Sensex, Nifty register small losses
Key benchmark indices registered small losses after moving in a narrow range during the trading session. The barometer index, the S&P BSE Sensex, settled above the psychological 25,000 level, having alternately moved above and below that level during the day. With small losses, the Sensex and the 50-unit CNX Nifty, both, registered their lowest closing level in nearly six weeks. The Sensex shed 17.37 points or 0.07%, up close to 115 points from the day's low and off about 90 points from the day's high. The market breadth indicating the overall health of the market was weak.
Capital goods stocks edged higher on renewed buying. IT major Infosys dropped. Shares of firms operating in the power sector gained. Metal and mining stocks gained ahead of Chinese gross domestic product (GDP) data for the second quarter due to be released on Wednesday, 16 July 2014. Realty stocks edged lower in choppy trade.
The S&P BSE Sensex shed 17.37 points or 0.07% to settle at 25,006.98, its lowest closing level since 4 June 2014. The index fell 132.35 points at the day's low of 24,892 in afternoon trade. The index rose 71.41 points at the day's high of 25,095.76 at the onset of the trading session.
The CNX Nifty lost 5.45 points or 0.07% to settle at 7,454.15, its lowest closing level since 4 June 2014. The index hit a high of 7,471.65 and a low of 7,422.15 in intraday trade.
The market breadth, indicating the overall health of the market, was weak. On BSE, 1,742 shares declined and 1,075 shares rose. A total of 110 shares were unchanged.
The total turnover on BSE amounted to Rs 2465 crore, lower than Rs 3763.91 crore on Friday, 11 July 2014.
The BSE Mid-Cap index lost 1.54 points or 0.02% to settle at 8,873.70, outperforming the Sensex. The BSE Small-Cap index lost 45.65 points or 0.47% to settle at 9,642.46, underperforming the Sensex.
The S&P BSE Realty index (down 0.78%), the S&P BSE FMCG index (down 0.4%), the S&P BSE Consumer Durables index (down 2.24%), the S&P BSE IT index (down 1.27%), the S&P BSE Teck index (down 0.99%) and the S&P BSE Healthcare index (down 0.53%) underperformed the Sensex.
The S&P BSE Power index (up 0.76%), the S&P BSE Metal index (up 0.97%), the S&P BSE Capital Goods index (up 1.14%), the S&P BSE Oil & Gas index (up 0.11%), the S&P BSE Auto index (up 0.99%), and the S&P BSE Bankex (up 0.3%), outperformed the Sensex.
Among the 30-share Sensex pack, 16 stocks declined and rest of them gained.
Shares of firms operating in the power sector gained. JSW Energy (up 1.55%), Power Grid Corporation of India (up 1.13%), Reliance Power (up 0.65%), Adani Power (up 1.33%), and NHPC (up 0.42%) edged higher. NTPC shed 1.27%. Reliance Infrastructure dropped 0.2%.
Tata Power Company gained 2.8%. According to the notice sent out by Tata Power Company to its shareholders for company's annual general meeting (AGM) to be held on 13 August 2014, approval has been sought for raising up to Rs 7000 crore through issue of non-convertible debentures (NCDs) on private placement basis.
The S&P BSE Power index rose 1.12% on Thursday, 10 July 2014, after the Finance Minister Arun Jaitley in Union Budget 2014-15 announced a ten-year tax holiday to the power sector undertakings, which begin generation, distribution and transmission of power by 31 March 2017. The index dropped 4.54% on Friday, 11 July 2014.
Further, the Finance Minister has proposed to allocate an initial sum of Rs 100 crore for preparatory work for a new scheme "Ultra-Modern Super Critical Coal Based Thermal Power Technology" to promote cleaner and more efficient thermal power.
The assurance of finance minister in his speech that adequate coal supply will be made available for already completed generation projects and those that would be completed by March 2015 will spring back lot of power projects that are idle or commercially unviable to operate on imported coal.
To further improve rural life, the government will launch the Deen Dayal Upadhyay Gram Jyoti Yojana to augment power supply at a cost of Rs 500 crore.
