Key benchmark indices extended losses and hit fresh intraday low in mid-afternoon trade. The 50-unit CNX Nifty hit its lowest level in more than a week. The market breadth, indicating the overall health of the market was negative. The barometer index, the S&P BSE Sensex, was down 182.10 points or 0.8%, off 244.87 points from the day's high and up 15.38 points from the day's low. The market sentiment was hit adversely after the India Meteorological Department (IMD) on Thursday, 24 April 2014, said that the country will likely get below-normal levels of monsoon rain this year. Weakness in Asian and European stocks also hit sentiment on the domestic bourses adversely.
Maruti Suzuki India dropped after the company reported weak Q4 result during trading hours today, 25 April 2014. Many FMCG stocks dropped after the India Meteorological Department (IMD) said on Thursday, 24 April 2014, said that the country will likely get below-normal levels of monsoon rain this year. Index heavyweight and cigarette major ITC extended intraday fall. Tata Teleservices (Maharashtra) surged after Japan's NTT Docomo said it may sell its entire stake of about 26.5% in Tata Teleservices. Exide Industries dropped after weak Q4 results.
High volatility was witnessed as the barometer index, the S&P BSE Sensex, and the 50-unit CNX Nifty, both, hit record high at the onset of the trading session. Volatility continued in morning trade as key benchmark alternately swung between positive and negative zone. Key benchmark indices languished in negative zone in mid-morning trade. Key benchmark indices languished in negative zone in early afternoon trade. Key benchmark indices extended losses and hit fresh intraday low in afternoon trade after European stocks edged lower in early trade there. Key benchmark indices extended losses and hit fresh intraday low in mid-afternoon trade. The 50-unit CNX Nifty hit its lowest level in more than a week.
At 14:18 IST, the S&P BSE Sensex was down 182.10 points or 0.8% to 22,694.44. The index lost 197.48 points at the day's low of 22,679.06 in mid-afternoon trade, its lowest level since 21 April 2014. The index gained 62.77 points at the day's high of 22,939.31 in early trade, a lifetime high for the barometer index.
The CNX Nifty was down 55.80 points or 0.82% to 6,785. The index hit a low of 6,776.55 in intraday trade, its lowest level since 17 April 2014. The index hit a high of 6,869.85 in intraday trade, a lifetime high for the index.
The market breadth, indicating the overall health of the market was negative. On BSE, 1,550 shares dropped and 1,124 shares rose. A total of 124 shares were unchanged.
The BSE Mid-Cap index was off 25.23 points or 0.34% at 7,369.83. The BSE Small-Cap index was off 52.11 points or 0.68% at 7,593.99. Both these indices outperformed the Sensex.
Maruti Suzuki India lost 2.47% to Rs 1,933.75. The stock was volatile. The stock lost as much as 3.24% at the day's low of Rs 1,918.50 so far during the day. The stock rose as much as 0.86% at the day's high of Rs 1,999.90 so far during the day.
Maruti Suzuki India's net profit fell 35.46% to Rs 800.10 crore on 9.48% decline in net sales to Rs 11818.10 crore in Q4 March 2014 over Q4 March 2013. The Q4 result was announced during trading hours today, 25 April 2014.
Maruti Suzuki India said that the bottom line was impacted adversely in Q4 March 2014 due to lower volumes, higher sales promotion expenses and a stock compensation to dealers owing to reduction in excise duty (exceptional expense).
In FY 2013, Suzuki Powertrain India was merged with Maruti Suzuki India. Financials for Q4 March 2013 include the full impact of the merger, Maruti Suzuki said.
Maruti Suzuki India's net profit rose 16.3% to Rs 2783.10 crore on 0.1% growth in net sales (net of excise) to Rs 42644.80 crore in the year ended 31 March 2014 (FY 2014) over the year ended 31 March 2013 (FY 2013).
Maruti Suzuki India said that the company's market performance showed positive indications during FY 2014. The company's cost reduction and localization initiatives, together with favourable foreign exchange, helped improve profit margins despite tough economic conditions, Maruti Suzuki said in a statement.
