Key benchmark indices edged lower in choppy trade after India blocked the World Trade Organisation's (WTO) trade facilitation agreement (TFA), a move that threatens to stymie a global trade deal. The barometer index, the S&P BSE Sensex, shed 145.10 points or 0.55%, up about 120 points from the day's low and off close to 165 points from the day's high. With small gains, the Sensex, and the 50-unit CNX Nifty, both, had scaled record high at the onset of the trading session. The market breadth indicating the overall health of the market was weak, with almost two losers for every gainer on BSE. The BSE Small-Cap index lost 1.88%. The BSE Mid-Cap index shed 1.24%.
Wipro dropped after the company reported a muted 1.2% growth in IT services revenue on sequential basis in Q1 June 2014. Shares of other IT stocks also declined after Wipro's Q1 results. Realty stocks declined. Capital goods stocks also declined. Metal and mining stocks declined. Steel Authority of India (Sail) dropped after Finance Minister Arun Jaitley reportedly said today, 25 July 2014, that the government plans to stocks dropped. FMCG stocks rose on revival of monsoon rains. Shares of Tata Motors tumbled on reports that its British luxury car unit Jaguar Land Rover (JLR) has announced a reduction in prices for three of its models selling in China.
India has blocked the World Trade Organisation's (WTO) trade facilitation agreement (TFA) which was largely agreed upon in Bali last year. India has its concern about food subsidy and stockpile of food grains and wants it to be addressed first before signing the TFA. The deadline to sign the agreement is 31 July 2014 and the deal has to come into force fully by 2015. The proponents of the agreement feel that deal could add $1 trillion to global GDP.
The S&P BSE Sensex lost 145.10 points or 0.55% to settle at 26,126.75, its lowest closing level since 22 July 2014. The index dropped 264.54 points at the day's low of 26,007.31 in mid-afternoon trade. The index rose 28.32 points at the day's high of 26,300.17 in early trade, a record high for the index.
The CNX Nifty shed 40.15 points or 0.51% to settle at 7,790.45, its lowest closing level since 22 July 2014. The index hit a low of 7,748.60 and a high of 7,840.95 in intraday trade, a record high for the index.
The total turnover on BSE amounted to Rs 3563 crore, higher than Rs 3109.87 crore on Thursday, 24 July 2014.
The market breadth indicating the overall health of the market was weak. On BSE, 1,936 shares fell and 978 shares rose. A total of 102 shares were unchanged.
The BSE Mid-Cap index shed 115.25 points or 1.24% to settle at 9,178.21. The BSE Small-Cap index lost 192.16 points or 1.88% to settle at 10,037.17. Both these indices underperformed the Sensex.
Shares of Tata Motors tumbled on reports that its British luxury car unit Jaguar Land Rover (JLR) has announced a reduction in prices for three of its models selling in China. The stock slumped 5.85%. The cut, uniform at 200,000 yuan for each of the three models V8 SC Autobiography Black, V8 Jaguar Sports and its F-TYPE Convertibles will be effective starting 2 August 2014. The price cut came after China's top economic decision making body, the NDRC, launched investigations into corporate price rigging and market monopoly practices earlier this year, according to reports.
FMCG stocks rose on revival of monsoon rains. Hindustan Unielever (HUL( (up 2.88%, Marico (up 2.65%), Dabur India (up 2.23%) and Godrej Consumer Products (up 2.24%) gained. FMCG firms derive substantial revenue from rural India.
Index heavyweight and cigarette maker ITC rose 0.38% to Rs 357.60. The stock hit high of Rs 358 and low of Rs 352.45.
Punjab National Bank (PNB) dropped 0.4% to Rs 925 after announcing Q1 result. The stock hit high of Rs 935 and low of Rs 907.80. The bank's net profit rose 10.17% to Rs 1405.12 crore in 9.18% rise in total income to Rs 12825.13 crore in Q1 June 2014 over Q1 June 2013. The result was announced during market hours.
Punjab National Bank's (PNB) ratio of net non-performing assets (NPAs) to net advances stood at 3.02% as on 30 June 2014, compared with 2.85% as on 31 March 2014 and 2.98% as on 30 June 2013.
