Key benchmark indices edged higher after Reserve Bank of India (RBI) announced Open Market Operations to ease the strain on liquidity in the banking system and as investors welcomed Bharatiya Janata Party's (BJP's) prime ministerial candidate Narendra Modi's economic vision for India in a speech delivered on Sunday, 19 January 2014. The barometer index, the S&P BSE Sensex, was provisionally up 129.26 points or 0.61%, off close to 30 points from the day's high and up about 190 points from the day's low. The market breadth, indicating the overall health of the market, once again turned positive from negative in late trade.
Indian stocks snapped 2-day losing streak today, 20 January 2014.
Index heavyweight Reliance Industries (RIL) edged lower as the company's net profit remained flat in Q3 December 2013 due to fall in gross refining margins (GRM). UltraTech Cement shrugged off the company's weak Q3 result. Wipro hit 52-week high on good Q3 result. HCL Technologies scaled record high. Infosys extended recent gains triggered by the company raising its revenue growth guidance for the year ending 31 March 2014.
Investors cheered Bharatiya Janata Party's (BJP's) prime ministerial candidate Narendra Modi's economic vision for India in his speech on Sunday, 19 January 2014, wherein he said that if the BJP comes to power after Lok Sabha elections, his emphasis will be on urbanisation, infrastructure and inflation control and said his wish list also includes setting up 100 new smart cities and introduction of bullet trains to all four corners of the country.
The Sensex reversed initial gains on weak Asian stocks. The Sensex hit one-week low. The 50-unit CNX Nifty hit its lowest level in almost a week. Key benchmark indices regained positive terrain and hit fresh intraday high in morning trade. The Sensex trimmed gains after hitting fresh intraday high in mid-morning trade. The Sensex further trimmed intraday gains in early afternoon trade. Key benchmark indices retained positive zone in mid-afternoon trade. The Sensex extended gains in late trade.
As per provisional figures, the S&P BSE Sensex was up 129.26 points or 0.61% to 21,192.88. The index jumped 157.75 points at the day's high of 21,221.37 in late trade. The index declined 62.49 points at the day's low of 21,001.13 in early trade, its lowest level since 13 January 2014.
The CNX Nifty was up 41.65 points or 0.67% to 6,303.30, as per provisional figures. The index hit a high of 6,307.45 in intraday trade. The index hit a low of 6,243.35 in intraday trade, its lowest level since 14 January 2014.
The total turnover on BSE amounted to Rs 1818 crore, lower than Rs 3133.56 crore on Friday, 17 January 2014.
The market breadth, indicating the overall health of the market, once again turned positive from negative in late trade. On BSE, 1,407 shares rose and 1,238 shares fell. A total of 152 shares were unchanged. Earlier, the market breadth had turned negative from positive in mid-afternoon trade.
Among the 30-share Sensex pack, 17 stocks rose and rest fell. Sesa Sterlite (up 2.37%), ITC (up 1.59%) and SBI (up 1.43%) gained.
Index heavyweight Reliance Industries (RIL) edged lower as the company's net profit remained flat in Q3 December 2013 due to fall in gross refining margins (GRM). The stock lost 1.96%. The stock was the biggest loser from the Sensex pack. The company's net profit rose 0.2% to Rs 5511 crore on 10.5% growth in revenue to Rs 106383 crore in Q3 December 2013 over Q3 December 2012. The Q3 result was announced after market hours on Friday, 17 January 2014.
RIL's profit before depreciation, interest and taxation (PBDIT) declined 1.8% to Rs 9927 crore in Q3 December 2013 over Q3 December 2012. RIL's non-operational income jumped 32.47% to Rs 2305 crore in Q3 December 2013 over Q3 December 2012.
RIL's gross refining margin (GRM) declined to $7.6/barrel in Q3 December 2013, from $7.7/barrel in Q2 September 2013 and $9.6/barrel in Q3 December 2012.
RIL said its refining business maintained stable earnings on Q-o-Q basis in Q3 December 2013 despite lower volumes and decline in regional benchmark complex margins. RIL's margins were positively impacted by widening crude differentials, strength in middle-distillates and naphtha product cracks, which was offset by weak gasoline cracks
RIL said that the net addition to fixed assets for the nine month ended 31 December 2013 was Rs 27645 crore including exchange rate difference capitalization. Capital expenditure was principally on account of ongoing expansions projects in the petrochemicals and refining business at Jamnagar, Dahej, Silvassa and Hazira.
