Key benchmark indices extended losses and hit fresh intraday low in mid-morning trade. The market breadth, indicating the overall health of the market, was weak. The market sentiment was hit adversely by the US Federal Reserve's decision of a further reduction in its monthly bond purchases and Fed's indication that it is likely to keep reducing its purchases in the coming months, citing a pickup in US economic activity and improvement in the US labor market. The barometer index, the S&P BSE Sensex, was down 240.29 points or 1.16%, off 94.91 points from the day's high and up 7.77 points from the day's low. The BSE Small-Cap and Mid-Cap indices were off more than 1% each.
Metal stocks declined after weak Chinese manufacturing data. PSU OMCs edged lower as higher crude oil prices and weakness in rupee against the dollar spared worries of higher cost of crude imports.
Key benchmark indices edged lower in early trade on weak Asian stocks. Key benchmark indices extended initial losses and to hit fresh intraday low in morning trade. The Sensex and the 50-unit CNX Nifty, both, hit their lowest level in more than nine weeks. Key benchmark indices extended losses and hit fresh intraday low in mid-morning trade.
The market may remain volatile today, 30 January 2014, as traders roll over positions in the futures & options (F&O) segment from the near month January 2014 series to February 2014 series. The January 2014 F&O contracts expire today, 30 January 2014.
Foreign institutional investors (FIIs) bought shares worth a net Rs 250.48 crore on Wednesday, 29 January 2014, as per provisional data from the stock exchanges.
Asian stocks dropped on Thursday, 30 January 2014, after the US Federal Reserve pressed on with cuts to US economic stimulus and as a report showed China's manufacturing industry contracted.
After a monetary policy review, the Federal Open Market Committee (FOMC) on Wednesday, 29 January 2014, announced it will reduce monthly bond purchases by another $10 billion to $65 billion. The Fed also signaled that it is likely to keep reducing its purchases in the coming months, citing a pickup in economic activity and improvement in the labor market. In emerging markets, the reduction in bond purchases by the Fed has triggered worries of slowdown in capital inflows and fears of capital outflows. Fed's bond-buying program has been a source of liquidity for most Asian and emerging markets in recent years.
The South Africa Reserve Bank unexpectedly raised the repurchase rate to 5.5% from 5% on Wednesday, 29 January 2014, following Turkey's decision early this week to more than double its benchmark rate amid a rout in its currency.
At 11:15 IST, the S&P BSE Sensex was down 240.29 points or 1.16% to 20,407.01. The index lost 248.06 points at the day's low of 20,399.24 in mid-morning trade, its lowest level since 27 November 2013. The index fell 145.38 points at the day's high of 20,501.92 in early trade.
The CNX Nifty was down 70.20 points or 1.15% to 6,050.05. The index hit a low of 6,044.40 in intraday trade, its lowest level since 27 November 2013. The index hit a high of 6,072.95 in intraday trade.
The BSE Mid-Cap was off 82.94 points or 1.32% to 6,199.56. The BSE Small-Cap index was off 86.98 points or 1.39% to 6,186.97. Both these indices underperformed the Sensex.
The market breadth, indicating the overall health of the market, was weak. On BSE, 1,373 shares declined and 556 shares rose. A total of 106 shares were unchanged.
Among the 30-share Sensex pack, 26 stocks declined and only four gained.
Metal stocks declined after weak Chinese manufacturing data. China is the world's largest consumer of copper and aluminum.
National Aluminium Company (Nalco) lost 3.01%. The company's net profit rose 10.16% to Rs 131.03 crore on 2.26% decline in total income to Rs 1764.64 crore in Q3 December 2013 over Q3 December 2012. The result hit the market after trading hours on Wednesday, 29 January 2014.
Sesa Sterlite lost 3.48%, with the stock extending Tuesday's 3.05% fall. On a consolidated basis, Sesa Sterlite reported a net profit Rs 1868.29 crore on total income of Rs 19912.90 crore in Q3 December 2013. The result was announced after market hours on Tuesday, 28 January 2014. The Q3 December 2013 figures are non comparable with Q3 December 2012 as the merger of copper producer Sterlite Industries (India) and iron-ore miner Sesa Goa, to form Sesa Sterlite took effect in August 2013.
JSW Steel lost 4.08%. The company reported a consolidated net profit of Rs 466.49 crore in Q3 December 2013 as against net loss of Rs 73.70 crore in Q3 December 2012. The Q3 result was announced during trading hours on Tuesday, 28 January 2014.
