Pharma and bank stocks led decline as key benchmark indices edged lower on the last trading session of the week. While the losses for the barometer index, the S&P BSE Sensex, and the 50-unit CNX Nifty were modest, the broad market depicted weakness. There were more than two losers for every gainer on BSE. Losses ranged from 3% to 20% for the side counters which edged lower. The Sensex and Nifty, both, hit their lowest level in more than two weeks amid high volatility witnessed towards the latter part the trading session. The Sensex was provisionally off 119.19 points or 0.41% to 28,731.78. The BSE Mid-Cap index was off 1.06%. The Small-Cap index was off 1.82%. The decline in both these indices was higher than the Sensex's decline in percentage terms.
The latest slide for Indian stocks comes as Brent crude oil futures surged and as concern over the outcome of a standoff between Greece and its creditors continued to bear down on European stock markets.
Key benchmark indices edged lower for the sixth day in a row today, 6 February 2015.
Meanwhile, as a measure to incentivise long term investors, the Reserve Bank of India (RBI) yesterday, 5 February 2015, allowed foreign portfolio investors (FPIs) to invest in government securities the coupons received on their existing investments in government securities.
HDFC Bank edged lower after announcing successful completion of raising funds through issue of shares to institutional investors in the domestic market and via issue of American Depository Receipts (ADR). NMDC edged higher after reporting Q3 earnings. Shares of public sector oil marketing companies (PSU OMCs) declined on rise in global crude oil prices. Index heavyweights Reliance Industries edged lower. Tata Motors tumbled after weak Q3 earnings.
Foreign portfolio investors sold shares worth a net Rs 27.43 crore yesterday, 5 February 2015, as per provisional data released by the stock exchanges. Domestic institutional investors (DIIs) bought shares worth a net Rs 325.61 crore yesterday, 5 February 2015, as per provisional data.
In the overseas markets, European stocks edged lower after disappointing German industrial production data and as concerns over Greece's future in the euro zone continued to dominate market sentiment. Asian stock markets were mixed today, 6 February 2015, as investors awaited the closely-watched US jobs report, which could provide cues on the US economic recovery. US stock markets surged yesterday, 5 February 2015, buoyed by a rebound in oil prices, deal news and upbeat quarterly earnings.
In the foreign exchange market, the rupee edged lower against the dollar in choppy trade.
Brent crude oil futures extended gains after a sharp surge in prices overnight triggered by reports of more unrest in the oil producing country Libya. Global crude oil prices have witnessed high volatility recently after a steep slide in prices over the past few months. The recent rebound in global crude oil prices will raise concerns pertaining to India's fiscal deficit, current account deficit and fuel price inflation. India imports about 80% of its crude oil requirements.
As per provisional closing, the S&P BSE Sensex was off 119.19 points or 0.41% to 28,731.78. The index fell 203.83 points at the day's low of 28,647.14 in late trade, its lowest level since 20 January 2015. The index rose 71.88 points at the day's high of 28,922.85 in morning trade.
The CNX Nifty was off 50.65 points or 0.58% at 8,661.05, as per provisional closing. The index hit a low of 8,645.55 in intraday trade, its lowest level since 20 January 2015. The index hit a high of 8,726.20 in intraday trade.
The BSE Mid-Cap index was off 112.89 points or 1.06% at 10,490.68. The BSE Small-Cap index was off 205.80 points or 1.82% at 11,077.34. The decline in both these indices was higher than the Sensex's decline in percentage terms.
The market breadth indicating the overall health of the market was quite weak, with more than two losers for every gainer on BSE. 1,990 shares declined and 879 shares advanced. A total of 103 shares were unchanged.
The total turnover on BSE amounted to Rs 3152 crore, lower than turnover of Rs 4216.09 crore during the previous trading session.
Index heavyweight Reliance Industries fell 1.29% at Rs 910.45. The stock hit a high of Rs 930.15 and a low of Rs 904.
Bank stocks declined. Canara Bank (down 3.23%), IndusInd Bank (down 2.05%), ICICI Bank (down 1.61%), Bank of Baroda (down 1.46%), Kotak Mahindra Bank (down 1.73%), Bank of India (down 0.82%), Axis Bank (down 0.12%), Punjab National Bank (down 0.78%), and State Bank of India (down 0.03%) edged lower. Yes Bank (up 0.24%) and Federal Bank (up 1.9%) edged higher.
