Key benchmark indices extended losses and hit fresh intraday low in early afternoon trade. The market breadth, indicating the overall health of the market turned negative from positive. The barometer index, the S&P BSE Sensex, was down 125.99 points or 0.61%, off about 90 points from the day's high and about 25 points from the day's low. The market sentiment was hit adversely as the government revised downwards the GDP growth rate for the year ended 31 March 2013 (FY 2013) to 4.5% from 5% reported earlier. Weakness in Asian stocks also dampened sentiment on the domestic bourses.
Shares of PSU OMCs fell after cutting non-subsidised cooking gas prices. Realty stocks edged lower. Pharma stocks edged higher.
The market edged lower in early trade on weak Asian stocks. A recovery from lower level after initial losses proved short lived as key benchmark indices weakened once again. The Sensex languished in negative terrain in mid-morning trade. The Sensex extended losses and hit fresh intraday low in early afternoon trade.
The market sentiment was affected adversely by data showing that foreign funds were net sellers of Indian stocks on Friday, 31 January 2014. Foreign institutional investors (FIIs) sold shares worth a net Rs 652.97 crore on Friday, 31 January 2014, as per provisional data from the stock exchanges.
Asian stocks fell on Monday, 3 February 2014, as slowdown in Chinese manufacturing growth added to concern the global economic recovery is faltering.
At 12:20 IST, the S&P BSE Sensex was down 125.99 points or 0.61% to 20,387.86. The index fell 151.64 points at the day's low of 20,362.21 in early afternoon trade, its lowest level since 30 January 2014. The index declined 33.50 points at the day's high of 20,480.35 in early trade.
The CNX Nifty was down 37.85 points or 0.62% to 6,051.65. The index hit a low of 6,045.90 in intraday trade, its lowest level since 30 January 2014. The index hit a high of 6,074.85 in intraday trade.
The BSE Mid-Cap index was off 14.49 points or 0.23% at 6,293.56. The BSE Small-Cap index was up 3.78 points or 0.06% at 6,267.13. Both these indices outperformed the Sensex.
The market breadth, indicating the overall health of the market turned negative from positive in early afternoon trade. On BSE, 1,097 dropped and 1,058 shares rose. A total of 113 shares were unchanged.
Among the 30-share Sensex pack, 23 stocks declined and rest of them rose. Hindalco Industries (down 3.15%), Tata Steel (down 2.75%) and Bharti Airtel (down 2.54%) edged lower from the Sensex pack.
L&T declined 0.16%. L&T Power has successfully completed commissioning and testing of the first unit of its 2x700 megawatts (MW) supercritical thermal power plant of Nabha Power on 31 January 2014, L&T said in a statement today, 3 February 2014. The plant was constructed on a turnkey basis by L&T Power with more than 90% of the equipment sourced from the group companies of L&T.
Pharma stocks edged higher. Cipla (up 0.09%), Dr Reddy's Laboratories (up 1.38%) and Sun Pharmaceutical Industries (up 1.16%) gained.
Lupin rose 0.93% ahead of its Q3 results today, 3 February 2014.
Ranbaxy Laboratories fell 0.43%.
Shares of PSU OMCs fell after cutting non-subsidised cooking gas prices. BPCL (down 2.37%), HPCL (down 2.17%) and Indian Oil Corporation (down 0.1%) declined. Effective Saturday, 1 February 2014, a 14.2 kg gas cylinder will cost Rs 1,134 per cylinder, down by Rs 107 per cylinder from earlier Rs 1,241 per cylinder in Delhi. There is no change in the price of subsidised cooking gas, which costs Rs 414 per cylinder in Delhi. The government had on 30 January 2014 raised the cap on supply of subsidised cooking gas cylinders from nine to 12 per household in a year.
PSU OMCs simultaneously hiked diesel prices by 50 paise per litre. The hike is excluding local sales tax, or VAT. The actual increase will be higher and will vary from city to city. In January 2013, the government allowed PSU OMCs to raise diesel prices in small measures at regular intervals while completely deregulating diesel prices sold to institutional or bulk buyers. The government has already freed pricing of petrol.
Coal India lost 0.4%. Coal production of Coal India and its subsidiary companies was 96% of targeted production at 47.38 million tonnes in January 2014. The coal offtake of Coal India and its subsidiary companies was 94% of targeted offtake at 44.44 million tonnes in January 2014. Coal India announced the production and sales data during trading hours today, 3 February 2014.
Realty stocks edged lower. DLF (down 0.22%), D B Realty (down 2.17%), HDIL (down 3.2%) and Unitech (down 1.9%) dropped.
Sobha Developers rose 3.01% after net profit rose 10.46% to Rs 58.10 crore on 26.48% increase in total income to Rs 545.50 crore in Q3 December 2013 over Q3 December 2012. The result was announced on Saturday, 1 February 2014.
