A sudden slide in mid-afternoon trade pulled key benchmark indices from positive zone to negative zone. The market breadth, indicating the overall health of the market, turned negative from positive in late trade. The barometer index, the S&P BSE Sensex, and the 50-unit CNX Nifty, both, hit their lowest level almost a week. The Sensex was provisionally down 88.33 points or 0.4%, off close to 225 points from the day's high and up about 50 points from the day's low.
Shares of IT major Infosys plunged after the company's Chief Executive S.D. Shibulal on Wednesday, 12 March 2014, warned that the company's sales growth for the current fiscal year may be near the lower end of its forecast as some of its clients are tightening spending on technology. Shares of other IT stocks edged lower in choppy trade. Realty stocks dropped in choppy trade. Sun Pharmaceutical Industries edged lower after the US FDA issued an import alert for the company's facility located in Gujarat.
A sharp initial decline in shares of index heavyweight Infosys triggered a weak opening on the domestic bourses. Key benchmark indices soon moved into positive zone from negative zone. Key benchmark indices retained positive zone in morning trade. A bout of volatility was witnessed as key benchmark indices trimmed gains after hitting fresh intraday high in mid-morning trade. Key benchmark indices retained positive zone in early afternoon trade. The Sensex moved in a narrow range in positive zone in afternoon trade. A sudden slide in mid-afternoon trade pulled key benchmark indices from positive zone to negative zone.
As per provisional figures, the S&P BSE Sensex was down 88.33 points or 0.4% to 21,767.89. The index lost 136.09 points at the day's low of 21,720.13 at the onset of the trading session, its lowest level since 7 March 2014. The index jumped 135.14 points at the day's high of 21,991.36 in mid-morning trade, its highest level cine 11 March 2014.
The CNX Nifty was down 25.75 points or 0.4% to 6,491.15, as per provisional figures. The index hit a low of 6,476.65 in intraday trade, its lowest level since 7 March 2014. The index hit a high of 6,561.45 in intraday trade, its highest level cine 11 March 2014.
The BSE Mid-Cap index was down 39.80 points or 0.59% at 6,668.42, underperforming the Sensex. The BSE Small-Cap index was down 15.62 points or 0.23% to 6,649.51, outperforming the Sensex.
The total turnover on BSE amounted to Rs 2703 crore, higher than Rs 2454.86 crore on Wednesday, 12 March 2014.
The market breadth, indicating the overall health of the market, turned negative from positive in late trade. On BSE, 1,512 shares fell and 1,288 shares rose. A total of 138 shares were unchanged.
Sesa Sterlite (down 1.94%), Bhel (down 1.22%), and Tata Steel (down 1.03%), edged lower from the Sensex pack.
Generic drugmaker Dr. Reddy's Laboratories rose 2.26%. The company is reportedly recalling about 58,656 bottles of the heartburn drug lansoprazole in the United States due to a microbial contamination, the US Food and Drug Administration said. It was classified as a "Class II" recall which indicates a remote chance of severe adverse consequences or death due to the product flaw.
Dr. Reddy's voluntary recall of lansoprazole delayed release capsules, a generic version of Swiss drugmaker Novartis' drug Prevacid 24 HR, began on 3 January 2014.
Sun Pharmaceutical Industries dropped 5.01% to Rs 573.75 after the company said that the US FDA issued an import alert for the company's cephalosporin facility located at Karkhadi, Gujarat in India. The stock was volatile. The scrip hit high of Rs 610 and low of Rs 565.60. The import alert was issued by the US FDA as a follow up to the last inspection of the facility, during which some non-compliance of current Good Manufacturing Practice (cGMP) regulations were identified, Sun Pharmaceutical Industries said in a statement.
Sun Pharmaceutical Industries said it remains fully committed to compliance and has already initiated several corrective steps to address the observations made by the US FDA. The contribution of this facility to Sun Pharma's consolidated revenues is negligible. Sun Pharma said that there is no change in the company's consolidated sales growth guidance for the year ending March 2014.
