MUMBAI: Key benchmark indices extended losses and hit fresh intraday low in early afternoon trade. The barometer index, the S&P BSE Sensex, was down 355.83 points or 1.68%, off 121.30 points from the day's high and up 3.98 points from the day's low. The market breadth indicating the overall health of the market was quite weak with more than three losers for every gainer on BSE. The BSE Mid-Cap and Small-Cap indices were off more than 2% each. Weakness in Asian stocks and a steep slide in US stocks on Friday, 24 January 2014, hit sentiment on the domestic bourses adversely.
Private sector banking giant ICICI Bank extended intraday slide. Steel giant Tata Steel also extended intraday fall. Realty stocks dropped ahead of the Reserve Bank of India (RBI) Third Quarter Review of Monetary Policy for 2013-14 tomorrow, 28 January 2014.
Asian stocks dropped on Monday, 27 January 2014, as concern that the global economic recovery is faltering spurred investors to sell riskier assets. Emerging-market stocks fell amid concern that slower Chinese growth and reduced Federal Reserve stimulus will spark more capital outflows.
Key benchmark indices slumped in early trade on weak Asian stocks. The Sensex fell below the psychological 21,000 mark. The Sensex and the 50-unit CNX Nifty, both, hit their lowest level in over two weeks. Weakness persisted on the bourses in mid-morning trade. Key benchmark indices extended losses and hit fresh intraday low in early afternoon trade.
The market sentiment was hit adversely by data showing that foreign funds were net sellers of Indian stocks on Friday, 24 January 2014. Foreign institutional investors (FIIs) sold shares worth a net Rs 230.96 crore on Friday, 24 January 2014, as per provisional data from the stock exchanges.
The market may remain volatile this week as traders roll over positions in the futures & options (F&O) segment from the near month January 2014 series to February 2014 series. The January 2014 F&O contracts expire on Thursday, 30 January 2014.
At 12:18 IST, the S&P BSE Sensex was down 355.83 points or 1.68% to 20,777.73. The index lost 359.81 points at the day's low of 20,773.75 in early afternoon trade, its lowest level since 10 January 2014. The index fell 234.53 points at the day's high of 20,899.03 in early trade.
The CNX Nifty was down 105.45 points or 1.68% to 6,161.30. The index hit a low of 6,160.55 in intraday trade, its lowest level since 10 January 2014. The index hit a high of 6,188.55 in intraday trade.
The market breadth indicating the overall health of the market was quite weak with more than three losers for every gainer on BSE. On BSE, 1,700 shares declined and 525 shares gained. A total of 97 shares were unchanged.
The BSE Mid-Cap index was off 136.53 points or 2.12% at 6,318.73. The Small-Cap index was off 132.08 points or 2.05% at 6,312.38. Both these indices underperformed the Sensex.
The total turnover on BSE amounted to Rs 861 crore by 12:20 IST compared to Rs 665 crore by 11:25 IST.
Among the 30-share Sensex pack, 28 declined while only two of them gained.
Maruti Suzuki India (down 3.38%), Sesa Sterlite (down 3.23%) and HDFC Bank (down 3.16%) edged lower from the Sensex pack.
Private sector banking giant ICICI Bank lost 4.11% to Rs 1,014.30, with the stock extending intraday slide. The stock hit a high of Rs 1,038.55 and low of Rs 1,014 so far during the day.
Steel major Tata Steel fell 4.04% to Rs 361.25, with the stock extending intraday decline. The stock hit a high of Rs 370 and low of Rs 360.60 so far during the day.
Realty stocks dropped ahead of the Reserve Bank of India (RBI) Third Quarter Review of Monetary Policy for 2013-14 tomorrow, 28 January 2014. Purchases of both residential and commercial property are largely driven by finance.
DLF (down 4.68%), Indiabulls Real Estate (down 6.01%), HDIL (down 8.76%), Unitech (down 4.85%), Godrej Properties (down 1.47%), Oberoi Realty (down 1.27%) and Parsvnath Developers (down 1.86%) declined.
Fiem Industries rose 3.64% to Rs 369.05 after hitting record high of Rs 370 in intraday trade. The company said it has signed an MoU with two Japanese companies for a joint venture proposal in India for manufacturing of key sets, door mirrors and outside handles. The announcement was made after market hours on Friday, 24 January 2014.
Fiem Industries said that the company has signed a memorandum of understanding (MoU) with two Japanese companies namely, Honda Lock Mfg. Co., Japan and Toyota Tsusho Corporation, Japan for a joint venture (JV) proposal in India for manufacturing of key sets, door mirrors and outside handles. The Japanese companies are group companies of Japanese conglomerates Honda and Toyota, respectively.
Fiem Industries said that the Management considers it a major breakthrough in diversification of the product line as well as enhancing the presence of the company in four-wheel segment and being a new product line for the company, will add new dimensions to the growth of the company. The key sets will be for four-wheel as well as for two-wheel vehicles also, the company said.
SKS Microfinance gained 3.02% after net profit galloped 1763.5% to Rs 21.40 crore on 54.8% growth in total income to Rs 139.66 crore in Q3 December 2013 over Q3 December 2012. The Q3 result was announced after market hours on Friday, 24 January 2014.
SKS Microfinance's loan disbursements on sequential basis grew 43.04% to Rs 1399 crore in Q3 December 2013 (YoY growth of 79%). Consequently, the non-Andhra Pradesh portfolio grew 16.51% to Rs 2364 crore in Q3 December 2013 over Q2 September 2013 (YoY growth of 58.02%). The company had incremental draw-downs of Rs 566 crore in Q3 December 2013.