RIL said its retail unit Reliance Retail continued its growth momentum in Q3 December 2013 despite challenging macroeconomic environment. Reliance Retail's revenue jumped 38.32% to Rs 3927 crore in Q3 December 2013 over Q3 December 2012.
Commenting on the company's Q3 performance, Mukesh D. Ambani, CMD, RIL said: "Reliance's robust refining configuration enabled it to deliver stable refining profits in Q3 December 2013, against the backdrop of declining regional benchmark margins. Even as we invest to further strengthen our energy businesses, this quarter demonstrates the outstanding quality of our refining and petrochemical business resources and their ability to deliver creditable performance in a period marked by cyclicality and uncertainties. We are happy to announce the commissioning of our new polyester facility in Silvassa, the first amongst a series of projects that underpin RIL's industry-leading competitive position. Our retail business continues on its rapid growth trajectory with 38% revenue growth during the quarter".
RIL's outstanding debt as on 31 December 2013 was Rs 81330 crore compared to Rs 72427 crore as on 31 March 2013. RIL had cash and cash equivalents of Rs 88705 crore as on 31 December 2013. These were in bank deposits, mutual funds, CDs and Government securities/bonds. RIL is debt free on a net basis as at 31 December 2013.
The Ministry of Petroleum and Natural Gas notified the Domestic Natural Gas Pricing Guidelines, 2014 for all domestically produced gas, including conventional, shale, coal bed methane (CBM). These guidelines will be applicable from 1 April 2014.
UltraTech Cement shrugged off the company's weak Q3 result. The stock rose 0.27%. The company's net profit fell 38.45% to Rs 369.76 crore on 1.85% decline in total income to Rs 4885.99 crore in Q3 December 2013 over Q3 December 2012. The result was announced during trading hours today, 20 January 2014.
UltraTech Cement said that the combined domestic cement and clinker sales remained flat at 9.7 million tonnes in Q3 December 2013. Cement and wall care putty sales jumped 10.3% to 2.89 lakh tonnes in Q3 December 2013 over Q3 December 2012.
UltraTech Cement that the Q3 December 2013 result was impacted adversely by lower selling prices due to the subdued demand. However, on-going cost optimization measures have helped in containing costs despite the continuing increase in input and logistics cost, UltraTech Cement said.
With regard to future business outlook, UltraTech Cement said that the outlook continues to remain challenging. In the long term, demand growth for cement is likely to be around 8%. The key demand drivers will continue to be housing and infrastructure spends, UltraTech Cement said.
Wipro rose 3.78% to Rs 573.35 on good Q3 result. The stock hit 52-week high of Rs 577.75 in intraday trade. Wipro after trading hours on Friday, 17 January 2014, said its consolidated net profit from continuing operations jumped 27% to Rs 2010 crore on 18% growth in revenue from continuing operations to Rs 11330 crore in Q3 December 2013 over Q3 December 2012. Excluding non-recurring expense, net profit from continuing operations jumped 28% to Rs 2030 crore in Q3 December 2013 over Q3 December 2012. The results are as per International Financial Reporting Standards (IFRS).
In dollar terms, IT services revenue were reported at $1.678.4 billion in Q3 December 2013, an increase of 2.9% over Q2 September 2013 and an increase of 6.4% over Q3 December 2012.
IT services revenues in rupee terms was at Rs 10330 crore in Q3 December 2013, an increase of 20% over Q3 December 2012.
IT services earnings before interest and tax (EBIT) was Rs 2380 crore in Q3 December 2013, an increase of 33% over Q3 December 2012.
Wipro expects revenues from IT services business to be in the range of $1.712 billion to $1.745 billion in Q4 March 2014 including the revenues from Opus CMC. The Opus CMC acquisition (announced in December 2013) was completed in January 2014, upon completion of customary closing conditions. Opus CMC's revenue for calendar year 2013, prior to the closing of the acquisition, was approximately $ 43 million, Wipro said.
Azim Premji, Chairman of Wipro, commenting on the results said: "As the global economy is progressing towards stability, we see optimism amongst clients, especially in the West. Corporations are leveraging technology to reduce operational costs and investing resources in differentiating themselves in the marketplace".
