Bank stocks edge higher

A bout of volatility was witnessed as key benchmark indices extended gains in afternoon trade. At 13:16 IST, the barometer index, the S&P BSE Sensex, was up 46.93 points or 0.17% at 27,411.85. The 50-unit CNX Nifty was up 10.65 points or 0.13% at 8,285.70. The market breadth indicating the overall health of the market was strong. On BSE, 1,557 shares rose and 1,009 shares fell. A total of 175 shares were unchanged. The BSE Mid-Cap index was up 0.79%. The BSE Small-Cap index was up 0.59%. Both these indices outperformed the Sensex.

In overseas stock markets, European stocks nudged higher amid volatility in early trade. Asian stocks were in green. US stocks registered small gains yesterday, 19 October 2015, in range-bound trading session.

Bank stocks edged higher. Among PSU banks, IDBI Bank (up 3.31%), Syndicate Bank (up 1.17%), Punjab National Bank (up 1.39%), Bank of India (up 1.31%), Corporation Bank (up 0.78%), Canara Bank (up 1.16%), Union Bank of India (up 1.3%), Bank of Baroda (up 1.43%), Andhra Bank (up 0.86%), Indian Overseas Bank (up 0.82%) and State Bank of India (up 0.71%) gained.

Oriental Bank of Commerce (OBC) rose 2.18% at Rs 147.55 after the state-run bank said that it intends to raise Tier II capital through private placement of Basel III compliant Tier 2 bonds of Rs 10 lakh each at par aggregating to Rs 1000 crore. The bonds have been rated CARE AA+ and ICRA AA+ (Hyb.) by CARE & ICRA, respectively.

Among private sector banks, Axis Bank (up 0.8%), IndusInd Bank (up 0.58%), Yes Bank (up 0.77%), ICICI Bank (up 0.33%) and HDFC Bank (up 0.14%) edged higher. Kotak Mahindra Bank (down 0.68%) edged lower.

Auto stocks were mixed. Eicher Motors (up 0.16%), Ashok Leyland (up 0.73%) and Tata Motors (up 3.83%) edged higher. Bajaj Auto (down 0.91%) and TVS Motor Company (down 0.14%) edged lower.

Hero MotoCorp was off 0.02% at Rs 2,613. The stock hit a high of Rs 2,617 and a low of Rs 2,589.05 so far during the day. The company is set to announce its Q2 September 2015 results today, 20 October 2015.

Maruti Suzuki India (MSIL) was up 0.69% at Rs 4,491. The company after market hours yesterday, 19 October 2015, announced the introduction of a new variant of its popular mid-size sedan Ciaz. The petrol version of Ciaz RS is priced Rs 9.20 lakh ex-showroom Delhi and the hybrid diesel version is priced at Rs 10.28 lakh ex-showroom Delhi.

Mahindra & Mahindra (M&M) was off 0.77% at Rs 1,269.65. The company during market hours today, 20 October 2015, announced the launch of SmartShift - a technology enabled load exchange platform. M&M becomes one of the first large corporate groups in the country to initiate a digital mobility platform that is completely under its aegis, the company said in a statement. SmartShift will act as an exchange platform for cargo owners and transporters, enabling them to work with each other. M&M is launching SmartShift in Mumbai today, 20 October 2015, followed by other towns and cities across India.

HCL Technologies rose 0.48% at Rs 861.25. The company during market hours today, 20 October 2015 said it has entered into a letter of intent with the Volvo Group for undertaking an outsourcing engagement for its IT infrastructure and operations services. The contract tenure is for five years. The total value of the contract was not disclosed. In addition, HCL Technologies would be acquiring from the Volvo Group, its external IT business relating to provision of IT infrastructure, mainframe services and application operation services for an all cash consideration of SEK 1.1 billion ($138 million). The transaction is to be closed during the second quarter of 2016 and will provide both cost savings and a capital gain. Volvo Group derived revenue of SEK 1.6 billion ($190 million) from external customers during the last twelve months.

Nestle India rose 1.26% to Rs 6,557.90 on media reports that the Karnataka and Gujarat state governments have lifted ban on manufacturing and sale of Maggi noodles, the company's popular instant food brand. It may be recalled that Nestle India had last week said that the test results from all the three laboratories mandated by the Bombay High Court to test Maggi noodles samples showed that the noodles are safe for consumption with lead content within permissible level.

Rane Brake Lining rose 4.49% at Rs 326 after net profit surged 123.6% to Rs 3.89 crore on 9.4% rise in net sales to Rs 109.22 crore in Q2 September 2015 over Q2 September 2014. The company announced the result after market hours yesterday, 19 October 2015.

Meanwhile, global credit rating agency Standard & Poor's Ratings Services (S&P) has affirmed its 'BBB-' long-term and 'A-3' short-term sovereign credit rating on India with stable outlook on the rating. S&P said in a statement that its current ratings on India reflect the country's sound external profile and improved monetary credibility. However, India's low per capita income and weak public finances are two major constraints on India's sovereign ratings, S&P said. According to S&P, India has made progress to address long-standing impediments to growth. These include strengthening the business climate, improving labor market flexibility and reforming the energy sector. On the flip side, domestic supply-side constraints will put a lid India's economic growth. S&P expects the Centre's revenue to get a boost in the medium term from the likely introduction of the goods and services tax.

S&P further said that based on its current assessment, the rating agency is unlikely to change its current sovereign ratings on India till at least 2016.

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