Sensex extends initial losses

Key benchmark indices extended initial losses and hit fresh intraday low in morning trade. The barometer index, the S&P BSE Sensex, was down 114.31 points or 0.57%, off about 155 points from the day's high and up close to 20 points from the day's low. The market sentiment was affected adversely by provisional data showing that foreign funds resorted to heavy selling of Indian stocks on Tuesday, 4 February 2014.

Realty shares edged lower. Index heavyweight and cigarette maker ITC extended initial losses. Most telecom stocks declined. Power Finance Corporation rose on good Q3 result.

The market breadth, indicating the overall health of the market, was positive.

The market edged lower amid initial volatility after provisional data showed that foreign funds resorted to heavy selling of Indian stocks on Tuesday, 4 February 2014. The 50-unit CNX Nifty fell below the psychological 6,000 mark. The Sensex extended initial losses and hit fresh intraday low in morning trade.

The market sentiment was affected adversely by data showing that foreign funds resorted to heavy selling of Indian stocks on Tuesday, 4 February 2014. Foreign institutional investors (FIIs) sold shares worth a net Rs 1234.02 crore on Tuesday, 4 February 2014, as per provisional data from the stock exchanges.

At 10:20 IST, the S&P BSE Sensex was down 114.31 points or 0.57% to 20,097.62. The index dropped 135.83 points at the day's low of 20,076.10 in morning trade. The index rose 42.89 points at the day's high of 20,254.82 in early trade.

The CNX Nifty was down 31.55 points or 0.53% to 5,969.35. The index hit a low of 5,962.05 in intraday trade. The index hit a high of 6,012.85 in intraday trade.

The BSE Mid-Cap index was up 1.38 points or 0.03% at 6,283.60. The BSE Small-Cap index was up 23.57 points or 0.38% at 6,269.29. Both these indices outperformed the Sensex.

The market breadth, indicating the overall health of the market, was positive. On BSE, 880 shares rose and 609 shares fell. A total of 83 shares were unchanged.

Among the 30-share Sensex pack, 21 stocks declined and rest rose. Bhel (down 2.05%), Hindalco Industries (down 1.41%) and Tata Motors (down 1.42%) edged lower from the Sensex pack.

Most telecom stocks declined. Bharti Airtel (down 0.73%), Idea Cellular (down 2.88%) and Tata Teleservices (Maharashtra) (down 0.82%) dropped. MTNL (up 1%) and Reliance Communications (up 0.89%) gained

The auction of spectrum in the 1800 MHz and 900 MHz band that began on Monday, 3 February 2014, continued on Tuesday, 4 February 2014. At the end of day Two, 14 rounds of bidding have been completed. Bids have been received in all 22 Service Areas in 1800 MHz band and in all 3 Service Areas in 900 MHz band. Thus, bidding has taken place in all the Service Areas in both bands, the Ministry of Communications & Information Technology said in a statement issued at 20:49 IST on Tuesday, 4 February 2014.

Index heavyweight and cigarette maker ITC declined 1.58% to Rs 319.85. The stock hit high of Rs 324.55 and low of Rs 319.20 so far during the day.

Realty shares edged lower. HDIL (down 0.83%), Unitech (down 1.19%), DLF (down 0.04%) and D B Realty (down 0.3%) declined.

Power Finance Corporation rose 3.55% on good Q3 result. The company's net profit rose 37.35% to Rs 1534.31 crore on 24.2% increase in operating income to Rs 5547.16 crore in Q3 December 2013 over Q3 December 2012. The company announced the result after market hours on Tuesday, 4 February 2014.

Power Finance Corporation (PFC) said it had exercised the option under para 46A of the amended AS-11 'The Effects of Changes in Foreign Exchange Rates' to amortize the exchange differences on the long term foreign currency monetary items over their tenure. Consequently, as on 31 December 2013, Rs 961.45 crore (as on 31 March 2013 - Rs 477.97 crore) has been carried forward in the Foreign Currency Monetary Item Translation Difference Account (FCMITDA).

