Key benchmark indices extended losses and hit fresh intraday low in afternoon trade after European stocks edged lower in early trade there. The 50-unit CNX Nifty hit its lowest level in more than a week. The market breadth, indicating the overall health of the market was negative. The barometer index, the S&P BSE Sensex, was down 157.12 points or 0.69%, off close to 220 points from the day's high and up about 5 points from the day's low. The market sentiment was hit adversely after the India Meteorological Department (IMD) on Thursday, 24 April 2014, said that the country will likely get below-normal levels of monsoon rain this year.
IT stocks were mixed. Auto stocks were also mixed. ICICI Bank dropped after announcing its Q4 results.
High volatility was witnessed as the barometer index, the S&P BSE Sensex, and the 50-unit CNX Nifty, both, hit record high at the onset of the trading session. Volatility continued in morning trade as key benchmark alternately swung between positive and negative zone. Key benchmark indices languished in negative zone in mid-morning trade. Key benchmark indices languished in negative zone in early afternoon trade. Key benchmark indices extended losses and hit fresh intraday low in afternoon trade after European stocks edged lower in early trade there. The 50-unit CNX Nifty hit its lowest level in more than a week.
At 13:20 IST, the S&P BSE Sensex was down 157.12 points or 0.69% to 22,719.42. The index fell 165.29 points at the day's low of 22,711.25 in afternoon trade, its lowest level since 21 April 2014. The index gained 62.77 points at the day's high of 22,939.31 in early trade, a lifetime high for the barometer index.
The CNX Nifty was down 49.05 points or 0.72% to 6,791.75. The index hit a low of 6,785.60 in intraday trade, its lowest level since 17 April 2014. The index hit a high of 6,869.85 in intraday trade, a lifetime high for the index.
The market breadth, indicating the overall health of the market was negative. On BSE, 1,511 shares dropped and 1,067 shares rose. A total of 118 shares were unchanged.
The BSE Mid-Cap index was off 35.63 points or 0.48% at 7,359.43, outperforming the Sensex. The BSE Small-Cap index was off 53.96 points or 0.71% at 7,592.14, underperforming the Sensex.
ICICI Bank dropped 0.6% after announcing its Q4 results. The bank's net profit rose 15.1% to Rs 2652.01 crore on 15.04% rise in total income to Rs 14465.34 crore in Q4 March 2014 over Q4 March 2013. The bank announced result during market hours today, 25 April 2014.
ICICI Bank's net interest income increased 15% to Rs 4357 crore in Q4 March 2014 over Q4 March 2013. Non-interest income jumped 35% to Rs 2976 crore in Q4 March 2014 over Q4 March 2013. Non-interest income in Q4 March 2014 includes Rs 222 crore of exchange rate gains on repatriation of retained earnings from overseas branches. ICICI Bank said that the bank's cost-to-income ratio reduced to 39.2% in Q4 March 2014 from 40% in Q4 March 2013.
ICICI Bank said its provisions surged to Rs 714 crore in Q4 March 2014, from Rs 460 crore Q4 March 2013.
Net non-performing assets as on 31 March 2014 stood at Rs 3301 crore, higher than Rs 3121 crore as on 31 December 2013 and Rs 2234 crore as on 31 March 2013. The net nonperforming asset ratio was 0.82% as on 31 March 2014, higher than 0.81% as on 31 December 2013 and 0.64% at 31 March 2013. The bank's provision coverage ratio, computed in accordance with the RBI guidelines, was 68.6% as on 31 March 2014 after write-offs of Rs 2156 crore during the year. Net loans to companies whose facilities have been restructured stood at Rs 10558 crore as on 31 March 2014, higher than Rs 8602 crore as on 31 December 2013 and Rs 5315 crore as on 31 March 2013.
ICICI Bank said that the bank has continued with its strategy of pursuing profitable growth. The bank continued to grow its retail franchise and has seen healthy growth in retail assets and deposits during the year. The bank continued to strengthen its deposit franchise with healthy mobilization of current and savings account (CASA) deposits during the year, leveraging its increased branch network and technology initiatives, ICICI Bank said.
During the year, ICICI Bank added 653 branches and 834 ATMs to its network.