JSW Steel's consolidated total income rose 53.29% to Rs 13637.21 crore in Q3 December 2013 over Q3 December 2012.
JSW Steel said that the Q3 December 2013 results are after giving effect to the scheme of amalgamation and arrangement (scheme) between the company and JSW ISPAT Steel and others, which became effective 1 June 2013 with appointed date of 1 July 2012. Hence, the current quarter figures are not strictly comparable with that of Q3 December 2012 as the effect of implementation of the scheme is included in the current quarter figures, JSW Steel said in a statement.
Jindal Steel & Power (JSPL) fell 0.75%, with the stock extending Tuesday's 1.8% fall. The company's consolidated net profit jumped 23% to Rs 559.21 crore 8% growth in turnover to Rs 5377.37 crore in Q3 December 2013 over Q2 September 2013. Earnings before interest, taxation, depreciation and amortization (EBITDA) rose 17% to Rs 1700.69 crore in Q3 December 2013 over Q2 September 2013. The company announced the results during trading hours Tuesday, 28 January 2014.
Among other metal shares, Hindustan Zinc (down 1.48%), Hindalco Industries (down 2.59%) and Tata Steel (down 2.78%) edged lower. Steel Authority of India (Sail) rose 1.29%.
PSU OMCs edged lower as higher crude oil prices and weakness in rupee against the dollar spared worries of higher cost of crude imports. PSU OMCs import majority of their crude oil requirements. BPCL (down 2.3%), HPCL (down 1.17%) and Indian Oil Corporation (IOC) (down 0.13%) declined.
The three public sector oil marketing companies (PSU OMCs) -- BPCL, HPCL and IOC -- suffer revenue loss or under recoveries on domestic sale of diesel, LPG (cooking gas) and kerosene at a controlled price. The government decontrolled pricing of petrol in 2010.
In the foreign exchange market, the rupee edged lower against the dollar, tracking weakness in emerging markets after the Federal Reserve further pruned its monetary stimulus. The partially convertible rupee was hovering at 62.795, compared with its close of 62.41/42 on Wednesday, 29 January 2014.
India has no target for the rupee's exchange rate and the currency will remain rangebound, the economic affairs secretary said, despite recent global market volatility. "We are vigilant...we believe that we are capable of withstanding (the impact of the Fed tapering)," Arvind Mayaram said.
Indian government bond prices dropped after the Federal Reserve further pruned its monetary stimulus. The yield on 10-year benchmark federal paper, 8.83% GS 2023, was hovering at 8.8104%, higher than its close of 8.7743% on Wednesday, 29 January 2014. Bond yield and bond price move in opposite direction.
Asian stocks dropped on Thursday, 30 January 2014, after the US Federal Reserve pressed on with cuts to US economic stimulus and as a report showed China's manufacturing industry contracted. Key benchmark indices in Hong Kong, China, Singapore, Japan and Indonesia fell by 0.4% to 2.89%. Stock markets in South Korea and Taiwan are closed today, 30 January 2014, and Hong Kong and Singapore will shut early for the Chinese New Year holidays. Stock markets in Taiwan are closed until 4 February 2014 for the Lunar New Year holiday.
The final reading on HSBC Holdings Plc and Markit Economics Ltd.'s January purchasing managers' index for Chinese manufacturing was 49.5, the first contraction in six months, from 50.5 in December. Readings above 50 indicate expansion.
China's markets close from tomorrow until Feb. 7 for the Lunar New Year holiday, while Hong Kong is shut until Feb. 4.
Trading in US index futures indicated that the Dow could advance 12 points at the opening bell on Thursday, 30 January 2014. US stocks sank on Wednesday, 29 January 2014, as earnings forecasts from Yahoo! Inc. and AT&T Inc. disappointed investors. The Federal Reserve on Wednesday, 29 January 2014, took another gradual step toward exiting its controversial bond-buying program, remaining stoic in the face of market turmoil. As expected, the Fed decided to reduce the pace of monthly asset purchases to $65 billion, from January's $75 billion. The Fed will purchase mortgage-backed securities at a pace of $30 billion per month and add to its holdings of Treasurys at a pace of $35 billion per month beginning in February.
The Fed also signaled that it is likely to keep reducing its purchases in the coming months, citing a pickup in economic activity and improvement in the labor market.
In addition to proceeding with plans to scale back its bond buying, the Fed made no changes to its other main policy plank: its pledge to keep interest rates low for some time to come. It has pledged to hold rates steady "well past" the point that the unemployment rate falls below 6.5% as long as inflation remains low.
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