Key benchmark indices ended almost unchanged for the day, giving up initial gains that took them to record high. The barometer index, the S&P BSE Sensex, shed 6.46 points or 0.03%, off about 95 points from the day's high and up close to 30 points from the day's low. The market breadth, indicating the overall health of the market, was positive.
Indian stocks snapped two-day winning streak today, 22 April 2014. From a recent low of 22,277.23 on 16 April 2014, the Sensex had risen 487.60 points or 2.18% in two trading sessions to a record closing high of 22,764.83 on Monday, 21 April 2014. The Sensex has risen 372.10 points or 1.66% in this month so far (till 22 April 2014). The Sensex has gained 1,587.69 points or 7.49% in calendar year 2014 so far (till 22 April 2014). From a 52-week low of 17,448.71 on 28 August 2013, the Sensex has risen 5,309.66 points or 30.43%.
Coming back to today's trade, shares of HDFC Bank edged higher after good Q4 March 2014 results. MRF dropped in choppy trade after weak Q2 March 2014 results. Shares of other tyre makers also edged lower after MRF's weak Q2 results.
Sesa Sterlite dropped after the company during market hours today, 22 April 2014, said that consequent to the Supreme Court order dated Monday, 21 April 2014, all mining leases in the state of Goa, including those of Sesa Sterlite, have expired in 2007 and that no mining operations can be carried out until renewal/execution of mining lease deeds by the state government.
Key benchmark indices edged higher amid initial volatility. The Sensex, and the 50-unit CNX Nifty, both, hit record high. Key benchmark indices extended initial gains and hit fresh intraday high in morning trade. Key benchmark indices trimmed intraday gains in mid-morning trade. Key benchmark indices moved in a narrow range in positive zone in early afternoon trade. A bout of volatility was witnessed as key benchmark indices regained positive zone after reversing intraday gains in afternoon trade. Volatility continued in late trade as the key benchmark indices trimmed losses after hitting fresh intraday low.
Indian stocks may remain volatile tomorrow, 23 April 2014, as traders roll over positions in the futures & options (F&O) segment from the near month April 2014 series to May 2014 series. The April 2014 F&O contracts expire tomorrow, 23 April 2014. The stock market remains closed on Thursday, 24 April 2014, on account of Parliamentary elections in Mumbai constituency.
The S&P BSE Sensex lost 6.46 points or 0.03% to settle at 22,758.37, its lowest closing level since 17 April 2014. The index fell 37.20 points at the day's low of 22,727.63 in late trade. The index gained 88.20 points at the day's high of 22,853.03 in morning trade, a lifetime high for the barometer index.
The CNX Nifty shed 2.30 points or 0.03% to settle at 6,815.35, its lowest closing level since 17 April 2014. The index hit a low of 6,806.25 in intraday trade. The index hit a high of 6,838 in intraday trade, a lifetime high for the index.
The BSE Mid-Cap index lost 11.24 points or 0.15% to settle at 7,386.17, underperforming the Sensex. The BSE Small-Cap index rose 1.13 points or 0.01% to settle at 7,629.10, outperforming the Sensex.
The S&P BSE IT index (down 0.55%), the S&P BSE Teck index (down 0.52%), the S&P BSE Metal index (down 0.79%), the S&P BSE Realty index (down 0.44%), the S&P BSE Auto index (down 0.44%), the S&P BSE FMCG index (down 0.46%), and the S&P BSE Power index (down 0.26%), underperformed the Sensex.
The S&P BSE Oil & Gas index (up 1.15%), the S&P BSE Consumer Durables index (up 0.27%), the S&P BSE Healthcare index (up 0.16%), the S&P BSE Capital Goods index (up 1.19%), and the S&P BSE Bankex (up 0.16%), outperformed the Sensex.
The total turnover on BSE amounted to Rs 2492 crore, higher than Rs 2384.20 crore on Monday, 21 April 2014.
The market breadth, indicating the overall health of the market, was positive. On BSE, 1,525 shares gained and 1,324 shares fell. A total of 125 shares were unchanged.
Shares of upstream and downstream oil and gas companies gained on renewed buying. Among state-run upstream oil firms, Oil India (up 2.4%), ONGC (up 0.94%) and GAIL (India) (up 1.41%) edged higher.
