A brief intraday recovery proved short-lived as the key benchmark indices weakened once again in early afternoon trade. The barometer index, the S&P BSE Sensex, was down 114.39 points or 0.55%, off 217.57 points from the day's high and up 35.73 points from the day's low. The market sentiment was hit adversely after provisional data showed that foreign funds remained net sellers of Indian stocks on Monday, 6 January 2014.
Hindalco Industries extended intraday fall in volatile trade. Shares of state-run power equipment major Bharat Heavy Electricals (Bhel) edged higher in choppy trade on bargain hunting. L&T rose in volatile trade after the company said that the power transmission and distribution business of L&T Construction has bagged a major international EPC order in the Kingdom of Saudi Arabia. Tata Power Company and Reliance Infrastructure (RInfra), both, extended Monday's losses triggered by media reports that the state government in Maharashtra is planning to cut power tariffs.
The market breadth, indicating the overall health of the market, was positive.
Key benchmark indices edged higher in early trade on firm Asian stocks. A sudden slide took key benchmark indices to negative zone from positive zone in morning trade. Key benchmark indices cut losses after hitting fresh intraday low in mid-morning trade. Key benchmark indices trimmed losses after hitting their lowest level in nearly three weeks in morning trade. A brief intraday recovery proved short-lived as the key benchmark indices weakened once again in early afternoon trade.
The market sentiment was hit adversely after provisional data showed that foreign funds remained net sellers of Indian stocks on Monday, 6 January 2014. Foreign institutional investors (FIIs) sold shares worth a net Rs 318.91 crore on Monday, 6 January 2014, as per provisional data from the stock exchanges.
At 12:15 IST, the S&P BSE Sensex was down 114.39 points or 0.55% to 20,672.91. The index lost 150.12 points at the day's low of 20,637.18 in morning trade, its lowest level since 18 December 2013. The index jumped 103.18 points at the day's high of 20,890.48 in early trade.
The CNX Nifty was down 32.70 points or 0.53% to 6,158.75. The index hit a low of 6,144.75 in intraday trade, its lowest level since 18 December 2013. The index hit a high of 6,221.50 in intraday trade.
The market breadth, indicating the overall health of the market, was positive. On BSE, 1,113 shares gained and 1,059 shares fell. A total of 146 shares were unchanged.
The total turnover on BSE amounted to Rs 1179 crore by 12:20 IST, compared with Rs 928 crore by 11:20 IST.
Among the 30-share Sensex pack, 24 stocks declined and rest of them gained.
Hindalco Industries lost 2.54% to Rs 115.25, with the stock extending intraday fall in volatile trade. The stock hit a high of Rs 119 and low of Rs 115.20 so far during the day.
Capital goods shares were in demand. BEML (up 2.73%), Bharat Electronics (up 0.39%), Crompton Greaves (up 1.01%), Siemens (up 0.39%) and Thermax (up 0.61%) gained.
Shares of state-run power equipment major Bharat Heavy Electricals (Bhel) edged higher in choppy trade on bargain hunting. The stock was up 2.52% at Rs 168.55. The stock hit a high of Rs 170 and low of Rs 163.50 so far during the day. Shares of Bhel had declined 8.33% in five trading sessions to settle at Rs 164.40 on Monday, 6 January 2014, from a recent high of Rs 179.35 on 30 December 2013.
L&T rose in volatile trade after the company said that the power transmission and distribution business of L&T Construction has bagged a major international EPC order in the Kingdom of Saudi Arabia from Saudi Arabian Oil Company (Saudi Aramco). The stock was up 1.14% to Rs 1,022.60. The stock hit a high of Rs 1,028 and low of Rs 1,008.60 so far during the day.
Tata Power Company and Reliance Infrastructure (RInfra), both, extended Monday's fall triggered by media reports that the state government in Maharashtra is planning to cut power tariffs. The cut would be only for farmers, domestic consumers and small businesses consuming less than a set amount of electricity, the report said.
A cut in power tariff in Maharashtra would come after the ruling Aam Aadmi Party's push in Delhi to cut power tariff in the state.
Shares of Tata Power lost 2.14% at Rs 80.15.
Shares of RInfra were off 1% at Rs 407. The stock was volatile. The scrip hit high of Rs 415.70 and low of Rs 406.25 so far during the day.
Tech Mahindra fell 0.85%. Tech Mahindra during market hours today, 7 January 2014, announced the appointment of John Hyslop as Head of Wealth Management within the company's Australian financial services business. Prior to joining Tech Mahindra Mr. Hyslop was Head of Technology for the National Australia Bank's Wealth Group where he led the technology transformation, integration and overall simplification program for the bank's wealth businesses.
With a career spanning more than 25 years in financial services, Mr. Hyslop brings deep Australian Superannuation Funds and trustee industry sector knowledge to Tech Mahindra, which counts among its existing clients NAB, Link Super and Suncorp, Tech Mahindra said in a statement. In October this year, the company won a multi-year deal with Perpetual whereby Tech Mahindra will take over the registry capability for Perpetual's Wholesale, WealthFocus and Select investment, superannuation and pension products.
Future Retail fell 4.37% to Rs 79.80 on profit booking after the stock jumped 10.82% in the preceding two trading sessions to settle at Rs 83.45 on Monday, 6 January 2014, from a recent low of Rs 75.30 on 2 January 2014.