In Q3 December 2013, the company invested in 6.16 crore, 10% cumulative fully convertible preference shares of Rs 10 each issued at par and 6.04 crore equity shares of Rs 10 each issued at par of its wholly-owned subsidiary, PFC Green Energy, the company said.

In the foreign exchange market, the rupee edged higher against the dollar, tracking weakness in the dollar versus majors and other Asian currencies. The partially convertible rupee was hovering at 62.4325, compared with its close of 62.525/535 on Tuesday, 4 February 2014.

Markit Economics will unveil the result of a monthly survey on the performance of India's services sector for January 2014 today, 5 February 2014. The HSBC Services Business Activity Index, compiled by Markit, fell to 46.7 in December, from 47.2 in November.

Finance Minister P Chidambaram will present the Vote-on-Account or interim budget on 17 February 2014. The objective of a Vote-on-Account is to get Parliament's nod for expenditure to be incurred in the months prior to elections. The next full-fledged budget will be presented by the new government which comes to power after the Lok Sabha polls in April-May 2014.

The Reserve Bank of India next undertakes monetary policy review on 1 April 2014. Sighting elevated consumer price inflation, the Reserve Bank of India raised its key lending rates by 25 basis points after Third Quarter Review of Monetary Policy for 2013-14 on 28 January 2014.

Asian stocks edged higher on Wednesday, 5 February 2014, after US shares rebounded overnight and Japanese companies posted earnings that cheered investors. Key benchmark indices in Indonesia, Japan, Singapore and South Korea were up 0.31% to 1.12%. Key benchmark indices in Hong Kong and Taiwan were off 0.02% to 2.38%

Stock markets in mainland China remain closed until 7 February 2014 for the Lunar New Year holiday.

Trading in US index futures indicated that the Dow could fall 17 points at the opening bell on Wednesday, 5 February 2014. US stocks closed with modest gains on Tuesday, clawing back a fraction of their worst losses since June made a day earlier. Investors welcomed a smaller-than-expected drop in factory orders during December.

The Federal Open Market Committee (FOMC) next undertakes monetary policy review on 18-19 March 2014. After a monetary policy review, the FOMC on 29 January 2014 announced it will reduce monthly bond purchases by another $10 billion to $65 billion. The Fed also signaled that it is likely to keep reducing bond purchases in the coming months, citing a pickup in US economic activity and improvement in the US labor market.

On Tuesday, 4 February 2014, two Federal Reserve district bank presidents signaled a decline in global stock markets probably won't deter the Fed from further trimming bond buying that has pushed up central bank assets to $4.1 trillion. "The hurdle ought to remain pretty high for pausing in tapering," Richmond Fed President Jeffrey Lacker said after a speech in Winchester, Virginia. The fall in equities hasn't affected the outlook for labor market conditions materially at this point, Lacker said. "We linked the asset purchase programs to significant improvement in the outlook for labor market conditions. That has definitely occurred, Lacker said. "The committee is always cognizant of global economic conditions and developments," Lacker said at Shenandoah University, adding that his colleagues have to make policy choices focused on Fed goals for the US economy. "We conduct policy to achieve price stability and maximum employment here in the United States," Lacker said.

Chicago Fed President Charles Evans said in Detroit that policy makers probably face a high hurdle to deviate from $10 billion cuts in monthly bond buying at each of their next several meetings. The Fed's reduction in bond buying has been expected for quite some time and shouldn't have been a big surprise to global financial markets, Evans said to reporters after a speech. "Each country has a set of issues they need to deal with," Evans said. "The moderate pace of tapering that we laid out in conjunction with our stronger forward guidance" on the path of the federal funds rate "provides an adequate amount of accommodation for the other foreign markets," Evans said.

Evans and Lacker don't vote on policy this year.

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