Volatility continued as key benchmark indices further pared gains and hit fresh intraday low in mid-morning trade. The barometer index, the S&P BSE Sensex, was up 46.58 points or 0.18%, off about 120 points from the day's high and up about 10 points from the day's low. The market breadth indicating the overall health of the market turned negative from positive. The BSE Mid-Cap and the Small-Cap indices, both, reversed gains.
Most bank stocks gained. Axis Bank rose in volatile trade after reporting Q1 results. Bank of Baroda gained after the Reserve Bank of India lifted curb on purchases of the shares of the bank by foreign investors.
At 11:20 IST, the S&P BSE Sensex was up 46.58 points or 0.18% to 26,072.38. The index jumped 162.84 points at the day's high of 26,188.64 in morning trade, its highest level since 8 July 2014. The index rose 34.09 points at the day's low of 26,059.89 in mid-morning trade.
The CNX Nifty was up 6.35 points or 0.08% to 7,774.20. The index hit a high of 7,809.20 in intraday trade, a lifetime high for the index. The index hit a low of 7,768.40 in intraday trade.
The market breadth indicating the overall health of the market turned negative from positive in mid-morning trade. On BSE, 1,223 shares fell and 1,113 shares rose. A total of 86 shares were unchanged.
The BSE Mid-Cap index was down 11.93 points or 0.13% at 9,299.16. The BSE Small-Cap index was down 51.36 points or 0.5% at 10,217.40. Both these indcies underperformed the Sensex.
Bank stocks gained. Among private sector banks, ICICI Bank (up 0.37%), HDFC Bank (up 0.36%), Yes Bank (up 0.64%), and Federal Bank (up 0.93%), gained. IndusInd Bank fell 0.42%. Kotak Mahindra Bank declined 0.68%.
Axis Bank rose 0.02% to Rs 2,017.95 in volatile trade after reporting good Q1 results. The stock hit high of Rs 2,042.95 and low of Rs 1,999.25 so far during the day. The bank after market hours on Tuesday, 22 July 2014, reported 18.29% rise in net profit to Rs 1666.76 crore on 10.17% rise in total income to Rs 9980.47 crore in Q1 June 2014 over Q1 June 2013.
Axis Bank's gross non-performing assets (NPAs) were at 1.34% of gross advances as on 30 June 2014, higher than 1.22% as on 31 March 2014 and 1.1% as on 30 June 2013. Net NPAs were 0.44% of net advances as on 30 June 2014, higher than 0.4% as on 31 March 2014 and 0.35% as on 30 June 2013.
Among PSU bank stocks, State Bank of India (SBI) (up 1.24%), Canara Bank (up 1.27%), Union Bank of India (up 0.74%), Bank of India (up 1.33%), and Punjab National Bank (up 1.35%) gained.
Bank of Baroda rose 3.03% after the Reserve Bank of India lifted curb on purchases of the shares of the bank by foreign investors. The Reserve Bank of India (RBI) on Tuesday, 22 July 2014, notified that the aggregate share holdings by foreign institutional investors (FIIs)/ registered foreign portfolio investors (FPIs)/non resident indian (NRI)/persons of Indian origin (PIO) under portfolio investment scheme in Bank of Baroda have gone below the prescribed threshold caution limit.
As on 30 June 2014, FIIs held 16.95% stake in Bank of Baroda.
ING Vysya Bank lost 3.89% after net profit declined 18.11% to Rs 143.40 crore on 4.77% growth in total income to Rs 1627.28 crore in Q1 June 2014 over Q1 June 2013. The Q1 result was announced after market hours on Tuesday, 22 July 2014.
ING Vysya Bank's board of directors at its meeting held on Tuesday, 22 July 2014, proposed to seek approval of the shareholders of the bank through postal ballot to borrow such amount that the total amount of borrowings of the bank outstanding at any time shall not exceed Rs 20000 crore notwithstanding that the money to be borrowed together with the moneys already borrowed by the bank (apart from temporary loans obtained from the bank's bankers in the ordinary course of business), will exceed the aggregate of the paid-up capital of the bank and its free reserves as against the existing authorization to borrow upto four times of the aggregate of the paid-up capital and free reserves.
The bank also proposes to augment its capital either through a Tier I and/or Tier II debt issuance (which qualifies under Basel III requirement) or a combination of both in India rupees or equivalent foreign currency not exceeding Rs 700 crore through private placement of securities.
