Sensex hits over six-week high

Key benchmark indices extended gains and hit fresh intraday high in mid-afternoon trade as European stocks reversed initial losses. The barometer index, the S&P BSE Sensex, hit its highest level in more than six weeks. The 50-unit CNX Nifty hit three-week high. The Sensex was up 49.32 points or 0.23%, up close to 120 points from the day's low.

IT stocks edged lower on profit booking after recent gains. Infosys edged higher in choppy trade. Amara Raja Batteries rose in volatile trade after reporting good Q3 results.

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

A bout of volatility was witnessed as key benchmark indices trimmed losses after a weak start triggered by weak Asian stocks. Key benchmark indices swung alternately between positive and negative terrain near the flat line in mid-morning trade. Key benchmark indices languished in negative zone in early afternoon trade. Key benchmark indices moved into positive zone from negative zone in afternoon trade. Key benchmark indices extended gains and hit fresh intraday high in mid-afternoon trade as European stocks reversed initial losses.

Foreign institutional investors (FIIs) bought shares worth a net Rs 279.45 crore on Wednesday, 22 January 2014, as per provisional data from the stock exchanges.

At 14:20 IST, the S&P BSE Sensex was up 49.32 points or 0.23% to 21,386.99. The index rose 52.80 points at the day's high of 21,390.47 in mid-afternoon trade its highest level since 9 December 2013. The index dropped 72.96 points at the day's low of 21,264.71 in early trade.

The CNX Nifty was up 11.10 points or 0.16% to 6,350.05. The index hit a high of 6,350.95 in intraday trade, its highest level since 2 January 2014. The index hit a low of 6,316.40 in intraday trade.

The market breadth, indicating the overall health of the market, was negative. On BSE, 1,354 shares fell and 1,221 shares rose. A total of 144 shares were unchanged.

L&T (up 2.74%), GAIL (India) (up 2.2%) and Sun Pharmaceutical Industries (up 1.77%) edged higher from the Sensex pack.

Most IT stocks edged lower on profit booking after recent gains. Tata Consultancy Services (TCS) shed 0.97%. The company announced after market hours on Tuesday, 21 January 2014, the launch of the Digital Software & Solutions Group, a new business unit designed to help customers undergo critical digital transformations through modular, fully integrated, industry-tailored licensed software and solutions. Initial industries served will be Retail, Communications and Banking and Financial Services, three sectors with a particularly urgent need to adopt emerging technologies to enhance digital commerce and customer intelligence capabilities, and rapidly shift product and service offerings to compete in highly competitive and customer-centric arenas, TCS said in a statement.

The Digital Software & Solutions Group's initial offerings include 'Digital Commerce' and 'Customer Intelligence & Insights'.

HCL Technologies fell 2.91%.

Wipro dropped 0.16%.

Tech Mahindra fell 0.85%. The company said during market hours that media reports saying that the company is close to buying a BFSI company are speculative in nature and not issued by the company.

Infosys extended its recent gains triggered by the company raising its revenue growth guidance for the year ending 31 March 2014 at the time of announcement of Q3 December 2013 earnings on 10 January 2014. Infosys was up 0.4% at Rs 3,782. The stock hit a record high of Rs 3,788.80 in intraday trade.

Amara Raja Batteries rose 3.15% after net profit rose 17.43% to Rs 95.01 crore on 13.69% increase in net sales to Rs 859.95 crore in Q3 December 2013 over Q3 December 2012. The result was announced during trading hours today, 23 January 2014.

Amara Raja Batteries said the automotive battery business reported double digit growth in revenue, aided by strong volume expansion in two-wheeler batteries and marginal volume growth in four-wheeler batteries. While the OEM demand continued to be sluggish, an early sign of demand slowdown in four-wheeler replacement was visible in Q3. The trading volume in home UPS business suffered due to unfavorable season. The ongoing capacity expansions in two-wheeler and four-wheeler battery product lines are progressing as envisaged, the company said.

The industrial battery business reported flat volume for the quarter compared to previous year, due to capacity constraints and subdued demand for UPS batteries. However the revenues grew in double digit owing to inflation and better product mix. The company continues to focus on enhancing the quality of business through various initiatives in the market place. In the UPS segment, the company expanded the Quanta product range with the introduction of 12V-120 Ah and 12V-150 Ah batteries. Now, the company has widest product range for optimal battery sizing by the UPS OEM's and other customers, the company said in a statement.

