Decline in index heavyweights in Reliance Industries (RIL) and Infosys pulled key benchmark indices lower in what was a choppy trading session. The barometer index, the S&P BSE Sensex, and the 50-unit CNX Nifty, reversed direction after a rally in early trade took both these benchmark indices to their highest level in more than 35 months. The Sensex and the Nifty, both, settle at one-week low. The market breadth, indicating the overall health of the market, was negative. The Sensex shed 42.45 points or 0.2%, up close to 70 points from the day's low and off about 310 points from the day's high. In the foreign exchange market, the rupee edged higher against the dollar in choppy trade on speculation the Federal Reserve will maintain stimulus for the US economy in the foreseeable future after disappointing US job data for September 2013 released early this week.
Indian stocks fell for the third day in a row today, 24 October 2013. From a recent high of 20,893.89 on 21 October 2013, the Sensex has declined 168.46 points or 0.8% in three trading sessions. The Sensex has gained 1,345.66 points or 6.94% in this month so far (till 24 October 2013). The Sensex has gained 1,298.72 points or 6.68% in calendar 2013 so far (till 24 October 2013). From a 52-week low of 17,448.71 on 28 August 2013, the Sensex has risen 3,276.72 points or 18.77%.
Coming back to today's trade, Reliance Industries (RIL) edged lower in choppy trade. IT stocks declined as the rupee edged higher against the dollar. Infosys reversed direction after hitting 52-week high. GAIL (India) rose after the company announced after market hours on Wednesday, 23 October 2013, that it has signed a Gas Cooperation Agreement (GCA) for natural gas infrastructure and city gas distribution with the Department of Industries, Government of Bihar. Coal India dropped. Index heavyweight ITC edged higher in volatile trade.
Kotak Mahindra Bank edged lower in volatile trade after the private sector bank reported Q2 results during trading hours. NHPC slumped after the company's board of directors set share buyback price close to the ruling market price.
The S&P BSE Sensex lost 42.45 points or 0.2% to settle at 20,725.43, its lowest closing level since 17 October 2013. The index fell 111.18 points at the day's low of 20,656.70 in late trade. The index jumped 271.54 points at the day's high of 21,039.42 in morning trade, its highest level since 8 November 2010.
The CNX Nifty was down 14 points or 0.23% to 6,164.35, its lowest closing level since 17 October 2013. The index hit a low of 6,142.95 in intraday trade. The index hit a high of 6,252.45 in intraday trade, its highest level since 11 November 2010.
The BSE Mid-Cap index rose 0.16% and outperformed the Sensex. The BSE Small-Cap index fell 0.05% and outperformed the Sensex.
The total turnover on BSE amounted to Rs 2064 crore, lower than Rs 2227 crore on Wednesday, 23 October 2013.
The market breadth, indicating the overall health of the market, was negative. On BSE, 1,292 shares declined and 1,197 shares gained. A total of 184 shares were unchanged.
Idea Cellular declined 0.2%. The company after trading hours today, 24 October 2013, said its profit after tax (PAT) rose 13.2% to Rs 398.50 crore in Q2 September 2013 from Rs 351.90 crore (despite including Rs 154.30 crore dividend from Indus) in Q2 September 2012. Revenue jumped 18.1% to Rs 6317 crore in Q2 September 2013 over Q2 September 2012. Revenue growth and scale benefit translated into healthy EBITDA margin of 27.6% in Q2 September 2013. EBITDA margin registered year-on-year (YoY) improvement by 4%, the company said.
The company's consolidated profit after tax (PAT) jumped 86.5% to Rs 447.60 crore in Q2 September 2013 over Q2 September 2012. Revenue, including 16% Indus contribution rose 19% on YoY basis in Q2 September 2013. The consolidated EBITDA margin of 31.2% in Q2 September 2013 is a YoY improvement of 4.4%, Idea Cellular said. The company announced Q2 result after market hours.
As competitive intensity in the telecom sector declines and as the overcapacity phase comes to an inevitable end and also as visibility of spectrum quantum and pricing improves, Idea Cellular expects to further consolidate its position in the telecom voice and data market, the company said in a statement.
Bharti Airtel rose 0.56%. The company before market hours today, 24 October 2013, said that the company's board of directors has approved the Scheme of Amalgamation of Airtel Broadband Services (formerly known as Wireless Business Services) which is a wholly owned subsidiary with the company.
Index heavyweight Reliance Industries shed 1.42% at Rs 883.10. The stock hit high of Rs 909.95 and low of Rs 881.