Index heavyweight Reliance Industries (RIL) gained 0.93% to Rs 968.35. The stock hit a 52-week high of Rs 988.90 in intraday trade. RIL on 18 April 2014 said its net profit rose 0.8% to Rs 5631 crore on 12.9% growth in turnover to Rs 97807 crore in Q4 March 2014 over Q4 March 2013. RIL's non-operational income dropped 9.22% to Rs 2036 crore in Q4 March 2014 over Q4 March 2013.
RIL's net profit rose 2.2% to Rs 5631 crore on 8.1% decline in turnover to Rs 97807 crore in Q4 March 2014 over Q3 December 2013. RIL's non-operational income dropped 11.67% to Rs 2036 crore in Q4 March 2014 over Q3 December 2013.
RIL's gross refining margin (GRM) dropped to $9.3 a barrel in Q4 March 2014, from $10.1 a barrel in Q4 March 2013. The GRM, however, rose on sequential basis from $7.6 a barrel in Q3 December 2013.
Cairn India rose 0.18%.
PSU OMCs gained on renewed buying. Indian Oil Corporation rose 3.74%.
BPCL gained 4% to Rs 482.30 after hitting a record high of Rs 486.80 in intraday trade.
HPCL advanced 2.75% to Rs 327.45 after hitting a 52-week high of Rs 333.35 in intraday trade.
Most pharma stocks declined. Cipla (down 0.56%), Ranbaxy Laboratories (down 0.6%) Dr Reddy's Laboratories (down 0.01%) and Sun Pharmaceutical Industries (down 0.35%) declined.
Glenmark Pharmaceuticals lost 0.33%. Glenmark Pharmaceuticals before market hours today, 22 April 2014, said it has lost its appeal to invalidate Abbott Laboratories' TARKA (trandolapril/verapamil hydrochloride) patent when the Court of Appeals for the Federal Circuit, USA affirmed the district court's decision regarding Glenmark's marketing of a generic equivalent of TARKA. Glenmark said it is disappointed with the decision and is considering its options, the company said in a statement.
Lupin rose 2.68%. Lupin announced after market hours on Monday, 21 April 2014, the appointment of Theresa Stevens as Chief Corporate Development Officer for its global operations. Theresa will assume full responsibility for global merger and acquisitions and specialty business strategy. Prior to joining Lupin, Theresa was with Aptalis pharma as the Chief Corporate Development Officer responsible for Mergers & Acquisitions (M&A), Strategy and Global Business Development. Before Aptalis, Theresa was in Novartis for 9+ years and held positions of increasing responsibility including Head, Global BD&L for General Medicines, Executive Director and Head, Global BD&L for Respiratory and Dermatology Business Units and Head US Business Development & Licensing, Life cycle management and generic brand strategies.
Theresa has a Masters Degree in Biochemistry from University of Maryland and is a Juris Doctor (J.D) from the Widener University School of Law, Wilmington, Delaware. She started her career as a research scientist at Dupont and has practiced Corporate Law at Pennie & Edmonds (Jones Day). Having worked with Aptalis and Novartis, Theresa has over 27 years of experience in the Pharmaceutical and Biotech sector with significant experience in managing strategy, corporate development, M&A and licensing.
Commenting on the appointment, Nilesh Gupta, Managing Director, Lupin said, "I am very pleased to welcome Theresa to the Lupin family. I am sure her rich experience in the areas of M&A and Specialty Strategy within the Pharmaceutical and Biotech industry sector will help Lupin's growth plans."
Novartis India jumped 6.34% after the company's Swiss parent Novartis AG agreed to fork out $16 billion to buy GlaxoSmithKline Plc's cancer drug business.
Switzerland-based Novartis announced on Tuesday, 22 April 2014, that it has reached a definitive agreement with GlaxoSmithKline plc (GSK) to exchange certain assets, building global leadership in key segments and focusing the company's portfolio. Under the agreement, Novartis would strengthen the company's innovative pharmaceuticals business by acquiring GSK oncology products, and would divest Vaccines (excluding flu) to them. The two companies would also create a joint venture, combining their consumer divisions to create a world-leading consumer healthcare business. Separately, the company announced a definitive agreement with Eli Lilly and Company (Lilly) to divest the animal health division, further focusing its portfolio on the leading businesses of innovative pharmaceuticals, eye care and generics.