The company said it commissioned on 22 January 2014 the modern and fully integrated MVRLA battery plant in a new location at Chittoor, Andhra Pradesh. The trial runs and product validation processes are under way. The plant is expected to commence supplies in full scale from March 2014 to support the growth momentum.

Commenting on the Q3 performance, Mr. Jayadev Galla, Vice Chairman and Managing Director, Amara Raja Batteries said, "It's heartening to deliver a consistent good performance despite challenging economy, volatile rupee and sluggish demand in the automotive OEM and UPS sectors. However, an early sign of slowdown in growth rate of four-wheeler automotive replacement demand requires close watch and innovative approach to sustain double digit volume growth. The successful completion of MVRLA capacity expansion and other ongoing capacity expansions in various product lines, will provide enough momentum to the growth in line with our strategic plan for the five years period leading to FY19".

In the foreign exchange market, the rupee edged lower against the dollar on global risk off sentiment. The partially convertible rupee was hovering at 61.92, compared with its close of 61.815/825 on Wednesday, 22 January 2014.

Bond prices dropped for the second day in a row after a committee set up by the Reserve Bank of India in its report submitted to the central bank early this week recommended that the central bank should start using a consumer-price inflation target to determine monetary policy. The panel's recommendations if accepted by the central bank may result in increase in interest rates to achieve the panel's 4% consumer-price inflation target by 2016. The yield on 10-year benchmark federal paper, 8.83% GS 2023, was hovering at 8.6274%, higher than its close of 8.6085% on Wednesday, 22 January 2014. Bond yield and bond prices move in opposite direction.

The Reserve Bank of India's Third Quarter Review of Monetary Policy for 2013-14 is scheduled on 28 January 2014. The RBI kept its main lending rate viz. the repo rate unchanged after its last policy review in December and said at that time that it expected inflation to ease in the following months.

Assuring global investors that India is prepared to face the impact of the US Fed tapering, finance minister P Chidambaram on Wednesday said the country is poised to clock 5% growth in 2013-14 and over 6% in 2014-15. Addressing a meeting of the World Economic Forum (WEF), Chidambaram said the Indian economy has "stabilised and it is poised to return to high-growth path and step by step we will go back to 8% growth rate".

On the impact of the calibrated tapering of bond purchases by the US central bank, Chidambaram said: "We were concerned in May. But now I think we have done a lot of preparatory work. There will be some consequences in developing and emerging economies but I think we are better prepared for the taper than when we were surprised in May".

European stocks reversed initial losses on Thursday, 23 January 2014. Key benchmark indices in France and UK were up 0.07% to 0.14%. Germany's DAX was off 0.12%.

Asian stocks declined on Thursday, 23 January 2014, after a private gauge of China's manufacturing in January unexpectedly contracted. Key benchmark indices in Japan, South Korea, Singapore, China, Taiwan and Hong Kong were down 0.35% to 1.51%. Indonesia's Jakarta Composite rose 0.26%.

A preliminary reading of HSBC's January China manufacturing Purchase Manufacturing Index fell to 49.6, below the 50 boundary between expansion and contraction, and down from 50.5 in the final result for December. It was the first contraction for the sector in six months, according to the HSBC data.

South Korea's economic growth slowed as expected in the final quarter of last year on weaker construction spending, despite robust exports that reaffirms a recovery in Asia's fourth-largest economy. Gross domestic product rose a seasonally adjusted 0.9% in the October-December period from the previous quarter, when the economy expanded 1.1%, the Bank of Korea said on Thursday, 23 January 2014.

Trading in US index futures indicated that the Dow could drop 34 points at the opening bell on Thursday, 23 January 2014. US stocks closed mostly higher on Wednesday after trading in a narrow range for the bulk of the session. Markets shrugged off largely disappointing earnings, but results from IBM weighed on the blue chips.

The Federal Open Market Committee (FOMC) holds a two-day monetary policy meeting on 28 and 29 January 2014. By a 9-to-1 vote, the Fed on 18 December 2013 decided to trim its asset-purchase program by $10 billion to $75 billion per month starting in January 2014.

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