Steel stocks gained after reports indicated that the government will raise import duty on some base metals including iron & steel by 2.5 percent, though there has been no official confirmation yet.
12:55 pm Market Update: Equity benchmarks remained under pressure. The Sensex declined 168.32 points to 27697.77 and the Nifty fell 61.20 points to 8401.15. About 807 shares have advanced, 1777 shares declined, and 148 shares are unchanged on the BSE.
12:45 pm Earnings: Private sector lender City Union Bank's first quarter net profit increased 12 percent year-on-year to Rs 111.5 crore, driven by strong net interest income and operating profit despite fall in other income.
Net interest income, the difference between interest earned and interest expended, grew by 19.8 percent to Rs 223.6 crore compared to Rs 186.7 crore in the same quarter last fiscal.
Non-interest income (other income) dropped 5.2 percent year-on-year to Rs 104.9 crore while operating profit climbed 14.2 percent to Rs 197.2 crore in the quarter ended June.
Provisions for bad loans in Q1 increased 5.6 percent to Rs 45.1 crore compared to Rs 42.7 crore in the year-ago period but sequentially declined 22.4 percent from Rs 58.1 crore.
Asset quality weakened a bit with the gross non-performing assets (NPA) rising 15 basis points sequentially and 10 bps year-on-year to 2.01 percent. Net NPA increased to 1.32 percent in June quarter from 1.30 percent in March quarter and 1.28 percent in same quarter last year.
12:25 pm Further Yuan fall possible?: The People's Bank of China (PBOC) on Tuesday morning allowed its currency yuan to depreciate close to 2 percent against the dollar. The development sent most global markets into a tizzy with all of them closing significantly in the red.
US' Dow index, European markets and German shares saw strong hammering on the yuan devaluation as it raised concerns about the Chinese economy and the likelihood of a currency war.
Eshwar Prasad, former IMF China chief says the Chinese central bank is using every tool in its arsenal to crop up growth, but other monetary measures such as cuts in banks' reserve ratios, interest rates are not seeing enough traction.
With the Chinese government's focus on restricting outflows, there will be a significant pressure on the yuan to depreciate further, suspects Prasad.
He expects the PBOC to allow yuan to fall further 3- 4 percent, but in a more gradual way.
12:00 pm Market Check
The market continued to be weak in noon trade with the Sensex falling more than 100 points weighed down by metals, auto and cement stocks. The BSE Midcap underperformed benchmarks, down 1 percent.
The 30-share BSE Sensex declined 114.42 points to 27751.67 and the 40-share NSE Nifty slipped 44.85 points to 8417.50. About 847 shares have advanced, 1692 shares declined, and 139 shares are unchanged on the BSE.
Yuan devaluation weighed on global equities. Asian markets declined with Japan's Nikkei down over 1 percent. Former IMF China chief Eswar Prasad says that the PBOC may allow yuan to depreciate 3-4 percent from current levels. Chief economic advisor Arvind Subramaniam believes that devaluation of yuan is aimed at reducing spreads between onshore & offshore rates.
The rupee fell to a two-year low against the dollar after yuan devaluation extended a sell-off in most Asian and emerging market currencies. Ananth Narayan, Standard Chartered Bank says that rupee depreciation to 65-65.50 levels will be good for economy.
Coal India plunged more than 4 percent as sources say the finance ministry will seek the cabinet's nod for the 10 percent stake sale which could fetch nearly Rs 25,000 crore. Also the company will report its numbers today.
Steel stocks gained after reports indicated that the government will raise import duty on some base metals including iron & steel by 2.5 percent, though there has been no official confirmation yet.The Great Diwali Discount!
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