GAIL (India) rose 1.59%. The company announced after market hours on Wednesday, 23 October 2013, that in a landmark development to expand the natural gas footprint in eastern India, GAIL (India) has signed a Gas Cooperation Agreement (GCA) for natural gas infrastructure and city gas distribution with the Department of Industries, Government of Bihar. Under the provisions of the GCA, GAIL and the Bihar Government will evaluate the feasibility for cooperation for the development of the use of eco-friendly fuel, especially natural gas, in the state as well as development of natural gas distribution and city gas infrastructure in identified urban areas and cities after obtaining due authorization from the Petroleum and Natural Gas Regulatory Board (PNGRB).
GAIL (India) is constructing the 2,050 km. Haldia-Jagdishpur pipeline from transmission and distribution of natural gas, of which about 621 km. will pass through 14 districts of Bihar. The mainline of the Haldia Jagdishpur will cover 4 districts of Bihar such as Kaimur, Rohtas, Aurangabad, Gaya and 10 districts for the spur lines. GAIL will explore the possibility of City Gas Distribution in major towns of Bihar along this pipeline route.
GAIL (India) and Industries Department, Bihar will also work towards promotion of joint venture for City Gas Distribution projects for domestic, commercial, industrial and transport sectors with the participation of GAIL or its wholly owned subsidiary GAIL Gas Limited and concerned departments of the Bihar Government, other state agencies or private players.
As per the GCA, Natural Gas Demand Assessment and Preliminary Techno Economic Feasibility Study will be undertaken for evaluation of medium and long term gas demand potential for the state for industrial, commercial, transport and residential sectors; assessment of pipeline infrastructure and associated facilities required for supply of natural gas including optical fibre network; and evaluation of natural gas supply options to Bihar on a long-term and competitive basis.
NHPC slumped 5.36% to Rs 18.55. The company during market hours today, 24 October 2013, said its board of directors has unanimously approved the buy-back of upto 10% of fully paid up equity shares at Rs 19.25 per share payable in cash for an aggregate amount of Rs 2367.89 crore through tender offer.
IT stocks declined as the rupee edged higher against the dollar. A firm rupee adversely affects operating profit margins of IT firms as the sector derives a lion's share of revenue from exports.
Wipro lost 4.41%, with the stock extending Wednesday's 4.41% fall triggered by the company's dollar revenue growth from IT services in Q2 September 2013 lagging that of its peer companies. Wipro announced the result after market hours on Tuesday, 22 October 2013.
Wipro reported 28% growth in consolidated net profit from continuing operations to Rs 1932 crore on 19% growth in revenue from continuing operations at Rs 10992 crore in Q2 September 2013 over Q2 September 2012. The results are as per International Financial Reporting Standards. Wipro said non-GAAP adjusted net profit from continuing operations jumped 29% to Rs 1932 crore in Q2 September 2013 over Q2 September 2012.
Non-GAAP constant currency IT services revenue in dollar terms grew 3.2% sequentially and 7.9% year-on-year (YoY), Wipro said. IT services revenue stood at $1.6311 billion in Q2 September 2013, a sequential increase of 2.7% and YoY increase of 5.9%. IT services revenues in rupee terms stood at Rs 10068 crore in Q2 September 2013, an increase of 20% YoY. IT services Earnings Before Interest and Tax (EBIT) was Rs 2264 crore in Q2 September 2013, an increase of 31% YoY.
Wipro expects 1.77% to 3.61% growth in revenues from IT services business at $1.66 billion to $1.69 billion in Q3 December 2013 over Q2 September 2013.
TCS lost 2.45% to Rs 2,010. The stock had hit record high of Rs 2,258.05 in intraday trade on 15 October 2013. The company after market hours on Monday, 21 October 2013, announced that it has been selected by Bombardier Transportation, a global leader in rail transportation technology, to manage its IT infrastructure for newly commissioned data centers. The multi-year, multi-million deal is the first that TCS has signed with a rail-transportation technology provider, TCS said.
Infosys shed 0.55% to Rs 3,306. The stock was volatile. The scrip rose as much as 1.44% at the day's high of Rs 3,372, also its 52-week high. The stock fell as much as 0.72% at day's low of Rs 3,292.10.
HCL Technologies fell 4.65% to Rs 1,053.85. The stock had hit record high of Rs 1,177 in intraday trade on 15 October 2013. The company last week said its consolidated net profit as per US accounting standards jumped 18.7% to Rs 1416 crore on 14% growth in revenue to Rs 7961 crore in Q1 September 2013 over Q4 June 2013.