At the time of the announcement of Q3 December 2013 results last month, Sun Pharmaceutical Industries had raised its consolidated revenue growth guidance to 29% for the year ending 31 March 2014, from the previous guidance of 25%. The guidance is at constant exchange rate.
Shares of IT major Infosys plunged after the company's Chief Executive S.D. Shibulal on Wednesday, 12 March 2014, warned that the company's sales growth for the current fiscal year may be near the lower end of its forecast as some of its clients are tightening spending on technology. The stock was off 8.47% at Rs 3,369. The scrip was volatile. The stock hit high of Rs 3,449 and low of Rs 3,340.
Shibulal said that the company's revenue growth in the fiscal year that begins in April may also be slow if business momentum remains weak. "At the ground level, some of the clients have seen a slowdown across various industry verticals, leading to unanticipated project ramp-downs," Shibulal told investors at a conference organized by Barclays in Bangalore on Wednesday, 12 March 2014. Infosys's clients in the retail and manufacturing sectors are facing "spending pressure," he said. "Many of the factors that have led to the recent slowdown will continue to impact client spending at least in the initial part of fiscal year 2015," Shibulal said.
It may be recalled that Infosys had at the time of the announcement of Q3 December 2013 results on 10 January 2014 raised its revenue growth guidance in both rupee and dollar terms for the year ending 31 March 2014 (FY 2014). At that time, the company forecast 11.5% to 12% growth in revenue in dollar terms for FY 2014. At that time, the company had forecast 24.4% to 24.9% in revenue in rupee terms for FY 2014 based on rupee dollar conversion rate of 61.81 for the rest of the financial year.
Shares of other IT firms edged lower in choppy trade. TCS (down 1.15%), Wipro (down 0.22%), and Tech Mahindra (down 1.22%), edged lower. HCL Technologies rose 0.07%.
Realty stocks edged lower in choppy trade. D B Realty (down 2.95%), HDIL (down 5.21%), and Unitech (down 4.15%) declined.
DLF tumbled 6.34% to Rs 167.80, with the stock sliding on profit booking after recent steep rally. Shares of DLF were on a roll recently. The stock had rallied 28.88% in seven trading sessions to settle at Rs 179.15 on Wednesday, 12 March 2014, from a recent low of Rs 139 on 3 March 2014.
In the foreign exchange market, the rupee edged higher against the dollar after data released by the government after trading hours on Wednesday, 12 March 2014, showed that the consumer price inflation eased to a 25-month low in February 2014. The partially convertible rupee was hovering at 61.08, compared with its close of 61.215/225 on Wednesday, 12 March 2014.
Inflation based on the consumer price index eased to a 25-month low last month, data released by the government after trading hours on Wednesday, 12 March 2014, showed. The rate of inflation based on the combined consumer price index (CPI) for urban and rural India eased to 8.1% in February 2014, from 8.79% in January 2014. Core CPI inflation, which excludes food and fuel prices fell below the 8% mark for the first time in 7 months. Core CPI inflation stood at 7.9% in February 2014, lower than 8.1% in January 2014. CPI inflation eased for all groups except clothing in February 2014.
Inflation based on the wholesale price index (WPI) is seen easing at 4.9% in February 2014, from 5.05% in January 2014, as per the median estimate of a poll of economists carried out by Capital Market. The data on inflation based on the wholesale price index (WPI) for February 2014 is due at 12:00 IST tomorrow, 14 March 2014.
The index of industrial production (IIP) rose 0.1% in January 2014, with the index snapping a decline for last three sequential months, data released by the government after trading hours on Wednesday, 12 March 2014, showed. The moderation in pace of decline in the output of manufacturing sector to 0.7% in January 2014 from 1.2% in December 2013, mainly led to marginal improvement in IIP during January 2014. Meanwhile, the output of mining sector rose at steady pace of 0.7%, while the electricity generation growth eased to 6.5% in February 2014. As per the used based classification, the output of basic goods rose 0.9% in January 2014, with the increase in mining output and healthy growth in electricity generation. The output of intermediate goods rose 3.4%, but that of capital goods and consumer goods declined 4.2% and 0.6%, respectively in January 2014. The decline in the output of consumer goods was driven by 8.3% plunge in consumer durable goods production recording fall for fourteenth straight month. The output of consumer non-durable goods moved up 4.4% in January 2014.