To promote wind energy, the basic customs duty has been reduced from 10% to 5% on forged steel rings used in the manufacture of bearings of wind operated electricity generators. The finance minister has also withdrwan the SAD of 4% on parts and raw materials required for the manufacture of wind operated generators.
Shares of power finance companies also edged higher. REC gained 0.17% to Rs 330.75. Power Finance Corporation jumped 4.88% to Rs 283.85.
IT stocks edged lower. HCL Technologies (down 3.36%), Tech Mahindra (down 0.53%) and Wipro (down 2.19%) declined.
IT major Infosys dropped 3%. While Infosys shares had risen 1% amid intraday volatility on Friday, 11 July 2014, after the announcement of the results before trading hours on that day, the company's ADR had lost 2.57% on that day. The company's consolidated net profit as per International Financial Reporting Standards (IFRS) fell 3.5% to Rs 2886 crore on 0.8% decline in revenue to Rs 12770 crore in Q1 June 2014 over Q4 March 2014. The result was announced before market hours on Friday, 11 July 2014.
Infosys expects its consolidated revenue to grow 7%-9% in dollar terms in the year ending 31 March 2015 (FY 2015). The guidance is unchanged compared to the one the company had given at the time of announcement of Q4 March 2014 results in April this year. The guidance in rupee terms has also been kept unchanged from that given in April as the company has assumed rupee dollar conversion rate of 60 which is exactly the same conversion rate given in April guidance. The company expects its revenue to grow 5.6%-7.6% in rupee terms in FY 2015.
At a conference call held after the first quarter results, Infosys management said it expects margins to remain flattish in the current year, excluding the impact of the depreciation as it plans to invest in the business as growth remains top priority. Infosys' depreciation outgo was lower by sharp 36% at Rs 230 crore in Q1 June 2014 over Q4 March 2014 due to a change in depreciation policy during the quarter.
Infosys said that the deal pipeline is stable with marginal improvement. There is greater comfort in the pipeline over the last year due to the increase in the discretionary spending, the management said in conference call. The company is focusing lot more on execution.
TCS rose 1.11%. The company announces its Q1 result is on Thursday, 17 July 2014.
No major sops were announced in the Union budget 2014-15 for the IT industry. While presenting the Union Budget 2014-15 on 10 July 2014, Finance Minster Arun Jaitley said all Central Government Departments and Ministries will integrate their services with a single window IT platform - the eBiz platform -- on priority by 31 December this year. Jaitley also announced the launch of a pan India programme viz. Digital India. This would ensure broad band connectivity at village level, improved access to services through IT enabled platforms, greater transparency in government processes and increased indigenous production of IT hardware and software for exports and improved domestic availability.
The increase in tax from 10% to 20% on long term capital gains from transfer of units of mutual funds, other than equity oriented funds is negative for the Indian IT companies as they invest surplus cash in these instruments.
The BSE IT index rebounded 1.42% on Friday, 11 July 2014 after falling 0.89% on Thursday, 10 July 2014, the budget day.
Metal and mining stocks gained ahead of Chinese gross domestic product (GDP) data for the second quarter due to be released on Wednesday, 16 July 2014. China is the world's largest consumer of copper and aluminum.
NMDC (up 0.59%), National Aluminium Company (up 1.64%), Hindustan Zinc (up 5.07%) edged higher. Hindustan Copper fell 2.4%.
Hindalco Industries surged 4.15%. Shares of Hindalco Industries had gained 3.16% on Thursday, 10 July 2014, after the government raised export duty on bauxite increased from 10% to 20% in Union Budget 2014-15. However, the stock fell 5.59% on Friday, 11 July 2014. Increase in export duty on bauxite will be favourable for aluminium smelters like Hindalco and Sesa Sterlite who will benefit from the resultant increase in domestic bauxite supply.
Shares of Sesa Sterlite fell 1.28%. The stock had declined 0.25% on Thursday, 10 July 2014. The stock shed 0.12% on Friday, 11 July 2014.
Steel stocks rose across the board as significant thrust on improving as higher outlay for housing, road, port, urban and rural housing and infrastructure development Union Budget 2014-15 would help improve steel consumption.