Tech Mahindra shed 0.89% to Rs 1,536. The stock had hit a 52-week high of Rs 1,594 in intraday trade on 17 October 2013.
Index heavyweight and cigarette major ITC edged higher in volatile trade. The stock rose 0.4% to Rs 342.90.
Coal India dropped 3.72% to Rs 278.30. The stock was volatile. The stock rose as much as 0.33% at the day's high of Rs 290. The scrip fell as much as 3.82% at the day's low of Rs 278.
Asian Paints fell 0.1% to Rs 521.10. The stock reversed direction after hitting a record high of Rs 533 in intraday trade.
Most metal stocks reversed intraday gain. Jindal Steel & Power (down 1.85%), Hindustan Zinc (down 0.3%), Tata Steel (down 0.88%), Sail (down 0.08%), and Hindalco Industries (down 0.99%), declined. Sesa Sterlite was unchanged for the day.
But, NMDC gained 2.75% ahead of its Q2 results today, 24 October 2013.
Capital goods pivotals were mixed. L&T rose 1.83%. The company early this week said that its construction division has secured new orders worth Rs 1333 crore in October 2013 in various business segments.
Bhel shed 1.68%.
Punj Lloyd declined 1.86%, with the stock reversing intraday gain. The company said that its wholly-owned Singapore based subsidiary has sold its entire shareholding in Olive Group Capital for a total consideration of $20 million. The announcement was made after market hours on Wednesday, 23 October 2013.
Punj Lloyd said that Punj Lloyd Pte Ltd., a Singapore based wholly owned subsidiary of the company, has sold its entire shareholding in Olive Group Capital, comprising 27.78% of its capital, for a total consideration of $20 million for a mix of initial and deferred consideration. The deferred consideration of approximately $11 million shall be received with interest thereon. Punj Lloyd Group had invested $14 million (approx) in Olive Group.
Punj Lloyd also announced that it has been awarded a contract, on cost plus basis, for setting up of various infrastructure facilities including civil, structural, mechanical, electrical & instrumentation, piping, cross country pipelines, horizontal direction drilling, equipment assembly, fabrication and erection, marine work, tankages work and electrical and other associated and miscellaneous works and rectification of defective works at a leading refinery in India. The approximate cost of the order is Rs 275 crore, it said.
Two wheeler makers dropped. Hero MotoCorp dropped 0.4%. The company during market hours on Wednesday, 23 October 2013, said net profit rose 9.26% to Rs 481.41 crore on 10.49% growth in total income to Rs 5841.67 crore in Q2 September 2013 over Q2 September 2012.
Hero MotoCorp said that with the company fast augmenting its presence globally and further strengthening its leadership in the domestic market, the company has unveiled a global vision for brand Hero to be achieved by the year 2020. This entails a target of Rs 60000 crore in turnover by the year 2020.
Bajaj Auto lost 0.69%.
Most PSU banks rose after the Ministry of Finance after trading hours on Wednesday, 23 October 2013, said that the Government of India (GoI) has approved infusion of a total of Rs 14000 crore in 20 public sector banks (PSBs) during Financial Year 2013-14 through preferential allotment of equity shares. The largest capital infusion will be SBI at Rs 2000 crore, followed by Rs 1800 crore each in Central Bank of India and IDBI Bank, Rs 1200 crore in Indian Overseas Bank and Rs 1000 crore in Bank of India. GoI will infuse Rs 550 crore in Bank of Baroda and Rs 500 crore in Punjab National Bank.
State Bank of India (SBI) (up 0.11%), IDBI Bank (up 0.66%), Central Bank of India (up 1.2%), Bank of Baroda (up 1.43%), Bank of India (up 0.11%) and Union Bank of India (up 2.04%) gained. Indian Overseas Bank (down 0.8%), Canara Bank (down 0.55%), and Punjab National Bank (down 0.22%), declined.
Private bank Kotak Mahindra Bank edged lower in volatile trade after the private sector bank reported Q2 results during trading hours. The stock was down 0.68% at Rs 704. The stock hit high of Rs 729.40 and low of Rs 703.50. The bank's net profit jumped 26% to Rs 353 crore in Q2 September 2013 over Q2 September 2012. Net interest income surged 22% to Rs 924 crore in Q2 September 2013 over Q2 September 2012. The bank announced Q2 result during market hours.
