Key benchmark indices continued to hover in negative terrain in afternoon trade. The market breadth, indicating the overall health of the market, was negative. The barometer index, the S&P BSE Sensex, was down 96.32 points or 0.48%, off about 181 points from the day's high and up close to 97 points from the day's low. The market sentiment was affected adversely by data showing that foreign funds remained sellers of Indian stocks on Wednesday, 5 February 2014.
DCM Shriram Industries rose on good Q3 earnings. Munjal Showa extended Wednesday's 7.95% rally triggered by the company reporting strong Q3 earnings. Aban Offshore fell after strong Q3 results.
The market edged higher in early trade on firm Asian stocks. Key benchmark indices retained positive terrain in morning trade. A sudden slide pushed key benchmark indices from positive zone to negative zone in mid-morning trade. The 50-unit CNX Nifty fell below the psychological 6,000 mark. The Sensex languished in negative terrain in afternoon trade.
The market sentiment was affected adversely by data showing that foreign funds remained sellers of Indian stocks on Wednesday, 5 February 2014. Foreign institutional investors (FIIs) sold shares worth a net Rs 576.20 crore on Wednesday, 5 February 2014, as per provisional data from the stock exchanges.
At 13:15 IST, the S&P BSE Sensex was down 96.32 points or 0.48% to 20,164.71. The index dropped 181.21 points at the day's low of 20,079.82 in mid-morning trade. The index rose 97.16 points at the day's high of 20,358.19 in morning trade, its highest level since 3 February 2014.
The CNX Nifty was down 33.10 points or 0.55% to 5,989.30. The index hit a low of 5,965.40 in intraday trade. The index hit a high of 6,048.35 in intraday trade, its highest level since 3 February 2014.
The BSE Mid-Cap index was off 18.46 points or 0.29% at 6,292.20. The BSE Small-Cap index was down 1.15 points or 0.02% at 6,304.27. Both these indices outperformed the Sensex.
The market breadth, indicating the overall health of the market, was negative. On BSE, 1,250 shares fell and 1,045 shares rose. A total of 153 shares were unchanged.
Among the 30-share Sensex pack, 18 stocks fell and rest rose. Bhel (down 2.93%), ICICI Bank (down 1.8%), GAIL (India) (down 1.37%), Larsen & Toubro (down 1.26%), HDFC (down 1.25%), TCS (down 1.25%), State Bank of India (down 1.14%), Axis Bank (down 1.09%), Bajaj Auto (down 1.06%), Hero MotoCorp (down 1.01%) and Sesa Sterlite (down 0.81%), edged lower from the Sensex pack.
Coal India (up 3.10%), Tata Power (up 2.61%), Hindustan Unilever (up 2.11%), Wipro (up 1.18%), HDFC Bank (up 0.75%), Maruti Suzuki India (up 0.61%), M&M (up 0.47%), Hindalco Industries (up 0.34%) and Dr. Reddy's Laboratories (up 0.11%), edged higher from the Sensex pack.
Aban Offshore fell 2.31% to Rs 510.80. The company's consolidated net profit surged 152.53% to Rs 80.28 crore on 9.39% increase in total income to Rs 994.37 crore in Q3 December 2013 over Q3 December 2012. The result was announced during trading hours today, 6 February 2014.
DCM Shriram Industries rose 1.88% to Rs 32.50 after net profit rose 29.3% to Rs 4.32 crore on 25.1% growth in net sales to Rs 371.62 crore in Q3 December 2013 over Q3 December 2012. The Q3 result was announced after market hours on Wednesday, 5 February 2014.
Munjal Showa surged 4.61% to Rs 76, with the stock extending Wednesday's 7.95% rally triggered by the company reporting strong Q3 earnings. Net profit jumped 35.2% to Rs 21.62 crore on 6.5% growth in net sales to Rs 415.91 crore in Q3 December 2013 over Q3 December 2012. The company during trading hours on Wednesday, 5 February 2014 reported strong Q3 December 2013 earnings. The stock had surged 7.95% to settle at Rs 72.65 on Wednesday, 5 February 2014.
In the foreign exchange market, the rupee edged higher against the dollar on global risk-on sentiment. The partially convertible rupee was hovering at 62.475, compared with its close of 62.57/58 on Wednesday, 5 February 2014.
Bond prices rose after the Ministry of Finance on Wednesday, 5 February 2014, said that the government has decided to cancel the deferred auction of dated securities worth Rs 15000 crore. The yield on 10-year benchmark federal paper, 8.83% GS 2023, was hovering at 8.699%, lower than its close of 8.7066% on Wednesday, 5 February 2014. Bond yield and bond prices move in opposite direction.
