A sudden slide took key benchmark indices to negative zone from positive zone in morning trade. The barometer index, the S&P BSE Sensex, and the 50-unit CNX Nifty, both, hit their lowest level in more than 2-1/2 weeks. The Sensex was down 124.56 points or 0.6%, off 227.74 points from the day's high and up 5.11 points from the day's low. The market sentiment was hit adversely after provisional data showed that foreign funds remained net sellers of Indian stocks on Monday, 6 January 2014.
Index heavyweight and cigarette major ITC reversed initial gain in volatile trade. Axis Bank reversed initial gain in volatile trade. Index heavyweight Reliance Industries reversed initial gain in volatile trade. Tyre shares rose on renewed buying, with CEAT hitting record high. L&T rose in volatile trade after the company said that the power transmission and distribution business of L&T Construction has bagged a major international EPC order in the Kingdom of Saudi Arabia.
The market breadth, indicating the overall health of the market, was positive.
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.
The market sentiment was hit adversely after provisional data showed that foreign funds remained net sellers of Indian stocks on Monday, 6 January 2014. 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 10:15 IST, the S&P BSE Sensex was down 124.56 points or 0.6% to 20,662.74. The index lost 129.67 points at the day's low of 20,657.63 in morning trade, its lowest level since 19 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 39.90 points or 0.64% to 6,151.55. The index hit a low of 6,150.80 in intraday trade, its lowest level since 19 December 2013. The index hit a high of 6,221.50 in intraday trade.
The market breadth, indicating the overall health of the market, was positive. On BSE, 875 shares gained and 817 shares fell. A total of 87 shares were unchanged.
The total turnover on BSE amounted to Rs 635 crore by 10:20 IST, compared with Rs 129.51 crore by 09:25 IST.
Among the 30-share Sensex pack, 24 stocks declined and rest of them gained.
Wipro (down 1.46%), Tata Power Company (down 1.65%) and SBI (down 1.11%) edged lower from the Sensex pack.
Index heavyweight and cigarette major ITC declined 0.73% to Rs 313.70, with the stock reversing initial gain in volatile trade. The stock hit a high of Rs 317.50 and low of Rs 313 so far during the day.
Axis Bank fell 1.67% to Rs 1,235, with the stock reversing initial gain in volatile trade. The stock hit a high of Rs 1,266 and low of Rs 1,232.25 so far during the day.
L&T rose in volatile trade after the company said that the power transmission and distribution business of L&T Construction has bagged a major international EPC order in the Kingdom of Saudi Arabia from Saudi Arabian Oil Company (Saudi Aramco). The stock was up 0.24%.
Index heavyweight Reliance Industries slipped 0.49% to Rs 850.70, with the stock reversing initial gain in volatile trade. The stock hit a high of Rs 859.75 and low of Rs 849.30 so far during the day.
ONGC shed 0.75%. ONGC Videsh, the overseas investment arm of explorer Oil and Natural Gas Corporation (ONGC), is considering an oil-for-debt deal to help fund the acquisition of a Mozambique gas field, its head of finance S.P. Garg said on Monday, 6 January 2014. ONGC Videsh has already raised $1.5 billion through bridge loans to help fund the purchase and will raise another $2.5 billion by March, Garg said. ONGC Videsh is a wholly-owned subsidiary of ONGC.
In June, ONGC together with Oil India acquired a 10% stake in a deepwater gas field in Mozambique's Rovuma basin from Videocon for $2.48 billion. In August ONGC agreed to buy another 10% stake in the field from Anadarko Petroleum for $2.64 billion. Garg said ONGC Videsh could sign a three-year deal to raise funding in exchange for future oil output from any of its producing assets in Russia, Azerbaijan or Brazil. Due to political problems in Sudan, ONGC Videsh is not planning to rely on its oil output from Sudan to raise debt and has shut its South Sudan fields, Garg said.
Tyre shares rose on renewed buying. Apollo Tyres (up 2.74%), Goodyear India (up 1.04%), JK Tyre & Industries (up 1.71%), MRF (up 0.09%) gained.
CEAT rose 1.88% to Rs 378.50 after hitting a record high of Rs 384.65 in intraday trade.
In the foreign exchange market, the rupee edged lower against the dollar as equities dropped. The partially convertible rupee was hovering at 62.42, 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.
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 Taiwan, Hong Kong, China, Singapore and South Korea were up 0.15% to 0.49%. Key benchmark indices in Japan and Indonesia were off 0.29% to 0.41%.
China is due to publish December trade data tomorrow, 8 January 2014, and December inflation figures on Thursday, 9 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.
In Europe, 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.
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