Banking stocks led decline as key benchmark indices extended losses in early afternoon trade. The barometer index, the S&P BSE Sensex, and the 50-unit CNX Nifty, both, hit one-week low. The market breadth indicating the overall health of the market turned negative from positive. BSE Small-Cap and Mid-Cap indices, both, slipped into the red from green. The Sensex was currently off 397.06 points or 1.34% at 29,284.71.
Bank of Baroda (BoB) tumbled after poor Q3 results. Shares of a number of other PSU bank stocks dropped after a sharp post result setback in BoB counter. Coal India dropped as bidding continued for the divestment of up to 10% government stake in the state-run firm through the stock exchanges mechanism.
Earlier, the Sensex and the 50-unit CNX Nifty, both, reversed direction after hitting record high at the onset of the trading session.
In the foreign exchange market, the rupee edged higher against the dollar.
Brent crude oil futures edged lower amid a supply glut.
Foreign portfolio investors (FPIs) bought shares worth a net Rs 1723.77 crore yesterday, 29 January 2015, as per provisional data.
In overseas markets, Asian stocks were mixed. US stocks registered broad-based gains yesterday, 29 January 2015, after weekly US jobless claims fell to the lowest level in 14 years.
At 12:16 IST, the S&P BSE Sensex was down 397.06 points or 1.34% at 29,284.71. The index lost 448.81 points at the day's low of 29,232.96 in early afternoon trade, its lowest level since 23 January 2015. The index jumped 162.39 points at the day's high of 29,844.16 at the onset of the trading session, a record high for the index.
The CNX Nifty was down 117.45 points or 1.31% at 8,834.90. The index hit a low of 8,820 in intraday trade, its lowest level since 23 January 2015. The index hit a high of 8,996.60 in intraday trade, a record high for the index
The market breadth indicating the overall health of the market turned negative from positive in early afternoon trade. On BSE, 1,456 shares declined and 1,039 shares gained. A total of 98 shares were unchanged.
The BSE Mid-Cap index was off 51.61 points or 0.48% at 10,719.47. The BSE Small-Cap index was off 41.80 points or 0.37% at 11,336.95. The fall in these two indices was lower than the Sensex's decline in percentage terms.
The total turnover on BSE amounted to Rs 2058 crore by 12:15 IST, compared with turnover of Rs 1411 crore by 11:15 IST.
Bank of Baroda (BoB) tumbled 11.7% to Rs 192. The stock dropped sharply after announcing weak Q3 result during market hours today, 30 January 2015. The stock was highly volatile. The stock hit a low of Rs 187.90 so far during the day. The stock hit high of Rs 220.80 so far during the day.
The bank reported 68.12% fall in net profit to Rs 333.98 crore on 11.16% rise in total income to Rs 11808.34 crore in Q3 December 2014 over Q3 December 2013. BOB's net profit during the quarter was dragged down by sharp surge in provisions and spike in tax liability.
The bank's provisions and contingencies jumped 65.67% to Rs 1262.25 crore in Q3 December 2014 over Q3 December 2013. Non performing loan provisioning coverage stood at 62.37% as on 31 December 2014.
BoB's tax liability jumped 99.56% at Rs 742.81 crore in Q3 December 2014 over Q3 December 2013. Tax expense in Q3 December 2014 includes an amount of Rs 374.86 crore levied by Dubai Income Tax Authorities, pertaining to earlier years. In addition, penalty of Rs 38.44 crore was also levied by the tax authority, which is included in other operating expenses.
BoB's ratio of gross non-performing assets (NPAs) to gross advances stood at 3.85% as on 31 December 2014 compared with 3.32% as on 30 September 2014 and 3.32% as on 31 December 2013. The ratio of net NPAs to net advances stood at 2.11% as on 31 December 2014 compared with 1.74% as on 30 September 2014 and 1.88% as on 31 December 2013.
BoB's Capital Adequacy Ratio (CAR) as per Basel III stood at 12.42% as on 31 December 2014 compared with 12.19% as on 30 September 2014 and 12.01% as on 31 December 2013.
Shares of a number of other PSU bank stocks dropped after a sharp post result setback in BoB counter. State Bank of India (SBI) (down 4.28%), Punjab National Bank (down 4.62%), Vijaya Bank (down 1.43%), Canara Bank (down 3.67%), Bank of India (down 4.2%) and Union Bank of India (down 3.89%) dropped.
Shares of private sector banks also edged lower. HDFC Bank (down 1.95%), IndusInd Bank (down 0.73%), ING Vysya Bank (down 0.29%), Axis Bank (down 1.26%), Yes Bank (down 0.69%), declined.
ICICI Bank fell 1.99% ahead of its Q3 December 2014 results today, 30 January 2015.
