Indian equity markets languished in the red throughout the trading session today. While the indices began the day's proceedings on a cautious note, selling activity across index heavyweights intensified thereafter pushing the indices deeper into the red. There was no respite in the final trading hour either and the indices closed well below the dotted line. While the BSE-Sensex today closed lower by 651 points, the NSE-Nifty closed lower by 209 points. The BSE Mid Cap and the BSE Small Cap were not spared either and lost 1% each. Losses were largely seen in banking, FMCG and oil and gas stocks.
As regards global markets, most Asian indices closed firm today while European indices have opened mixed. The rupee was trading at Rs 68.11 to the dollar at the time of writing.
PSU banking stocks closed in the red today and key losers were Bank of India, Bank of Baroda and State Bank of India (SBI). As per a leading business daily, SBI has raised its stake in its Indonesian subsidiary to 99%. The bank has acquired 23% shares of Bank State Bank of India, Indonesia (BSBII). The Tier I capital of the subsidiary stood at 10.4%, while the total capital was 11.6% at the end of March 31, 2013. The number of SBI's foreign offices stood at 186 at the end of 2012-13 spread across 34 countries. Having said that, the operating efficiency of SBI deteriorated during 1QFY14 as operating expenses burgeoned as high as 31%. This was largely on account of higher employee costs due to pension provisions and expansion in the bank's physical network. Consequently, the cost-income ratio worsened and was reported at 52.8% during 1QFY14; which is one of the highest in the industry.
Most auto stocks closed weak today and the key losers were Hero Motocorp, Ashok Leyland and Bajaj Auto. Mahindra & Mahindra (M&M) and Tube Investments managed to buck the trend. As per a leading business daily, Bajaj Auto reported a decline in sales for August 2013. Volumes of motorcycles were down 8% YoY during the month. Three wheelers fared worse as volumes fell by 17% YoY. The silver lining in the cloud was exports which grew by 10% YoY. It must be noted that the company had a poor first quarter as well. During 1QFY14, revenues rose by a mere 1% YoY during the quarter on account of a 9% YoY drop in volumes. There was a decline in motorcycle volumes, but three wheelers had registered a healthy double digit growth largely led by exports.