IT stocks decline

A bout of volatility was seen in morning trade as the key benchmark indices cut losses after an initial slide triggered by weak Asian stocks. At 10:18 IST, the barometer index, the S&P BSE Sensex was off 199.86 points or 0.77% at 25,667.09. The 50-unit Nifty 50 index was off 59.95 points or 0.77% at 7,765.05.

The market breadth indicating the overall health of the market was weak with almost two losers for every gainer. On BSE, 1,235 shares declined and 630 shares advanced. A total of 110 shares were unchanged. The BSE Mid-Cap index was currently down 0.98%. The decline in this index was higher than Sensex's decline in percentage terms. The BSE Small-Cap index was currently down 0.51%. The decline in this index was lower than Sensex's decline in percentage terms.

In overseas markets, Chinese stocks led decline in Asian stocks on fear of hard landing for the Chinese economy, the world's second largest economy. US stocks dropped sharply yesterday, 12 November 2015 as a sharp slide in commodities triggered sell-off in shares of energy and raw-material providers. Several speeches from Fed officials yesterday, 12 November 2015 hinted at an interest-rate hike by the US Federal Reserve at its next monetary policy review in December 2015.

The Fed-funds futures market is now pricing in 70% probability of an increase in US benchmark interest rate in December 2015. Investors in emerging markets, including India are worried that once the Fed starts raising interest rates, it will drain liquidity from global emerging markets and redirect it to developed economies. The Fed has held its benchmark short-term interest rate near zero since December 2008. The ultra-loose monetary policy in the US has encouraged heavy investment in higher-yielding emerging markets. The next monetary policy review from the Fed is scheduled on 15-16 December 2015.

Vedanta (down 2.52%), Cipla (down 2.35%) and ONGC (down 1.85%) edged lower from the Sensex pack.

IT stocks declined on firm rupee. A firm rupee adversely affects operating profit margins of IT firms as the sector derives a lion's share of revenue from exports.

TCS (down 2.24%), Infosys (down 0.93%), Wipro (down 1%), HCL Technologies (down 2.85%), Oracle Financial Services Software (down 0.96%), Tech Mahindra (down 0.57%) declined.

National Aluminium Company fell 1.47% after net profit fell 33.78% to Rs 226.14 crore on 10.31% decline in total income to Rs 1,941.11 crore in Q2 September 2015 over Q2 September 2014. The result was announced on Thursday, 12 November 2015.

Indiabulls Housing Finance tumbled 11.12% after the company said it acquired about 40% stake in UK-based OakNorth Bank for $100 million making it the lender's biggest shareholder and aiding its expansion into new business areas overseas. The announcement was made on Wednesday, 11 November 2015.

In the foreign exchange market, the rupee edged higher against the dollar. The partially convertible rupee was hovering at 66.1425, compared with its close of 66.315 during the previous trading session on Tuesday, 10 November 2015.

Macro economic data released yesterday, 12 November 2015 showed that index of industrial production (IIP) growth moderated to 3.6% in September 2015 over a year ago compared with the revised growth of 6.3% in August 2015. The IIP growth improved from 2.6% growth recorded in September 2014. The output of the manufacturing sector rose 2.6% in September 2015, against 2.6% rise in September 2014. Meanwhile, the mining sector output improved 3% in September 2015, showing acceleration from 0.1% growth in September 2014. The electricity generation also surged 11.4% in September 2015 against 3.9% rise in September 2014.

Another data released yesterday, 12 November 2015 showed that the all-India general CPI inflation increased to four-month high of 5% in October 2015, compared with 4.4% reading in September 2015.

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