Sensex closes marginally down (0.05%) for the week

Fri, 14 Feb Closing

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Buoyed by gains in few sectors such as technology, metals and private banks, Indian markets closed the day in the green. The indices stood higher in the last hour of trade supported by buying in heavy weights. Underperforming benchmark indices, the BSE Small Cap index was down by 0.03% but the BSE Mid Cap was up by 0.1%. The BSE Sensex closed higher by 174 points and the NSE-Nifty was seen up by 47 points.

On the global front, barring Japan and Singapore markets, all other Asian indices closed the day on an optimistic note and most of the European indices too opened the day on a positive note. The rupee was trading at Rs 62.19 to the dollar at the time of writing.

Inflation data for the month of January 2014 was announced recently. And the same seems to be in a cooling off mode. As reported, inflation as measured by the wholesale price index (WPI) came in at a figure of 5.05%. This is the lowest figure in about eight months. During the preceding month i.e. December 2013, the figure stood at 6.16%. A key reason for the decline in the same is lower vegetable prices, which declined sharply on a month on month basis. As per data, food inflation reduced sharply to 8.8% as against 13.86% reported in December 2013. Vegetable inflation in specific reduced at a very sharp rate, falling to 16.6% - which is still high in absolute terms - as compared to 57.33% in the month of December 2013. With this announcement, the focus has come back to the RBI and its stance on interest rates. However, in the recent past RBI governor Dr. Rajan has strongly hinted that the focus over the short to medium would be on curbing inflation levels, rather than propping up growth levels.

Stocks from the PSU banks sector closed the day on a mixed note with Indian Bank and United Bank of India leading the pack of losers whereas stocks such as Andhra Bank and IDBI Bank were leading the pack of gainers.

As per leading financial news daily, India's largest lender, State Bank of India (SBI) announced disappointing earnings performance for 3QFY14. The profitability for the quarter fell 34.2% YoY to Rs 22.3 bn on account of higher provisions and expenses. The net interest income increased 13.3% YoY to Rs 126.4 bn from Rs 111.5 bn a year ago. The expense for the quarter jumped 20% YoY to Rs 314 bn while other income was up by 15.5% YoY to Rs 41.9 bn same quarter a year ago. The employee expenses stood on the higher side and jumped 35% YoY to Rs 58.7 bn primarily due to higher provisions for salary and pension. The domestic net interest margins stood at 3.5% during 3QFY14. The gross NPAs increased to 5.7% during 3QFY14 as against 5.6% in 2QFY14 while net NPA rose to 3.2% from 2.9% during the same period a year ago. The provision coverage ratio declined to 58.3% from 60.2% on sequential basis. The total advances for the company grew 17.3% YoY and the deposits grew 16.4% YoY during 3QFY14.