SBI’s poor Q2 showing drag markets to intra-day low

In a knee jerk reaction to poor earnings of index heavyweight, State Bank of India (SBI), benchmark equity indices dropped sharply to their intra-day’s low level. Although, country's largest lender, SBI reported 30 per cent year-on-year jump in quarterly profits for the fiscal second quarter ending September 2012 at Rs 3,660 crore aided by lower provisioning for bad loans, the gross Non-performing assets (NPAs) stood at 5.15% versus 4.99% quarter-on-quarter. Additionally, even feeble global cues were adding to the already bearish sentiment at D-Street. Squandering a positive start, 30 share barometer index-Sensex-on BSE declining over half a century of points, trading below the 18,800 bastion. Similarly, widely followed index-Nifty-on NSE, taking a knock of over quarter percent, is currently trading near 5700 mark. Broader indices, meanwhile, are showcasing mixed trend.

On the global front, Asian shares fell further on Friday, weighed down by worries over the risk of a recession in the world's largest economy as the United States faces a looming fiscal crisis, while Europe still awaits a bailout for Greece, keeping investor risk appetite subdued.

Closer home, Public Sector Undertaking, Information Technology and Bankex counters are amongst the biggest loser amongst 13 sectoral indices. On the flip side, Fast Moving Consumer Goods, Metal and Power counters are the silver lining amidst cloudy session of trade. Meanwhile, plunge of SBI, which casted rub-off effect on other state owned banks stocks, viz, Bank of India, Canara bank, Punjab National Bank, has dragged the Banking counters lower. The overall market breadth on BSE is in the favour of declines which have thumped advances in the ratio of 1309:1183, while 123 shares remained unchanged.

The BSE Sensex currently trading at 18783.34, down by 62.92 points or 0.33% after touching a high and a low of 18894.42 and 18776.35 respectively. There were 13 stocks advancing against 17 declines on the index.

The broader indices are showcasing mixed trend; the BSE Mid cap edged lower by 0.21% and Small cap index was trading up by 0.18%.

The top gaining sectoral indices on the BSE were, FMCG up by 0.12%, Metal up by 0.01% and HC too was trading flat with positive bias. On the flip side, PSU down 0.74%, IT down by 0.61%, Bankex down by 0.56%, Capital Goods down by 0.48% and TECk down by 0.44% were the only losers on the index.

The top gainers on the Sensex were Tata Power up by 1.03%, Jindal Steel up by 0.86%, Hindalco Industries up by 0.86%, Hindalco Industries up by 0.75%, Tata Steel up by 0.71% and Bajaj Auto up by 0.68%.

On the flip side, ONGC down by 2.00%, SBI down by 1.50%, Sterlite Industries down by 1.17%, Hero MotoCorp down by 0.99% and Infosys down by 0.93% were the top losers on the Sensex.

Meanwhile, amid concerns raised by the telcos that the government is trying to jack-up the auction prices, the Supreme Court has asked the government to immediately explain why it is restricting the sale of airwaves in the upcoming auctions, and not selling all spectrum vacated by the 122 licences whose permits were cancelled earlier this year.

Earlier, Idea Cellular and the Cellular Operators Association of India (COAI), the industry body representing GSM operators, had challenged the government's decision to restrict the sale of airwaves in the upcoming sale. It was stated in the petition that 431 MHz of second generation airwaves was vacated by the apex court's February 2 verdict, but the government had only put 271 MHz up for auction.

The COAI had also asked the court to direct the government to include 83.6 MHz of GSM spectrum in the 1800 MHz band given to Tata Teleservices on the same date as the now-quashed 122 licences. But the court said it would deal with this issue separately.

In a related development, the Supreme Court expressed its displeasure that the Delhi High Court was hearing the matters relating to the 2G spectrum scam despite its order restraining courts below the apex court from adjudicating issues arising out of the case. 

The S&P CNX Nifty is currently trading at 5,719.30, down by 19.45 points or 0.34% after trading in a range of 5,751.70 and 5,709.90. There were 21 stocks advancing against 28 declines while one stock remained unchanged on the index.

The top gainers of the Nifty were Ultra-tech Cement up by 0.99%, Hindalco up by 0.79%, Tata Power up by 0.74%, Bajaj Auto up by 0.68% and Cipla up by 0.61%.

On the flip side, ONGC down by 2.11%, SBI down by 1.80%, Siemens down by 1.61%, Sesa Goa down by 1.54% and Hero MotoCorp down by 1.10% were the major losers on the index.

Most Asian equity indices were trading in the red; Kospi Composite  declined 0.34%, Jakarta Composite lost 0.28%, Straits Times edged lower by 0.12%, KLSE Composite was trading lower by 0.09%, Hang Seng  plunged 0.64%, Nikkei 225 plumetted 0.90%, Shanghai Composite declined 0.34%, while Taiwan Weighted gained 0.70% was lone gainer amongst Asian pacific shares.