As per the deal, Novartis has agreed to acquire GSK oncology products for a $14.5 billion payment and up to $1.5 billion contingent on a development milestone. Under the terms of the transaction, Novartis would have opt-in rights to GSK's current and future oncology R&D pipeline.
Novartis said it has also agreed to divest its Vaccines business to GSK, currently excluding its flu business, for $7.1 billion plus royalties. The $7.1 billion consists of $5.25 billion upfront and up to $1.8 billion in milestones. As a part of a value-maximization strategy in the context of the portfolio review, Novartis has initiated a separate sales process for its flu business.
Novartis and GSK have agreed to create a world-leading consumer healthcare business through a joint venture between Novartis OTC and GSK Consumer Healthcare. Upon completion, Novartis will own a 36.5% share of the joint venture and will have four of eleven seats on the joint venture's Board. Furthermore, Novartis will have customary minority rights and exit rights at a pre-defined, market-based pricing mechanism, Novartis AG said in a statement.
In a separate transaction, Novartis has agreed to divest its Animal Health Division to Lilly for approximately $5.4 billion. This transaction is the result of a competitive process, which upon completion would create a leading animal health business under Lilly's ownership and would optimize the value of the asset in the interest of Novartis shareholders.
The overall financing for Novartis' obligations in the transactions is planned to be provided through a combination of excess liquidity at the time of closing, short-term financing instruments and limited new bond issues if needed, the company said.
Novartis said the acquisition of GSK oncology products is expected to further reinforce its leading Oncology business and improve the growth profile of the combined portfolio.
As on 31 December 2013, Novartis AG held 75% stake in Novartis India.
Auto stocks edged lower. Tata Motors (down 0.67%), Ashok Leyland (down 2.06%) and Mahindra & Mahindra (M&M) (down 0.81%) edged lower.
Maruti Suzuki India fell 0.9% to Rs 1,970.50, with the stock reversing direction after hitting record high of Rs 2,007.60 at the onset of the trading session.
Shares of most two wheeler makers declined. Bajaj Auto (down 0.38%) ad TVS Motor Company (down 1.06%) dropped. Hero MotoCorp rose 0.89%.
Tech Mahindra rose 0.06%. The company after market hours today, 22 April 2014, announced that it has been chosen by New Hampshire's Division of Motor Vehicles (DMV) to implement its Motor Vehicle Enterprise System (MOVES), a configurable Microsoft Dynamics CRM-based solution. The solution will replace and modernize New Hampshire DMV's existing legacy system. This is a multi-million dollar deal, and the system will be implemented over a span of 22 months, Tech Mahindra said in a statement.
Bank stocks were mixed. Among private sector banks, Kotak Mahindra Bank (up 0.09%) and Axis Bank (up 0.05%) gained. Yes Bank fell 0.18%.
ICICI Bank rose 0.35% at Rs 1,286.05. The stock hit 52-week high of Rs 1,295.90 in intraday trade. The stock hit a low of Rs 1,270.30.
HDFC Bank rose 1.63% after net profit rose 23.1% to Rs 2326.52 crore on 14.94% increase in total income to Rs 12789.98 crore in Q4 March 2014 over Q4 March 2013. The company made the announcement during trading hours today, 22 April 2014.
HDFC Bank's net profit rose 26.05% to Rs 8478.40 crore on 17.03% increase in total income to Rs 49055.18 crore in the year ended March 2014 over the year ended March 2013.
On a consolidated basis, HDFC Bank's net profit rose 27.28% to Rs 8743.49 crore on 18.28% increase in total income to Rs 50852.52 crore in the year ended March 2014 over the year ended March 2013.
HDFC Bank's ratio of net non-performing assets (NPA) to net advances stood at 0.3% as on 31 March 2014, compared with 0.3% as on 31 December 2013 and 0.2% as on 31 March 2013.
The bank's ratio of gross NPA to gross advances stood at 1% as on 31 March 2014, compared with 1% as on 31 December 2013 and 1% as on 31 March 2013.
Provisions and contingencies fell 4.79% to Rs 286.13 crore in Q4 March 2014 over Q4 March 2013.
The bank's Capital Adequacy Ratio (CAR) as per Basel III norms stood at 16.1% as on 31 March 2014, compared with 14.7% as on 31 December 2013.
