Intraday volatility continued as key benchmark indices once again slipped into the red after moving into positive zone from negative zone in mid-morning trade. The barometer index, the S&P BSE Sensex, was down 6.56 points or 0.03%, up 56.89 points from the day's low and off 15.63 points from the day's high. The market breadth, indicating the overall health of the market, was positive.
Capital goods stocks edged higher on renewed buying. SKF India jumped after the company reported strong Q4 result after market hours on Friday, 21 February 2014.
Key benchmark indices edged lower in early trade on weak Asian stocks. A bout of volatility was witnessed in morning trade as the key benchmark indices trimmed initial losses in morning trade. Intraday volatility continued as key benchmark indices once again slipped into the red after moving into positive zone from negative zone in mid-morning trade.
The market may remain volatile this week as traders roll over positions in the futures and options (F&O) segment from the near-month February 2014 series to March 2014 series. The near month February 2014 F&O contracts expire on Wednesday, 26 February 2014. The stock market remains closed on Thursday, 27 February 2014, on account of Mahashivratri.
Foreign institutional investors (FIIs) bought shares worth a net Rs 603.41 crore on Friday, 21 February 2014, as per provisional data from the stock exchanges.
At 11:15 IST, the S&P BSE Sensex was down 6.56 points or 0.03% to 20,694.19. The index rose 9.07 points at the day's high of 20,709.82 in mid-morning trade. The index fell 63.45 points at the day's low of 20,637.30 in early trade.
The CNX Nifty was down 4.15 points or 0.07% to 6,151.30. The index hit a high of 6,155.05 in intraday trade. The index hit a low of 6,130.80 in intraday trade.
The BSE Mid-Cap index was up 23.70 points or 0.37% at 6,445.75. The BSE Small-Cap index was up 24.93 points or 0.39% at 6,418.26. Both these indices outperformed the Sensex.
The market breadth, indicating the overall health of the market, was positive. On BSE, 1,163 shares gained and 956 shares fell. A total of 141 shares were unchanged.
The total turnover on BSE amounted to Rs 841 crore by 11:30 IST, compared with Rs 485 crore by 10:20 IST.
Capital goods stocks edged higher on renewed buying. Bharat Heavy Electricals (Bhel) (up 2.03%), Crompton Greaves (up 1.8%), Siemens (up 1.17%) and Thermax (up 1.69%) gained. ABB India fell 0.37%.
L&T edged higher after the company said that the Foreign Investment Promotion Board (FIPB) has approved the proposal for issuance of equity shares, Compulsorily Convertible Preference Shares (CCPS) and /or Compulsorily Convertible Debentures (CCD) of Rs 1000 crore by L&T Infrastructure Development Projects (L&T IDPL) to a wholly owned subsidiary of CPP Investment Board (USRE III), Inc. which is under incorporation. The stock was up 2.46%. The investment is subject to finalisation and execution of definitive agreements with the investor and receipt of necessary regulatory and other approvals, L&T said.
BEML gained 1.54%. BEML after market hours on Friday, 21 February 2014, said it has rolled out 136th Metro Car to Delhi Metro Rail Corporation, the final consignment for deployment in the RS-6 Project of Delhi Metro. BEML bagged an order worth Rs 923.44 crore from Delhi Metro in March 2011 for the supply of 136 Intermediate Cars for its prestigious RS-6 Project for replacing the existing 4-Car train sets to 6-Car train sets for enhancing passenger carrying capacity.
SKF India jumped 7.1%. The company's net profit surged 50.32% to Rs 48.39 crore on 15.31% growth in total income from operations to Rs 599.59 crore in Q4 December 2013 over Q4 December 2012. The Q4 result was announced after market hours on Friday, 21 February 2014.
SKF India's net profit declined 12.28% to Rs 166.72 crore on 2.12% growth in total income from operations to Rs 2274.96 crore in the year ended 31 December 2013 over the year ended 31 December 2012.
The profit after tax (PAT) of Rs 166.72 crore in FY 2013 is after absorbing an expenditure of Rs 22.10 crore incurred as VRS compensation which has been disclosed as an exceptional item, SKF India said in a statement.
SKF India's board of directors at its meeting held on Friday, 21 February 2014, inter alia has decided to recommend a dividend of Rs 7.50 per share for the year ended 31 December 2013 (FY 2013).
Commenting on the company's financial performance, Mr. Shishir Joshipura, MD, SKF India said, "2013 was challenging year on several fronts. Steep depreciation of Rupee, high interest rates and persistent inflation coupled with subdued industrial activity demanded a differentiated response from leaders. Our focused efforts at enhancing delivered value to our customers and improving operational efficiencies enabled us to deliver a steady performance and strengthen our leadership position."
Gujarat Pipavav Port rose 1.06%. The company after market hours on Friday, 21 February 2014, said it has received approval from the Ministry of Environment & Forests for its expansion plan. The approval dated 5 June 2012 was challenged by an nongovernmental organization (NGO) in the National Green Tribunal and the Tribunal vide its order dated 22 August 2013 kept the company's environment approval in abeyance for a period of 6 months. As per the Tribunal's Order, the Expert Appraisal Committee reviewed the entire expansion plan one more time and recommended it for approval during November 2012. The Ministry's approval letter is now received, the company said in a statement.
SKS Microfinance (SKS) rose 1.78% after the company said it has completed seventh substantial microfinance securitization of Rs 158.27 crore during the current financial year. The announcement was made during trading hours today, 24 February 2014.