The bank's capital adequacy as per Reserve Bank of India's guidelines on Basel III norms was 17.70% and Tier-1 capital adequacy was 12.78% as on 31 March 2014, well above regulatory requirements.
IT stocks were mixed. Infosys rose 0.01%. Infosys after market hours on Wednesday, 23 April 2014, announced a strategic partnership with Orange to offer customers a new immersive experience on Orange's IPTV offering. Infosys will deliver a broad portfolio of interactive TV apps on the Orange Livebox Play.
The TV apps will be powered by Infosys DigitizeEdge, an integrated digital asset and experience platform for TV operators, media companies, advertisers, and content publishers. Infosys will leverage this cloud-based platform to onboard top content providers and brands across the globe. DigitizeEdge will enable Orange to deliver a wide range of lifestyle-centric, video-rich, and contextual over-the-top (OTT) services via TV apps, to enhance viewer experience and interaction with their TV. The platform will customize content for Orange's viewers in France.
HCL Technologies (up 0.34%) and Tech Mahindra (up 0.33%) gained. TCS (down 0.67%) and Wipro (down 1.16%) declined.
Auto stocks were mixed. Maruti Suzuki India fell 1.75% ahead of its financial results today, 25 April 2014.
Mahindra & Mahindra (M&M) rose 3.01%, with the stock extending Wednesday's gains.
Ashok Leyland (up 0.21%) and Tata Motors (up 0.33%) gained.
Shares of two-wheeler makers declined. Bajaj Auto (down 0.39%), Hero MotoCorp (down 0.75%) and TVS Motor Company (down 1.25%) dropped.
Biocon rose 2.98% after the company at the time of announcing Q4 results said it expects FY 2015 to reflect continued business momentum with biosimilars, branded formulations and research services driving growth. The Q4 result was announced on Thursday, 24 April 2014. The stock market was closed that day, on account of Parliamentary elections in Mumbai constituency.
Biocon's consolidated net profit declined 54.51% to Rs 113.08 crore on 14.92% growth in total income to Rs 745.77 crore in Q4 March 2014 over Q4 March 2013.
Biocon's consolidated net profit declined 18.69% to Rs 413.72 crore on 15.57% growth in total income to Rs 2933.19 crore in the year ended 31 March 2014 (FY 2014) over the year ended 31 March 2013 (FY 2013).
Commenting on the company's financial performance, Kiran Mazumdar-Shaw, CMD, Biocon said, "Biocon ended fiscal 2014 on a strong note. We delivered 16% revenue growth along with a healthy EBITDA margin of 25%. This fiscal we recorded robust performance, an outcome of our efforts aimed at optimizing our product mix, augmenting capacities and driving operational efficiencies. We have delivered on our promise of affordable innovation through commercialization of Alzumab, an anti-CD6 novel biologic for Psoriasis; and CANMAb, the world's most affordable trastuzumab. We are pleased that a large number of patients benefit from these two products. We continue with our innovation led business strategy and look to deliver superior value to our stakeholders".
With regard to its future business outlook, Biocon said that it expects FY 2015 to reflect continued business momentum with biosimilars, branded formulations and research services driving growth. The progress in the company's development pipeline (across biosimilars and novel molecules) will see some of its molecules enter the clinic, Biocon said. The company said it continues to make investments in infrastructure and people to support its growth.
Biocon's board of directors at its meeting held on Thursday, 24 April 2014, recommended final dividend of Rs 5 per share for FY 2014.
Biocon's board of directors at its meeting held on Thursday, 24 April 2014, approved the induction of Dr Arun Chandavarkar, on to the board of Biocon. He has also been appointed CEO & Joint Managing Director of the company.
Welcoming Arun on the Board, Kiran Mazumdar-Shaw, CMD, Biocon said, "I am extremely happy to have Arun join the Board of Directors and take on the mantle of CEO & Joint MD. Arun has been a core member of the leadership team at Biocon and has worked very closely with me over the last 24 years. He has played a pivotal role in the evolution of Biocon and I am confident that, in his new role, he will build immense value for Biocon and its stakeholders".
Dr Arun Chandavarkar, CEO & Joint MD, Biocon said, "I am delighted and honoured to join the Board of Biocon. These are exciting times and I look forward to steering the company to the next level".