Maruti Suzuki India's board of directors at its meeting held today, 25 April 2014, recommended final dividend of Rs 12 per share for FY 2014.
Many FMCG stocks dropped after the India Meteorological Department (IMD) said on Thursday, 24 April 2014, said that the country will likely get below-normal levels of monsoon rain this year. FMCG firms derive substantial sales from rural India.
Britannia Industries (down 0.67%), Godrej Consumer Products (down 0.72%), Hindustan Unilever (down 2.37%), Marico (down 1.55%) and Tata Global Beverages (down 1.86%) declined. Colgate-Palmolive (India) (up 0.8%), Dabur India (up 0.2%) and Nestle India (up 0.69%) rose.
Index heavyweight and cigarette major ITC was off 2.65% at Rs 344, with the stock extending intraday fall. The stock hit high of Rs 355.20 and low of Rs 343.15 so far during the day.
Tata Teleservices (Maharashtra) surged 14.04% after Japan's NTT Docomo said it may sell its entire stake of about 26.5% in Tata Teleservices.
NTT Docomo Inc. announced today, 25 April 2014, that its board of directors resolved today, 25 April 2014, to exercise option for the sale of the company's entire stake (124.89 crore shares, or about 26.5% of outstanding shares) in Tata Teleservices (TTSL), a Docomo-affiliated company accounted for by the equity method, as soon as the conditions for such exercise are met.
Docomo, TTSL and Tata Sons, Tata Group's holding company, concluded a shareholder agreement when Docomo entered into a business alliance with TTSL in March 2009. Under the agreement, Docomo holds the right to require that its TTSL shares be acquired for 50% of the acquisition price, which amounts to Rs 7250 crore or a fair market price, whichever is higher, in the event that TTSL fails to achieve certain specified performance targets (the above-mentioned option), Docomo said in a statement.
In the event that TTSL fails to achieve these performance targets by the end of the fiscal year ended 31 March 2014, Docomo plans to exercise the above-mentioned right in or before June 2014. Docomo expects to sell its TTSL shares in accordance with the agreement. It is uncertain how the option will be performed, however, and Docomo is not able to predict how events will unfold. The effect on Docomo's corporate earnings for the fiscal year ending 31 March 2015 cannot be forecast at this time due to these uncertainties, the Japanese firm said.
Tata Teleservices, along with Tata Teleservices (Maharashtra), offer telecom services. Tata Teleservices (Maharashtra) operates in telecom circles of Maharashtra (including Mumbai) and Goa. Tata Teleservices offers its telecom services in regions other than Maharashtra and Goa. As on 31 March 2014, NTT Docomo held 11.76% stake, Tata Teleservices held 36.54% stake, Tata Sons held 19.58% stake and Tata Power Company held 7.02% stake in TTML.
South Indian Bank lost 3.09% after net profit declined 19% to Rs 124.60 crore on 8.76% growth in total income to Rs 1399.18 crore in Q4 March 2014 over Q4 March 2013. The Q4 result was announced on Thursday, 24 April 2014.
South Indian Bank's provisions and contingencies declined 57.08% to Rs 28.28 crore in Q4 March 2014 over Q4 March 2013.
The bank's ratio of gross non-performing assets (NPAs) to gross advances stood at 1.19% as on 31 March 2014 as against 1.66% as on 31 December 2013 and 1.36% as on 31 March 2013. The ratio of net NPAs to net advances stood at 0.78% as on 31 March 2014 as against 1.18% as on 31 December 2013 and 0.78% as on 31 March 2013.
The bank's Capital Adequacy Ratio (CAR) as per Basel III norms stood at 12.42% as on 31 March 2014 as against 12.2% as on 31 December 2013.
South Indian Bank's net profit rose 1.04% to Rs 507.50 crore on 12.88% growth in total income to Rs 5383.53 crore in the year ended 31 March 2014 (FY 2014) over the year ended 31 March 2013 (FY 2013).
In the foreign exchange market, the rupee reversed intraday losses against the dollar. The partially convertible rupee was hovering at 60.67, compared with its close of on 61.07/08 on Wednesday, 23 April 2014. Indian financial markets were closed on Thursday, 24 April 2014, on account of Parliamentary elections in Mumbai constituency.
