Key benchmark indices edged lower in choppy trade on the last trading session of the week after the latest data showed that India's merchandise exports fell for the second month in a row in March 2014. The barometer index, the S&P BSE Sensex, was provisionally down 103.93 points or 0.46%, off close to 70 points from the day's high and up about 85 points from the day's low. Weakness in Asian and European stocks and overnight steep slide in US stocks hit sentiment on the domestic bourses adversely.
The Sensex snapped a two-day winning streak today, 11 April 2014.
Index heavyweight Reliance Industries (RIL) dropped. Auto and capital goods stocks also edged lower. Maruti Suzuki India edged lower after the company said it will proactively replace 'fuel filler neck' of 1.03 lakh vehicles which includes 42,481 units of Dzire, 47,237 units of Swift and 13,593 units of Ertiga manufactured between 12 November 2013 and 4 February 2014.
The market breadth, indicating the overall health of the market was positive.
The Sensex edged lower in early trade as Asian stocks fell after overnight steep slide in US stocks. The Sensex languished in negative terrain in morning trade. Weakness continued on the bourses in mid-morning trade. The Sensex extended losses and hit fresh intraday low in early afternoon trade. Key benchmark indices trimmed losses in afternoon trade. Key benchmark indices hovered in negative terrain in mid-afternoon trade after the latest data showed that India's merchandise exports fell for the second month in a row in March 2014. Volatility ruled the roost as key benchmark indices weakened once again after trimming intraday losses in late trade.
The stock market remains closed on Monday, 14 April 2014, on account of Dr. Baba Saheb Ambedkar Jayanti.
As per provisional figures, the S&P BSE Sensex was down 103.93 points or 0.46% to 22,611.40. The index declined 188.44 points at the day's low of 22,526.89 early afternoon trade, its lowest level since 9 April 2014. The index fell 36.15 points at the day's high of 22,679.18 in late trade.
The CNX Nifty was down 26.90 points or 0.4% to 6,769.50, as per provisional figures. The index hit a low of 6,743.15 in intraday trade, its lowest level since 9 April 2014. The index hit a high of 6,789.35 in intraday trade.
The BSE Mid-Cap index was up 7.18 points or 0.1% at 7,338.46. The BSE Small-Cap index was up 49.30 points or 0.66% at 7,523.18. Both these indices outperformed the Sensex.
The total turnover on BSE amounted to Rs 2735 crore, lower than Rs 3602.26 crore on Thursday, 10 April 2014.
The market breadth, indicating the overall health of the market was positive. On BSE, 1,535 shares rose and 1,272 shares fell. A total of 124 shares were unchanged.
Among the 30 Sensex shares, 20 fell and the remaining shares rose. GAIL (India) (down 1.59%), State Bank of India (SBI) (down 1.61%), and Hindalco Industries (down 1.47%) edged lower from the Sensex pack.
Index heavyweight Reliance Industries (RIL) dropped 1.73% to Rs 952. The stock hit high of Rs 970.60 and low of Rs 950.30.
Auto stocks dropped. Mahindra & Mahindra (M&M) (down 2.08%), Hero MotoCorp (down 1.82%) TVS Motor Company (down 1.8%) Ashok Leyland (down 0.83%) and Bajaj Auto (down 0.76%), declined.
Maruti Suzuki India lost 0.98%. The company today, 11 April 2014, said it will proactively replace 'fuel filler neck' of 1.03 lakh vehicles which includes 42,481 units of Dzire, 47,237 units of Swift and 13,593 units of Ertiga manufactured between 12 November 2013 and 4 February 2014. This exercise is limited to vehicles within the above specified range and does not pertain to any other vehicle of the company, Maruti said. In the affected vehicles there is a possibility of fuel smell and in extreme condition there may be some fuel leakage, if fuel is filled upto the fuel cap, beyond 'Auto cutoff level', Maruti said.