The Reserve Bank of India (RBI) yesterday, 5 February 2015, said in its guidelines for implementation of Countercyclical Capital Buffer (CCCB) that the CCCB may be maintained in the form of Common Equity Tier 1 (CET 1) capital or other fully loss absorbing capital only, and that the amount of the CCCB may vary from 0 to 2.5% of total risk weighted assets (RWA) of the banks. While the framework for CCCB takes immediate effect, the activation of CCCB will take place when circumstances warrant, the RBI said. Currently, circumstances do not warrant activation of CCCB, the central bank said. All banks operating in India should maintain capital for Indian operations under CCCB framework based on their exposures in India, the RBI said. For all banks operating in India, CCCB shall be maintained on a solo basis as well as on consolidated basis, the central bank said.
The credit-to-GDP gap will be the main indicator in the CCCB framework in India. However, credit-to-GDP gap shall not be the only reference point and shall be used in conjunction with gross non-performing assets (GNPA) growth, the RBI said. Credit-to-GDP gap is the difference between credit-to-GDP ratio and the long term trend value of credit-to-GDP ratio at any point in time. The same set of indicators that are used for activating CCCB may be used to arrive at the decision for the release phase of the CCCB, the RBI said.
HDFC Bank fell 2.44% at Rs 1,051. The stock hit a high of Rs 1,080 and a low of Rs 1,050.15. HDFC Bank after market hours yesterday, 5 February 2015, said that the special committee of the bank, at its meeting held on 5 February 2015, inter alia, declared the closure of the issue period for the QIP on 5 February 2015. The committee approved the issue price of Rs 1,067 per equity share for the equity shares to be allotted to determined and approved eligible qualified institutional buyers (QIBs) in the QIP.
Separately, HDFC Bank after market hours yesterday, 5 February 2015 said that the special committee of the bank, at its meeting held on 5 February 2015, inter alia, declared the closure of the issue period for the ADR offering on 5 February 2015. The committee approved the issue price of $57.76 per ADR to be issued to eligible investors in the ADR offering.
IDBI Bank rose 1.07% at Rs 66.35. The stock hit a high of Rs 66.35 and a low of Rs 63.20. IDBI Bank's net profit declined 1.12% to Rs 102.79 crore on 10.99% growth in total income to Rs 7935.99 crore in Q3 December 2014 over Q3 December 2013. The result was announced during market hours today, 6 February 2015.
IDBI Bank's ratio of net non-performing assets (NPAs) to net advances stood at 3.05% as on 31 December 2014, compared with 2.79% as on 30 September 2014 and 2.93% as on 31 December 2013.
The bank's ratio of gross NPAs to gross advances stood at 5.94% as on 31 December 2014, compared with 5.72% as on 30 September 2014 and 5.44% as on 31 December 2013.
The bank's Capital Adequacy Ratio (CAR) as per Basel III norms stood at 12.23% as on 31 December 2014, compared with 11.71% as on 30 September 2014 and 12.71% as on 31 December 2013.
Pharma stocks dropped. Sun Pharmaceutical Industries (down 2.57%), Aurobindo pharma (down 4.12%), Ranbaxy Laboratories (down 2.23%), Ipca Laboratories (down 1.78%), Lupin (down 1.01%), Cipla (down 1.03%), Dr Reddy's Laboratories (down 1.1%), GlaxoSmithkline Pharmaceuticals (down 0.35%), and Glenmark Pharmaceuticals (down 0.33%) edged lower.
Tech Mahindra fell 0.67% at Rs 2,857. The stock hit a high of Rs 2,920 and a low of Rs 2,852. Tech Mahindra during market hours today, 6 February 2015, said that Three Ireland's new customer service centre in Waterford was officially opened by Three Ireland and Tech Mahindra. The new centre in Waterford will bolster Three's operation and help deliver market-leading support and services to its customers, Tech Mahindra said.
Tata Motors tumbled 5.11% at Rs 559.40. Tata Motors' consolidated net profit declined 25.5% to Rs 3581 crore on 9.6% growth in revenue (net of excise) to Rs 69973 crore in Q3 December 2014 over Q3 December 2013. The result was announced after market hours yesterday, 5 February 2015. Tata Motors said that its topline in Q3 December 2014 grew despite continuing weak operating environment in the standalone business which was more than offset by, increase in wholesale volumes, richer product mix and market mix at Jaguar Land Rover (JLR).
Tata Motors' British luxury car unit JLR's net profit declined 4.2% to GBP 593 million on 10.3% growth in revenue to GBP 5879 million in Q3 December 2014 over Q3 December 2013. Operating profit (EBITDA) rose 7.8% to GBP 1096 million in Q3 December 2014 over Q3 December 2013. Continued strong revenue and operating performance were driven by wholesale volume increase, richer product mix supported by the ongoing success of Range Rover Sport, Range Rover and Jaguar F-TYPE and rich market mix, Tata Motors said. JLR's profit before tax (PBT) dropped 18.6% to GBP 685 million in Q3 December 2014 over Q3 December 2013. The decline in PBT was due to unfavourable revaluation of foreign currency debt and unrealised hedges and higher depreciation and amortisation.