Advances as on 30 September 2013 were up 11% year-on-year (YoY) to Rs 50609 crore (Rs 45443 crore as on 30 September 2012). Kotak Mahindra Bank said that it is cautiously slowing down on CECV lending. Without considering CECV, the growth in advances was 18% YoY in Q2 September 2013.
Restructured loans considered standard stood at 0.09% of net advances as on 30 September 2013.
Savings deposits as on 30 September 2013 grew by 42% to Rs 8385 crore from Rs 5926 crore as on 30 September 2012. CASA ratio was 29% as on 30 September 2013.
The Reserve Bank of India vide circular dated 23 August 2013, as a one-time measure permitted banks to transfer SLR securities from AFS/HFT category to HTM category at valuation rates prevailing on 15 July 2013. Kotak Mahindra Bank said it has not transferred any SLR security from AFS/HFT category to HTM category. The bank's total HTM securities as on 30 September 2013 were 11.4% of NDTL. As permitted under the same RBI circular, the Kotak Mahindra Bank has opted to distribute the net depreciation on the AFS and HFT portfolios in equal installments during the financial year 2013-14. Accordingly, of the net depreciation of Rs 264 crore as on 30 September 2013, the bank has recognised depreciation of Rs 88 crore till 30 September 2013.
Kotak Mahindra Bank's consolidated net profit rose 16% to Rs 583 crore in Q2 September 2013 over Q2 September 2012. Consolidated advances rose 11% to Rs 68226 crore as on 30 September 2013 from Rs 61255 crore as on 30 September 2012. Without considering CECV, the growth in advances was 16% YoY. Total assets managed/advised by the Kotak Mahindra Group stood at Rs 60450 crore as on 30 September 2013, compared with Rs 55850 crore as on 30 September 2012.
Realty stocks reversed intraday gain. HDIL (down 2.89%), D B Realty (down 1.17%) and Unitech (down 4.92%), edged lower. But, DLF rose 0.35%.
Power Grid Corporation of India shed 1.79%. The company's net profit rose 10.06% to Rs 1239.20 crore on 26.57% increase in total income to Rs 4104.43 crore in Q2 September 2013 over Q2 September 2012. The result was announced after market hours on Wednesday, 23 October 2013.
Ambuja Cements fell 1.37% on weak Q3 results. Net profit fell 45.4% to Rs 166 crore on 7.4% fall in net sales to Rs 2005 crore in Q3 September 2013 over Q3 September 2012. The result was announced after market hours on Wednesday, 23 October 2013.
Ambuja Cements' operating EBITDA (earnings before interest, taxation, depreciation and amortization) declined 48.7% to Rs 268 crore in Q3 September 2013 over Q3 September 2012.
Cement and clinker sales volume rose 2.1% to 4.89 million tonnes in Q3 September 2013 over Q3 September 2012.
Ambuja Cements said that the cement industry is going through subdued demand on account of overall economic slowdown. Lower realisation and higher logistics cost adversely impacted the company's profitability in Q3 September 2013.
Ambuja Cements said that the outlook continues to remain challenging due to difficult macro-economic condition and resultant subdued demand for cement. The company will continue working on improving efficiencies, Ambuja Cements said. The company further added that it has been able to cap its production cost increase to about 4.5% QoQ.
Subsequent to quarter ended 30 September 2013, the company commissioned a bulk packing terminal of 1 million ton capacity at Mangalore in Karnataka.
Britannia Industries gained 1.5% to Rs 928.70 after striking a record high of Rs 972.50 in intraday trade.
Jet Airways (India) fell 1.82% after the company posted a net loss of Rs 891.01 crore in Q2 September 2013, higher than net loss of Rs 99.67 crore in Q2 September 2012. Jet Airways (India)'s total income rose 1.74% to Rs 4267.77 crore in Q2 September 2013 over Q2 September 2012. The result was announced after market hours on Wednesday, 23 October 2013.
The company reported 1% increase in operating revenue to Rs 4607.90 crore in Q2 September 2013 over Q2 September 2012.
In terms of operational performance, the company reported 12% growth in number of passengers, 3% growth in available seat kilometres and 6% growth in number of departures in Q2 September 2013 over Q2 September 2012.
The company registered 11% fall in passenger yields to Rs 7376 in Q2 September 2013 from Rs 8335 in Q2 September 2012. Jet said lean season and economic slowdown resulted in drop in yields. Depreciating currency, high fuel prices and increases in airport charges in select Indian airports have driven cost pressures resulting into losses.
