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Market breadth turns negative from positive

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A bout of volatility was witnessed as key benchmark indices trimmed gains after a sharp surge took the two key benchmark indices -- the barometer index, the S&P BSE Sensex, and the 50-unit CNX Nifty -- to fresh record high in early afternoon trade. The market breadth, indicating the overall health of the market turned negative from positive. The Sensex was up 279.21 points or 1.3%, off close to 70 points from the day's high and up about 255 points from the day's low.

Bank stocks surged. Pharma stocks declined as investors offload defensive stocks in favour of high beta stocks as key benchmark indices scaled record high. Bharti Airtel surged after the company said that Standard and Poor's Rating Services (S&P) has upgraded its issuer rating of the company to 'BBB-'.

Trading for the day started on an upbeat note as the Sensex and the 50-unit CNX Nifty, both, hit record high in early trade. Key benchmark indices extended initial gains and hit fresh intraday high in morning trade. The uptrend continued uptrend as key benchmark indices hit fresh intraday high in mid-morning trade. A bout of volatility was witnessed as key benchmark indices trimmed gains after a sharp surge in early afternoon trade.

Foreign institutional investors (FIIs) bought shares worth a net Rs 1272.93 crore on Thursday, 6 March 2014, as per provisional data from the stock exchanges.

At 12:20 IST, the S&P BSE Sensex was up 279.21 points or 1.3% to 21,793.08. The index jumped 352.64 points at the day's high of 21,866.51 in early afternoon trade, a fresh record high, with the index surpassing its previous record high of 21,525.14 hit on Thursday, 6 March 2014. The index gained 25.57 points at the day's low of 21,539.44 in opening trade.

The CNX Nifty was up 83.10 points or 1.3% to 6,484.25. The index hit a high of 6,506.15 in intraday trade, a new record high, with the index surpassing its previous record high of 6,415.25 hit on 9 December 2013. The index hit a low of 6,413.55 in intraday trade.

The BSE Mid-Cap index was off 26.89 points or 0.4% at 6,681.11. The BSE Small-Cap index was off 24.82 points or 0.37% at 6,601.64. Both these indices underperformed the Sensex.

The market breadth, indicating the overall health of the market turned negative from positive in early afternoon trade. On BSE, 1,323 shares dropped and 1,141 shares rose. A total of 130 shares were unchanged.

Among the 30-share Sensex pack, 17 stocks rose and rest of them fell. L&T (up 5.87%), RIL (up 3.92%) and Bhel (up 2.89%) edged higher from the Sensex pack.

Bank shares surged. Among private bank stocks, Yes Bank (up 7.16%), Federal Bank (up 4.45%), IndusInd Bank (up 4.92%), ICICI Bank (up 7.78%), AXIS Bank (up 6.75%), Kotak Mahindra Bank (up 3.56%), and HDFC Bank (up 4.22%) gained.

Among PSU bank stocks, Union Bank of India (up 2.11%), Bank of Baroda (up 4.84%), Canara Bank (up 2.51%), Bank of India (up 3.07%), Punjab National Bank (up 4.66%) and State Bank of India (up 4.68%) edged higher.

Central Bank of India rose 3.07% after the bank said it has after due approval sold its entire stake in Credit Information Bureau of India to Transunion International Inc (FII). The announcement was made after market hours on Thursday, 6 March 2014.

Bharti Airtel surged 5% after the company said during market hours that Standard and Poor's Rating Services (S&P) has upgraded its issuer rating of the company to 'BBB-'. The rating agency assigned a stable outlook which is above the credit rating outlook assigned to the country, reflecting the company's ability to withstand sovereign stress, Bharti Airtel said.

Bharti Airtel now carries a stable investment grade rating from all 3 major rating agencies - S&P (BBB-; Stable), Moody's (Baa3;Stable) and Fitch (BBB-; Stable). The rating reflects Bharti's strong market leadership, business diversity, strong financial profile and the improving regulatory and competitive environment in India. According to S&P, Bharti has an adequate liquidity profile, and anticipates that the net sources of liquidity will remain positive even if EBITDA declines by 15%.

Mr. Harjeet Kohli, Group Treasurer, Bharti Airtel said: "The investment grade rating by all the 3 major agencies is a correct reflection of the strength of our business. The consistent ratings give us an even better access to global capital markets to continue to diversify our sources of funding and lengthening the tenors of our debt. S&Ps assessment also reflects on our ability to withstand a sovereign stress".

