ITC cut intraday losses. Index heavyweight Reliance Industries (RIL) extended intraday fall in volatile trade. ICICI Bank declined after declaring Q1 result. Yes Bank tumbled on reports of alleged corporate governance issues. Grasim Industries fell as the stock turned ex-dividend today, 31 July 2013. Motherson Sumi Systems declined after announcing Q1 results.
The market slumped in early trade as a further slide in rupee against the dollar rattled investor sentiment. The Sensex extended initial losses to hit fresh intraday low in morning trade. The S&P BSE Sensex and the 50-unit CNX Nifty, both, hit their lowest level in nearly five weeks. A bout of volatility was witnessed as key benchmark indices trimming losses after hitting fresh intraday low in mid-morning trade. The Sensex hovered in negative terrain in early afternoon trade. Key benchmark indices hovered in negative zone in afternoon trade.
The rupee approached a record low against the dollar on Wednesday, 31 July 2013, with the local currency extending Tuesday's steep slide. The rupee was hovering at 61.05 versus the dollar, weaker than Tuesday's close of 60.47/48. The rupee had hit record low of 61.21 in intraday deals on 8 July 2013. The Reserve Bank of India (RBI) on Tuesday said that its recent liquidity tightening measures aimed at checking undue volatility in the foreign exchange market 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.
Bond prices extended Tuesday's losses. The yield on the most traded 8.2% GS 2025 was currently at 8.6554%, higher than Tuesday's close of 8.6416%. Bond yield and bond prices are inversely related.
At 13:20 IST, the S&P BSE Sensex was down 123.19 points or 0.64% to 19,225.15. The index declined 221.52 points at the day's low of 19,126.82 in morning trade, its lowest level since 28 June 2013. The index fell 22.95 points at the day's high of 19,325.39 in early trade.
The CNX Nifty was down 53.10 points or 0.92% to 5,701.95. The index hit a low of 5,675.75 in intraday trade, its lowest level since 27 June 2013. The index hit a high of 5,742.10 in intraday trade.
The market breadth, indicating the overall health of the market, was weak. On BSE, 1,554 shares fell and 541 shares rose. A total of 118 shares were unchanged.
The total turnover on BSE amounted to Rs 1431 crore by 13:20 IST.
Among the 30-share Sensex pack, 19 stocks fell and rest of them rose. NTPC (down 5.32%), Jindal Steel & Power (down 3.26%) and GAIL (India) (down 2.75%), edged lower.
Bharti Airtel (up 5.55%), Wipro (up 3.25%) and Coal India (up 2.36%) edged higher from the Sensex pack.
ICICI Bank lost 3.06%. The private sector bank during market hours today, 31 July 2013 reported 25.29% rise in net profit to Rs 2274.21 crore on 12.94% growth in total income to Rs 12904.97 crore in Q1 June 2013 over Q1 June 2012.
Net interest margin increased by 26 basis points to 3.27% for Q1 June 2013 from 3.01% for Q1 June 2012.
Net non-performing assets at 30 June 2013 were Rs 2472 crore compared to Rs 2234 crore at 31 March 2013. The net non-performing asset ratio was 0.69% at 30 June 2013 compared to 0.64% at 31 March 2013. The bank's provision coverage ratio, computed in accordance with the RBI guidelines was 75.4% at 30 June 2013. Net loans to companies whose facilities have been restructured were Rs 5915 crore at 30 June 2013 compared to Rs 5315 crore at 31 March 2013.
The bank said it continued with its strategy of pursuing profitable growth. The bank continued to leverage its strong corporate franchise, its international presence and its branch network in India. During Q1 June 2013, the bank added 250 branches, including 150 low cost Gramin branches, and 421 ATMs to its network. At 30 June 2013, the bank had 3,350 branches, the largest branch network among private sector banks in the country. The Bank's ATM network increased to 10,902 ATMs at 30 June 2013 as compared to 9,366 at 30 June 2012.
Yes Bank tumbled 9.62% to Rs 315.35 as reports of alleged corporate governance issues. The stock tumbled as much as 17.3% at the day's low of Rs 288.55, also its 52-week low. As per reports, Madhu Kapur, the widow of Ashok Kapur, one of the promoters of the bank along with Rana Kapoor, had raised corporate governance issues in an affidavit filed in the Bombay high court on Monday in the case over the rejection of her daughter Shagun Gogia's nomination as a director.
These issues related to what she alleged was favourable treatment to the wife and daughter of managing director and chief executive officer Rana Kapoor. The court will hear the case on 12 August 2013.
Meanwhile, the private sector bank announced increase in base rate and increase in deposit rates on select tenors. The bank during market hours today, 31 July 2013, said it has raised deposit rates by 0.25% to 0.5% in select tenors. This provides an opportunity for retail depositors to lock in higher rates on term deposits, the private sector bank said. Yes Bank has also consequently raised its base rate by 0.25% 10.75% with effect from 1 August 2013.
