The market breadth, indicating the overall health of the market, turned negative from positive in mid-afternoon trade. Key benchmark indices viz. the barometer index, the S&P BSE Sensex, and the 50-unit CNX Nifty retained positive zone 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 Sensex was up 87.57 points or 0.42%, off close to 55 points from the day's high and up about 150 points from the day's low.
Bank stocks were mixed. AXIS Bank extended recent losses as the bank's bad loans rose in Q3 December 2013. TCS extended intraday gains.
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.
At 14:20 IST, the S&P BSE Sensex was up 87.57 points or 0.42% to 21,151.19. The index jumped 145.95 points at the day's high of 21,209.57 in mid-morning 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 24.40 points or 0.39% to 6,286.05. The index hit a high of 6,304.95 in intraday trade. The index hit a low of 6,243.35 in intraday trade, its lowest level since 14 January 2014.
The market breadth, indicating the overall health of the market, turned negative from positive in mid-afternoon trade. On BSE, 1,243 shares fell and 1,217 shares rose. A total of 151 shares were unchanged.
Among the 30-share Sensex pack, 16 stocks fell and rest rose. Wipro (up 3.42%), ITC (up 1.37%) and M&M (up 1.21%) gained.
TCS rose 4.86%, with the stock extending intraday gains. 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.
Bank stocks were mixed. AXIS Bank extended recent losses as the bank's bad loans rose in Q3 December 2013. The stock shed 0.07%. AXIS Bank's net profit rose 19.06% to Rs 1604.11 crore on 9.94% increase in total income to Rs 9433.55 crore in Q3 December 2013 over Q3 December 2012. The result was announced during trading hours on Thursday, 16 January 2014.
The bank's gross non-performing assets increased to Rs 3008.20 crore as on 31 December 2013, from Rs 2734.47 crore as on 30 September 2013 and Rs 2275.30 crore as on 31 December 2012. The ratio of net non-performing assets to net advances stood at 0.42% as on 31 December 2013, compared with 0.37% as on 30 September 2013 and 0.33% as on 31 December 2012. The ratio of gross non-performing assets (NPA) to gross advances stood at 1.25% as on 31 December 2013, compared with 1.19% as on 30 September 2013 and 1.10% as on 31 December 2012.
Provisions and contingencies fell 47.65% to Rs 202.49 crore in 31 December 2013 over Q3 December 2012. Provisions and contingencies declined 70.54% on sequential basis
ICICI Bank rose 0.36%.
HDFC Bank gained 0.19%. The bank's net profit rose 25.1% to Rs 2325.70 crore on 17.75% growth in total income to Rs 12738.95 crore in Q3 December 2013 over Q3 December 2012. The bank announced Q3 results during market hours on Friday, 17 January 2014.
HDFC Bank's net interest income (NII) rose 16.4% to Rs 4634.80 crore in Q3 December 2013 over Q3 December 2012. The net interest margin or NIM declined to 4.2% in Q3 December 2013, from 4.3% in Q3 December 2012. HDFC Bank's's non-interest income rose 11.4% to Rs 2148.30 crore in Q3 December 2013 over Q3 December 2012.
With asset quality remaining stable during the quarter, provisions and contingencies declined 4% to Rs 388.80 crore in Q3 December 2013 over Q3 December 2012, HDFC Bank said.
Total deposits rose 22.9% YoY to Rs 349215 crore as on 31 December 2013. Adjusted for foreign currency non-resident (FCNR) deposits raised during the quarter, the total deposits growth rate would have been 15.5% and CASA ratio would be 43.7%, HDFC Bank said.
Advances grew 22.9% YoY to Rs 296742 crore as of 31 December 2013. The domestic loan growth was contributed by both retail and wholesale segments, with retail loans growing by 13.6% and wholesale loans by 22.1%, resulting in a domestic loan mix between retail and wholesale of 54:46. Total advances in overseas branches as of 31 December 2013 were at 8% of the total advances as against 3.8% as of 31 December 2012, HDFC Bank said.
The bank's Capital Adequacy Ratio (CAR) as at 31 December 2013 as per Basel III guidelines stood at 14.7%, as against a regulatory requirement of 9%. Of this, Tier-I CAR was 9.9%. These CAR ratios are based on net worth numbers which do not take into account the profits for nine months ended 31 December 2013. Had the same been included, the total CAR and Tier-I CAR would have been 16.2% and 11.5% respectively, HDFC Bank said.
State Bank of India rose 0.58%.
Bank of Baroda declined 1.1% 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.
Union Bank of India shed 0.7% as the stock turned ex-dividend today, 20 January 2014, for the interim dividend of Rs 2.70 per share for the year ending 31 March 2014.
Subex hit an upper circuit limit of 5% at Rs 9.26 after the company announced that it has won five new customer deals, worth $10 million, across key emerging markets. The announcement was made during trading hours today, 20 January 2014.
Subex said it participated and won these highly competitive bids against competition to provide its revenue assurance, fraud management and credit risk management solutions, few of them as managed services. Two of the wins are from APAC, two from North Africa and one from the Middle East.
Vinod Kumar, Chief Operating Officer said, "We have started the new year strongly. We have been on top of the pack winning highly competitive bids. These wins give us great impetus to remain focused on larger opportunities as we continue to make investments in key markets and expand our footprint. With renewed focus on our core products and with increased market momentum for our ROG Asset Assurance solution, we are fairly optimistic of growth in Subex 2.0."
Force Motors lost 7.15% after the company reported net loss of Rs 8.36 crore in Q3 December 2013, as compared to net profit of Rs 8.12 crore in Q3 December 2012. Force Motors' total income from operations (net) rose 9.89% to Rs 479.47 crore in Q3 December 2013 over Q3 December 2012. The Q3 result was announced on Saturday, 18 January 2014.
In the foreign exchange market, the rupee edged lower against the dollar on global dollar strength. The partially convertible rupee was hovering at 61.565, lower than its close of 61.54/55 on Friday, 17 January 2013. The US dollar edged higher amid speculation the Federal Reserve will continue reducing stimulus as the US economy improves.
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 8.5615%, 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 fell 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 0.25% to 0.43%.
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 0.58% 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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