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Nifty struggles below 8900; HDFC Bank, Lupin, RIL support

10:00

The News International Team

10:30am SBBJ in focus

State Bank of Bikaner and Jaipur’s (SBBJ) third quarter net profit increased 7.5 percent year-on-year to Rs 163.4 crore, supported by other income. However, the slow growth in net interest income and higher provisions restricted growth in bottomline.

Net interest income grew 2.2 percent to Rs 747.6 crore in October-December quarter from Rs 731.6 crore in same quarter last fiscal. Net interest income is the difference between interest earned and interest expended.

Other income (non-interest income) during the same period increased 14.5 percent to Rs 193.29 crore on yearly basis.

Provisions for bad loans jumped 45.5 percent year-on-year (up 19.8 percent sequentially) to Rs 244.5 crore during the quarter with the provision coverage ratio at 58.57 percent as on December 2014.

Asset quality was weakened in December quarter as gross non-performing assets (NPA) rose 41 basis points Y-o-Y (up 14 bps Q-o-Q) to 4.38 percent and net NPA climbed 20 bps year-on-year (up 15 bps quarter-on-quarter) to 2.64 percent.

10:00am Market Check

The market remained under pressure in morning trade following weakness in global markets post Fed meet and ahead of big offer for sale of Coal India on Friday. Banking & financials, metals, telecom and select technology stocks dragged the market while Reliance Industries, HDFC and L&T supported the market.

The Sensex fell 150.68 points to 29408.50 while the Nifty lost 42.45 points to 8871.85 ahead of expiry of January derivative contracts today. However, the broader markets outperformed benchmarks with the BSE Midcap and Smallcap indices rising marginally.
 
Yogesh Radke, head of quantitative research at Edelweiss Securities is of the view that with rights issues, offer for sale, divestments, fund raising in the pipeline, there could be large supply in the market, so one needs to be a bit cautious at present and unwind long leverage positions.

The leverage positions in the Futures market have gone as high as Rs 1 lakh crore, he adds.

In an interview to CNBC-TV18 he says, although the India story is still intact, the Nifty is likely to consolidate or correct around 4 percent and see levels of 8600-8500. According to him 9000 levels would act as strong resistance.

Coal India dropped nearly 4 percent ahead of stake sale by the government tomorrow. HDFC, ICICI Bank, Sun Pharma, ONGC, Bharti Airtel and Mahindra & Mahindra declined 1.4-2.4 percent.

However, HDFC Bank and Lupin gained more than a percent on CCEA clearance for foreign investment in company. Reliance Industries climbed over a percent followed by L&T, HUL, Wipro and Hero Motocorp with 0.3-0.9 percent upside.

Dr Reddy’s Labs gained 0.4 percent ahead of Q3 earnings. According to a CNBC-TV18 poll, profit is expected to fall 13.6 percent year-on-year to Rs 534.3 crore.

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