T K Kurien, Executive Director & Chief Executive Officer of Wipro, said: "Our focus on account management has yielded encouraging results. We continue to execute to our strategy for superior engagement with clients while investing in emerging technologies to drive towards a higher growth trajectory. During the quarter, our Global Infrastructure Services business grew strongly on revenues."
Suresh Senapaty, Executive Director & Chief Financial Officer of Wipro, said: "Our strategy of 'standardization at the core' is yielding results. Our investments in automation and productivity tools have driven efficiencies and helped us expand margins of IT Services by 54 basis points to 23%."
TCS rose 5.3%, with the stock bouncing back from Friday's post-result slide. The company's consolidated net profit rose 15.1% to Rs 5333 crore on 1.5% increase in revenue to Rs 21294 crore in Q3 December 2013 over Q2 September 2013. Operating profit grew 0.5% to Rs 6337 crore in Q3 December 2013 over Q2 September 2013. Operating margin was reported at 29.8% in Q3 December 2013. TCS announced the third quarter results after trading hours on Thursday, 16 January 2014.
TCS said growth in Q3 December 2013 was driven by industries like Life Science & Healthcare, Manufacturing, Media, Travel & Hospitality and Telecom. The company's broad based presence across markets and services helped overcome seasonal weakness in some markets. Europe led growth, driven by the continuous investments being made in that market, while North America and UK also grew during the quarter, TCS said in a statement. Among growth markets, Latin America, APAC and MEA registered strong growth. India business suffered from volatility and declined sequentially, TCS said. Among service lines, Business Process Services, Enterprise Solutions, Global Consulting were the leaders.
HCL Technologies rose 4.53% to Rs 1443.75, a record high for the stock. The company's consolidated net profit rose 5.7% to Rs 1496 crore on 2.8% increase in revenue to Rs 8184 crore in Q2 December 2013 over Q1 September 2013. The results are as per US Generally Accepted Accounting Principles (US GAAP). The company announced Q3 results on Thursday, 16 January 2014.
Earnings before interest, taxation, depreciation and amortization (EBITDA) rose 1.6% to Rs 2126 crore in Q2 December 2013 over Q1 September 2013. EBITDA margin declined to 26% in Q2 December 2013, from 26.3% in Q1 September 2013.
HCL Technologies' consolidated net profit as per US GAAP rose 7.1% to $241.6 million on 4% growth in revenue at $1.3213 billion in Q2 December 2013 over Q1 September 2013. EBITDA rose 2.8% to $343.3 million in Q2 December 2013 over Q1 September 2013. EBITDA margin edged lower to 26% in Q2 December 2013, from 26.3% in Q1 September 2013.
Tech Mahindra gained 3.19%.
Infosys rose 0.85% to Rs 3,759.80, with the stock extending recent gains triggered by the company raising its revenue growth guidance for the year ending 31 March 2014. The stock hit record high of Rs 3,760 in intraday trade. At the time of announcement of Q3 December 2013 earnings, Infosys, on 10 January 2014, raised its revenue growth guidance in both rupee and dollar terms for the year ending 31 March 2014. The company expects consolidated revenue in rupee terms to grow 24.4% to 24.9% for the year ending 31 March 2014 (FY 2014). This guidance is based on rupee dollar conversion rate of 61.81 for the rest of the financial year. The company expects consolidated revenue in dollar terms to grow 11.5% to 12% in FY 2014.
Nucleus Software Exports rose by maximum permissible 20% upper limit at Rs 162.50 after consolidated net profit jumped 113.71% to Rs 23.28 crore on 9.37% growth in total income from operations (net) to Rs 89.96 crore in Q3 December 2013 over Q2 September 2013. The company announced Q3 results during market hours today, 20 January 2014.
Nucleus Software Exports said that the company saw a total of three new customers being added to the count of over 150 customers across the globe in Q3 December 2013. The company said that 31 product module implementations successfully went live across geographies and it won 8 new product orders worldwide in the latest concluded quarter.
Commenting on the performance of the third quarter, Mr. Vishnu R. Dusad, CEO and Managing Director, Nucleus Software Exports, said, We are continuing to register a healthy growth in the current financial year. We are happy to share that our increasing penetration in new markets has given us a positive momentum. Additionally, with the objective of building capabilities for the future, we have been investing in new talent and nurturing the existing talent pool. Our focus on our people has been to ensure quality and achieving perfection while delivering world class products to our customers.
