Key benchmark indices flared up after a government data showed that inflation based on the wholesale price index (WPI) eased to five-month low at 6.16% in December 2013. Easing inflation provided legroom for the central bank to cut interest rates in its next policy meet in order to bolster growth. Firmness in Asian and European stocks also boosted sentiment. The S&P BSE Sensex and the 50-unit CNX Nifty, both, closed at their highest level in more than five-weeks. The Sensex rose 256.61 points or 1.22%, up about 198 points from the day's low and off close to 13 points from the day's high. The market breadth, indicating the overall health of the market, was positive.
The Sensex has risen 118.81 points or 0.56% in this month so far (till 15 January 2014). From a 52-week low of 17,448.71 on 28 August 2013, the Sensex has risen 3,840.78 points or 22.01%. From a record high of 21,483.74 hit on 9 December 2013, the Sensex is off 194.25 points or 0.90%.
Coming back to today's trade, bank stocks gained after data showed inflation based on the wholesale price index (WPI) eased to 6.16% in December 2013. Yes Bank rose on good Q3 result. Capital goods stocks gained on renewed buying.
The market edged higher in early trade. Firmness continued on bourses in morning trade. It extended gains and hit fresh intraday high in mid-morning trade. It hit fresh intraday high in early afternoon trade. Key benchmark indices pared gains in afternoon trade. It regained strength in mid-afternoon trade.
Asian and European stocks rose on Wednesday on optimism the global economy is strengthening.
The S&P BSE Sensex rose 256.61 points or 1.22% to 21,289.49, its highest closing level since 9 December 2013. The index rose 269.85 points at the day's high of 21,302.73 in late trade. The index gained 58.58 points at the day's low of 21,091.46 in opening trade.
The CNX Nifty rose 79.05 points or 1.27% to 6,320.90, its highest closing level since 10 December 2013. The index hit a high of 6,325.20 in intraday trade. The index hit a low of 6,265.30 in intraday trade.
The S&P BSE Mid-Cap index rose 0.18% and the S&P BSE Small-Cap index rose 0.30%. Both these indices underperformed the Sensex.
The market breadth, indicating the overall health of the market, was positive. On BSE, 1,375 shares gained and 1,293 shares fell. A total of 170 shares were unchanged.
The total turnover on BSE amounted to Rs 1865 crore, higher than Rs 1685.79 crore on Tuesday, 14 January 2014.
The S&P BSE Consumer Durables index (down 0.75%), the S&P BSE Healthcare index (down 0.02%), the S&P BSE Oil & Gas index (up 0.37%), the S&P BSE FMCG index (up 0.59%), the S&P BSE Teck index (up 0.65%), the S&P BSE IT index (up 0.7%), the S&P BSE Power index (up 0.76%) and the S&P BSE Metal index (up 1.11%), underperformed the Sensex.
The S&P BSE Capital Goods index (up 1.98%), the S&P BSE Bankex index (up 1.59%), the S&P BSE Realty index (up 1.31%) and the S&P BSE Auto index (up 1.22%), outperformed the Sensex.
Among the 30 Sensex shares, 29 shares rose and only one fell.
Capital goods stocks gained on renewed buying. AIA Engineering (up 5.07%), Jindal Saw (up 3.47%), Larsen & Toubro (up 2.71%), BEML (up 2.69%), Punj Lloyd (up 2.68%), Praj Industries (up 2.59%), Lakshmi Machine Works (up 2.2%), Bhel (up 2.15%), SKF India (up 1.4%), Thermax (up 1.39%), Suzlon Energy (up 1.19%), ALSTOM India (up 1.16%) and ABB (up 0.35%), edged higher.
Siemens rose 0.21% to Rs 607.75. The stock turned ex-dividend today, 15 January 2014 for the dividend of Rs 5 per share for the year ending September 2013.
Bank stocks gained after data showed inflation based on the wholesale price index (WPI) eased to 6.16% in December 2013. ICICI Bank (up 2%) and HDFC Bank (up 1.22%), gained.
AXIS Bank rose 0.21%. The bank unveils Q3 results on Thursday, 16 January 2014.
Yes Bank rose 1.95% on good Q3 result. The bank's net profit rose 21.4% to Rs 415.60 crore on 17.4% growth in total net income to Rs 1053.30 crore in Q3 December 2013 over Q3 December 2012. Yes Bank's net-interest income (NII) rose 13.9% to Rs 665.40 crore in Q3 December 2013 over Q3 December 2012, on account of a cautious and steady growth in advances. Non-interest income rose 23.9% to Rs 387.90 crore in Q3 December 2013 over Q3 December 2012, on the back of continued growth across all fee income streams, Yes Bank said. The bank's net interest margin (NIM) declined to 2.9% from 3% in Q3 December 2012.
Yes Bank's operating profit rose 9.1% to Rs 614.70 crore in Q3 December 2013 over Q3 December 2012, driven by stable growth in NII and non-interest income
Yes Bank's current and savings account (CASA) surged 37.8% YoY to Rs 14246.10 crore taking the CASA ratio to 20.9% as on 31 December 2013, up from 18.3% as on 31 December 2012. Yes Bank said it continues to demonstrate strong traction in CASA on the back of an increase in branch network, enhanced savings rate offering and improvements in productivity.
The bank's gross non-performing advances as a proportion of gross advances was at 0.39% as on 31 December 2013 while net non-performing advances as a proportion of net advances was at 0.08% as at 31 December 2013. Bank's specific loan provision coverage ratio was at 78.4% as on 31 December 2013 (excluding counter cyclical provision). Total counter cyclical provision stood at 0.4% of advances, Yes Bank said.