The bank's ratio of gross NPAs to gross advances stood at 5.48% as on 30 June 2014, compared with 5.25% as on 31 March 2014 and 4.84% as on 30 June 2013.
Provisions and contingencies fell 13.02% to Rs 927.61 crore in Q1 June 2014 over Q1 June 2013. The provisioning coverage ratio as on 30 June 2014 stood at 60%.
Metal and mining stocks declined. Sesa Sterlite (down 2.23%), JSW Steel (down 3.74%), Hindalco Industries (down 3.01%), NMDC (down 1.12%), Hindustan Zinc (down 3.8%), and Hindustan Copper (down 0.66%) declined. National Aluminum Company rose 1.48%.
Jindal Steel & Power (JSPL) dropped 3.99%. The company after market said that the Board of Directors of its subsidiary Jindal Power (JPL) at a meeting held on 28 April 2014 gave in-principle approval for sale of JPL's entire equity share in Kamala Hydro Electric Power Company. As and when some proposal is finalized, the same will be appropriately disclosed to stock exchanges, JSPL said. The company clarified this with respect to media reports, "Jindal Power seeks to sell entire stake in Arunachal hydro project".
Steel Authority of India (Sail) dropped after Finance Minister Arun Jaitley reportedly said today, 25 July 2014, that the government plans to sell 5% stake in the steel major in the current fiscal year. The stock was off 2.94% at Rs 87.55. The government currently owns 80% stake in Sail.
Tata Steel declined 1.73% to Rs 557.25. The stock was volatile. The stock hit high of Rs 573.90 and low of Rs 552. The company announced before trading hours a successful dual tranche Reg S issuance of $1.5 billion of unsecured bonds in the international markets. The issue comprises $500 million 4.85% Unsecured Bonds due on 31 January 2020 and $1 billion 5.95% Unsecured Bonds due on 31 July 2024 by Abja Investment Co Pte, a wholly owned subsidiary of Tata Steel incorporated in Singapore. The issue is guaranteed by Tata Steel. The bonds are rated BB+ by Fitch and BB by S&P and will be listed on the Frankfurt Stock Exchange.
Tata Steel said that a tremendous response for the offering enabled the issue to be priced about 50 basis points (bps) tighter than the initial price thoughts on the both the tranches. Tata Steel said that the proceeds of the bond offering will be deployed as per the strategic plan of the company, including off shore investment. The successful bond issue enables the company to diversify the investor base, lengthen maturity profile and optimise the financing and capital structure, the steel major said.
Realty stocks declined. DLF (down 4.57%), Housing Development and Infrastructure (down 5.17%), Anant Raj (down 4.98%), and Unitech (down 3.64%), declined.
Asian Paints rose 2.85% to Rs 636 after hitting record high of Rs 638.95 in intraday trade.
HDFC gained 2.5% to Rs 1,061.30 after hitting record high of Rs 1,075.60 in intraday trade.
Capital goods stocks declined. Bharat Heavy Electricals (Bhel) (down 4.04%), ABB (India) (down 0.78%), L&T (down 0.41%), Siemens (down 1.97%) and Crompton Greaves (down 4.91%) declined.
Wipro dropped after the company reported a muted 1.2% growth in IT services revenue on sequential basis in Q1 June 2014. The stock was off 4.7% at Rs 549.70. The stock hit high of Rs 554.95 and low of Rs 525. The company's consolidated net profit as per International Financial Reporting Standards (IFRS) jumped 30% to Rs 2100 crore on 14% growth in total revenue to Rs 11140 crore in Q1 June 2014 over Q1 June 2013. The result was announced after trading hours yesterday, 24 July 2014.
IT services revenue was $1.74 billion in Q1 June 2014, a sequential increase of 1.2% and year on year (YoY) increase of 9.6%. IT services revenues in rupee terms was Rs 10510 crore in Q1 June 2014, an increase of 18% YoY. IT services earnings before interest and tax (EBIT) was Rs 2400 crore in Q1 June 2014, an increase of 35% YoY. Non-GAAP constant currency IT services revenue in dollar terms was $1.725 billion in Q1 June 2014, which was within the company's guidance range of $1.715 billion to $1.755 billion. Wipro expects revenue from IT services business to be in the range of $1.77 billion to $1.81 billion in Q2 September 2014.