In the foreign exchange market, the rupee edged lower against the dollar as equities dropped. The partially convertible rupee was hovering at 62.3775, compared with its close of 62.31/32 on Monday, 6 January 2014.
The Reserve Bank of India on Monday, 6 January 2014, allowed Indian companies to issue non-convertible/redeemable preference shares or debentures to non-resident shareholders, including the depositories that act as trustees for the ADR/GDR holders, by way of distribution as bonus from its general reserves under a Scheme of Arrangement approved by a Court in India under the provisions of the Companies Act, as applicable, subject to no-objection from the Income Tax Authorities. This general permission to Indian companies is only for issue of non-convertible/redeemable preference shares or debentures to non-resident shareholders by way of distribution as bonus from the general reserves, the RBI said in a circular. The issue of preference shares (excluding non-convertible/redeemable preference shares) and convertible debentures (excluding optionally convertible/partially convertible debentures) under the Foreign Direct Investment (FDI) scheme would continue to be subject to A.P. (DIR Series) Circular Nos.73 and 74 dated 8 June 2007 as hitherto, the RBI said.
The next major trigger for the stock market is Q3 December 2013 corporate earnings. Investors and analysts will closely watch the management commentary that would accompany the result to see if there is any revision in their future earnings forecast of the company for the current year and/or the next year. The Q3 earnings season begins later this week when IT major Infosys and private sector bank IndusInd Bank unveil their earnings on Friday, 10 January 2014.
The Reserve Bank of India's Third Quarter Review of Monetary Policy for 2013-14 is scheduled on 28 January 2014.
Markit Economics today, 7 January 2014, said that the HSBC Emerging Markets Index (EMI), a monthly indicator derived from the PMI surveys, signalled overall growth of output across global emerging markets in December 2013. But, the EMI fell to 51.6, from 52.1 in November, signalling a weaker rate of expansion. Manufacturing output continued to rise at a faster pace than services activity, and the rate of growth was only fractionally weaker than November's eight-month high. Meanwhile, service sector output rose at the slowest rate in three months.
Goods output growth was broad-based across emerging market economies at the end of 2013, with the strongest expansions indicated in Taiwan, the Czech Republic and Turkey. Chinese manufacturing output growth eased from November's eight-month high.
New business inflows in global emerging markets rose for the fifth month running, albeit at the weakest rate since September. Backlogs continued to expand marginally, in line with the broad trend shown throughout the fourth quarter. Inflationary pressures in emerging markets remained muted in the final month of 2013, with average input prices rising at the slowest pace since July. This led to the weakest increase in output prices in the current five-month sequence of inflation.
The HSBC Emerging Markets Future Output Index fell to a six-month low in December, reflecting weaker sentiment in both manufacturing and services. But, the index's average in Q4 was higher than those in the previous two quarters. Among the largest emerging markets, Brazil continued to post the strongest sentiment regarding anticipated output growth in 2014, but the extent of optimism continued to ease sharply from October's peak. Russian firms remained less optimistic, on average, than their counterparts in China and India.
Asian stocks edged higher on Tuesday, 7 January 2014, after Janet Yellen won US Senate confirmation on Monday, 6 January 2014, to become the 15th chairman of the Federal Reserve and the first woman to head the central bank in its 100-year history. Key benchmark indices in Taiwan, Hong Kong, Singapore and South Korea were up 0.02% to 0.32%. Key benchmark indices in China, Japan and Indonesia were off 0.35% to 0.59%.
China is due to publish December trade data tomorrow, 8 January 2014, and December inflation figures on Thursday, 9 January 2014.
Trading in US index futures indicated that the Dow could advance 20 points at the opening bell on Tuesday, 7 January 2014. US stocks closed lower on Monday, with the S&P 500 index falling for a third consecutive session after weaker-than-expected services-sector data. The Institute for Supply Management said Monday its services index for December decelerated to 53% from 53.9% in November. In a separate report, orders for goods produced in US factories jumped 1.8% in November. The increase, led by orders for durable goods, suggests the manufacturing sector enjoyed stronger growth than the services side of the economy toward the end of last year.
Meanwhile, the Senate on Monday approved Janet Yellen to be the first woman to run the Federal Reserve in the central bank's 100-year history. Yelllen's four-year term will begin on 1 Feburary 2014. Currently Fed vice chairman, Yellen has backed Fed chairman Ben Bernanke's efforts to steer the US economy through its most severe crisis since the 1930s with record-low interest rates and three rounds of bond buying that have swelled Fed assets to $4.02 trillion. She pledged in a Nov. 14 confirmation hearing to press on with accommodation until achieving a "strong recovery."
The US Federal Reserve will release minutes of its December Federal Open Market Committee policy meeting tomorrow, 8 January 2014.
The Federal Open Market Committee (FOMC) holds a two-day monetary policy meeting on 28 and 29 January 2014. The Federal Reserve said after a two-day monetary policy review on 18 December 2013 that it will cut its monthly bond purchases to $75 billion from $85 billion starting in January 2014 amid an improved outlook for the job market in the world's largest economy. The US central bank is poised to continue winding down its stimulus measures gradually this year.
The US government will unveil the influential non-farm payroll report for December 2013 on Friday, 10 January 2014.
In Europe, the European Central Bank holds a monetary policy meeting on Thursday, 9 January 2014. UK's central bank -- Bank of England -- also undertakes monthly monetary policy review on the same day.
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