Pharma stocks declined as investors offload defensive stocks in favour of high beta stocks as key benchmark indices scaled record high. Cipla (down 0.95%), Dr Reddy's Laboratories (down 3.11%), Ranbaxy Laboratories (down 1.16%) and Sun Pharmaceutical Industries (down 0.86%) declined.

Lupin shed 2.31% to Rs 960.70, with the stock reversing initial gains. The company said after market hours on Thursday, 6 March 2014, that it has received final approval for its Doxycycline Capsules USP, 50 mg, 75 mg, and 100 mg from the United States Food and Drugs Administration (FDA) to market a generic version of Aqua Pharmaceuticals Monodox Capsules 50 mg, 75 mg, and 100 mg. Lupin's Doxycycline Capsules 50mg, 75mg and 100mg are the AB-rated generic equivalents of Aqua Pharmaceuticals, LLC's Monodox Capsules 50mg, 75mg and 100mg and are indicated in the treatment of infections caused by various microorganisms and as an adjunctive therapy in severe acne.

The company also received final approval from the FDA for its Ciprofloxacin for Oral Suspension, 5 g/100 mL (250 mg/5 mL) and 10 g/100 mL (500 mg/5 mL) to market a generic version of Bayer HealthCare Pharmaceuticals, Inc.'s (Bayer) Cipro for Oral Suspension 5 g/100 mL and 10 g/100 mL, Lupin said. Lupin's Ciprofloxacin Oral Suspension, 5 g/100 mL (250 mg/5 mL) and 10 g/100 mL (500 mg/5 mL) is the generic equivalent of Bayer's Cipro Oral Suspension 5 g/100 mL (250 mg/5 mL) and 10 g/100 mL (500 mg/5 mL) and indicated for the treatment of infections caused by susceptible isolates of the designated microorganisms in various conditions and patient populations.

Lupin is the first applicant to file an ANDA for Cipro Oral Suspension 250 mg/ml & 500 mg/ml and as such is entitled to 180 days of marketing exclusivity. Lupin Pharmaceuticals Inc. (LPI), the company's US subsidiary would commence marketing the products shortly, Lupin said in a statement.

Monodox Capsules had annual US sales of $180.6 million (IMS MAT Dec, 2013) whereas Cipro Oral Suspension had annual US sales of $8.6 million (IMS MAT Dec, 2013).

In the foreign exchange market, the rupee edged higher against the dollar as equities rose. The partially convertible rupee was hovering at 61.05, compared with its close of 61.11/12 on Thursday, 6 March 2014.

Indian government bond prices fell as the yield on 10-year US Treasury note rose overnight. The yield on 10-year benchmark federal paper, 8.83% GS 2023, was hovering at 8.8147%, higher than its close of 8.7922% on Thursday, 6 March 2014. Bond yield and bond prices move in opposite direction. The yield on 10-year US Treasury note rose 3 basis points to settle at 2.74% on Thursday 6 March 2014 after weekly jobless claims fell in the US to the lowest level since the end of November 2013.

The Reserve Bank of India next undertakes monetary policy review on 1 April 2014. Citing price pressures, the Reserve Bank of India raised its key lending rates by 25 basis points after Third Quarter Review of Monetary Policy for 2013-14 on 28 January 2014.

On the political front, the BJP-led National Democratic Alliance (NDA) is expected to do well in the upcoming Lok Sabha elections according to CNN-IBN-Lokniti-CSDS national election tracker and seat projections by Chennai Mathematical Institute Director Rajeeva Karandikar. As per the survey, NDA is projected to win 212-232 seats. The Congress-led UPA is projected to get 119-139. The survey indicates that the BJP alone is expected to get 193-213 seats and the Congress alone can get 94-110 seats. Mamata Banerjee led TMC is expected to emerge as the third largest party with 20-28 seats. The Left Front is expected to win just 15-23 seats. Tamil Nadu CM J Jayalalithaa led AIADMK is likely to win 14-20 seats, YS Jagan Mohan Reddy's YSR Congress Party is projected to get 11-17 seats, Mulayam Singh Yadav led SP is likely to get 11-17 seats, Naveen Patnaik led BJD is expected to win 10-16 seats, The TDP led by N Chandrababu Naidu is expected to win 10-16 seats, M Karunanidhi led DMK is expected to win 10-16 seats, Mayawati's BSP is projected to get 8-14 seats, K Chandrashekhara Rao led TRS is expected get 4-8 seats, former PM HD Deve Gowda's JDS is also expected to get 4-8 seats, the JDU 1-5 seats and the AAP is also projected to get 1-5 seats respectively.