T K Kurien, Executive Director & Chief Executive Officer, Wipro, said that the company continues to win large deals, particularly in the application and infrastructure space. These wins demonstrate confidence of clients in Wipro's transformational capabilities, he said. Suresh Senapaty, Executive Director & Chief Financial Officer, Wipro said that Wipro's operating margins for Q1 June 2014 was on expected lines, impacted largely due to wage hikes.
Shares of other IT stocks also declined after Wipro's Q1 results. Infosys (down 0.81%), and HCL Technologies (down 0.22%) declined.
Tech Mahindra declined 0.17% as the stock turned ex-dividend today, 25 July 2014, for dividend of Rs 20 per share for the year ended 31 March 2014.
TCS rose 0.48% to Rs 2,607. The stock hit high of Rs 2,613.35 and low of Rs 2,568.80.
Shares of Cairn India extended Thursday's steep fall triggered by investor concerns about the use of the company's cash reserves. The stock was off 4.17%. The stock had slumped 6.67% on Thursday, 24 July 2014. As per reports, Cairn India's management disclosed at a post-result conference call on Wednesday, 23 July 2014, that the company has lent $1.25 billion to parent Vedanta for a two-year period as a part of the company's treasury operations. Cairn India had already disbursed $800 million to Vedanta in Q1 June 2014 and the balance amount will be disbursed in the coming quarters.
Cairn India reported 65.05% fall in consolidated net profit to Rs 1092.90 crore on 10.33% rise in total income from operations (net) to Rs 4482.85 crore in Q1 June 2014 over Q1 June 2013. The result was announced after market hours on Wednesday, 23 July 2014.
The steep fall in the company's bottom line was due to an exceptional deprecation charge of Rs 1627.39 crore with retrospective effect in Q1 June 2014 due to change in method of depreciation from Straight Line method (SLM) to the Unit of Production (UOP) method.
Cairn India in its outlook said that with ongoing net capital investments program of $3 billion through end of year ending 31 March 2017, the company remains committed to the creation of long term shareholder value. Based on recent exploration successes, the company is confident that it will establish 3 billion barrels of oil equivalent (boe) hydrocarbons in-place, significantly ahead of schedule. Cairn India has identified significant gas potential in the block and plans are underway to advance commercialisation of discovered gas volumes. Considering the significant potential of the Rajasthan asset, the company continues to focus on other major development projects to enhance recovery and achieve a 3 year production CAGR of 7-10% from known discoveries with flat production in FY 2015, Cairn India said.
Pharma stocks gained. Cipla (up 2.03%), Dr Reddy's Laboratories (up 1.09%), and Wockhardt (up 9.45%) gained.
Lupin rose 3.06% to Rs 1,127.15 after hitting record high of Rs 1,133.50 in intraday trade.
Glenmark Pharmaceuticals surged 6.68% after reporting strong Q1 results. The company's consolidated net profit jumped 43.65% to Rs 184.84 crore on 20.08% growth in revenue to Rs 1486.94 crore in Q1 June 2014 over Q1 June 2013. The Q1 result was announced after market hours on Thursday, 24 July 2014. Glenmark Pharmaceuticals' consolidated earnings before interest, taxation, depreciation and amortization (EBITDA) surged 38.16% to Rs 342.33 crore in Q1 June 2014 over Q1 June 2013.
Ranbaxy Laboratories rose 4.4% to Rs 586, which was also a 52-week high for the stock. The company announced after market hours on Thursday, 24 July 2014, that it has signed a licensing agreement with Cipher Pharmaceuticals Inc. to exclusively market, sell and distribute Cipher's isotretinoin capsules in Brazil. The agreement extends the current relationship with Cipher, under which Ranbaxy is marketing and distributing Cipher's isotretinoin product in the United States under the brand Absorica.