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.
The next major trigger for the stock market is the outcome of the upcoming Lok Sabha elections. 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.
European stocks edged higher in choppy trade on Thursday, 13 March 2014, as investors awaited reports on American retail sales and initial jobless claims. Key benchmark indices in France, UK and Germany were up 0.04% to 0.35%.
Asian stocks edged higher on Thursday, 13 March 2014, after a report signaled Australia's labor market is strengthening. Key benchmark indices in China, Indonesia, South Korea, and Taiwan were up 0.1% to 1.07%. Key benchmark indices in Hong Kong, Japan and Singapore were off 0.1% to 0.67%.
China's industrial-output, investment and retail-sales growth cooled more than estimated in the first two months of the year, signaling a slowdown in the economy as leaders seek to sustain 7.5% expansion. Factory production rose 8.6% in the January-February period from a year earlier, the National Bureau of Statistics said today, 13 March 2014, in Beijing. Retail sales advanced 11.8%, while fixed-asset investment excluding rural households was up 17.9%.
China Premier Li Keqiang signalled that his government will not ride to the rescue of every troubled investment by saying some loan defaults are "hard to avoid" in what he called a challenging economic environment. Speaking at a news conference, Li acknowledged the economy faced difficulties, but said those who are overly pessimistic about the country's prospects have always been wrong in the past. "We believe we have the ability, and all the means, to ensure that economic growth will stay within a reasonable range this year," Li said at the carefully orchestrated conference where media questions were vetted in advance. "We are reluctant to see defaults of financial products, but some cases are hard to avoid," he said. China saw its first default of a domestic bond last week when a loss-making solar equipment firm in Shanghai missed an interest payment of 89 million yuan. Li skillfully dodged a question on how far Beijing would let economic growth slip before it steps in with policy measures to support activity. Instead, he repeated the government's line that job creation takes precedence over growth.
But on government corruption, Li had an unequivocal answer. "We will show zero tolerance for corrupt behaviour and corrupt officials. No matter who it is, or how senior their position, everyone is equal before the law," Li said, without mentioning any names.
The Bank of Korea left its key rate unchanged, supporting a rebound in growth as Kim Choong Soo gets ready to pass the reins to a new governor who will face risks from record household debt to US monetary tapering. Kim and his board held the seven-day repurchase rate at 2.5% for a tenth straight month, the central bank said in a statement in Seoul today, 13 March 2014.
New Zealand's central bank raised its key interest rate, the first developed nation to exit record-low borrowing costs this year, and said it plans to remove stimulus faster than earlier forecast to contain prices. "It is necessary to raise interest rates toward a level at which they are no longer adding to demand," Reserve Bank of New Zealand Governor Graeme Wheeler said in a statement in Wellington after increasing the official cash rate by a quarter percentage point to 2.75%.
Trading in US index futures indicated that the Dow could advance 37 points at the opening bell on Thursday, 13 March 2014. US stocks finished little changed on Wednesday after erasing early losses that followed a selloff in Asian and European equities.
Stanley Fischer, the nominee to be Federal Reserve vice chairman, said the world's largest economy still needs the central bank's unprecedented accommodation as joblessness remains elevated. "At 6.7%, the unemployment rate remains too high," Fischer, a former Bank of Israel governor and Citigroup Inc. vice chairman, said in remarks prepared for his confirmation hearing before the Senate Banking Committee.
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.
US President Barack Obama called Russia's incursion into Crimea a violation of international law and told Ukrainian Prime Minister Arseniy Yatsenyuk that the US stands with Ukraine to protect its sovereignty and territory.
Leaders of the Group of Seven nations warned Russia on Wednesday not to annex Ukraine's Crimean region.
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