Kotak Mahindra Bank slipped 0.21%. Shares of Bharti Airtel fell 1.44%. Kotak Mahindra Bank after trading hours yesterday, 29 January 2015, announced that it has agreed, subject to regulatory approvals, to invest 19.90% in Airtel M Commerce Services (AMSL), a subsidiary of Bharti Airtel, on AMSL obtaining the Payment Bank licence from Reserve Bank of India.
Separately, Bharti Airtel announced after trading hours yesterday, 29 January 2015, that the company's wholly owned subsidiary Airtel M Commerce Services (AMSL) is seeking to convert its existing Prepaid Payment Instrument license into a Payments Bank license to be issued by the Reserve Bank of India (RBI). It also announced that subject to grant of a Payments Bank license to AMSL by the RBI and all regulatory approvals, Kotak Mahindra Bank (Kotak) will acquire 19.90% stake in AMSL as an investor. AMSL offers mobile money services under the brand name Airtel Money.
Coal India lost 3.27% to Rs 362.90. The stock was volatile. The stock hit high of Rs 364 and low of Rs 360.50 so far during the day. Bids were received for a total of 6.07 crore shares amounting to 19.22% of the base issue size for divestment of the government's 5% stake in the state-run coal major, till 12:05 IST, as per data from the stock exchanges. The government has put on block 31.58 crore shares of Coal India, constituting 5% equity with an option to sell additional up to 31.58 crore shares through the stock exchanges mechanism. The floor price for the offer for sale (OFS) of Coal India's shares has been set at Rs 358 per share. The OFS commenced today, 30 January 2015, at 9:15 IST and will close at 15:30 IST.
The government has reserved 20% of the size of the sale for retail investors. Retail investors will be offered a discount of 5% to the bid price entered by them in accordance with the Sebi OFS circulars.
In the foreign exchange market, the rupee edged higher against the dollar. The partially convertible rupee was hovering at 61.735, compared with its close of 61.875 during the previous trading session.
Brent crude oil futures edged lower amid a supply glut. Brent for March settlement was off 12 cents at $49.01 a barrel. The contract had gained 66 cents a barrel or 1.36% to settle at $49.13 a barrel during the previous trading session.
The Reserve Bank of India (RBI) is widely expected to keep its main lending rate viz. the repo rate unchanged at 7.75% after a monetary policy review next week. The sixth bi-monthly monetary review from the RBI is scheduled on Tuesday, 3 February 2015. The central bank may focus on the details of the upcoming Union Budget 2015-16 which is scheduled on 28 February 2015, before taking a call on further monetary policy easing. The RBI surprised financial markets by announcing a cut in the repo rate by 25 basis points in an unscheduled monetary policy review on 15 January 2015, citing easing of inflationary pressures in the economy. The annual rate of inflation based on the combined consumer price indices (CPI) for urban and rural India rose to 5% in December 2014 from 4.4% in November 2014. Over the long term, the RBI aims to restrict consumer price inflation to 4%, within a two-per-cent band.
Asian stocks were mixed today, 30 January 2015. Key benchmark indices in Japan, Singapore and Indonesia rose by 0.16% to 0.49%. Key benchmark indices in China, Hong Kong, South Korea and Taiwan fell by 0.09% to 1.21%.
Japan's industrial output rose a seasonally adjusted 1% in December from the previous month, government data showed today, 30 January 2015 signaling the economy may have started to recover slowly following last year's consumption tax hike. The rise in December came after a 0.5% fall in November.
Taiwan's economy expanded more slowly in the fourth quarter, as falling oil prices hurt petrochemical exports, though demand for electronics remained strong. Taiwan's gross domestic product rose 3.17% from a year earlier in the final quarter of 2014, the lowest rate in five quarters, and 1.17% from the previous quarter, an initial official reading showed today, 30 January 2015. The economy expanded 3.63% in the third quarter of 2014.
Trading in US index futures indicated that the Dow could fall 55 points at the opening bell today, 30 January 2015. US stocks closed higher yesterday, 29 January 2015 as an upturn in oil prices and a rally in Apple and Boeing shares helped offset some disappointing earnings and lingering questions over US monetary policy.
In economic news, the number of people who applied for US unemployment-insurance benefits plunged 43,000 to 265,000 in the week that ended Jan. 24, hitting the lowest tally in 14 years, according to Labor Department data released yesterday, 29 January 2015.
Separately, pending home sales cooled in December, which the National Association of Realtors attributed to fewer homes available for sale and a slight rise in prices. The pending home sales index fell 3.7% during December, though the year-on-year gain was 11.7%, the highest since June 2013.
The US Commerce Department releases its first estimate of fourth-quarter GDP today, 30 January 2015.
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