Under the terms of the agreement, Cipher will receive an upfront payment and is eligible for additional pre-commercial milestone payments. Cipher will be supplying the product and Ranbaxy will be responsible for gaining regulatory approval of the product in Brazil. Ranbaxy plans to promote the product through a brand dermatology division in Brazil. The isotretinoin formulation is expected to be a flagship product in Ranbaxy's dermatology franchise in Brazil, once it achieves regulatory approval.
Cipher's isotretinoin product is a novel formulation of isotretinoin, which is used in the treatment of severe recalcitrant nodular acne. Isotretinoin is the most effective severe acne therapy available to teenagers who suffer from acne.
Sun Pharmaceutical Industries rose 4.44% to Rs 780.90 after hitting record high of Rs 782.35 in intraday trade. In April 2014, Sun Pharma acquired Ranbaxy in $4 billion landmark transaction.
Ambuja Cements fell 3.34% to Rs 211 after announcing Q1 results. The stock was volatile. The stock hit high of Rs 222 and low of Rs 210.50. The company after market hours on Thursday, 24 July 2014 reported 26.06% rise in net profit to Rs 408.70 crore on 16.61% rise in total income to Rs 2858.14 crore in Q2 June 2014 over Q2 June 2013. Operating earnings before interest, taxation, depreciation and amortization (EBITDA) grew by 12.4% to Rs 588 crore in Q2 June 2014 over Q2 June 2013.
In its outlook, Ambuja Cements said that although macro-economic condition remains challenging, construction activity is expected to pick up pace considering favorable announcement in the Union Budget 2014-15 for infrastructure and housing. The company continues to work on improving efficiencies and focus on customer and commercial excellence. The company believes that these initiatives will help to preserve and also improve performance, Ambuja Cements said.
Ambuja Cements' board of directors at its meeting held on Thursday, 24 July 2014, has approved payment of interim dividend of Rs 1.80 per share.
Shares of organised retailers declined after trade minister Nirmala Sitharaman reportedly said today, 25 July 2014, the government has not decided its stance on a policy in place to allow foreign direct investment in supermarkets. Trent (down 1.88%), Shoppers Stop (down 1.49%) and Future Retail (down 4.32%) dropped.
The Bharatiya Janata Party-led government opposes the policy put in place by its predecessor to allow foreign supermarkets to operate in India. But the new administration has not been clear whether it will revoke the policy.
Shares of jewellery retailers declined after Minister of State for Finance Nirmala Sitharaman quoted as saying today, 25 July 2014, the government does not have any current proposal to cut the record 10% import duty on gold. Shree Ganesh Jewellery House (down 5%), Gitanjali Gems down 4.59%), Tribhovandas Bhimji Zaveri (down 2.35%), Tara Jewels (down 1.61%), Titan Company (down 1.06%) and PC Jeweller (down 0.86%) declined.
The Sensex and the 50-unit CNX Nifty, both, hit record high amid initial volatility. Key benchmark indices lost ground in morning trade. Key benchmark indices extended losses and hit fresh intraday low in mid-morning trade. A bout of volatility was witnessed as key benchmark indices hit fresh intraday low in early afternoon trade. Key benchmark indices extended losses and hit fresh intraday low in afternoon trade. Key benchmark indices trimmed losses in mid-afternoon trade. Volatility ruled the roost in late trade as key benchmark indices weakened once again after trimming losses.
Indian stocks snapped eight-day winning streak today, 25 July 2014. From a recent low of 25,006.98 on 14 July 2014, the Sensex had risen 1,264.87 points or 5.05% in eight trading sessions to settle at a record closing high of 26,271.85 on Thursday, 24 July 2014. The Sensex has risen 712.97 points or 2.8% in this month so far (till 25 July 2014). The Sensex has gained 4,956.07 points or 23.41% in calendar year 2014 so far (till 25 July 2014). From a 52-week low of 17,448.71 on 28 August 2013, the Sensex has risen 8,678.04 points or 49.73%.
