The market breadth, indicating the overall health of the market, turned negative from positive in afternoon trade. Key benchmark indices viz. the barometer index, the S&P BSE Sensex, and the 50-unit CNX Nifty, both, regained strength after trimming intraday gains early afternoon trade. The Sensex was up 281.07 points or 1.35%, off close to 27 points from the day's high and up about 189 points from the day's low. Indian stocks surged today, 13 January 2014, as a weaker-than-estimated US jobs report eased concern that the US Federal Reserve may accelerate the pace of stimulus cuts. Fed's bond-buying program has been a source of liquidity for most Asian and emerging markets in recent years. India has been one of the biggest beneficiaries of foreign capital flows.
Lead acid batteries maker Exide Industries dropped after announcing poor Q3 December 2013 results. Shares of pharmaceutical major Ranbaxy Laboratories tumbled after the company said it has received the form 483 with certain observations as a result of the recent US FDA inspection at its active pharmaceuticals ingredient (API) plant at Toansa, Punjab, India.
The Sensex surged in early trade as a weaker-than-estimated US jobs report eased concern that the US Federal Reserve may accelerate the pace of stimulus cuts. The Sensex moved past the psychological 21,000 mark. The Sensex extended initial gains and hit fresh intraday high in morning trade. The Sensex and the 50-unit CNX Nifty, both, hit 1-1/2-week high. Key benchmark indices regained strength after trimming intraday gains early afternoon trade.
Foreign institutional investors (FIIs) bought shares worth a net Rs 68.16 crore on Friday, 10 January 2014, as per provisional data from the stock exchanges.
At 13:17 IST, the S&P BSE Sensex was up 281.07 points or 1.35% to 21,039.56. The index jumped 307.59 points at the day's high of 21,066.08 in morning trade, its highest level since 2 January 2014. The index rose 92.05 points at the day's low of 20,850.54 in opening trade.
The CNX Nifty was up 72.85 points or 1.18% to 6,244.30. The index hit a high of 6,259 in intraday trade, its highest level since 2 January 2014. The index hit a low of 6,189.55 in intraday trade.
The market breadth, indicating the overall health of the market, turned negative from positive in afternoon trade. On BSE, 1,276 shares fell and 1,247 shares gained. A total of 150 shares were unchanged.
Infosys (up 3.36%), TCS (up 2.71%), ONGC (up 2.41%), Reliance Industries (up 1.90%), ICICI Bank (up 1.75%), Tata Motors (up 1.70%), Larsen & Toubro (up 1.22%), HDFC Bank (up 1.19%), HDFC (up 1.17%) and Wipro (up 1.05%), edged higher from the Sensex pack.
Tata Power Company (down 2.86%), Hindalco Industries (down 1.54%), Sun Pharmaceutical Industries (down 1.18%), Maruti Suzuki India (down 1.15%), Jindal Steel & Power (down 1.11%), Hindustan Unilever (down 1%), Sesa Sterlite (down 0.92%), Dr. Reddy's Laboratories (down 0.72%), GAIL (India) (down 0.62%) and Bhel (down 0.40%), edged lower from the Sensex pack.
Shares of pharmaceutical major Ranbaxy Laboratories tumbled after the company said it has received the form 483 with certain observations as a result of the recent US FDA inspection at its active pharmaceuticals ingredient (API) plant at Toansa, Punjab, India. The stock was off 8.53%. Ranbaxy said that the company is assessing the US FDA observations, and will respond to the US FDA in accordance with the agency's procedure to resolve the concerns at the earliest. Ranbaxy said it continues to improve its systems and processes, and remains fully committed to upholding the highest standards that patients, prescribers, regulators and all other stakeholders expect from the company. The company added that it stays firmly committed to its philosophy of quality and patients first.
Lead acid batteries maker Exide Industries dropped after announcing poor Q3 December 2013 results. The stock was off 3.61% at Rs 108. The stock hit a 52-week low of Rs 106.65 in intraday trade. Exide Industries' net profit fell 25.52% to Rs 77.52 crore on 11.28% decline in total income to Rs 1308.85 crore in Q3 December 2013 over Q3 December 2012. The result was announced during trading hours today, 13 January 2014.
Commenting on the performance, Exide Industries' Managing Director & CEO Mr P K Kataky said that continued sluggish demand had its impact on the performance of the company. In the replacement market, the demand for heavy duty and light duty commercial vehicles including passenger cars used for commercial application (taxi) remained subdued. Automobile OEMs had a degrowth. In industrial batteries, the demand for infrastructure, motive power, telecom and inverter batteries continued to be sluggish, Mr Kataky said. He said that the company's cost control and technological upgradation initiatives are progressing well and this will enable the company to succeed in its marketing efforts in a high competitive market in the future.