The BJP and its allies together (NDA) are expected to get 36% votes and the Congress and its allies are projected to get 29% votes nationally. The BJP alone can get 33% votes and the allies can add 3% more. The Congress is projected to get 26% votes on its own and the allies may contribute 3% extra votes. Both the BJP and the Congress have lost 1% votes each since January survey. While the Congress allies have gained 2% votes, the BJP allies have gained 1% votes since last January.

According to election tracker, the BJP is expected do to remarkably well in battleground states of UP and Bihar, where its electoral fortunes have been on a downswing for a long time. However, regional parties are expected to do very well in Andhra Pradesh (including Telangana), Odisha, West Bengal and Tamil Nadu. Smaller regional parties like TRS, JDS etc are also expected to retain their relevance at national level by retaining their strength in their respective states, according to the survey.

According to CNN-IBN-Lokniti-CSDS election tracker, BJP Prime Ministerial candidate Narendra Modi leads the race for the next prime minister in six states of India. Of the six states, five are key battleground states of Uttar Pradesh, Bihar, Maharashtra, Andhra Pradesh and Tamil Nadu. The sixth state is Delhi, the stronghold of the AAP led by Arvind Kejriwal.

The Lok Sabha elections will be held between 7 April 2014 and 12 May 2014 in nine phases. The counting of votes will be take place on 16 May 2014. The term of the current Lok Sabha expires on June 1 and the new House has to be constituted by May 31. Along with the Lok Sabha election, Andhra Pradesh (AP), including the regions comprising Telangana, Odisha and Sikkim will go to polls to elect new assemblies. AP, Odisha and Sikkim assemblies come to end on June 2, June 7 and May 7 respectively.

Asian shares edged higher on Friday, 7 March 2014, as most US stocks rose on Thursday, 6 March 2014, with the S&P 500 hitting record closing high. Key benchmark indices in China, Singapore, Japan, Hong Kong and Indonesia were up 0.01% to 1.01%. Key benchmark indices in South Korea and Taiwan shed 0.01% to 0.05%.

Trading in US index futures indicated that the Dow could advance 30 points at the opening bell on Friday, 7 March 2014. Most US stocks rose on Thursday, 6 March 2014, sending the Standard & Poor's 500 Index to an all-time high as data showed jobless claims fell to the lowest level in three months and investors watched developments in Ukraine.

Fewer Americans than projected filed applications for unemployment benefits last week, an indication companies are holding on to staff even as cold weather threatens to slow the world's largest economy. Separate data indicated factory goods orders in January fell 0.7%, declining more than forecast.

The US Labor Department will release its February jobs report today, 7 March 2014.

The Federal Open Market Committee (FOMC) next undertakes monetary policy review on 18-19 March 2014. After a monetary policy review, the FOMC on 29 January 2014 announced it will reduce monthly bond purchases by another $10 billion to $65 billion.

In Europe, the European Central Bank (ECB) kept interest rates unchanged at a record low of 0.25% on Thursday, 6 March 2014, as stronger inflation and economic output reduced the need for officials to take action. ECB head Mario Degahi again said that although the bank is not introducing new easing programs, he is still ready to act if need be. The ECB also raised its growth outlook and said that inflation is likely to increase slowly in the medium-term.

The Bank of England on Thursday, 6 March 2014, made no change in policy, holding its key lending rate at a record low of 0.5% and its asset purchases at 375 billion pounds ($627 billion).

Lawmakers in the largely-autonomous Russian-majority peninsula of Crimea on Thursday voted in favour of leaving Ukraine and joining the Russian Federation, even as the US slapped visa restrictions on the separatists and began lining up financial sanctions against Moscow.

The US and Ukraine complained that Crimean legislators were tutored by Russia and they did not recognize the legitimacy of a formal referendum that has been scheduled for March 16 to put a seal of approval on the vote. The Crimean parliament resolved "to enter into the Russian Federation with the rights of a subject of the Russian Federation" It said it had asked Russian President Vladimir Putin "to start the procedure"

US President Barack Obama said the US and its allies will keep raising pressure on Russia to back down in Ukraine and held open the possibility of further sanctions if Vladimir Putin's government doesn't respond. His administration earlier banned visas for Ukrainian officials and others, including Russians, who it says are threatening Ukraine's sovereignty. Obama also authorized the imposition of financial sanctions.

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First Published: Fri, March 07 2014. 12:15 IST
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