The Reserve Bank of India on Tuesday, 22 July 2014, said that it is expected that about 4 to 6 banks may be designated as domestic systemically important banks (D-SIBs) and that the RBI will disclose the names of the banks classified as D-SIBs in the month of August every year starting from 2015. For identifying D-SIBs, the RBI will use four indicators viz. size, interconnectedness, substitutability and complexity of the bank. Based on their systemic importance scores in ascending order, banks will be plotted into four different buckets and will be required to have additional Common Equity Tier 1 capital requirement ranging from 0.2% to 0.8% of risk weighted assets, depending upon the bucket they are plotted into. D-SIBs will also be subjected to differentiated supervisory requirements and higher intensity of supervision based on the risks they pose to the financial system, the RBI said a press release. Size is a more important measure of systemic importance than any other indicators and therefore, size indicator will be assigned more weight than the other indicators, the RBI said.
During the recent global financial crisis, it was observed that problems faced by certain large and highly interconnected financial institutions hampered the orderly functioning of the financial system, which in turn, negatively impacted the real economy. Government intervention was considered necessary in many jurisdictions to ensure financial stability. Cost of public sector intervention and consequential increase in moral hazard require that future regulatory policies should aim at reducing the probability of failure of systemically important banks (SIBs) and the impact of the failure of these banks, the RBI said. In October 2010, the Financial Stability Board (FSB) recommended that all member countries needed to have in place a framework to reduce risks attributable to systemically important financial institutions (SIFIs) in their jurisdictions.
Shilpi Cable Technologies was locked at 5% upper circuit at Rs 55.15 on BSE after the company said its board of directors will meet on 2 August 2014 to consider bonus issue of equity shares to the existing shareholders. The announcement was made after market hours on Tuesday, 22 July 2014.
JMT Auto was locked at 5% upper circuit at Rs 447.35 on BSE after the company said its board has fixed 31 July 2014 as the record date for 5:2 bonus issue. The announcement was made after market hours on Tuesday, 22 July 2014.
Key benchmark indices surged in early trade as firmness in Asian stocks and provisional data showing that foreign funds were net buyers of Indian stocks during the previous trading session on Tuesday, 22 July 2014, boosted sentiment. A bout of volatility was witnessed as key benchmark indices pared gains soon after hitting fresh intraday high in morning trade. The 50-unit CNX Nifty pared gains after hitting record high. The Sensex trimmed gains after hitting its highest level in more than two weeks. Key benchmark indices further pared gains and hit fresh intraday low in mid-morning trade.
Foreign portfolio investors (FPIs) bought shares worth a net Rs 412.03 crore on Tuesday, 22 July 2014, as per provisional data from the stock exchanges.
In the foreign exchange market, the rupee edged higher against the dollar. The partially convertible rupee was hovering at 60.1625, compared with its close of 60.25 on Tuesday, 22 July 2014.
Asian stocks advanced for a third day today, 23 July 2014, boosted by better-than-expected inflation and housing reports in the US. Key benchmark indices in Hong Kong, South Korea, China and Indonesia were up 0.34% to 0.64%. South Korea's Kospi fell 0.08%. Japan's Nikkei Avergae declined 0.02%. The stock market in Taiwan was closed due to a typhoon.
Trading in US index futures indicated that the Dow could gain 2 points at the opening bell on Wednesday, 23 July 2014. US stocks closed modestly higher on Tuesday, 22 July 2014, boosted by better-than-expected inflation and housing reports as well as a flood of second-quarter earnings reports.
The US consumer price index increased 0.3% in June 2014 after a 0.4% gain in May 2014, figures from the Labor Department showed yesterday, 22 July 2014, in Washington. The data damped concerns that the US Federal Reserve will bring forward increase in interest rates.
Purchases of existing houses advanced 2.6% to a 5.04 million annual rate in June 2014, the National Association of Realtors reported.
As per reports, the European Union (EU) agreed Tuesday, 22 July 2014, to expand a list of Russian entities and individuals subject to asset freezes and travel bans. The EU's latest sanctions against Russia come amid accusations that pro-Russian rebels shot down Malaysia Airlines flight MH17 in Ukraine on 17 July. All 298 people on the flight died after the downing of the jet. EU has reportedly threatened to expand the sanctions against Russia to include vast sectors of the Russian economy if Russia does not act swiftly to rein in rebels.
In the Middle East, violence continues in Gaza strip. As per reports, more than 600 Palestinians have been killed and over 4,000 wounded as fighting continues between Israel and Palestinian militants in Gaza Strip.
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