Jindal Steel & Power rose 1.26%. The stock had gained 1.6% on the day of Budget on Thursday, 10 July 2014. The scrip had plunged 7.08% on Friday, 11 July 2014.
JSW Steel rose 1.17%. The stock had gained 0.76% on Thursday, 10 July 2014. The scrip had lost 5.33% on Friday, 11 July 2014.
Tata Steel rose 2.6% to Rs 513.95. The stock was volatile. The stock hit high of Rs 517.40 and low of Rs 49.65. Tata Steel turned ex-dividend today, 14 July 2014, for dividend of Rs 10 per share for the year ended 31 March 2014.
Steel Authority of India (Sail) gained 1.22%. The stock had declined 1.91% on Thursday, 10 July 2014. The scrip lost 6.06% on Friday, 11 July 2014.
Realty stocks edged lower in choppy trade. Sobha developers (down 3.55%), Oberoi Realty (down 3.39%), DLF (down 0.84%) and D B Realty (down 4.92%) edged lower. The BSE Realty index slumped 5.16% on Friday, 11 July 2014 after surging 4.96% on Thursday, 10 July 2014, the budget day.
While presenting the Union Budget 2014-15 on 10 July 2014, the Finance Minster Arun Jaitley said that the government will provide tax incentives for Real Estate Investment Trusts (REIT). The government hiked the deduction limit on interest on housing loan in respect of self occupied house property from Rs 1.5 lakh to Rs 2 lakh in Union Budget 2014-15. Jaitley also announced additional allocation for National Housing Bank of Rs 4000 crore for low cost housing and a proposal for developing 100 smart cities.
PSU OMCs edged higher as crude oil prices declined. BPCL (up 1.95%) and HPCL (up 2.56%) gained. Indian Oil Corporation (IOCL) fell 1.51%.
Brent crude oil futures for August delivery were up 31 cents or 0.29% to $106.97 a barrel in electronic trading today, 14 July 2014. Brent crude oil futures for August delivery fell $2.01 to settle at $106.66 a barrel on Friday, 11 July 2014, after hitting a three-month low as fears about supply shortages in the Middle East and North Africa continued to recede.
Lower crude oil prices could decrease under-recoveries of state-run oil marketing companies (PSU OMCs) on domestic sale of diesel, LPG and kerosene at controlled prices. The government has adopted the policy of gradually increasing diesel prices to eliminate under recovery and deregulate the diesel prices. It is expected that the gap between administered price and market price of diesel would be eliminated by early FY 2015, the Finance Ministry said in its fiscal policy strategy statement on 10 July 2014. The government has already freed pricing of petrol.
Tata Motors rose 2.41%. Tata Motors after market hours on Friday, 11 July 2014, said that its global wholesales declined 10.46% to 75,623 units in June 2014 over June 2013.
Capital goods stocks edged higher on renewed buying. Bharat Heavy Electricals (Bhel) (up 1.57%), Bharat Electronics (up 1.71%), Crompton Greaves (up 3.4%), Siemens (up 1.51%) gained. ABB India (down 0.05%) and Thermax (down 0.63%) declined.
L&T gained 1.93%. L&T after market hours said that its wholly owned subsidiary dedicated to oil and gas -- L&T Hydrocarbon -- has secured an order worth Rs 5076 crore from Kuwait Oil Company (KOC). L&T Hydrocarbon will execute complete Engineer-Procure-Construct contract for a gathering centre for KOC, a subsidiary of Kuwait Petroleum Corporation (KPC) and fully owned by the State of Kuwait. Located in North Kuwait, the oil gathering facilities will receive crude from the Raudhatain fields.
Key benchmark indices reversed direction after a higher opening triggered by gains in Asian stocks. Key benchmark indices reversed intraday fall to regain positive zone in morning trade. Volatility continued on the bourses as the key benchmark indices reversed intraday gain in mid-morning trade. Volatility ruled the roost in early afternoon trade as the key benchmark indices edged lower once again after staging an intraday recovery after the latest data showed easing of inflation based on the wholesale price index (WPI) in June 2014 and upward revision in WPI inflation for April 2014. Key benchmark indices trimmed losses after hiting fresh intraday low in afternoon trade. The Sensex hit its lowest level in three weeks. The 50-unit CNX Nifty hit its lowest level in 5-1/2 weeks. Volatility continued as key benchmark indices trimmed losses in mid-afternoon trade. Key benchmark indices eked out small gains after alternately moving between positive and negative zone in late trade.