Mr. M.R. Rao, Managing Director & CEO, SKS Microfinance said, "The growth momentum has returned, and disbursements have gained traction with a 43% quarter-on-quarter growth and 79% year-on-year growth. The non-Andhra Pradesh portfolio has registered 58% year-on-year growth and 17% quarter-on-quarter growth. Our efficiency initiatives have been yielding results with reduction in Opex as a percentage of credit assets. In Q4 FY 2014 too, we do not plan to increase branches or headcount. However, the portfolio outstanding could grow by another 15% quarter on quarter, and that is when we will register further efficiency gains".
Mr. S. DiIli Raj, Chief Financial Officer, SKS Microfinance said, "Growth in credit assets, effective liquidity management and operating leverage playing out have placed our Return on Assets (ROA) and Return on Equity (ROE) in the best-of-the-breed league. Economic value of the unavailed deferred tax provision of Rs 567 crore has also started showing up on the profit and loss statement. Sufficient liquidity, a positive asset liability management (ALM) structure and a strong distribution network equip us to address the huge unmet demand potential of the rural credit segment we target".
SKS Microfinance had a net worth of Rs 432 crore and capital adequacy of 28.1% (21.6% without taking RBI dispensation on provisioning for the Andhra Pradesh portfolio) as of 31 December 2013. Cash and bank balances as at 31 December 2013 stood at Rs 309 crore.
SKS Microfinance before market hours today, 27 January 2014 said that its board of directors will meet on 4 February 2014, interalia, to consider and approve Business Plan for FY 2015 & FY 2016.
Sabero Organics Gujarat rose 3.05%. Coromandel International declined 7.36%. Sabero Organics Gujarat said that the board of directors of the company and Coromandel International have approved the merger of the company with Coromandel International. The announcement was made after market hours on Friday, 24 January 2014.
Sabero Organics Gujarat (SOGL) said that the board of directors of Coromandel International (Coromandel) and SOGL, a subsidiary of Coromandel, at their respective meetings held on Friday, 24 January 2014, have approved merger of SOGL with Coromandel through a scheme of amalgamation, subject to approval of the stock exchanges, shareholders, creditors, concerned High Courts/Tribunal, and other regulators as applicable. As per the scheme, the public shareholders of SOGL will be issued shares in Coromandel in the ratio of five equity shares of Re 1 each of Coromandel for every eight equity shares of Rs 10 each of SOGL. The shares held by Coromandel and its wholly owned subsidiary Parry Chemicals (PCL) in SOGL shall get extinguished. In terms of the scheme, amalgamation of SOGL with Coromandel will be followed by the dissolution of SOGL.
Coromandel, along with PCL, holds 74.9% equity stake in SOGL.
Meanwhile, SOGL during trading hours today, 27 January 2014, said that the appointed date for the scheme of amalgamation is 1 April 2014.
In the foreign exchange market, the rupee edged lower against the dollar in choppy trade as equities fell sharply. The partially convertible rupee was hovering at 62.745, compared with its close of 62.66/67 on Friday, 24 January 2014.
The Ministry of Consumer Affairs, Food & Public Distribution on Friday, 24 January 2014, said that as per data monitored by the Ministry of Consumer Affairs and Food, prices of rice, wheat and sugar during the week - 16 January 2014 to 23 January 2014 - remained steady in wholesale markets across the country. The Price Monitoring Cell of the Ministry monitors prices of twenty two essential commodities regularly at 55 wholesale centers. During the period, prices of rice remained steady at all wholesale centers and decreased at one center (Aizwal). Prices of wheat also were steady at all wholesale centers except one centre at Ludhiana. While sugar prices decreased at eight centers and remain steady at rest of the reporting centers, the Ministry of Consumer Affairs and Food said in a statement.
Prices of twenty two essential commodities are regularly monitored by Department of Consumer Affairs for taking suitable action to keep the prices under check. Price data is collected on daily basis from the State Civil Supplies Departments of the respective State Governments.
The Reserve Bank of India announces Third Quarter Review of Monetary Policy for 2013-14 at 11:00 IST tomorrow, 28 January 2014. The RBI 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.
Asian stocks slumped on Monday, 27 January 2014, as concern that the global economic recovery is faltering spurred investors to sell riskier assets. Key benchmark indices in Taiwan, Hong Kong, China, Singapore, Japan, Indonesia and South Korea were off 0.92% to 2.51%.
Emerging-market stocks fell amid concern that slower Chinese growth and reduced Federal Reserve stimulus will spark more capital outflows. In recent years, emerging markets have been supported by the Fed's policy of easy money, but any cut could pull more money out of these risky markets and hurt growth.
Japan reported a record annual trade deficit for last year as energy shipments and weakness in the yen pumped up the nation's import bill. The shortfall was 11.5 trillion yen ($113 billion), almost double the previous year's 6.9 trillion yen, a finance ministry report showed in Tokyo today, 27 January 2014. Imports rose 25% in December from a year earlier and exports gained 15%, leaving a monthly deficit of 1.3 trillion yen.
South Korea has accepted the North Korea's offer to renew reunions of families separated by the Korean War, a move that may signal thawing tensions between the two nations.
Trading in US index futures indicated that the Dow could drop 5 points at the opening bell today, 27 January 2014. US stocks tumbled on Friday, 24 January 2014, as investors fled equities and emerging-markets currencies on concerns about a contagion effect from China's manufacturing slowdown. The CBOE Volatility Index, known as the Vix, surged 32%, its steepest rise since the April 15 Boston Marathon bombings.
The Federal Open Market Committee's (FOMC) two-day monetary policy meeting begins tomorrow, 28 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.
Global stocks tumbled the most since June on Friday, 24 January 2014, as a sell-off in emerging-market currencies prompted investors to seek havens in Treasuries, gold and the yen.