Net interest income (interest earned less interest expended) for the quarter ended 31 March 2014 accounted for 71.2% of net revenues and grew by 15.3% to Rs 4952.60 crore from Rs 4295.30 crore for the quarter ended 31 March 2013, driven by average asset growth of 20.3% and a net interest margin for the quarter of 4.4%.
Total deposits as on 31 March 2014 were Rs 367337 crore, an increase of 24% over 31 March 2013. Savings account deposits grew 16.9% over the previous year to reach Rs 103133 crore. Current account deposits grew 17.5% over the previous year to reach Rs 61488 crore. CASA deposits were 44.8% of total deposits as on 31 March 2014.
Advances as of 31 March 2014, were Rs 303000 crore, an increase of 26.4% over 31 March 2013. The domestic load mix between retail:wholesale is 53:47. Total advances in overseas branches as of 31 March 2014 were at 8% of the total advances as against 4% as of 31 March 2013. Adjusted for the one time increase in FCNR deposits swapped with RBI under the special window in the quarter ended 31 December 2013, and the related foreign currency loans, core deposits and advances growth for the year was 16.9% and 21.8% respectively.
The bank added 341 branches in the year ended 31 March 2014, of which 230 of these branches are in unbanked locations. As of 31 March 2014, the bank's distribution network was at 3,403 branches and 11,256 ATMs in 2,171 cities / towns as against 3,062 branches and 10,743 ATMs in 1,845 cities / towns as of 31 March 2013. 55% of the total branches are now in semi-urban and rural areas.
IndusInd Bank fell 1.33%, with the stock sliding on profit taking after recent gains. Shares of IndusInd Bank had risen 4.46% in three trading sessions to settle at Rs 505.75 on Monday, 21 April 2014, from a recent low of Rs 484.15 on 15 April 2014.
IndusInd Bank's net profit rose 28.83% to Rs 396.05 crore on 23.35% rise in total income to Rs 2702.19 crore in Q4 March 2014 over Q4 March 2013. The result was announced on 16 April 2014. IndusInd Bank said that the bank is targeting 25% to 30% annual loan growth during 2014-17. IndusInd Bank announced Q4 result on 16 April 2014.
South Indian Bank rose 0.81% after the central bank allowed foreign investors to buy shares in South Indian Bank as the foreign shareholding in the bank has gone below caution limit stipulated under the extant FDI policy. The Reserve Bank of India (RBI) on Monday, 21 April 2014, notified that the aggregate share holding by foreign institutional investors (FIIs)/non-resident indians (NRIs)/persons of Indian origin (PIOs)/foreign direct investment (FDI)/American depository receipt (ADR)/global depository receipts (GDRs) under the portfolio investment scheme (PIS) in South Indian Bank have gone below the prescribed threshold caution limit stipulated under the extant FDI policy. Hence the restrictions placed on the purchase of shares of the above company are withdrawn with immediate effect.
Equity shares of South Indian Bank can now be purchased through primary market and stock exchanges, RBI said in a statement.
Currently, FIIs are allowed to invest upto 49% of the paid-up capital of South Indian Bank under the portfolio investment scheme (PIS). As on 31 March 2014, FIIs held 41.69% stake in South Indian Bank.
Among PSU bank stocks, State Bank of India (SBI) (down 0.99%), Union Bank of India (down 2.65%), Bank of India (down 0.13%), Canara Bank (down 0.75%), Bank of Baroda (down 0.63%) and Punjab National Bank (down 2.24%) declined.
Sesa Sterlite dropped after the company during market hours today, 22 April 2014, said that consequent to the Supreme Court order dated Monday, 21 April 2014, all mining leases in the state of Goa, including those of Sesa Sterlite, have expired in 2007 and that no mining operations can be carried out until renewal/execution of mining lease deeds by the state government. The stock lost 4.04%. The Supreme Court in its order dated Monday, 21 April 2014, lifted the ban on mining in the state of Goa, subject to certain conditions. The Supreme Court has imposed an interim restriction on the maximum annual excavation from the mining leases in Goa at 20 million tonnes subject to determination of final capacity by Expert Committee appointed by the Supreme Court.
Sesa Sterlite said that the company is working towards securing the necessary permissions for commencement of mining operations in Goa at the earliest.