As per Basel III, Tier I capital stood at 9.9% and total CRAR stood at 16.1% (including nine-months FY 2014 profits, adjusted for prorated dividend) with CET I ratio at 9.3% as at 31 December 2013, Yes Bank said.
Commenting on the results, Mr. Rana Kapoor, MD, Yes Bank said, "Yes Bank has delivered a satisfactory quarter of financial performance despite a challenging economic environment. During this year, Yes Bank has further invested in its branch network, which is generating increasing granular and CASA deposits. The bank has maintained NIMs and delivered consistent RoA and RoEs despite the tightening interest rate environment. The bank continues to generate satisfactory returns resulting in improving core Tier I as per Basel III norms. Yes Bank has recently received approval from the UAE Central Bank (previously from RBI) to set up a representative office in Abu Dhabi, UAE which will be the bank's maiden international beginning".
Among PSU bank stocks, Bank of India (up 4.09%), Canara Bank (up 3.27%), Punjab National Bank (up 2.54%), Union Bank of India (up 2.37%) and State Bank of India (up 1.02%), edged higher.
Bank of Baroda gained 3.59%. The bank said during market hours that the board of directors of the Company at its meeting held on 15 January 2014, has declared an interim dividend of Rs 11 per share for the year ending 31 March 2013. The bank has fixed 29 January 2014 as the payment date.
Auto stocks gained as easing of inflation in December 2013 raised hopes that the central bank could cut interest rates to tackle slowdown in growth. Purchases of automobiles, including that of cars, utility vehicles and commercial vehicles are substantially driven by financing.
Tata Motors gained 1.33%. The Tata Motors Group's global wholesales declined 19.95% to 79,220 units in December 2013 over December 2012. Global wholesales for Jaguar Land Rover (JLR) jumped 24.66% to 40,244 units in December 2013 over December 2012. Tata Motors unveiled the data on monthly wholesales after trading hours on Tuesday, 14 January 2014.
Tractor major M&M rose 1.53%.
Maruti Suzuki India rose 1.41%. The company clarified before market hours regarding reports Maruti's parent may hike its stake in the company that the company is in no position to comment on the contents of the article in question as the matter has never been placed before the board of directors of the company.
Bajaj Auto (up 1.17%), Hero MotoCorp (up 1.77%), gained. TVS Motor Company declined 2.45%.
Coal India clocked a highest turnover of Rs 66.67 crore on BSE. Yes Bank (Rs 63.42 crore), Infosys (Rs 50.91 crore), Axis Bank (Rs 40.71 crore) and State Bank of India (Rs 40.38 crore), were the other turnover toppers on BSE in that order.
Empower India reported highest volumes of 1.23 crore shares on BSE. Unitech (91.36 lakh shares), Ybrant Digital (27.83 lakh shares), Southern Ispat & Energy (27.7 lakh shares) and Shalimar Productions (26.16 lakh shares), were the other volume toppers on BSE in that order.
Inflation based on the wholesale price index (WPI) eased to 6.16% in December 2013 as compared to 7.52% (provisional) for the previous month and 7.31% during the corresponding month of the previous year. Build up inflation rate in the financial year so far was 5.35% compared to a build up rate of 4.84% in the corresponding period of the previous year. Index for October 2013 revised upwards to 7.24% as compared to earlier reported 7%.
The Reserve Bank of India's Third Quarter Review of Monetary Policy for 2013-14 is scheduled on 28 January 2014. The Reserve Bank of India 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.
European stocks climbed on Wednesday on speculation the global economy is strengthening. Key benchmark indices in France, Germany and UK rose 0.29% to 0.88%.
Germany's economy expanded less than forecast last year even as it led the euro area out of the region's longest-ever recession. Gross domestic product increased 0.4% from 2012, when it gained 0.7%, the Federal Statistics Office said in Berlin today.
Asian stocks rose on Wednesday on optimism the global economy is strengthening. Key benchmark indices in Hong Kong, Indonesia, Japan, Singapore, South Korea and Taiwan were up 0.37% to 2.5%. China's Shanghai Composite fell 0.17%.
Trading in US index futures indicated that the Dow could gain 31 points at the opening bell on Wednesday, 15 January 2014. US stocks rose on Tuesday, giving the Standard & Poor's 500 Index its biggest gain of the year, as better-than-forecast retail sales and corporate merger activity signaled confidence in the economy.
US retail sales increased 0.2% after a 0.4% advance in November, Commerce Department figures showed in Washington.
Philadelphia Fed President Charles Plosser said that the central bank's stimulus program should end later this year because the economy is on a "firmer footing" than it has been in the past several years. Richard Fisher, Fed president in Dallas, likened quantitative easing to "beer goggles" that makes everything look good. There are signs that "we have made for an intoxicating brew as we have continued pouring liquidity down the economy's throat," he said in a speech.
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.
The World Bank raised its global growth forecasts as the easing of austerity policies in advanced economies supports their recovery, boosting prospects for developing markets' exports. The Washington-based lender sees the world economy expanding 3.2% this year, compared with a June projection of 3 percent and up from 2.4% in 2013. The forecast for the richest nations was raised to 2.2% from 2%. Part of the increase reflects improvement in the 18-country euro area, with the US ahead of developed peers, growing twice as fast as Japan. The report by the institution that's trying to eradicate extreme poverty by 2030 indicates a near-doubling of the growth in world trade this year from 2012, as developed economies lift export-reliant emerging nations. At the same time, the withdrawal of monetary stimulus in the US may raise market interest rates, hurting poorer countries as investors return to assets such as Treasuries, according to the bank.
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