In the foreign exchange market, the rupee edged higher against the dollar as a weaker-than-estimated US jobs report eased concern that the Federal Reserve may accelerate the pace of stimulus cuts. The partially convertible rupee was hovering at 61.44, compared with its close of 61.89/90 on Friday, 10 January 2014. Gains in equities also aided rupee's gains.
Bond prices rose as industrial production data released after market hours on Friday, 10 January 2014, showed contraction in output for second straight month. The yield on 10-year benchmark federal paper, 8.83% GS 2023, was hovering at 8.7256%, lower than its close of 8.7581% on Friday, 10 January 2014. Bond yield and bond prices are inversely related. The weak industrial production data has raised the expectations of RBI continuing with status quo on policy rates at third quarter review of monetary policy due on 28 January 2014. The CPI inflation data for December 2013 to be released today, 13 January 2014, is also expected show easing from November 2013 level, supporting sentiments in the gilts market.
The index of industrial production (IIP) declined 2.1% in November 2013, recording decline for second consecutive month after 1.6% dip in October 2013. The sharp decline in the output of manufacturing sector by 3.5% mainly led to decline in IIP in November 2013. Meanwhile, the marginal 1% growth in mining sector output and healthy 6.3% growth in the electricity generation restricted further dip in industrial production during November 2013. The government unveiled industrial production data for November 2013 after market hours on Friday, 10 January 2014.
Inflation based on the combined consumer price index (CPI) of urban and rural India is projected to ease at 10.1% in December 2013, from a record high of 11.24% in November 2013, as per the median estimate of a poll of economists carried out by Capital Market. The government will unveil CPI data for December 2013 after trading hours today, 13 January 2014.
The Reserve Bank of India's Third Quarter Review of Monetary Policy for 2013-14 is scheduled on 28 January 2014.
Asian stocks edged higher on Monday, 13 January 2014, as a weaker-than-estimated US jobs report eased concern that the US Federal Reserve may accelerate the pace of stimulus cuts. Fed's bond-buying program has been a source of liquidity for most Asian and emerging markets in recent years. Key benchmark indices in Indonesia, Hong Kong, South Korea and Taiwan were up 0.26% to 2.88%. Key benchmark indices in China and Singapore were off 0.11% to 0.19%. Markets in Japan were closed for a holiday.
Trading in US index futures indicated that the Dow could drop 24 points at the opening bell on Monday, 13 January 2014. US stocks ended mostly higher on Friday, 10 January 2014, as a weaker-than-estimated jobs report eased concern that the Federal Reserve may accelerate the pace of stimulus cuts. A government report showed that US employment rose at the slowest pace in three years in December. The 74,000 gain in payrolls was the weakest since January 2011, Labor Department figures showed in Washington. The coldest December in four years probably contributed to a slump in hiring at construction and recreation companies, while industries such as health care and accounting also cut staff.
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.
Another cut to bond purchases by the US central bank appears in the offing this month despite data on Friday, 10 January 2014, that showed US jobs growth slowed sharply in December 2013, two top Federal Reserve officials said on Friday, 10 January 2014. "I would be disinclined to react to one month's number," St. Louis Fed President James Bullard told reporters after speaking at an Indiana bankers event. "For now we're on a program where we're likely to continue to taper (asset purchases) at subsequent meetings," Bullard said. He said he was more focused on the drop in unemployment than on the paltry 74,000 jobs that were created, a number he expects to be revised higher.
Asked whether the Fed might be forced to lower that 6.5% unemployment rate threshold, given the sharp drop in joblessness, Bullard said it was unlikely in part because such a move could compromise the credibility of the policy promise. However the big "wildcard" for Fed policy this year remains persistently low inflation, Bullard said. "For now we're on a program where we're likely to continue to taper at subsequent meetings ... But it is data dependent. If inflation stepped lower in a clear way then I think that would give me some pause" in continuing the cuts, he said.
Jeffrey Lacker, the hawkish head of the Richmond Fed, said it would take a "couple of quarters" of bad news to change the US economy's improving trend. "It takes a lot more than one labor market report to be convincing that the trend has shifted and in my experience one employment report rarely has an effect by itself on monetary policy," said Lacker, who has been an opponent of bond buying from its start. "I would expect a similar reduction in pace to be discussed at the upcoming meeting," Lacker told reporters after a speech to a business group in Raleigh.
The Fed targets 2% inflation. Lacker said he was confident inflation would move back towards that goal in the next year or two but added: "This is not a certainty, however, and I believe the FOMC will want to watch this closely," referring to the policy-setting Federal Open Market Committee.
Neither Bullard nor Lacker have votes on policy this year under the Fed's rotating system.
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