Sobha Developers registered new sales value of Rs 502 crore in Q3 December 2013. The company reported new sales volume of 0.74 million square feet in Q3 December 2013. The company achieved average price realisation of Rs 6,786 per square feet during the quarter.
The firm said it launched two new projects: 0.66 million square feet of developable area and 0.46 million square feet of saleable area.
Sobha Developers completed and handed over 2 real estate projects of 1.10 million square feet of developable area and 8 contractual projects of 2.76 million square feet of developable area.
Commenting on the company's performance, J C Sharma, Vice Chairman and Managing Director, Sobha Developers said, "Despite the prevailing economic headwinds, the company's unbilled revenue as of 31 December 2013 is Rs 2264 crore on the sales made so far, out of which we expect a minimum of Rs 355 crore to be recognised in the last quarter (Q4) of the fiscal year ending March 2014 (FY 13-14). In addition to this, income from new sales will also contribute to the revenue."
Commenting on the company's growth plans, J C Sharma said, "We are bullish about the industry and the markets in which we operate. We have scheduled 11 million square feet of new launches in the coming four to five quarters. We also plan to enter the Kochi market in Kerala during this financial year."
Delineating the company's core markets, Mr Sharma said, "We are optimistic that our key southern markets will drive the sales. With a strong pipeline of proposed new launches, we expect the sales to gain momentum in the coming few quarters. Our core market, Bangalore, has been the most resilient Indian real estate market. Thanks to the IT boom, this market has gained popularity as the preferred market for real estate investment. In the current financial year (until September), Bangalore alone has accounted for 18% of the nation-wide sales, making the city the fastest growing as well as the largest real estate market in India. We expect the trend to continue in the coming year and Bangalore to remain the most lucrative real estate market."
ING Vysya Bank lost 1.46% after net profit rose 3.08% to Rs 167.34 crore on 4.37% growth in total income to Rs 1487.85 crore in Q3 December 2013 over Q3 December 2012. The Q3 result was announced after market hours on Friday, 31 January 2014.
The bank's provisions and contingencies declined 6.46% to Rs 23.01 crore in Q3 December 2013 over Q3 December 2012.
ING Vysya Bank's ratio of gross non-performing assets (NPAs) to gross advances declined to 1.68% as on 31 December 2013, from 1.72% as on 30 September 2013 and 1.77% as on 31 December 2012. The ratio of net NPAs to net advances stood at 0.21% as on 31 December 2013 as against 0.19% as on 30 September 2012 and 0.05% as on 31 December 2012.
The bank's Capital Adequacy Ratio (CAR) stood at 16.93% as on 31 December 2013 as against 16.75% as on 30 September 2013 and 12.47% as on 31 December 2012.
The Reserve Bank of India (RBI) has vide its circular dated 20 December 2013 advised all banks to create, as a matter of prudence, a Deferred Tax Liability (DTL) on Special Reserve created under Section 36(1)(viii) of Income Tax Act, 1961. Accordingly, the tax expense for the quarter and nine months ended 31 December 2013 includes proportionate nine month deferred tax charge of Rs 4.08 crore on Special Reserve at that date. Further, on the Special Reserve balance of Rs 74.70 crore at 31 March 2013, the bank created a DTL of Rs 25.39 crore by debiting opening Revenue Reserves, ING Vysya Bank said.
In the foreign exchange market, the rupee reversed initial gains against the dollar as equities dropped. The partially convertible rupee was hovering at 62.7025, compared with its close of 62.68/69 on Friday, 31 January 2014.
Bond prices rose on optimism demand for existing debt will increase as the government's annual borrowing program draws to a close. The finance ministry is scheduled to raise as much as Rs 10000 crore this week at the final auction of the year through March. The yield on 10-year benchmark federal paper, 8.83% GS 2023, was hovering at 8.745%, lower than its close of 8.7696% on Friday, 31 January 2014. Bond yield and bond prices move in opposite direction.
Indian manufacturers signalled a further improvement in operating conditions during January, according to a survey. The headline HSBC India Purchasing Managers' Index (PMI) posted a reading of 51.4 for January 2014, up from 50.7 for December 2013. The latest reading was the highest since March 2013, but pointed to a marginal pace of expansion that was well below the series average (55.1). January saw new orders expand at the quickest rate in ten months, with survey participants reporting stronger demand from both domestic and overseas clients.
Concurrently, new business from abroad grew at a solid pace that was the fastest since June last year. Subsequently, Indian manufacturers raised their production levels for the third successive month. The rate of output growth was solid and the strongest since February 2013.
Sector data indicated that consumer goods continued to outperform the remaining two monitored categories, while operating conditions deteriorated at capital goods producers. Growth rates for output and new orders in the consumer goods sub-category surpassed those seen at intermediate goods companies.
