Gains for key benchmark indices were erased in early afternoon trade as stocks of state-run banks lost ground and private sector banks pared gains. At 12:18 IST, the barometer index, the S&P BSE Sensex, was up 4.03 points or 0.01% at 27,310.86. The 50-unit CNX Nifty index was currently off 9.95 points or 0.12% at 8,251.70. The market breadth indicating the overall health of the market turned negative from positive in early afternoon trade. On BSE, 1,211 shares fell and 1,197 shares rose. A total of 137 shares were unchanged. The BSE Mid-Cap index was down 0.13%. The BSE Small-Cap index was down 0.38%. Both these indices underperformed the Sensex.
A sudden slide in stocks in mainland China weighed on Indian stocks. Earlier, both the Sensex and the Nifty struck their highest level in almost 9 weeks as these two key benchmark indices extended initial gains in morning trade. Chinese equities retreated from an eight-week high as investors weighed whether an equity rebound had gone too far. The Shanghai Composite was currently off 3.9%.
Dr Reddy's Laboratories was down 3.25% at Rs 4,174.95. The stock hit a high of Rs 4,289 and a low of Rs 4,165.05 so far during the day.
Shares of PSU banks witnessed selling pressure. Union Bank of India (down 1.75%), Allahabad Bank (down 1.5%), Bank of India (down 1.4%), Canara Bank (down 1.28%), Andhra Bank (down 1.08%), Punjab National Bank (down 1.05%), State Bank of India (down 0.96%), UCO Bank (down 0.89%), Bank of Baroda (down 0.88%), IDBI Bank (down 0.88%), Central Bank of India (down 0.86%), Syndicate Bank (down 0.64%), Corporation Bank (down 0.55%), Dena Bank (down 0.47%), United Bank of India (down 0.44%), Punjab and Sind Bank (down 0.26%), edged lower. Vijaya Bank (up 0.53%) and Indian Bank (up 0.62%), edged higher.
Private sector banks were mixed. HDFC Bank (up 0.53%), IndusInd Bank (up 0.43%), Kotak Mahindra Bank (up 0.22%) and Axis Bank (up 0.08%), edged higher. ICICI Bank (down 0.72%), Yes Bank (down 1.03%) and City Union Bank (down 1.64%), edged lower.
Federal Bank lost 11.24% to Rs 58.05 after net profit fell 32.9% to Rs 161.28 crore on 0.9% rise in total income to Rs 2084.53 crore in Q2 September 2015 over Q2 September 2014. The bank announced results after market hours yesterday, 20 October 2015.
Federal Bank's ratio of net non-performing assets (NPAs) to net advances rose to 1.33% as on 30 September 2015, from 0.98% as on 30 June 2015 and 0.66% as on 30 September 2014. The bank's ratio of gross NPAs to gross advances rose to 2.9% as on 30 September 2015, from 2.59% as on 30 June 2015 and 2.1% as on 30 September 2014. The bank's Capital Adequacy Ratio (CAR) as per Basel III norms stood at 14.71% as on 30 September 2015, compared with 15.07% as on 30 June 2015 and 14.45% as on 30 September 2014.
FMCG stocks declined. Tata Global Beverages (down 0.86%), Nestle India (down 0.66%), GlaxoSmithKline Consumer Healthcare (down 0.51%), Jyothy Laboratories (down 0.35%), Procter & Gamble Hygiene & Health Care (down 0.12%), Marico (down 0.06%), Britannia Industries (down 0.05%), Dabur India (down 0.02%) and Godrej Consumer Products (down 0.02%), edged lower. Colgate Palmolive (India) (up 0.17%), Bajaj Corp (up 0.23%) and Hindustan Unilever (up 0.48%) edged higher.
Auto stocks were in demand. Escorts (up 2.08%), TVS Motor Company (up 1.32%), Ashok Leyland (up 0.83%), Eicher Motors (up 0.56%), Bajaj Auto (up 0.35%), Tata Motors (up 0.07%) and Maruti Suzuki (India) (up 0.05%), edged higher. Mahindra & Mahindra was down 0.59%.
Hero MotoCorp was up 0.94% to Rs 2,629.60. The company's net profit rose 1.13% to Rs 772.06 crore on 2.37% decline in total income to Rs 6939.68 crore in Q2 September 2015 over Q2 September 2014. The result was announced after market hours yesterday, 20 October 2015. The company's EBITDA (earnings before interest, taxation, depreciation and amortization) margin improved to 15.85% in Q2 September 2015 from 13.52% in Q2 September 2014.
Pawan Munjal, Chairman, Managing Director and Chief Executive Officer of Hero MotoCorp said that Q2 September 2015 saw the beginning of a sales revival and the management is cautiously optimistic that this trend will continue in the second half of FY 2016. The festive season could lead to positive sentiment in the market, which may help maintain the momentum in the coming months, Munjal said.
Shriram Transport Finance Company dropped 3.97% to Rs 935 after the Reserve Bank of India banned further purchases of the company's shares by foreign institutional investors as the total shareholding of foreign institutional investors in the company crossed the maximum permissible level.
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