IT stocks slide as rupee strengthen past 64 against dollar

A range bound movement was witnessed as key benchmark indices languished in negative zone in early afternoon trade. The barometer index, the S&P BSE Sensex, was currently trading above the psychological 27,000 mark. Earlier, the Sensex had fallen below that level amid initial volatility. The Sensex had settled above the psychological 27,000 mark after yesterday's rally. The Sensex was currently off 156.48 points or 0.57% at 27,094.62. The market breadth indicating the overall health of the market was positive. In overseas markets, Asian stocks edged lower as the sell-off in global bonds accelerated, with Japanese yields rising to their highest level since March.

Shares of private sector banks edged lower. PSU bank stocks were mixed. IT stocks declined as the rupee edged higher against the dollar. Shares of UFO Moviez India were trading at small discount compared with the initial public offer (IPO) price.

On the macro front, the latest data showed that inflation based on the wholesale price index (WPI) remained in negative zone last month.

Foreign portfolio investors (FPIs) sold shares worth a net Rs 71.20 crore yesterday, 13 May 2015, as per provisional data released by the stock exchanges. Domestic institutional investors (DIIs) bought shares worth a net Rs 254 crore yesterday, 13 May 2015, as per provisional data released by the stock exchanges.

In overseas markets, Asian stocks edged lower as the sell-off in global bonds accelerated, with Japanese yields rising to their highest level since March. US stocks closed virtually unchanged yesterday, 13 May 2015, as early gains faded by the end of the session.

At 12:16 IST, the S&P BSE Sensex was down 156.48 points or 0.57% at 27,094.62. The index lost 302.48 points at the day's low of 26,948.62 in early trade. The index rose 42.89 points at the day's high of 27,293.99 at onset of day's trading session.

The CNX Nifty was down 44.55 points or 0.54% at 8,190.90. The index hit a high of 8,232.80 in intraday trade. The index hit a low of 8,137.30 in intraday trade.

The market breadth indicating the overall health of the market was positive. On BSE, 1,206 shares gained and 1,047 shares declined. A total of 106 shares were unchanged.

The BSE Mid-Cap index was up 39.73 points or 0.38% at 10,473.60. The BSE Small-Cap index was up 50.05 points or 0.46% at 10,922.90. Both these indices outperformed the Sensex.

The total turnover on BSE amounted to Rs 1553 crore by 12:15 IST, compared with turnover of Rs 1306 crore by 11:15 IST.

Shares of private sector banks edged lower. HDFC Bank (down 0.76%), IndusInd Bank (down 0.6%), Kotak Mahindra Bank (down 1.21%), Axis Bank (down 0.62%), Yes Bank (down 0.06%), and ICICI Bank (down 0.96%) declined.

PSU bank stocks were mixed. State Bank of India (SBI) (up 1.22%), Canara Bank (up 0.96%), Bank of India (up 0.96%) and Union Bank of India (up 3.08%) rose. Vijaya Bank (down 0.88%), Punjab National Bank (down 0.09%), Bank of Baroda (down 0.16%) fell.

IT stocks declined as the rupee edged higher against the dollar. A firm rupee adversely affects operating profit margins of IT firms as the sector derives a lion's share of revenue from exports. Infosys (down 1.44%), TCS (down 0.96%), Wipro (down 1.01%), HCL Technologies (down 1.39%), Tech Mahindra (down 1.11%) declined.

The rupee strengthened past 64 against the dollar today, 14 May 2015. The partially convertible rupee was hovering at 63.84, compared with closing of 64.01 during the previous trading session.

Shares of UFO Moviez India were trading at Rs 615.05, a discount of 1.59% compared with the initial public offer (IPO) price of Rs 625. The stock debuted at Rs 600 on BSE, at a discount of 4% compared with its IPO price. The stock hit a high of Rs 623 and a low of Rs 600 so far during the day. On BSE, so far 6.36 lakh shares were traded in the counter.

On the macro front, the latest data showed that inflation based on the wholesale price index (WPI) remained in negative zone last month. WPI inflation stood at negative 2.65% in April 2015, data released by the government today, 14 May 2015, showed. WPI inflation was minus 2.33% in March 2015. Build up of inflation in the financial year so far was minus 0.06%, compared to a build up rate of 0.28% in the corresponding period of the previous year.

Meanwhile, WPI inflation for February 2015 was revised downwards to negative 2.17% from negative 2.06% reported earlier.

Prime Minister Narendra Modi arrived on a three-day visit to China today, 14 May 2015, during which he will hold summit talks with Chinese president Xi Jinping on a range of issues.

In overseas markets, Asian stocks edged lower today, 14 May 2015, as the sell-off in global bonds accelerated, with Japanese yields rising to their highest level since March. Key benchmark indices in Hong Kong, China, Singapore, Taiwan and Japan were off 0.01% to 1.16%. In South Korea, the Seoul Composite index rose 0.29%. Indonesian markets are closed for a holiday.

US stocks closed virtually unchanged yesterday, 13 May 2015, as early gains faded by the end of the session. In economic data, US retail sales were unchanged in April as households cut back on purchases of cars and other big-ticket items and import prices fell for a 10th straight month in April and business inventories barely rose in March.

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