Finance Minister Arun Jaitley reportedly said today, 25 July 2014, that he is preparing to take a final decision on the controversial General Anti-Avoidance Rules (GAAR). GAAR is a tool to curb tax avoidance. GAAR announced by the previous government had sparked alarm among foreign investors because of provisions that included tightening rules on investments from countries that have double taxation treaties with India. The implementation of GAAR was deferred by two years until 1 April 2015.
Meanwhile, investors are keeping a close watch of crude oil prices amid fears geopolitical tension in the Middle East and Ukraine could push oil prices higher. India imports almost 80% of its crude oil requirements. Brent crude futures for September delivery were up 13 cents at $107.20 a barrel. The contract had closed 96 cents lower on Thursday, 24 July 2014.
The death toll in Gaza's fighting has continued to rise, with over 800 Palestinians and 33 Israelis killed since 8 July 2014, according to reports. At least 13 people were killed and more than 200 injured when a UN-run school used as a shelter came under fire in Gaza on Thursday, 24 July 2014, reports said. Israel launched its military offensive against Gaza on 8 July with the declared objective of stopping Hamas firing rockets into Israel.
Meanwhile, the US reportedly said on Thursday, 24 July 2014, that it has evidence that Russia has fired artillery across the border targeting Ukrainian military positions. Russia has frequently denied sending any rocket launchers into Ukraine. Russia is facing international pressure after Malaysia Airlines flight MH17 crashed in eastern Ukraine on 17 July, with pro-Russian rebels widely accused of shooting it down.
In the foreign exchange market, the rupee was unchanged against the dollar in choppy trading. The partially convertible rupee was hovering at 60.11, unchanged from its close of 60.11 on Thursday, 24 July 2014.
The monsoon rains were reportedly 24% above average in the week ended July 23. The annual monsoon arrived over the southern Kerala coast on 6 June, and then covered the entire country on 17 July. Rains are vital to India's farm sector, which accounts for about 14% of the country's nearly $2 trillion economy. Two-thirds of its 1.2 billion population lives in rural areas.
European stocks declined today, 25 July 2014, as LVMH Moet Hennessy Louis Vuitton SA and Danone SA posted worse-than-expected financial results. Key benchmark indices in UK, France and Germany were down 0.11% to 0.7%.
The UK economy has completely recovered the output lost during the financial crisis after growth powered ahead for a sixth consecutive quarter. Gross domestic product expanded 0.8% between April and June, pushing output 0.2% above its previous peak in the first three months of 2008, the Office for National Statistics said today in London. The increase followed a 0.8% gain in the first quarter.
Asian stocks rose in choppy trade today, 25 July 2014. Key benchmark indices in China, Hong Kong, Japan and South Korea were up by 0.31% to 1.13%. Key benchmark indices in Indonesia, Singapore and Taiwan were off 0.11% to 0.93%.
Trading in US index futures indicated that the Dow could fall 29 points at the opening bell on Friday, 25 July 2014. US stocks finished a quiet session mostly flat on Thursday, 24 July 2014, as earnings painted a mixed picture of the economy, though the S&P 500 index set another record closing high.
The number of Americans filing applications for unemployment benefits dropped last week to the lowest level in more than eight years, reflecting what could be a pickup in auto making during a typically slow time of year. Jobless claims fell by 19,000 to 284,000 in the week ended July 19, the fewest since February 2006 and lower than forecast, a Labor Department report showed in Washington.
Fewer US new homes than forecast were sold in June and data for the prior month was revised down by a record, painting a troubling picture of a market struggling to gain traction. Sales declined 8.1% to a 406,000 annualized pace, the fewest since March and lower than forecast, Commerce Department figures showed in Washington. That followed a May rate of 442,000.
The International Monetary Fund yesterday, 24 July 2014, lowered its outlook for global growth this year as expansion rates from China to the US weaken and military conflicts from Ukraine to the Middle East raise the risk of a surge in oil prices. The world economy will expand 3.4% in 2014, the IMF said, less than its 3.6% prediction in April and stronger than last year's 3.2%. Next year, growth will be 4% compared with an April forecast for 3.9%, the fund said.
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