Andhra Bank lost 7.54% to Rs 64 after net profit dropped 36.08% to Rs 231.28 crore on 14.8% rise in total income to Rs 3854.16 crore in Q1 June 2013 over Q1 June 2012. The result was announced during market hours today, 31 July 2013. The stock hit a 52-week low of Rs 62.85 in intraday trade today, 31 July 2013.
Andhra Bank's ratio of net non-performing assets (NPA) increased to 3.27% as on 30 June 2013, from 2.45% as on 31 March 2013 and 1.52% as on 30 June 2012. The ratio of gross NPA to gross advances increased to 4.73% as on 30 June 2013, from 3.71% as on 31 March 2013 and 2.72% as on 30 June 2012.
The bank's provisions (other than tax) and contingencies surged 86.35% to Rs 384.90 crore in Q1 June 2013 over Q1 June 2012.
Andhra Bank's capital adequacy ratio (CAR) as per Basel II norms stood at 11.46% as on 30 June 2013, as against 11.76% as on 31 March 2013 and 12.68% as on 30 June 2012.
Shares of state-run oil exploration major ONGC shed 0.34%.
Reliance Industries (RIL) fell 1.61% to Rs 845 in volatile trade. The stock hit high of Rs 864.45 and low of Rs 843 so far during the day.
RIL and ONGC on 27 July 2013 announced signing a memorandum of understanding (MoU) to explore the possibility of sharing RIL's infrastructure facility in the East Coast. The MoU aims at working out the modalities for sharing of infrastructure, identifying additional requirements as well as firming up the commercial terms. The companies intend to enter into a definitive agreement after concluding a joint study which will be spread over the next nine months, RIL said in a statement on 27 July 2013.
Index heavyweight and cigarette major ITC fell 1.93% to Rs 343.80, with the stock cutting losses after hitting an intraday low of Rs 336.35
Grasim Industries lost 2.23% as the stock turned ex-dividend today, 31 July 2013, for dividend of Rs 22.50 per share for the year ended 31 March 2013.
Motherson Sumi Systems fell 4.19%. The company during market hours today, 31 July 2013 reported 799.26% surge in consolidated net profit to Rs 73.2 crore on 14.8% rise in total income to Rs 7086.87 crore in Q1 June 2013 over Q1 June 2012.
Jet Airways (India) lost 6.69%. The stock extended Tuesday's 7.7% fall triggered by the Foreign Investment Promotion Board on Monday, 29 July 2013, approving a proposal by Jet Airways (India) to sell a 24% stake to Abu Dhabi-based Etihad Airways, with some conditions. Last month, FIPB had deferred a decision on Jet-Etihad deal, asking for more details on effective control and ownership of the Indian carrier post the stake sale.
The Jet Airways stock had spurted recently on speculation that the FIPB will clear the Jet-Etihad deal as its meeting on Monday, 29 July 2013.
On the political front, the ruling Congress party approved on Tuesday the creation of a new Telangana state, a move that has revived deep political divisions and raised fears of violence in the area, home to global firms including Google. The decision to break up Andhra Pradesh and establish Telangana comes ahead of elections next year.
European stock markets opened lower on Wednesday, after disappointing German retail-sales data, and with investors staying cautious ahead of the release of U.S. second-quarter GDP data and the latest policy decision from the Federal Reserve. Key benchmark indices in UK, Germany and France were down 0.19% to 0.58%.
In Europe, the European Central Bank (ECB) and the Bank of England (BoE) will announce their policy decisions tomorrow, 1 August 2013.
German retail sales unexpectedly declined in June, suggesting that doubts about Europe' economic recovery weighed on consumer spending. Sales adjusted for inflation and seasonal swings dropped 1.5% from May, when they rose 0.7%, the Federal Statistics Office in Wiesbaden said today.
Asian stocks fell on Wednesday, 31 July 2013, amid caution ahead of the Federal Reserve's policy decision. Key benchmark indices in Japan, Singapore, South Korea, Indonesia and Taiwan fell by 0.16% to 1.45%.
Mainland Chinese stocks rose after the powerful politburo of China's communist party on Tuesday said it would act to maintain steady growth in the second half of 2013. China's Shanghai Composite rose 0.19%. Hong Kong's Hang Seng fell 0.38%.
The results of two separate surveys on Chinese manufacturing activity in July are due tomorrow, 1 August 2013.
Taiwan's economy expanded at a faster-than-estimated pace in the second quarter as domestic consumption improved, even as a slowdown in China damps the outlook for the island's exports. Gross domestic product rose 2.27% from a year earlier after increasing 1.67% in the first quarter, the statistics bureau said in a preliminary report in Taipei today.
Trading in US index futures indicated that the Dow could fall 15 points at the opening bell on Wednesday, 31 July 2013. US stocks closed mixed on Tuesday in quiet trading session as many investors remained on the sidelines ahead of the Federal Reserve's Wednesday announcement on interest rates and monetary policy.
The Federal Open Market Committee's (FOMC) two-day policy meeting ends today, 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.
The influential US non-farm payroll data for July 2013 is due on Friday, 2 August 2013.
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