Maruti Suzuki dealers will contact owners of all vehicles in the above mentioned range. The company will replace the 'fuel filler neck' free of cost. As part of its quality tests in the manufacturing process, the company noticed the problem. The new filler neck is being progressively despatched to the dealer workshops, Maruti said. Considering the number of vehicles impacted, the company is building up stock of the required component at its dealer workshops, before inviting customers, Maruti said.
Tata Motors fell 1.81% to Rs 423. The stock reversed direction after hitting record high of Rs 437.70 in intraday trade. The company's British luxury car unit Jaguar Land Rover (JLR) on Thursday, 10 April 2014, said its sales rose 3% to 55,183 units in March 2014 over March 2013. Jaguar sales jumped 19% to 11,731 units in March 2014 over March 2013. In March, Land Rover sold 43,452 vehicles, in line with prior year, with strong performances across the range, JLR said in a statement.
JLR's sales rose 8% to 124,776 vehicles in Q1 March 2014 over Q1 March 2013. Jaguar sales rose 19% to 24,031 vehicles in the Q1 March 2014 over Q1 March 2013. Land Rover sales rose 6% to 100,745 vehicles in Q1 March 2014 over Q1 March 2013.
Commenting on the quarterly performance, Andy Goss, Jaguar Land Rover Group Sales Operations Director said: "This has been a strong start to the year for both brands thanks to continued global demand for our latest model offerings. The F-TYPE Coupe has just been launched to the world's media to critical acclaim and Land Rover is set to reveal a Discovery Vision Concept car at the New York International Auto Show, to showcase Land Rover's design vision for a new family of Discovery vehicles".
Capital goods stocks edged lower. ABB India (down 1.04%), Bharat Heavy Electricals (Bhel) (down 1.15%), Crompton Greaves (down 0.06%), L&T (down 1.65%), Punj Lloyd (down 0.58%) and Siemens (down 0.67%) declined.
Electrosteel Castings gained 1.36% to Rs 22.30 after the company said its board of directors have decided to issue equity shares to the promoters of the company on preferential basis. The announcement was made during trading hours today, 11 April 2014. Electrosteel Castings said that the Board of Directors of the company at its meeting held today, 11 April 2014, has decided to issue upto 1.70 crore equity shares of the company at an approximate price of Rs 19.41 (including a premium of Rs 18.41) per equity share aggregating upto Rs 32.99 crore (approximately) to the promoters of the company on preferential basis. The issuance of the said securities shall however be subject to the approval of the shareholders of the company at the general meeting and the issuance of the equity shares shall also be in terms of the provisions of the SEBI (Issue of Capital and Disclosure Requirements), Regulations, 2009 and Companies Act, 2013 read together with the related rules thereunder, the company said.
Shares of Shasun Pharmaceuticals gained 5.06% and Sequent Scientific rose 6.23% as the joint venture company of these two firms has successfully completed the transactions which were agreed upon at the time of formation of the JV firm. Shasun Pharmaceuticals and Sequent Scientific during trading hours today, 11 April 2014 said that with reference to the earlier announcements dated 13 July 2013 and 7 March 2014, regarding entering into a joint venture (JV) agreement to develop, manufacture and sell veterinary products Inclusive of both API (Active Pharmaceuticals Ingredients) and formulations in the global market, the JV company named Alivira Animal Health (Alivira) has successfully completed the transactions viz. Alivira has allotted 74 lakh equity shares to Shasun Pharmaceuticals in consideration for the transfer of the Shasun's Vizag Unit. Further, Alivira has also allotted 21.14 lakh shares to Devicam Capital LLP, an enterprise jointly owned by the promoters of Shasun Pharmaceuticals and Sequent Scientific for cash.
In the foreign exchange market, the rupee edged lower against the dollar on global risk-off sentiment. The partially convertible rupee was hovering at 60.235, compared with its close of 60.07/08 on Thursday, 10 April 2014.