In the standalone business, Tata Motors reported a massive net loss of Rs 2123 crore for Q3 December 2014. Loss before tax for Q3 December 2014 was Rs 2105 crore. The loss before tax for the quarter ended 31 December 2014 includes provision of Rs 310 crore to the carrying cost of buildings at Singur due to uncertainty on the timing of the resolution of the legal case pending in the Supreme Court of India and the unamortized exchange loss of Rs 216 crores due to the prepayment of the existing foreign currency borrowings with new foreign currency borrowings in the quarter.
Shares of public sector oil marketing companies (PSU OMCs) declined on rise in crude oil prices. BPCL (down 2.13%), HPCL (down 3.89%), and Indian Oil Corporation (down 2.46%) edged lower. Higher crude oil prices could increase under-recoveries of PSU OMCs on domestic sale of LPG and kerosene at government controlled prices. The government has already decontrolled pricing of petrol and diesel.
NMDC rose 1.91% at Rs 141.10. The stock hit a high of Rs 141.70 and a low of Rs 135.45. NMDC's net profit rose 1.64% to Rs 1593.01 crore on 4.35% growth in total income from operations (net) to Rs 2946.05 crore in Q3 December 2014 over Q3 December 2013. The result was announced during market hours today, 6 February 2015.
In the foreign exchange market, the rupee edged lower against the dollar in choppy trade. The partially convertible rupee was hovering at 61.77, compared with its close of 61.74 during the previous trading session.
Brent crude oil futures extended gains after a sharp surge in prices overnight triggered by reports of more unrest in the oil producing country Libya. Brent for March settlement was up $1.40 a barrel at $57.97 a barrel. The contract had advanced $2.41 a barrel or 4.44% to settle at $56.57 a barrel during the previous trading session.
Meanwhile, as a measure to incentivise long term investors, the Reserve Bank of India (RBI) yesterday, 5 February 2015, allowed foreign portfolio investors (FPIs) to invest in government securities the coupons received on their existing investments in government securities. These investments shall be kept outside the applicable limit for investments by FPIs in government securities, currently capped at $30 billion, the RBI said in a notification.
European stock markets were lower today, 6 February 2015, after disappointing German industrial production data and as concerns over Greece's future in the euro zone continued to dominate market sentiment. Key benchmark indices in Germany, France and UK were off 0.42% to 0.89%.
Industrial output in Germany finished the last month of 2014 above the growth line, albeit just barely, data from the economy ministry showed today, 6 February 2015. Output rose only 0.1% in December 2014. Broken down by category, manufacturing output was up 0.5%, while construction output declined 2.9%.
Greece remains in the spotlight. German Finance Minister Wolfgang Schauble said yesterday, 5 February 2015, said that Greece's financial difficulties were the result of the nation's domestic problems and that Germany would do all in its power to help Greece. Schauble was speaking at a joint press conference with his Greek counterpart Yanis Varoufakis in Berlin. The comments came after the European Central Bank on Wednesday, 4 February 2015, said it would no longer accept Greek bonds as collateral for lending, shifting the burden on to Greece's central bank to provide additional liquidity for its lenders and increasing pressure on Athens. Greece's government is seeking debt relief on its current 240 billion bailout, which has fuelled fears over a clash with its creditors that could bring about its eventual exit from the euro zone.
Asian stock markets were mixed today, 6 February 2015, as investors awaited the closely-watched US jobs report, which could provide cues on the US economic recovery. Key indices in Japan, Singapore, South Korea, and Indonesia were up 0.14% to 1.19%. In Taiwan, the Taiwan Weighted was off 0.59%.
Stocks fell in China after a senior official from the People's Bank of China said the latest reserve-ratio cut by the central bank is not the start of strong stimulus, according to state media reports in the previous day. In mainland China, the Shanghai Composite index was off 1.91%. In Hong Kong, the Hang Seng index was off 0.35%.
Australia's central bank today, 6 February 2015, lowered both its medium-term forecasts for inflation and economic growth, saying the economy won't grow fast enough in the next year to prevent a further rise in unemployment. The Reserve Bank of Australia (RBA) said GDP growth is expect to remain weak through 2015, tracking below 3%, a rate often cited as needed to prevent unemployment from rising.
Trading in US index futures indicated that the Dow could gain 15 points at the opening bell today, 6 February 2015. US stock markets advanced yesterday, 5 February 2015, buoyed by a rebound in oil prices, deal news and upbeat quarterly earnings.
The US government is schedule to release nonfarm payroll data for January 2015 later in the global day today, 6 February 2015.
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