A recovery in mid-afternoon trade helped key benchmark indices recoup almost entire intraday losses. The market breadth, indicating the overall health of the market, once again turned positive from negative in mid-afternoon trade. The barometer index, the S&P BSE Sensex, was down 12.54 points or 0.06%, up 137.58 points from the day's low and off 115.72 points from the day's high.
Index heavyweight and cigarette major ITC regained positive zone in volatile trade. ICICI Bank also regained positive zone in volatile trade. Shares of Multi Commodity Exchange of India (MCX) surged after Blackstone on Monday, 6 January 2014, bought 2.79% stake in the company for around Rs 81 crore on BSE. Shares of Financial Technologies (India) (FTIL) were locked at 10% upper circuit. Shares of offshore oil services providers extended Monday's upmove. Sugar shares were in demand.
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 Sensex languished in the negative terrain in afternoon trade. A recovery in mid-afternoon trade helped key benchmark indices recoup almost entire intraday losses.
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 14:19 IST, the S&P BSE Sensex was down 12.54 points or 0.06% to 20,774.76. 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 5.50 points or 0.09% to 6,185.95. 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, once again turned positive from negative in mid-afternoon trade. On BSE, 1,243 shares gained and 1,165 shares declined. A total of 158 shares were unchanged. The breadth alternately swung between positive and negative zone since early afternoon trade.
Among the 30-share Sensex pack, 16 stocks declined and rest of them gained. Maruti Suzuki India (up 2.32%), Bhel (up 1.86%) and Sun Pharmaceutical Industries (up 1.45%) edged higher.
Index heavyweight and cigarette major ITC rose 0.4% to Rs 317.25, with the stock regaining positive zone in volatile trade. The stock hit a high of Rs 317.50 and low of Rs 313 so far during the day.
ICICI Bank rose 0.32% to Rs 1,044.05, with the stock regaining positive zone in volatile trade. The stock hit a high of Rs 1,059.10 and low of Rs 1,025.10 so far during the day.
Tata Steel lost 1.74% to Rs 401.15. The stock hit a high of Rs 412 and low of Rs 396.20 so far during the day.
Shares of Multi Commodity Exchange of India (MCX) surged after Blackstone on Monday, 6 January 2014, bought 2.79% stake in the company for around Rs 81 crore on BSE. The stock was up 4.07% at Rs 594.70. As per the stock exchange data, Blackstone GPV Capital Partners (Mauritius) VI FII acquired 14.22 lakh shares, or 2.79% stake, in MCX at Rs 573 each from Merrill Lynch Holdings (Mauritius).
Last month, Forward Markets Commission (FMC) approved Blackstone GPV Capital partners (Mauritius) VI FII to increase its stake in MCX upto 4.99% through secondary market transaction.
As on 30 September 2013, Blackstone GPV Capital Partners Mauritius VI FII held 10.19 lakh shares, or 2% stake, while Merrill Lynch Holdings (Mauritius) held 14.22 lakh equity shares, or 2.79% stake, in MCX.
Shares of Financial Technologies (India) (FTIL) were locked at 10% upper circuit at Rs 271.45 on BSE.
Shares of offshore oil services providers extended Monday's upmove. Aban Offshore (up 7.93%), Hindustan Oil Exploration Company (up 10%), Dolphin Offshore Enterprises (India) (up 1.09%), GOL Offshore (up 2.5%) and Jindal Drilling Industries (up 2.19%), edged higher.
Oil secretary Vivek Rae on Monday, 6 January 2014, said that the government will offer at least 56 oil and gas blocks in its next round of auction of exploration blocks that will be launched next week. The oil ministry, which has already moved a cabinet note for the next exploration licensing round, plans to invite bids for the blocks in February.
Sugar shares were in demand. Bajaj Hindusthan (up 2.55%), Dhampur Sugar Mills (up 3.62%), Sakthi Sugars (up 3.29%), Balrampur Chini Mills (up 1.78%), Shree Renuka Sugars (up 9.14%), Simbhaoli Sugar Mills (up 7.31%) and Dwarikesh Sugar Industries (up 1.11%) gained.
In the foreign exchange market, the rupee edged lower against the dollar as equities dropped. The partially convertible rupee was hovering at 62.38, 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.
European stocks alternately swung between positive and negative zone on Tuesday, 7 January 2014. Key benchmark indices in UK, France and Germany were currently off 0.05% to 0.17%.
British businesses plan to hire more staff and invest in new equipment this year, signaling the UK's economic revival is likely to gather strength through 2014. A survey of nearly 8,000 businesses by the British Chambers of Commerce, published Tuesday, said a gauge of manufacturing firms' hiring intentions reached a record high at the close of 2013, while firms in Britain's services sector reported their strongest hiring intentions since the end of 2007.
French consumer confidence rose slightly in December, although it remains at a level below its long-term average, statistics showed Tuesday. Consumer confidence measures by national statistics agency Insee rose to 85 in December from 84 in November. The long-term average reading is 100.
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.
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 China, Taiwan, Hong Kong, Singapore and South Korea were up 0.08% to 0.32%. Key benchmark indices in Japan and Indonesia were off 0.37% 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 38 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.
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