SKS said that with the latest securitization transaction of Rs 158.27 crore, the total sum of securitizations completed for FY 2014 (YTD) is Rs 1108.29 crore.
SKS said it has downloaded the receivables from micro loans extended to more than 1.80 lakh rural women entrepreneurs to a Special Purpose Vehicle, and Pass Through Certificates (PTCs) have been purchased by a major private sector bank. The entire pool qualifies for priority sector treatment as per RBI's priority sector lending guidelines, the company said in a statement.
Notably, 35% of the pool represents women entrepreneurs from Scheduled Castes and Scheduled Tribes, 11% from minorities, 38% from Backward Castes and the remaining 16% from women belonging to the Other Castes, SKS said. The entire pool comprises receivables from women entrepreneurs belonging to weaker sections, the company said in a statement.
SKS said that the pool is rated AA (SO) by a leading rating agency signifying 'a high degree of safety regarding timely servicing of financial obligations'. Such instruments carry a very low credit risk, the company added.
The pool is structured with geographical diversity as it comprises receivables from 14 non-Andhra Pradesh states, and has been subjected to a seasoning of three months, SKS said in a statement.
In the foreign exchange market, the rupee was trading unchanged for the day against the dollar. The partially convertible rupee was hovering at 62.125, compared with its close of 62.12/13 on Friday, 21 February 2014.
Government bond prices dropped after Reserve Bank of India Governor Raghuram Rajan on Sunday, 23 February 2014, said that inflation remains the biggest threat to growth. The yield on 10-year benchmark federal paper, 8.83% GS 2023, was hovering at 8.8507%, higher than its close of 8.7954% on Friday, 21 February 2014. Bond yield and bond prices move in opposite direction.
"Even at this point our challenge really is to bring inflation down, because inflation is hurting growth. "As inflation comes down, we will get much more possibilities for growth," Rajan said in Sydney in an interview to a news agency. Rajan, who last month warned of a breakdown in international monetary policy cooperation, said there was "widespread agreement" that advanced economies should worry about spillover effects of central bank actions.
Finance Minister P. Chidambaram last week said that RBI must strike a balance between price stability and growth, while adding that the elected government must determine the pace of growth and policies that help the economy expand.
The Reserve Bank of India next undertakes monetary policy review on 1 April 2014. Citing price pressures, the Reserve Bank of India raised its key lending rates by 25 basis points after Third Quarter Review of Monetary Policy for 2013-14 on 28 January 2014.
Asian stocks edged lower on Monday, 24 February 2014, after a Chinese state-owned newspaper said some Chinese banks curbed loans to property developers. Key benchmark indices in Japan, Indonesia, Taiwan, China, Hong Kong and South Korea fell by 0.21% to 2.03%. In Singapore, the Straits Times index rose 0.01%
Industrial Bank Co. and other unidentified banks have curbed lending to the property sector and related industries such as steel and cement, Shanghai Securities News reported as China said new home prices rose in 69 of 70 cities last month from a year before. But the growth in new-home prices in China's first-tier cities slowed in January, National Bureau of Statistics data today showed.
Trading in US index futures indicated that the Dow could drop 20 points at the opening bell on Monday, 24 February 2014. US stocks edged lower in choppy trade on Friday, 21 February 2014, after the latest data showed existing-home sales in January showed a bigger-than-expected decline. In other economic news on Friday, Dallas Federal Reserve President Richard Fisher said the central bank should continue to taper its bond-buying program that's boosted stocks.
Richmond Fed President Jeffrey Lacker on Friday, 21 February 2014, said the 2008 Federal Open Market Committee transcripts released earlier in the day show "me and several other consumers of economic research grappling with some very difficult policy decisions." In prepared comments at Arizona State, he said there wasn't enough discussion during the crisis about specific models of banking and financial markets that there could have been, and there wasn't enough discussion about long-term consequences. Lacker said he still opposes the Fed's credit market interventions and said he remains "deeply skeptical about the advisability of those actions." Speaking of the market for asset-backed commercial paper, he said markets were responding in a plausibly efficient manner to significant revisions in expectations about the underlying economic fundamentals. Lacker also said the Fed's emergency lending program simply reallocated credit and was not like the "lender of last resort" that Henry Thornton and Walter Bagehot wrote about in the 1800s.
The Federal Open Market Committee (FOMC) next undertakes monetary policy review on 18-19 March 2014. After a monetary policy review, the FOMC on 29 January 2014 announced it will reduce monthly bond purchases by another $10 billion to $65 billion.
Finance leaders from the world's biggest economies leaned on central banks and governments to help spur growth, reverting to the global economy's playbook of recent years, in an effort to safeguard a fragile recovery. Group of 20 officials ended their two-day summit on Sunday, 23 February 2014, saying they would look to boost world growth by more than $2 trillion over the next few years under a strategy crafted by the International Monetary Fund.
Under the G-20 plan, advanced economies would continue with their easy-money policies while emerging markets would seek to restructure their economies and tame inflation. In addition, governments everywhere would be expected to channel private-sector finance into new infrastructure projects.
The G-20's final communiquhighlights agreement among central banks to communicate their stimulus-exit strategies clearly and in a timely fashion. The communiquwarned that the global economy faces a period of potential "excessive volatility" harmful to growth as countries adjust their economic policies. "We do not want any surprises," Joe Hockey, Australia's treasurer and G-20 host, said at the conclusion of the summit on Sunday.
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