There were also instances of aircraft on ground, the impact of which was approximately Rs 123.30 crore. These aircraft will be leased out in the next few months, the company said in a statement.
Fuel rates increased approximately by 8% in Q2 September 2013 over Q2 September 2012. A portion of this was passed on to the passengers in the form of increase in fuel surcharge during September and early October. Full impact of this will be seen from the current quarter, the company said.
Mr. Gary Toomey, Chief Executive Officer, Jet Airways (I) said: "Indian aviation Industry witnessed increasing cost challenges, mainly due to Rupee depreciation against US Dollar, high fuel prices and increase in airport charges in certain stations putting pressure on the bottom line. In the current scenario, Jet Airways has managed to remain competitive through series of planned steps, such as discontinuing loss making routes and stringent cost control measures. The ongoing initiatives will augment well for the airline's performance in the quarters to come. We believe and strive for customer satisfaction by investing into effective marketing strategies and proactive initiatives resulting in enhancing our guest experience. Jet airways roots for customer delight while building industry benchmark for service excellence and supreme quality."
In its outlook, Jet Airways said that Q3 December 2013 quarter will reflect high seasonality, which will help to improve yields. Domestic fare revision which was made at the fag end of Q2 September 2013 will start showing positive effect in the balance part of the year. The forward booking trends for the quarter are quite encouraging. In this ensuing peak season more of business class seats will be on offer.
Rupee depreciation versus dollar and crude oil prices continues to be a cause of concern, the company said, adding that balance sheet deleveraging will play out. High costing debt will be repaid through equity infusion and cheaper debt.
The company said it will either lease out or sell the surplus aircraft in the system in quarters to come. The firm said it will focus on various avenues of ancillary revenues, which should help to boost revenues in the quarters to come.
Other aviation stocks also declined after poor Q2 results from Jet Airways (India). SpiceJet (down 3.33%) and Kingfisher Airlines (down 3.83%) declined.
In the foreign exchange market, the rupee edged higher against the dollar in choppy trade on speculation the Federal Reserve will maintain stimulus for the US economy in the foreseeable future after disappointing US job data for September 2013 released early this week. The partially convertible rupee was hovering at 61.47, compared with its close of 61.59/60 on Wednesday, 23 October 2013.
Indian government bond prices rose on speculation the Federal Reserve will maintain stimulus for the US economy in the foreseeable future after disappointing US job data for September 2013 released early this week. The yield on the 10-year benchmark government security 7.16% GS 2023 was hovering at 8.5838%, lower than its close of 8.6315% on Wednesday, 23 October 2013. Bond yield and bond prices are inversely related.
European stocks edged higher on Thursday, 24 October 2013, as investors welcomed upbeat manufacturing data from China. Key benchmark indices in France, Germany and UK were up 0.19% to 0.66%.
Private-sector activity in the euro zone grew at a slower pace in October, suggesting that the currency area's return to economic growth remains tentative as it enters the final quarter of the year. Distilling the results of its survey of 5,000 companies in the services and manufacturing sectors, data firm Markit said its Composite Purchasing Managers Index fell to 51.5 from 52.2 in September. A level below 50 indicates activity is declining, while a reading above that mark shows that activity is increasing. The PMI for the services sector fell to 50.9 from 52.2, while the PMI for manufacturing rose to 51.3 from 51.1.
Asian markets edged higher on Thursday, 24 October 2013, after a measure of Chinese factory hit a seven-month high. Key benchmark indices in South Korea, Singapore, Indonesia, Japan and Taiwan rose by 0.24% to 1.06%. Key benchmark indices in Hong Kong and China fell 0.71% to 0.86%.
The initial October reading for China's manufacturing activity came out at 50.9, compared to a final reading of 50.2 in September. The score was a seven-month high, above the 50 mark that separates expansion and contraction in factory activity. The preliminary reading was among the first economic data on the region's largest economy in the third quarter, coming less than a week after figures showed that Chinese growth picked up from a dip in the second quarter.
Trading in US index futures indicated that the Dow could advance 65 points at the opening bell on Thursday, 24 October 2013. US stocks closed lower on Wednesday with the S&P 500 falling from a record, as investors assessed mixed results from US corporations, including a disappointment from equipment-maker Caterpillar Inc.
The Federal Open Market Committee (FOMC) holds a two-day policy meeting on 29-30 October 2013. On 18 September 2013, the Fed surprised economists and investors with its decision to delay scaling back its stimulus amid concerns about the strength of the economic recovery.
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