A bout of volatility was witnessed as key benchmark indices trimmed losses after hitting fresh intraday low in mid-afternoon trade. The barometer index, the S&P BSE Sensex, was down 121.65 points or 0.54%, up about 70 points from the day's low and off close to 170 points from the day's high. The market breadth, indicating the overall health of the market was weak. The BSE Small-Cap was index was off more than 1%. The market sentiment was hit adversly after private weather forecaster Skymet on Tuesday, 15 April 2014, said it expects the June-September monsoon to be below normal this year. The forecast of below-normal rains triggered worries that food price inflation will edge up. Increase in global crude oil prices also hit sentiment on the domestic bourses adversely.
Crompton Greaves hit 52-week high. IndusInd Bank rose after good Q4 results.
Increase in crude oil prices triggered concerns about India's current account deficit and fiscal deficit. Brent oil edged higher on Tuesday, 15 April 2014, after news that Ukrainian armed forces launched military operations in the east of the country. The June contract for Brent settled 29 cents higher at $109.36 a barrel on Tuesday, 15 April 2014. India imports majority of its crude oil requirements.
A bout of initial volatility was witnessed as key benchmark indices regained positive terrain after slipping into the red for a brief period after opening slightly higher. Volatility continued as key benchmark indices regained positive once again after reversing intraday gains in morning trade. Key benchmark indices were trading marginally higher in mid-morning trade, having moved in a narrow range. The Sensex slipped into the red in early afternoon trade. Key benchmark indices extended losses and hit fresh intraday low in afternoon trade. The Sensex and the 50-unit CNX Nifty, both, hit their lowest level in more than a week. A bout of volatility was witnessed as key benchmark indices trimmed losses after hitting fresh intraday low in mid-afternoon trade.
Foreign institutional investors (FIIs) sold shares worth a net Rs 21.63 crore on Tuesday, 15 April 2014, as per provisional data from the stock exchanges.
At 14:20 IST, the S&P BSE Sensex was down 121.65 points or 0.54% to 22,363.34. The index declined 189.34 points at the day's low of 22,295.59 in afternoon trade, its lowest level since 7 April 2014. The index rose 48.69 points at the day's high of 22,533.61 in early trade.
The CNX Nifty was down 31.40 points or 0.47% to 6,701.70. The index hit a low of 6,672.50 in intraday trade, its lowest level since 7 April 2014. The index hit a high of 6,748.65 in intraday trade.
The BSE Mid-Cap index was off 65.58 points or 0.9% at 7,246.41. The BSE Small-Cap index was off 79.72 points or 1.06% at 7,501.50. Both these indices underperformed the Sensex.
The market breadth, indicating the overall health of the market was weak. On BSE, 1,603 shares declined and 1,000 shares gained. A total of 130 shares were unchanged.
Infosys (down 2.88%), Tata Power Company (down 2.66%) and Wipro (down 2.49%) edged lower from the Sensex pack.
Maruti Suzuki India rose 0.95% to Rs 1941.40 after a foreign brokerage maintained buy rating on the stock with an increased target price of Rs 2,295 per share from Rs 2,135 earlier.
Bank pivotals edged higher. ICICI Bank (up 0.61%), Axis Bank (up 0.13%), State Bank of India (SBI) (up 0.19%) and HDFC Bank (up 0.08%) gained. Kotak Mahindra Bank declined 1.23%.
IndusInd Bank rose 0.34% after good Q4 results. The bank's net profit rose 28.83% to Rs 396.05 crore on 23.35% rise in total income to Rs 2702.19 crore in Q4 March 2014 over Q4 March 2013. The result was announced during market hours.
During the quarter ended 31 March 2014, the bank decided to align the accounting policy on valuation of investments under Available for Sale (AFS) and Held for Trading (HFT) categories in line with RBI guidelines. Accordingly, the securities have been valued scrip-wise and depreciation/appreciation has been aggregated for each classification. While aggregate depreciation for each classification has been provided, the aggregate net appreciation, if any, for a classification has been ignored, IndusInd Bank said. As a result of change, the provision for depreciation on AFS/HFT securities is lower by Rs 14.05 crore and consequently net profit for the quarter and year ended 31 March 2014 higher by Rs 9.27 crore, IndusInd Bank said in a footnote to the results.
The RBI permitted banks to distribute the net depreciation on the Available for Sale (AFS) and Held for Trading (HFT) portfolios as on each of the valuation dates in equal installments during the financial year 2013-2014. The bank amortised such depreciation during the quarters ended 30 September and 31 December 2013. In the Profit and Loss Account for the quarter and year ended 31 March 2014, IndusInd Bank has recognised depreciation in respect of the AFS and HFT portfolios in full.
Crompton Greaves rose 1.15% to Rs 180.30 on reports the company's founding family is holding talks to sell its stake to Hitachi. The stock hit 52-week high of Rs 188 in intraday trade. The company has clarified that it is not engaged in or informed of any negotiations regarding the rumored stake sale by the promoters of the company.
In the foreign exchange market, the rupee edged lower against the dollar as stocks fell. The partially convertible rupee was hovering at 60.295, compared with its close of 60.23/24 on Tuesday, 15 April 2014.
Private weather forecaster Skymet on Tuesday, 15 April 2014, said it expects the June-September monsoon to be below normal this year. It has forecast the monsoon at 94% (error margin of +/-4%) of the long period average (LPA) of 896 mm for the four-month period from June to September 2014. In terms of geographical risk, Skymet suggests that peninsular India will be at less risk through June, July, August and September (JJAS). There seems to be weakness in majority subdivisions in Northwest India viz. Gujarat, Saurashtra, Kutch, Punjab, Rajasthan and Haryana and in West-Central India viz. East MP, West MP, Chhattisgarh, Vidarbha, Marathwada, Madhya Maharshtra, Konkan & Goa, North Interior Karnataka and Telangana during the whole season, Skymet said in a statement. August is expected to be the best month among the four, although negative. It appears that onset of the monsoon may be staggered this time, Skymet said.