MRF lost 3.58% to Rs 22,720 on weak Q2 results. The stock witnessed immense volatility after the result hit the market in mid-afternoon trade. The stock hit high of Rs 23,660 and low of Rs 21,400. MRF's net profit declined 18.86% to Rs 170.87 crore on 13.66% growth in total income to Rs 3309.66 crore in Q2 March 2014 over Q2 March 2013.
MRF's operating profit margin (OPM) declined sharply to 12.5% in Q2 March 2014, from 15.28% in Q2 March 2013. On sequential basis, the OPM declined from 13.08% in Q1 December 2013.
Shares of other major tyre makers dropped after MRF's weak Q2 results. Apollo Tyres (down 4.71%), CEAT (down 2.97%), Goodyear India (down 2.03%), JK Tyre & Industries (down 5.85%) and TVS Srichakra (down 3.77%) declined.
In the foreign exchange market, the rupee edged lower against the dollar on the back of heavy dollar demand from oil importers. The partially convertible rupee was hovering at 60.77, compared with its close of 60.59/60 on Monday, 21 April 2014.
An El Nino will probably start as soon as July, according to the Australian government forecaster, adding to predictions for the event that can affect weather patterns worldwide and roil farm-commodity prices. All the climate models surveyed indicated that an El Nino was likely this year, with six of seven models suggesting that thresholds for the event may be exceeded as early as July, the Bureau of Meteorology said in a statement today, 22 April 2014. A warming of the Pacific Ocean, which drives the changes by affecting the atmosphere above it, will probably continue in the coming months, the Melbourne-based bureau said.
The chances of an El Nino have increased to 65% from 52%, the US Climate Prediction Center said on 10 April 2014. There are signs that an El Nino is imminent, presaging changes to global weather patterns, the UN's World Meteorological Organization said on 15 April 2014.
An El Nino phenomenon is associated with above-average water temperatures in the central and eastern Pacific and can in its worst form bring drought to West Africa (the world's largest cocoa producing region), less rainfall to India during its vital monsoon season and drier conditions for the cultivations crops such as sugar and cotton in major grower Australia.
The Reserve Bank of India (RBI) next undertakes monetary policy review on 3 June 2014. The RBI left its main lending rate viz. the repo rate unchanged at 8% after a monetary policy review on 1 April 2014, as consumer-price inflation eased to a two-year low and as the rupee firmed up against the dollar.
A major near term trigger for the stock market is the outcome of the upcoming Lok Sabha elections. The 36 days long voting process began on 7 April 2014 and will conclude on 12 May 2014. The results will be declared on 16 May 2014 after which India will get a new government. The term of the current Lok Sabha expires on 1 June and the new House has to be constituted by 31 May.
European stocks edged higher on Tuesday, 22 April 2014, aided by strength from a number of pharmaceutical shares following reports that Pfizer Inc. will bid for British drug maker AstraZeneca PLC and after Novartis AG outlined changes in its portfolio lineup, including plans to buy GlaxoSmithKline PLC's oncology unit for about $14.5 billion. Key benchmark indices in France, Germany and UK were up 0.94% to 1.297%.
Asian stock markets edged higher in choppy trade Tuesday, 22 April 2014, after Wall Street stocks rallied into a fifth session overnight. Key benchmark indices in Taiwan, China, Singapore, Indonesia and South Korea were up 0.12% to 0.67%. Key benchmark indices in Hong Kong and Japan were off 0.13% to 0.85%.
A provisional reading of HSBC Holdings Plc and Markit Economics Ltd.'s China manufacturing purchasing managers' index is due tomorrow, 23 April 2014.
Trading in US index futures indicated that the Dow could gain 10 points at the opening bell on Tuesday, 22 April 2014. US stocks closed modestly higher on Monday, 21 April 2014, helping the S&P 500 to extend its winning streak to the longest in six months. Estimate-beating results from a number of companies on Monday boosted sentiment amid thin volumes on Wall Street.
In economic news, the Chicago Fed National Activity Index decreased slightly in March. However, the Conference Board's leading economic index rose in March and February, signaling that growth could accelerate in coming months.
The Federal Open Market Committee (FOMC) next undertakes monetary policy review at a two-day meeting on 29-30 April 2014. The Federal Reserve on 19 March 2014 decided after the conclusion of a monetary policy review to trim its monthly bond purchases by $10 billion to $55 billion.
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