India's merchandise exports fell 3.15% to $29.57 billion in March 2014 over March 2013, data released by the Ministry of Commerce and Industry today, 11 April 2014, showed. Imports declined 2.11% to $40.08 billion in March 2014 over March 2013. Oil imports jumped 17.7% to $15.78 billion in March 2014 over March 2013. Non-oil imports fell 11.8% to $24.3 billion in March 2014 over March 2013. The trade deficit widened to $10.50 billion in March 2014, from $10.4 billion in March 2013.
The country's merchandise exports rose 3.98% to $312.35 billion in year ended 31 March 2014 (FY 2014) over the year ended 31 March 2013 (FY 2013). Imports declined 8.11% to $450.94 billion in FY 2014 over FY 2013. Oil imports rose 2.2% to $167.62 billion in FY 2014 over FY 2013. Non-oil imports fell 13.3% to $283.32 billion in FY 2014 over FY 2013. The trade deficit declined sharply to $138.59 billion in FY 2014, from $190.33 billion in FY 2013.
India's industrial production growth is seen inching up to 0.9% in February 2014, from 0.1% in January 2014, as per the median estimate of a poll of economists carried out by Capital Market. The government unveils industrial production data for February 2014 at 17:30 IST today, 11 April 2014.
The rate of inflation based on the wholesale price index (WPI) is seen edging up to 5.3% in March 2014, from 4.7% in February 2014, as per the median estimate of a poll of economists carried out by Capital Market. The government is scheduled to announce WPI inflation data for March 2014 at 12 noon on Tuesday, 15 April 2014.
The rate of inflation based on the consumer price index (CPI) is seen inching up to 8.2% in March 2014, from 8.1% in February 2014, as per the median estimate of a poll of economists carried out by Capital Market. The government is scheduled to announce CPI inflation data for March 2014 at 17:00 IST on Tuesday, 15 April 2014.
Reserve Bank of India Governor Raghuram Rajan on Thursday, 10 April 2014, said in a media interview in Washington that India is prepared for potential financial fallout if the US Federal Reserve increases interest rates before April 2015. "Nobody is prepared for every eventuality, but for most eventualities, we are prepared. For us, the specific timing matters less than that it should happen when US growth is strong," Rajan said. The Fed is "mostly" right in how it is managing monetary policy, Rajan said during a panel discussion at George Washington University, adding the central bank needs to improve communications because measures it is taking now will affect what emerging markets do in the future. Still, he said he doesn't expect a US rate increase by April 2015.
Rajan, in Washington to attend the spring meetings of the International Monetary Fund and the World Bank, also said the IMF needs to play a larger role in promoting global stability and offering liquidity to emerging markets, which often face "substantial stigma" when they approach the lender. If emerging markets are again pushed to a sustained bout of exchange-rate intervention and reserve accumulation, that will be detrimental to global demand, said Rajan, a former chief economist of the IMF.
The Reserve Bank of India (RBI) next undertakes monetary policy review on 3 June 2014. The RBI left its main lending rate viz. the repo rate unchanged at 8% after a monetary policy review on 1 April 2014, as consumer-price inflation eased to a two-year low and as the rupee firmed up against the dollar.
The next major trigger for the stock market is Q4 March 2014 and year ended 31 March 2014 (FY 2014) corporate earnings. Investors and analysts will closely watch the management commentary that would accompany the results to see if there is any revision in their future earnings forecast of the company for the year ending 31 March 2015 (FY 2015) and/or for the year ending 31 March 2016 (FY 2016). Indian companies will start reporting their Q4 and full year results from mid-April 2014, with Infosys announcing its results on 15 April 2014. The results season will conclude in end-May 2014.
A major near term trigger for the stock market is the outcome of the upcoming Lok Sabha elections. Voting for the lone Lok Sabha constituency and an Assembly by-poll in Mizoram began today, 11 April 2014. The 36 days long voting process began on 7 April 2014 and will conclude on 12 May 2014. The results will be declared on 16 May 2014 after which India will get a new government. The term of the current Lok Sabha expires on 1 June and the new House has to be constituted by 31 May.