Nucleus Software Exports said that continued focus on building the right talent as a foundation of growth will remain one of its top priorities in the coming quarters. Focusing on integrated talent management for sustained higher performance, the company has recruited a healthy mix of graduate talent and experienced professionals in technology and business management areas.
Nucleus Software Exports said that the company has hired over 200 campus graduates and over 190 experienced professionals in the current financial year. In Q3 December 2013, the company hired a mix of over 100 campus graduate and experienced professionals. The organization has started investing in relationships and hiring from top B-Schools in India to strengthen the strategic management and functional business management capabilities across its various teams. Nucleus Software has strengthened its commitment and investment in Talent and Leadership Development initiatives to build leadership capability for the future across all levels in the organization, the company said.
Nucleus Software Exports' cash and cash equivalents, including investments in debt schemes of mutual funds, fixed deposits with banks and tax free PSU bonds was Rs 299.45 crore as on 31 December 2013, as against Rs 249.44 crore on 31 December 2012.
Bank of Baroda declined 0.88% as the stock turned ex-dividend today, 20 January 2014, for interim dividend of Rs 11 per share for the year ending 31 March 2014. The state-run bank said during market hours that on 18 January 2014, the Allotment Committee of the bank has issued and allotted 81.58 lakh shares at issue price of Rs 674.12 per share, aggregating to Rs 549.99 crore to Government of India (President of India) on preferential basis.
South Indian Bank rose 3.95% after the central bank allowed foreign investors to buy shares in the private sector bank as the foreign shareholding in the bank has gone below the prescribed limit. The foreign share holding through 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) in South Indian Bank have gone below the prescribed threshold caution limit stipulated under the extant foreign direct investment (FDI) policy, the Reserve Bank of India (RBI) said in a statement.
Hence, the restrictions placed on the purchase of shares of South Indian Bank are withdrawn with immediate effect, it said. Equity shares of South Indian Bank can now be purchased through primary market and stock exchanges, RBI said.
Currently, FIIs are allowed to invest upto 49% of the paid-up capital of South Indian Bank under the portfolio investment scheme (PIS).
Dewan Housing Finance Corporation rose 4.6% after net profit rose 51.69% to Rs 138.39 crore on 54.78% increase in total income to Rs 1301.36 crore in Q3 December 2013 over Q3 December 2012. The result was announced during trading hours today, 20 January 2014. Dewan
Tata Sponge Iron gained 4.14% after net profit rose 18.1% to Rs 24.31 crore on 0.1% decline in total income to Rs 207.15 crore in Q3 December 2013 over Q3 December 2012. The result was announced after market hours on Friday, 17 January 2014.
Bond prices rose after the Reserve Bank of India on Friday, 17 January 2014, said it has decided to conduct Open Market Operations by purchasing government securities for an aggregate amount of Rs 10000 crore on Wednesday, 22 January 2014, in a bid to ease the strain on liquidity in the banking system. The yield on 10-year benchmark federal paper, 8.83% GS 2023, was hovering at 8.5784%, lower than its close of 8.6269% on Friday, 17 January 2014. Bond yield and bond prices are inversely related.
The Reserve Bank of India said on Friday, 17 January 2014, that the liquidity conditions are undergoing some stress in the recent period, primarily on account of the build-up of cash balances of the Government of India. In order to address the temporary liquidity deficit situation, the Reserve Bank of India has been infusing additional liquidity through 7/14/28 days term repo auctions in addition to the existing overnight repo under liquidity adjustment facility and standing liquidity facilities. The current assessment suggests that the strain on market liquidity is likely to remain enduring in view of the fiscal targets set for the year as well as projections for aggregate credit growth, warranting the need to provide liquidity of a more permanent nature. Accordingly, the Reserve Bank has decided to conduct Open Market Operations by purchasing the following government securities for an aggregate amount of Rs 10000 crore on Wednesday, 22 January 2014, through multi-security auction using the multiple price method.
The Reserve Bank of India's Third Quarter Review of Monetary Policy for 2013-14 is scheduled on 28 January 2014. The RBI kept its main lending rate viz. the repo rate unchanged after its last policy review in December and said at that time that it expected inflation to ease in the following months.