On review of the Government of India's cash position and funding requirement, it has been decided to cancel the deferred auction scheduled on 17 January 2014 for Rs 15,000 crore, the Ministry of Finance said in a statement on Wednesday, 5 February 2014. This would result in decrease in government market borrowing programme for 2013-14 to that extent, it said.
Meanwhile, the Reserve Bank of India (RBI) announced that it has partially completed the debt-switching program at Rs 27000 crore with an institutional investor against budget proposal of Rs 50000 crore.
Finance Minister P Chidambaram will present the Vote-on-Account or interim budget on 17 February 2014. The objective of a Vote-on-Account is to get Parliament's nod for expenditure to be incurred in the months prior to elections. The next full-fledged budget will be presented by the new government which comes to power after the Lok Sabha polls in April-May 2014.
The Reserve Bank of India next undertakes monetary policy review on 1 April 2014. Sighting elevated consumer price inflation, 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.
Asian shares edged higher on Thursday, 6 February 2014, as investors weighed earnings and US data showing service-industries growth against a private jobs report that missed estimates. Key benchmark indices in Indonesia, South Korea, Hong Kong, Singapore and Taiwan rose 0.45% to 1.06%. Japan's Nikkei Average fell 0.18%.
Stock markets in mainland China remain closed until tomorrow, 7 February 2014 for the Lunar New Year holiday.
Trading in US index futures indicated that the Dow could advance 33 points at the opening bell on Thursday, 6 February 2014. US stocks ended Wednesday's choppy session lower after a weaker-than-expected report on private-sector employment. Philadelphia Fed President Charles Plosser's comments urging to speed up the tapering reminded investors that quantitative easing is unlikely to come to aid the markets in 2014.
Growth picked up in the US services sector in January, with steady strength in private-sector hiring, suggesting the winter weather that socked the country over the last several weeks had a limited effect on the economy.
Companies in the US boosted payrolls by 175,000 in January, the ADP Research Institute said on Wednesday, 5 February 2014, before the government's monthly jobs data tomorrow, 7 February 2014.
Philadelphia President Charles Plosser, who votes on policy this year, on Wednesday, 5 February 2014, said he expects the economy to expand 3% in 2014 as the jobless rate falls to 6.2% by year-end, warranting a quicker tapering to bond purchases by the central bank. Policy makers made the first two cuts to asset purchases in December and January, slowing to $65 billion a month from $85 billion. While welcoming the trims, Plosser said they may prove to be insufficient if growth keeps accelerating. "My preference is to scale back our purchase program at a faster pace to reflect the strengthening economy," he said in a speech in Rochester, New York. "We must begin to back away from increasing the degree of policy accommodation in a manner commensurate with an improving economy," said Plosser, who has opposed the bond purchases by the Fed. Labor markets will continue to improve and inflation expectations will be relatively stable as price increases move up toward the Fed's 2% goal over the next year, Plosser said. The economy has met the criteria of significant improvement in labor market conditions for ending the quantitative easing program, Plosser said. "Further increases in the balance sheet are unlikely to provide appreciable benefits for the recovery," Plosser said.
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. The Fed also signaled that it is likely to keep reducing bond purchases in the coming months, citing a pickup in US economic activity and improvement in the US labor market.
In Europe, the European Central Bank (ECB) undertakes monthly monetary policy review today, 6 February 2014, amid speculation the ECB will reinforce its commitment to lower rates. The ECB will probably hold the benchmark interest rate at a record-low 0.25% at its policy meeting tomorrow, 6 February 2014, as it faces slowing inflation. After the Jan. 9 policy meeting, ECB President Mario Draghi said the central bank "strongly emphasizes" that it will maintain accommodative measures for as long as necessary.
The Bank of England's (BoE) Monetary Policy Committee (MPC) undertakes monthly monetary policy review today, 6 February 2014, with markets waiting to see if Governor Mark Carney will alter guidance on lifting its record-low interest rate. The MPC is widely expected to keep the BoE's main interest rate at a record-low level of 0.5%. It is widely predicted also to maintain quantitative easing at 375 billion ($613 billion, 454 billion euros), opting against following the US Federal Reserve in tapering stimulus.
Britain's 12-month inflation slowed to 2% in December, recent official data showed, touching the lowest level for more than four years. The BoE's main task is to use monetary policy as a tool to keep annual inflation close to a government-set target of 2%, to preserve the value of money.
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