Key benchmark indices edged lower amid initial volatility on weak Asian stocks. The barometer index, the S&P BSE Sensex, was down 18.04 points or 0.08%, up about 50 points from the day's low. The market breadth, indicating the overall health of the market, was positive.
Index heavyweight Reliance Industries (RIL) rose ahead of its Q3 results today, 17 January 2014. Coal India dropped as the stock turned ex-dividend today, 17 January 2014, for dividend of Rs 29 per share for the year ending March 2014. TCS dropped as the company's third quarter results fell short of market expectations. Indian Oil Corporation (IOC) rose while ONGC and Oil India declined on reports a panel of ministers has approved sale of a 10% government stake in IOC to ONGC and OIL India through a block deal on the stock exchanges.
At 9:32 IST, the S&P BSE Sensex was down 18.04 points or 0.08% to 21,247.14. The index declined 66.43 points at the day's low of 21,198.75 in early trade. The index fell 16.31 points at the day's high of 21,248.87 in early trade.
The CNX Nifty was down 9.75 points or 0.15% to 6,309.15. The index hit a low of 6,304.40 in intraday trade. The index hit a high of 6,317.70 in intraday trade.
The market breadth, indicating the overall health of the market, was positive. On BSE, 671 shares gained and 566 shares fell. A total of 65 shares were unchanged.
Among the 30-share Sensex pack, 20 stocks rose and rest fell. ICICI Bank (down 0.8%), L&T (down 0.26%) and NTPC (down 0.23%) declined.
Index heavyweight Reliance Industries (RIL) rose 0.21% ahead of its Q3 results today, 17 January 2014.
Index heavyweight and cigarette maker ITC fell 0.03% ahead of its Q3 results today, 17 January 2014.
Coal India dropped 8.04% to Rs 278.35 as the stock turned ex-dividend today, 17 January 2014, for dividend of Rs 29 per share for the year ending March 2014. Before turning ex-dividend, the stock offered a dividend yield of 9.58% based on the closing price of Rs 302.70 on Thursday, 16 January 2014.
IT major Wipro shed 0.16% ahead of its Q3 results today, 17 January 2014.
TCS dropped as the company's third quarter results fell short of market expectations. The stock was off 2.8%. 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.
Commenting on the Q3 performance, Chief Executive Officer and Managing Director, N Chandrasekaran, TCS said: "Strong international demand for our services and discipline in execution has helped TCS maintain its momentum and post robust growth in volumes as well as realisation. Our diversified market presence and services portfolio have helped us overcome seasonal weakness and soft demand in the Indian market. Based on initial discussions with our customers we believe 2014 will be a stronger year for us than 2013, as customers execute their business plans in a relatively stable environment. With Digital technologies rapidly changing the way an enterprise operates in multiple dimensions, our continuous investments positions us well to help customers reimagine their business".
Rajesh Gopinathan, Chief Financial Officer, TCS said: "We have been able to maintain our profitability by operating in a disciplined manner while sustaining our investments in customer-facing initiatives globally. We have also been able to significantly increase our cash generation due to efficient working capital management".
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.
Indian Oil Corporation (IOC) rose 1.44% after Oil Minister Veerappa Moily was quoted by media as saying on Thursday, 16 January 2014, that a panel of ministers has approved sale of a 10% stake in IOC through a block deal on the stock exchanges. State exploration firms ONGC and Oil India will buy the stake, Oil Secretary Vivek Rae was quoted as saying. The transaction is likely within the next week or so, Rae said.
ONGC fell 0.51%. Oil India declined 0.62%.
HDFC Bank fell 0.07% ahead of its Q3 results today, 17 January 2014.
Corporation Bank shed 0.08%. The bank on Thursday, 16 January 2014, said it has signed a Memorandum of Understanding (MoU) with Geojit BNP Paribas Financial Services to offer trading account facilities to its retail customers. This has been done consequent upon withdrawal of trading account facilities by HSBC Invest Direct to retail customers of the bank, Corporation Bank said.
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.
Asian stocks fell on Friday, 17 January 2014, as US bank earnings disappointed and investors waited for Chinese economic data due next week. Key benchmark indices in China, Indonesia, Singapore, Japan, South Korea and Taiwan were down 0.15% to 0.56%. Hong Kong's Hang Seng rose 0.76%.
US stocks ended lower on Thursday, 16 January 2014, snapping a two-day rally, after disappointing results from Best Buy Co. Inc., Citigroup Inc. and Goldman Sachs Group Inc. The Nasdaq Composite edged higher.
In economic news, the number of Americans who applied last week for unemployment benefits fell slightly and is now back to a level that prevailed shortly before the Thanksgiving holiday. Separately, US consumer prices rose a seasonally adjusted 0.3% in December, led by higher energy and shelter costs, the Labor Department said. The overall and core inflation numbers were also in line with expectations.
Fed Bank of Atlanta President Dennis Lockhart, who doesn't vote on monetary policy this year, said yesterday that he expects inflation that's been "too low" will accelerate toward the Fed's 2% target.
During an interview with Liaquat Ahamed, Fed Chairman Ben Bernanke defended the response to the financial crisis and said stock market valuations are within historic range. Commenting about the central bank's bond purchases, known as quantitative easing, he said: "The problem with QE is that it works in practice but it doesn't work in theory." Meanwhile, in a paper delivered at a Brookings Institution seminar on US monetary policy, San Francisco Fed President John Williams warned of "nagging concerns that large-scale asset purchases carry with them particular risks to the economy or the health of the financial system that we still don't fully understand." He also said the central bank's new forward-guidance tool seems "overly simplified and prone to misinterpretation."
The Senate cleared for President Barack Obama's signature a bipartisan $1.1 trillion bill to finance the US government through Sept. 30, making a debt ceiling increase the next potential fiscal showdown. The Democratic-controlled Senate voted 72-26 in favor of the spending measure a day after the Republican-led House passed it, 359-67. The bipartisan cooperation marks a turnaround from the Tea Party-fueled discord that caused a 16-day partial government shutdown in October.
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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