Jatin Singh, CEO, Skymet said: "This weakness in monsoon could possibly be attributed to an evolving ENSO". The ENSO is a phenomenon wherein the Central and East Pacific ocean warms (El Ni) or cools (La Ni), in turn affecting the monsoon. El Ni is evolving as of now, but is expected to get arrested, Skymet said. There is only a 30% chance of this phenomenon getting stronger, it said. If this El Ni was amplifying, then there would be a stronger chance of drought, like in 2009, Skymet said. This does not seem to be the case at this point in time, it said. There is no clear signal about the emergence of Indian Ocean Dipole (IOD) this year during monsoon, Skymet said.
According to Skymet, rains in June are expected at 90% of LPA (LPA = 174 mm). In July, the monsoon is expected at 94% of LPA (LPA = 285 mm). Rains in August are expected at 98% of LPA (LPA = 253 mm). Rains in September are expected at 90% of LPA (LPA = 184 mm).
The rate on inflation based all India general consumer price index (CPI) combined for urban and rural India accelerated to 8.31% (provisional) in March 2014, from 8.03% (final) in February 2014, led by increase in food prices, data released by the government after trading hours on Tuesday, 15 April 2014, showed. Core CPI inflation which excludes food and fuel prices eased to 7.82% in March 2014, from 7.84% in February 2014.
CPI inflation eased to 9.5% for the year ended 31 March 2014 (FY 2014), from 10.2% for the year ended 31 March 2013 (FY 2013).
The Reserve Bank of India (RBI) next undertakes monetary policy review on 3 June 2014. The RBI left its main lending rate viz. the repo rate unchanged at 8% after a monetary policy review on 1 April 2014, as consumer-price inflation eased to a two-year low and as the rupee firmed up against the dollar.
A major near term trigger for the stock market is the outcome of the upcoming Lok Sabha elections. The 36 days long voting process began on 7 April 2014 and will conclude on 12 May 2014. The results will be declared on 16 May 2014 after which India will get a new government. The term of the current Lok Sabha expires on 1 June and the new House has to be constituted by 31 May.
European stocks edged higher on Wednesday, 16 April 2014, with resource firms posting some of the biggest gains after better-than-expected growth data from China. Key benchmark indices in UK, France and Germany were up 0.49% to 0.82%.
Asian stocks edged higher on Wednesday, 16 April 2014, as China reported data on economic growth for the January-to-March period which was better than estimates. Key benchmark indices in Japan, Singapore, Indonesia, Hong Kong and Taiwan were up 0.11% to 3.01%. In South Korea, Seoul Composite index was off 0.06 points at 1,992.21.
In mainland China, the Shanghai Composite was up 0.17% in choppy trade. China's expansion slowed to the weakest pace in six quarters, testing leaders' commitment to keep reining in a credit boom and pollution as risks mount of missing a 7.5% annual growth target. However, the growth was slightly higher than market expectations. Gross domestic product rose 7.4% in the January-to-March period from a year earlier, the National Bureau of Statistics said today in Beijing.
Fixed-asset investment in non-rural areas of China rose 17.6% in the January-March period compared with the same period a year earlier, data from the National Bureau of Statistics showed. The rise in the closely watched indicator of construction activity was slower than the 17.9% increase recorded in the January-February period.
Retail sales in China rose 12.2% in March from a year earlier, accelerating from a 11.8% on-year rise for January and February, data from the National Bureau of Statistics showed. Retail sales also increased 1.23% in March from February. In February, they rose 0.71%.
China's industrial production grew 8.8% in March, slightly below market expectations of 9% growth.
Trading in US index futures indicated that the Dow could advance 59 points at the opening bell on Wednesday, 16 April 2014. US stocks rose in choppy trade on Tuesday, 15 April 2014, as earnings from Coca-Cola Co. and Johnson & Johnson overshadowed concerns that tensions in Ukraine are worsening.
The latest US economic data showed manufacturing in the New York region grew at a slower pace in April while the cost of living in the US rose more than projected in March as food and rents became more expensive. Confidence among US homebuilders rose less than forecast in April, as sales and prospective buyer traffic stagnated, showing the residential real estate market struggled to improve after a harsh winter.
The US Federal Reserve is considering further steps to force big banks to hold more capital, and sees a case for other stability-enhancing measures for more shadowy areas of Wall Street as well, Fed Chair Janet Yellen said on Tuesday. The Fed has been pushing banks to strengthen their balance sheets since the 2007-2009 financial crisis, and last week joined other regulators in requiring the eight largest US banks to increase their capital levels by some $68 billion in total.
She cited a 2010 study by the Basel Committee, an international standard-setting body, that suggested tighter standards would provide economic benefits.
The United States is in the process of implementing new international capital and liquidity standards known as Basel III, which will be phased in between 2015 and early 2019. The rules are meant to help banks weather short-term funding crises.
Yellen said the US central bank's staff was "actively considering" whether even more needed to be done to address risks in the so-called short-term wholesale funding market, which is a significant source of funding for firms.
The Federal Open Market Committee (FOMC) next undertakes monetary policy review at a two-day meeting on 29-30 April 2014. The Federal Reserve on 19 March 2014 decided after the conclusion of a monetary policy review to trim its monthly bond purchases by $10 billion to $55 billion.
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