The country will likely get below-normal levels of monsoon rain this year, the India Meteorological Department (IMD) said on Thursday, 24 April 2014. The IMD said that the rainfall during the June-September summer rainy season will likely be 95% of the long-term average for the country. India's weather department defines a normal monsoon as one with rainfall between 96% and 104% of the 50-year average, which is 89 centimeters this year. This year could be a below normal monsoon, the weather department said, as there is a 60% possibility of the emergence of the El Ni weather phenomenona warm weather system that starts in the southern Pacific can affect weather around the world. El Ni last affected India's monsoon in 2009 when the monsoon rainfall was 23% below normal.
Annual rains are important for India as most of its farmlands are dependent or rain for irrigation and more than half of its workforce is employed in agriculture. The monsoon rains usually arrive over the southern state of Kerala by the end of May or the first week of June, and gradually cover the entire country by July. The IMD will revise its update in June.
The Reserve Bank of India (RBI) next undertakes monetary policy review on 3 June 2014. The RBI left its main lending rate viz. the repo rate unchanged at 8% after a monetary policy review on 1 April 2014, as consumer-price inflation eased to a two-year low and as the rupee firmed up against the dollar.
A major near term trigger for the stock market is the outcome of the upcoming Lok Sabha elections. The 36 days long voting process began on 7 April 2014 and will conclude on 12 May 2014. The results will be declared on 16 May 2014 after which India will get a new government. The term of the current Lok Sabha expires on 1 June and the new House has to be constituted by 31 May.
European stocks dropped on Friday, 25 April 2014, as investors weighed corporate earnings and escalating tensions in Ukraine. Key benchmark indices in France, Germany and UK were off 0.22% to 0.78%.
Asian stocks declined on Friday, 25 April 2014, on fears of escalating tensions in Ukraine. Key benchmark indices in China, South Korea, Taiwan, Hong Kong and Singapore were off 0.4% to 1.92%. Key benchmark indices in Indonesia and Japan were up 0.17% to 0.22%.
In Japan, consumer prices rose 2.7% in April from a year earlier, the biggest jump since 1992, driven by a sales-tax increase and stimulus from the Bank of Japan. Inflation excluding fresh food accelerated from 1% in the previous month, while nationally the same price gauge rose 1.3% in March from a year earlier, statistics bureau data showed today, 25 April 2014.
Trading in US index futures indicated that the Dow could drop 20 points at the opening bell on Friday, 25 April 2014. US stock markets finished Thursday's volatile session generally higher as positive earnings and stronger-than-expected data outweighed worries over military escalation near Ukrainian border.
The Federal Open Market Committee (FOMC) next undertakes monetary policy review at a two-day meeting on 29-30 April 2014. The Federal Reserve on 19 March 2014 decided after the conclusion of a monetary policy review to trim its monthly bond purchases by $10 billion to $55 billion.
US Secretary of State John Kerry on Thursday, 24 April 2014, warned that Russia is running out of time to comply with an accord to ease tensions in Ukraine, as Russian forces began new military exercises on the two countries' border. The agreement on disarming rebels and other measures signed April 17 in Geneva by Ukraine, Russia, the European Union and the US is on the brink of collapse. Kerry spoke hours after Russian President Vladimir Putin warned Ukraine against continuing an anti-separatist offensive.
Standard & Poor's Ratings Services today, 25 April 2014, cut its rating on Russia to one notch above junk, citing large capital outflows in the first quarter. S&P cut its rating one level, to BBB-minus from BBB. It kept its outlook on the country negative, where it has been since March 20, when the ratings firm lowered it from stable in light of heightened tension in Ukraine and the prospect of economic sanctions.
"In our view, the tense geopolitical situation between Russia and Ukraine could see additional significant outflows of both foreign and domestic capital from the Russian economy and hence further undermine already weakening growth prospects," S&P wrote in its report.
S&P also said the downgrade reflects the risks that the large outflows seen in the first quarter, during which the size of Russia's financial account deficit was almost twice that of the current account surplus, would continue.
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