Employment rose for the fourth month running in January, with all three broad areas of the manufacturing economy posting job creation. Despite being slight, the overall rate of expansion was broadly in line with the long-run series average. Companies operating in the Indian manufacturing sector signalled pressure on operating capacity in January, as backlogs of work increased solidly. Moreover, the latest increase in unfinished work was the eighteenth in as many months. All three market groups posted higher work-in-hand, with the sharpest increase noted at consumer goods firms.
Meanwhile, supplier performance improved in the latest month for the first time since September 2013. Anecdotal evidence suggested that shorter delivery times reflected a greater availability of raw materials at vendors.
Amid reports of new business gains, purchasing activity in the Indian manufacturing economy rose at the start of 2014, although the pace of expansion was only slight and well below the series average. Growth of buying activity was largely centred on the consumer goods sub-sector. Pre-production stocks increased at consumer goods producers, but fell at both capital and intermediate goods firms. This resulted in an overall decline of stocks of purchases across the Indian manufacturing economy as a whole.
Average input costs rose in January, with manufacturers reporting higher prices for a range of raw materials, including metals, chemicals and energy. The rate of cost inflation remained robust. Consequently, companies raised their tariffs again. Although the strongest in three months, the latest rise in output charges was moderate and much weaker than seen for input costs.
Commenting on the India Manufacturing PMI survey, Leif Eskesen, Chief Economist for India & ASEAN at HSBC said: "Manufacturing activity moved into higher gear led my faster growth in new orders. However, inflation pressures also firmed, suggesting that the RBI has to keep up its inflation guards".
The First Revised Estimates of National Income, Consumption Expenditure, Saving and Capital Formation, for the year 2012-13 released on Friday, 31 January 2014, showed India GDP revised down to 4.5% in 2012-13 from 5% earlier and as against a growth of 6.7% in the year 2011-12. The downward revision was mainly due to lower than provisionally estimated output in primary and secondary sectors. The data also showed lower-than-estimated growth numbers for exports, capital investment and consumption sectors, thereby pointing out to deeper underlying weaknesses.
The Eight Core Industries having a combined weight of 37.9% in the Index of Industrial Production (IIP) increased by 2.1% in December 2013 compared with a growth of 7.5% growth in December 2012 and 1.7% growth in November 2013, data released by the government after trading hours on Friday, 31 January 2014, showed.
The fiscal deficit reached Rs 5.16 lakh crore during April-December 2013, or 95.2% of the full-year target, compared with 78.8% a year earlier, data released by the government after trading hours on Friday, 31 January 2014, showed. Factory gate duties were down 6.9% at Rs 1.02 lakh crore during April-December from the year-earlier period, while customs tax receipts rose 4.3% to Rs 1.24 lakh crore -- much lower than the 13.6% annual growth target.
The Reserve Bank of India next undertakes monetary policy review on 1 April 2014. Sighting elevated consumer price inflation, 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 fell on Monday, 3 February 2014, after a slowdown in Chinese manufacturing growth added to concern the global economic recovery is faltering. Key benchmark indices in Indonesia, Japan, Singapore and South Korea shed by 0.38% to 1.98%.
China's markets remain closed until 7 February 2014 for the Lunar New Year holiday, while markets in Hong Kong and Taiwan markets are shut until 4 February 2014.
A Chinese manufacturing gauge fell to a six-month low in January as output and orders slowed, adding to signs that government efforts to rein in excessive credit will cool growth in the world's second-largest economy. The Purchasing Managers' Index was at 50.5 in January 2014, compared with December's 51 reading, the National Bureau of Statistics and China Federation of Logistics and Purchasing said Feb. 1 in Beijing. The survey showed jobs and export orders shrinking, amplifying risks of a deeper slowdown as Communist Party leaders clamp down on the $6 trillion shadow-banking industry and interbank borrowing costs rise. A separate private manufacturing gauge released by HSBC Holdings Plc and Markit Economics on Jan. 30 pointed to the first contraction in six months.
Growth in China's services sector cooled in January to its slowest pace in at least a year, data showed on Monday, the latest sign that the Chinese economy lost momentum last month in the run-up to the Lunar New Year holiday. The official non-manufacturing Purchasing Managers' Index slipped to 53.4 from December's 54.6, the lowest reading in at least a year but still above the 50-point level that indicates growth.
Trading in US index futures indicated that the Dow could drop 3 points at the opening bell on Monday, 3 February 2014. US stocks fell sharply on Friday amid continued unease over emerging markets and a number of high-profile earnings disappointments.
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. The Fed also signaled that it is likely to keep reducing bond purchases in the coming months, citing a pickup in US economic activity and improvement in the US labor market.
Powered by Capital Market - Live News