Revenue Secretary Shaktikanta Das was quoted by the media as saying on Saturday, 12 July 2014, that the government would shortly take a view on whether tax law General Anti-Avoidance Rules (GAAR) should be implemented from the scheduled date of April 2015. Reports that the government has reiterated that General Anti Avoidance Rules (GAAR) will be applicable from 1 April 2015 spooked the market on Friday, 11 July 2014 -- a day after the presentation of the Union Budget 2014-15 on 10 July 2014. The Sensex lost 1.37% on Friday, 11 July 2014.
There was an expectation that the new government will postpone the implementation of GAAR to a future date. GAAR is a tool to curb tax avoidance. GAAR announced by the previous government had sparked alarm among foreign investors because of provisions that included tightening rules on investments from countries that have double taxation treaties with India. Foreign portfolio investors (FPIs) sold shares worth a net Rs 675.82 crore into the secondary equity markets on Friday, 11 July 2014, as per the data from the National Securities Depository.
Indian stocks fell for the fifth day in a row today, 14 July 2014. The Sensex has fallen 1,093.10 points or 4.18% in five trading sessions from a record closing high of 26,100.08 on 7 July 2014. The Sensex has fallen 406.80 points or 1.6% in this month so far (till 14 July 2014). The Sensex has gained 3,836.30 points or 18.12% in calendar year 2014 so far (till 14 July 2014). From a 52-week low of 17,448.71 on 28 August 2013, the Sensex has risen 7,558.27 points or 43.31%. From a record high of 26,190.44 on 8 July 2014, the Sensex has fallen 1,183.46 points or 4.51%.
In the foreign exchange market, the rupee edged lower against the dollar. The partially convertible rupee was hovering at 60.14, compared with its close of 59.93/94 on Friday, 11 July 2014.
On the macro front, inflation based on the wholesale price index eased to 5.43% in June 2014, from 6.01% in May 2014, data released by the government during trading hours today, 14 July 2014, showed. Core inflation or non-food manufacturing inflation edged up to 3.9% in June 2014, from 3.8% in May 2014. Meanwhile, WPI inflation for April 2014 was revised upwards to 5.55%, from 5.2% reported earlier.
The government is scheduled to announce the data of inflation based on consumer price index (CPI) for the month of June 2014 after trading hours today, 14 July 2014.
Industrial output grew at its strongest pace in 19 months at 4.7% in May 2014, higher than 3.4% growth in April 2014, data released by the government after market hours on Friday, 11 July 2014, showed.
European stocks advanced on Monday, 14 July 2014, as oil dropped as the threat of supply disruptions in the Middle East abated. Key benchmark indices in France, UK and Germany rose 0.53% to 0.68%.
European markets had risen on Friday, 11 July 2014, as investors decided that losses associated with the founding family of Banco Espirito Santo were unlikely to disrupt Portugal's financial system or revive broader worries about the bloc's weaker economies.
Asian markets edged higher on Monday, 14 July 2014, as euro zone banking jitters faded. Key benchmark indices in South Korea, China, Taiwan, Hong Kong and Japan were up 0.26% to 0.96%. Key benchmark indices in Indonesia and Singapore were off 0.14% to 0.23%.
The Bank of Japan concludes a two-day monetary policy meeting tomorrow, 15 July 2014.
Singapore's economy unexpectedly contracted in the second quarter as a tight labor supply and company moves to shift production overseas hurt manufacturing. Gross domestic product fell an annualized 0.8% in the three months through June from the previous quarter, when it expanded a revised 1.6%, the trade ministry said in a statement today, 14 July 2014.
Trading in US index futures indicated that the Dow could rise 56 points at the opening bell on Monday, 14 July 2014. US stocks rose on Friday, 11 July 2014 as a rally in Amazon.com Inc. and EBay Inc. led an intraday rebound from declines spurred by concern over financial stress in Europe.
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