European indices edged lower on Friday, 11 April 2014, as investors fled global stocks on valuation concerns and slowdown worries about China. Key benchmark indices in UK, France and Germany were off 1.21% to 1.45%.
The Bank of England kept its key interest rate at a record low after a monetary policy review on Thursday, 10 April 2014, as policy makers try to gauge the amount of spare capacity in the economy. The Monetary Policy Committee (MPC) also kept its asset-purchase program on hold at 375 billion pounds ($629 billion), according to a statement released in London by the central bank.
Fitch Ratings today, 11 April 2014, raised its outlook for Portugal to 'positive' from 'negative,' citing the bailed-out euro-zone nation's strong economic recovery and falling budget deficit. Fitch affirmed the country's BB+ rating and said its fiscal financing conditions have improved substantially since October 2013, the date of its last Portugal ratings review. The ratings agency raised its economic forecasts and now sees gross domestic product growth of 1.3% this year and 1.5% in 2015, sharply up from 0.2% and 1% previously. It noted that the economy grew on an annual basis for the first time in three years in the last quarter of 2013, by 1.6%.
Fitch Ratings said if Portugal's deficit reduction remained on track, with "continued economic recovery and evidence that private debt peaks and starts to gradually decline," the nation could see an upgrade to investment grade.
Russian President Vladimir Putin warned leaders in Europe on Thursday, 10 April 2014, that Russia could cut supplies of natural gas to Ukraine if its unpaid bill isn't addressed, potentially disrupting deliveries to the rest of the continent. In a letter sent to leaders in countries reliant on Russian gas, Mr. Putin ramped up pressure on the fledgling government in Kiev, repeating his threat that Russia may have to take the extreme measure of making Ukraine pays in advance for the gas it uses. He called for emergency talks with Europe to resolve the matter. The bulk of Russian gas flows to Europe transit through Ukraine and disruptions there have caused continentwide problems in the past.
Asian stocks edged lower on Friday, 11 April 2014, as a selloff in US biotech, Internet and other high-growth stocks on Thursday, 10 April 2014, cut demand for riskier assets. Key benchmark indices in Hong Kong, Japan, China, Singapore, South Korea and Taiwan were off 0.17% to 2.38%. In Indonesia, the Jakarta Composite index was up 1.07%.
A report today, 11 April 2014, showed Chinese consumer prices rose 2.4% in March from a year earlier, after gaining 2% in February. The nation's producer price index retreated 2.3% following the previous month's 2% drop.
China will ease restrictions on overseas investments by local firms and deals below $1 billion will no longer need approval, the country's economic planner said in another step to cut red-tape and facilitate the growth of private investment. Starting from May 8, Chinese firms planning to invest less than $1 billion will only need to register with authorities rather than seek approvals from the National Development and Reform Commission (NDRC), the commission said in a statement late on Thursday. 10 April 2014.
The NDRC said the new rules do not apply to investment projects in "sensitive countries, regions or sectors."
Currently, overseas resource-related investments above $300 million are subject to approvals by the NDRC, while the threshold for deals in other sectors is capped at $100 million.
Deals of above $1 billion will still need the approval by the NDRC, while those valued at $2 billion and above will need the approval of the State Council, China's cabinet, according to the new regulations.
Trading in US index futures indicated that the Dow could drop 5 points at the opening bell on Friday, 11 April 2014. US stocks tumbled on Thursday, 10 April 2014, with the Nasdaq Composite Index falling the most since 2011, as a technology selloff resumed amid concern valuations may be too high at the start of earnings season.
A government report on Thursday showed the fewest number of Americans since before the last recession filed applications for unemployment benefits last week, pointing to more progress in the labor market.
The Federal Open Market Committee (FOMC) next undertakes monetary policy review at a two-day meeting on 29-30 April 2014. The Federal Reserve on 19 March 2014 decided after the conclusion of a monetary policy review to trim its monthly bond purchases by $10 billion to $55 billion.
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