Bharatiya Janata Party's (BJP's) prime ministerial candidate Narendra Modi on Sunday, 19 January 2014, came out with his vision for a new India ahead of the 2014 Lok Sabha elections, pledging to project the country as a brand worldwide if a BJP government was voted to power. The key elements of the Bharatiya Janata Party prime ministerial candidate's programme are urbanisation, infrastructure, education and healthcare, apart from cracking down on scourges such as inflation and black money. Modi said he wanted to reach out to every level of society to ensure that the benefits of economic change didn't just go to the advantaged. His wish list includes Indian Institutes of Technology, Indian Institutes of Management and All India Institutes of Medical Science in every state, 100 new smart cities and bullet trains to all four corners of the country. He said inflation - one of BJP's main election planks besides corruption and "mis-governance" by the UPA government - was the country's biggest predicament and said steps needed to be taken to contain it. The answer lay in farm data that was much more current than it is now and a fund that could be used to protect the vulnerable. Modi also floated the idea of a price stabilisation fund to ensure that nobody went hungry.
He spoke of the need to focus on Brand India, referring to five Ts in this connection-tradition, talent, tourism, technology and trade. He also pledged a mix of social welfare schemes that would bring India on a par with developed economies, urging people to vote for him.
Other priorities in Modi's programme include development of infrastructure such as roads, ports and airports, reviving power plants that are shut, creating jobs, skill development, setting up agro infrastructure gas grids, deploying optical fibre networks, pushing the river interlinking project and establishing special courts to punish black marketing. In the 75-minute speech, Modi said the country has to treat urbanisation as an "opportunity", not as a "challenge", something India hasn't done. A BJP government under him will build 100 new cities to be developed as smart cities, twin cities and satellite cities, he said. "If the railways is modernised, we can give impetus to progress. By the time the country celebrates the diamond jubilee of independence (2022), we should have bullet trains going in four directions. The world will start seeing us with a new vision," he said.
Modi also touched on senior BJP leader LK Advani's pet theme of getting black money stashed overseas back to the country, saying that a task force will be set up to ensure that this is achieved. Modi also spoke of the need to uphold what he regarded as India's traditions, likening it to a rainbow with seven shades family values, agriculture and rural India, empowerment of women, environment, youth, democracy and knowledge.
European stocks edged lower on Monday, 20 January 2014, after China's economic growth slowed in the fourth quarter as gains in factory output and investment spending eased. Key benchmark indices in France, Germany and UK were off 0.04% to 0.35%.
Global credit rating agency Moody's Investor Service on Friday, 17 January 2014, lifted Ireland's debt ratings to Baa3/P-3 from Ba1/NP, back to investment-grade status, and added a positive outlook. There were two reasons listed: growth potential of the Irish economy, which is expected to help bring government debt ratios down from a recent peak, and the government's exit from its international bailout, which will help improve solvency and restore market access.
Asian stocks edged lower on Monday, 20 January 2014, after China's economic growth slowed in the fourth quarter as gains in factory output and investment spending eased. Key benchmark indices in China, Japan, Singapore and Hong Kong were off 0.59% to 0.88%. Key benchmark indices in Indonesia, South Korea and Taiwan were up 0.3% to 0.48%.
China's economy expanded 7.7% in the fourth quarter from a year earlier, the National Bureau of Statistics said today. That compares 7.8% growth in the previous three months. Industrial production rose 9.7% in December from a year earlier, data showed, down from a 10% gain in November. Retail sales last month rose 13.6% from a year earlier, slowing from 13.7% in November. Fixed-asset investment in China excluding rural households increased 19.6% in the January-to-December period from a year earlier, when it expanded 20.6%.
The US stock market remains closed today, 20 January 2014, for a holiday commemorating civil rights leader Martin Luther King Jr.
US stocks settled mostly lower on Friday as disappointing results from Intel Corp. and General Electric Co. weighed on sentiment.
The Federal Open Market Committee (FOMC) holds a two-day monetary policy meeting on 28 and 29 January 2014. By a 9-to-1 vote, the Fed on 18 December 2013 decided to trim its asset-purchase program by $10 billion to $75 billion per month starting in January 2014.
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