Key benchmark indices reversed initial gains in mid-morning trade. The barometer index, the S&P BSE Sensex, and the 50-unit CNX Nifty, both, hit their lowest level in more than a week. The market breadth, indicating the overall health of the market, turned negative from positive in mid-morning trade. The Sensex was down 95.10 points or 0.43%, off close to 230 points from the day's high and up about 45 points from the day's low. Weakness in Asian stocks hurt sentiment on the domestic bourses adversely.
Hero MotoCorp reversed direction after hitting record high in early trade. Among cement shares, UltraTech Cement scaled record high. In metal shares, JSW Steel hit 52-week high. Reliance Infrastructure also hit 52-week high. Shares of organised retailers declined after the BJP in its manifesto for the Lok Sabha elections said that if the party comes to power after elections, it will allow foreign direct investment in sectors wherever needed for job and asset creation, infrastructure and acquisition of niche technology and specialized expertise but not in multi-brand retailing.
The market edged higher in early trade. Key benchmark indices trimmed gains after hitting fresh intraday high in morning trade after the leading opposition party -- the Bharatiya Janata Party (BJP) -- said in its manifesto for the Lok Sabha elections that economic revival will be the party's priority if it comes to power after elections. Key benchmark indices slipped into the red in mid-morning trade.
Foreign institutional investors (FIIs) bought shares worth a net Rs 232.46 crore on Friday, 4 April 2014, as per provisional data from the stock exchanges.
Asian stocks dropped on Monday, 7 April 2014, in the aftermath of a mostly disappointing US jobs report.
At 11:20 IST, the S&P BSE Sensex was down 95.10 points or 0.43% to 22,264.40. The index declined 134.84 points at the day's low of 22,224.66 in mid-morning trade, its lowest level since 28 March 2014. The index jumped 122.12 points at the day's high of 22,481.62 in morning trade.
The CNX Nifty was down 28.10 points or 0.42% to 6,666.25. The index hit a low of 6,658.10 in intraday trade, its lowest level since 28 March 2014. The index hit a high of 6,725.15 in intraday trade.
The BSE Mid-Cap index was down 44.65 points or 0.62% at 7,152.97, underperforming the Sensex. The BSE Small-Cap index was down 26.21 points or 0.36% at 7,238.84, outperforming the Sensex.
The market breadth, indicating the overall health of the market, turned negative from positive in mid-morning trade. On BSE, 935 shares fell and 833 shares rose. A total of 94 shares were unchanged.
Bharat Heavy Electricals (Bhel) (down 2.64%), Cipla (down 2.12%) and ICICI Bank (down 1.83%) edged lower from the Sensex pack.
Hero MotoCorp fell 0.72% to Rs 2234. The stock reversed direction after hitting record high of Rs 2320 in intraday trade.
JSW Steel rose 0.08% to Rs 1067.30. The stock hit 52-week high of Rs 1073.75 in intraday trade. The company early last week said it has reduced prices for its two steel products -- hot rolled coil and wire rod with effect from 1 April 2014. The quantum of the cut will be Rs 500-750 per tonne for HRC and Rs 500 for Wire rod, the company said after trading hours on 1 April 2014.
UltraTech Cement gained 2.2% to Rs 2,197.90 after hitting record high of Rs 2,200.20 in intraday trade.
Reliance Infrastructure rose 0.44% to Rs 457.90 after hitting 52-week high of Rs 500 in intraday trade.
Shares of organised retailers declined after the BJP in its manifesto for the Lok Sabha elections said that if the party comes to power after elections, it will allow foreign direct investment in sectors wherever needed for job and asset creation, infrastructure and acquisition of niche technology and specialized expertise but not in multi-brand retailing. Future Retail (down 3.48%), Shoppers Stop (down 1.71%) and Trent (down 1.39%) declined.
BJP said in its Lok Sabha poll manifesto that the party is committed to protecting the interest of small and medium retailers, SMEs and those employed by them.
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. The result season will conclude in end-May 2014.
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.
A major near term trigger for the stock market is the outcome of the upcoming Lok Sabha elections. The 36 days long voting process began today, 7 April 2015, in 6 Lok Sabha constituencies of Assam and Tripura and will finally 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 June 1 and the new House has to be constituted by May 31.
In the foreign exchange market, the rupee edged higher against the dollar as speculation an increase in US borrowing costs may be pushed back boosted India's yield advantage over developed-nation debt. US Treasury yields slumped on Friday, 4 April 2014, as an American jobs report that trailed estimates reduced bets the Federal Reserve will raise interest rates anytime soon. The partially convertible rupee was hovering at 59.965, compared with its close of 60.08/09 on Friday, 4 April 2014.
Asian stocks fell for the first time in nine days on Monday, 7 April 2014, with telecommunication and technology shares leading declines. Key benchmark indices in South Korea, Hong Kong, Singapore and Japan were down 0.33% to 1.94%. Indonesia's Jakarta Composite rose 1.28%. Markets in mainland China and Thailand are closed for a holiday.
The World Bank trimmed its 2014 growth forecast for developing East Asia but said the region's economies were likely to see steady growth in the next couple of years, helped by a pick-up in global growth and trade. The Washington-based development bank expects the developing East Asia and Pacific (EAP) region to grow 7.1% in 2014 and 2015, down from the 7.2% rate it had previously forecast for both years. Growth in 2016 is also seen at 7.1%, staying slightly below the 2013 growth rate of 7.2%.
Fitch Ratings has affirmed China's Long-Term Foreign and Local Currency Issuer Default Ratings (IDRs) at 'A+'. The issue ratings on China's senior unsecured foreign and local currency bonds are also affirmed at 'A+'. The Outlooks on the Long-Term IDRs are Stable. The Country Ceiling is affirmed at 'A+' and the Short-Term Foreign Currency IDR at 'F1'.
Trading in US index futures indicated that the Dow could fall 25 points at the opening bell on Monday, 7 April 2014. US stocks fell on Friday, 4 April 2014, with the Nasdaq Composite Index sliding the most in two months, after large technology stocks from Google Inc. to Yahoo Inc. plunged as investors sold the bull market's biggest winners.
Companies led the US job market past a milestone in March as private employment exceeded its pre-recession peak for the first time, progress that will allow the Federal Reserve to stick to its policy course. Payrolls excluding government agencies rose 192,000 after a 188,000 gain in February that was larger than first estimated, the Labor Department reported in Washington. That brought the job count to 116.1 million, beating the January 2008 high of 116 million. The jobless rate held at 6.7% even as half a million Americans entered the workforce.
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 said after the conclusion of a monetary policy review that it will trim its monthly bond purchases by $10 billion to $55 billion. The Federal Reserve will end its bond-buying program before the end of the year with an interest-rate increase likely to follow in "around six months," Chair Janet Yellen said on 19 March 2014. Quarterly Fed forecasts on 19 March 2014 showed more officials predicting that the benchmark interest rate, now close to zero, will rise to at least 1% by the end of 2015 and 2.25% a year later.
In Europe, a monthly meeting of the Monetary Policy Committee of the Bank of England's (BoE) for monetary policy review is scheduled on Thursday, 10 April 2014.
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