In the foreign exchange market, the rupee reversed intraday losses against the dollar. The partially convertible rupee was hovering at 60.63, compared with its close of on 61.07/08 on Wednesday, 23 April 2014. Indian financial markets were closed on Thursday, 24 April 2014, on account of Parliamentary elections in Mumbai constituency.
The country will likely get below-normal levels of monsoon rain this year, the India Meteorological Department (IMD) said on Thursday, 24 April 2014. The IMD said that the rainfall during the June-September summer rainy season will likely be 95% of the long-term average for the country. India's weather department defines a normal monsoon as one with rainfall between 96% and 104% of the 50-year average, which is 89 centimeters this year. This year could be a below normal monsoon, the weather department said, as there is a 60% possibility of the emergence of the El Ni weather phenomenona warm weather system that starts in the southern Pacific can affect weather around the world. El Ni last affected India's monsoon in 2009 when the monsoon rainfall was 23% below normal.
Annual rains are important for India as most of its farmlands are dependent or rain for irrigation and more than half of its workforce is employed in agriculture. The monsoon rains usually arrive over the southern state of Kerala by the end of May or the first week of June, and gradually cover the entire country by July. The IMD will revise its update in June.
The Reserve Bank of India (RBI) next undertakes monetary policy review on 3 June 2014. The RBI left its main lending rate viz. the repo rate unchanged at 8% after a monetary policy review on 1 April 2014, as consumer-price inflation eased to a two-year low and as the rupee firmed up against the dollar.
A major near term trigger for the stock market is the outcome of the upcoming Lok Sabha elections. The 36 days long voting process began on 7 April 2014 and will conclude on 12 May 2014. The results will be declared on 16 May 2014 after which India will get a new government. The term of the current Lok Sabha expires on 1 June and the new House has to be constituted by 31 May.
European stocks dropped on Friday, 25 April 2014, as investors weighed corporate earnings and escalating tensions in Ukraine. Key benchmark indices in France, Germany and UK were off 0.43% to 1.15%.
Asian stocks declined on Friday, 25 April 2014, on fears of escalating tensions in Ukraine. Key benchmark indices in China, South Korea, Taiwan, Hong Kong and Singapore were off 0.38% to 1.92%. Key benchmark indices in Indonesia and Japan were up 0.17% to 0.44%.
In Japan, consumer prices rose 2.7% in April from a year earlier, the biggest jump since 1992, driven by a sales-tax increase and stimulus from the Bank of Japan. Inflation excluding fresh food accelerated from 1% in the previous month, while nationally the same price gauge rose 1.3% in March from a year earlier, statistics bureau data showed today, 25 April 2014.
Trading in US index futures indicated that the Dow could drop 33 points at the opening bell on Friday, 25 April 2014. US stock markets finished Thursday's volatile session generally higher as positive earnings and stronger-than-expected data outweighed worries over military escalation near Ukrainian border.
The Federal Open Market Committee (FOMC) next undertakes monetary policy review at a two-day meeting on 29-30 April 2014. The Federal Reserve on 19 March 2014 decided after the conclusion of a monetary policy review to trim its monthly bond purchases by $10 billion to $55 billion.
US Secretary of State John Kerry on Thursday, 24 April 2014, warned that Russia is running out of time to comply with an accord to ease tensions in Ukraine, as Russian forces began new military exercises on the two countries' border. The agreement on disarming rebels and other measures signed April 17 in Geneva by Ukraine, Russia, the European Union and the US is on the brink of collapse. Kerry spoke hours after Russian President Vladimir Putin warned Ukraine against continuing an anti-separatist offensive.
Standard & Poor's Ratings Services today, 25 April 2014, cut its rating on Russia to one notch above junk, citing large capital outflows in the first quarter. S&P cut its rating one level, to BBB-minus from BBB. It kept its outlook on the country negative, where it has been since March 20, when the ratings firm lowered it from stable in light of heightened tension in Ukraine and the prospect of economic sanctions.
"In our view, the tense geopolitical situation between Russia and Ukraine could see additional significant outflows of both foreign and domestic capital from the Russian economy and hence further undermine already weakening growth prospects," S&P wrote in its report.
S&P also said the downgrade reflects the risks that the large outflows seen in the first quarter, during which the size of Russia's financial account deficit was almost twice that of the current account surplus, would continue.
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