Volatility continued in morning trade as the key benchmark indices once again reversed direction after hitting intraday low. The barometer index, the S&P BSE Sensex and the 50-unit CNX Nifty both hit their lowest level in over thee weeks. The barometer index, the S&P BSE Sensex was up 30.56 points or 0.15%, up 118.76 points from the day's low and off 37.12 points from the day's high. The market breadth, indicating the overall health of the market, turned positive from negative in morning trade. In the foreign exchange market, the rupee edged higher against the dollar.
Reliance Industries (RIL) extended intraday gain. Infosys gained in volatile trade after the company raised its revenue growth guidance in both rupee and dollar terms for the year ending 31 March 2014. Other IT stocks were also in demand. TCS hit record high. HCL Technologies also scaled record high. Shares of gold financing firms extended Thursday's rally triggered by the central bank allowing non-banking finance companies to lend up to 75% of the value of gold from 60%.
Volatility struck bourses in early trade as the key benchmark indices reversed initial gains. Volatility continued in morning trade as the key benchmark indices once again reversed direction after hitting intraday low. The barometer index, the S&P BSE Sensex and the 50-unit CNX Nifty both hit their lowest level in over thee weeks.
Asian markets were trading mostly higher ahead of US jobs data due later in the global day.
Foreign institutional investors (FIIs) sold shares worth a net Rs 3.74 crore on Thursday, 9 January 2014, as per provisional data from the stock exchanges.
At 10:19 IST, the S&P BSE Sensex was up 30.56 points or 0.15% to 20,743.93. The index gained 67.68 points at the day's high of 20,781.05 in early trade, its highest level since 8 January 2014. The index fell 88.20 points at the day's low of 20,625.17 in early trade, its lowest level since 18 December 2013.
The CNX Nifty was up 5.40 points or 0.09% to 6,173.75. The index hit a high of 6,185.90 in intraday trade. The index hit a low of 6,139.60 in intraday trade, its lowest level since 18 December 2013.
The market breadth, indicating the overall health of the market, turned positive from negative in morning trade. On BSE, 827 shares gained and 784 shares declined. A total of 102 shares were unchanged.
The total turnover on BSE amounted to Rs 488 crore by 10:20 IST compared to Rs 147 crore by 09:25 IST.
Among the 30-share Sensex pack, 18 stocks declined and rest of them gained.
Reliance Industries (RIL) rose 1.11% to Rs 859.95, with the stock extending intraday gain. The stock hit a high of Rs 860.30 and low of Rs 848.45 so far during the day. RIL, which operates the Krishna-Godavari basin's D6 block off the east coast, has reportedly started producing gas from the MA-8 well from 1 January 2014. The well has potential to produce 1 million to 2 million standard cubic metres per day (mscmd) of gas from the well.
Infosys gained 2.95% to Rs 3,553. The stock hit a high of Rs 3,556 and low of Rs 3,449 so far during the day. The stock saw early volatility in reaction to its Q3 results which was announced before market hours today, 10 January 2014. On a consolidated basis, Infosys' net profit grew 19.4% to Rs 2875 crore on 0.5% rise in revenues to Rs 13026 crore in Q3 December 2013 over Q2 September 2013. Infosys has made a provision of Rs 219 crore towards visa related expenses in Q2 September 2013. The results are as per International Financial Reporting Standards (IFRS). Infosys made a provision of Rs 219 crore towards visa related matters as administrative expenses in Q3 December 2013.
Infosys raised its revenue growth guidance in both rupee and dollar terms for the year ending 31 March 2014. The company expects consolidated revenues in rupee terms to grow 24.4% to 24.9% for the fiscal year ending 31 March 2014, under IFRS (based on a conversion rate of $1 = Rs 61.81 for the rest of the fiscal year). The company expects consolidated revenues in dollar terms to grow 11.5% to 12% for the fiscal year ending 31 March 2014, under IFRS.
Infosys and its subsidiaries added 54 clients during Q3 December 2013. The company and its subsidiaries reported a gross addition of 6,682 employees for the quarter. Infosys and its subsidiaries had 158,404 employees as on 31 December 2013.
Infosys said its board at its meeting held on 10 January 2014, appointed Mr. U. B. Pravin Rao as an Additional Director and Whole-time Director of the company with immediate effect.
The board also appointed Ms. Kiran Mazumdar-Shaw as an Additional (Independent) Director of the Company with immediate effect.
At the time of announcement of Q2 September 2013 results in October 2013, Infosys had raised its revenue guidance in both dollar and rupee terms. The increase in revenue growth guidance in rupee terms was driven by weakness in rupee against the dollar. The company had at that time forecast 9% to 10% growth in revenue in dollar terms for the year ending 31 March 2014 (FY 2014). At that time, the company had issued a forecast of 21% to 22% growth in revenue in rupee terms based on the assumption of rupee dollar conversion rate of 62.61 for the rest of the fiscal year.
"The year ahead looks exciting for the IT services industry. We believe the global economic environment has improved and our clients are gaining confidence to invest in their strategic initiatives. said S. D. Shibulal, CEO and Managing Director. We continue to differentiate ourselves to seize growth opportunities. The recent changes in organizational structure will enable us to strengthen client relationships and increase market share."
'During the quarter, we saw early but promising results of our initiatives to increase efficiency in our operations," said Rajiv Bansal, Chief Financial Officer. "We continue to remain focused on making investments necessary to secure and grow our future."
Liquid assets including cash and cash equivalents, available-for-sale financial assets, certificates of deposits and government bonds were Rs 27,440 crore as on 31 December 2013 versus Rs 26907 crore as on 30 September 2013.
Other IT stocks edged higher. Wipro gained 1.61%.
TCS rose 0.6% to Rs 2,257.10 after hitting a record high of Rs 2,265 in intraday trade.
HCL Technologies gained 0.63% to Rs 1,293.15 after hitting a record high of Rs 1,299 in intraday trade.
Tech Mahindra (up 2.43%), Polaris Financial Technology (up 2.97%), Hexaware Technologies (up 0.93%), Oracle Financial Services Software (up 0.42%) edged higher.
Mastek lost 3.1% to Rs 195.30, with the stock sliding on profit booking after recent steep rally triggered by the company's announcement of buyback of equity shares.
Shares of Mastek had rallied 28.45% in five trading sessions to settle at Rs 201.55 on Thursday, 9 January 2014, from a recent low of Rs 156.90 on 2 January 2014. The recent rally in the stock was triggered by the announcement of share buyback proposal.
Mastek had on 3 January 2014 said that its board will consider share buyback proposal on Wednesday, 8 January 2014. Subsequently, the company after market hours on Wednesday, 8 January 2014 said its board approved buyback of maximum of 32 lakh equity shares and minimum of 9.50 lakh equity shares from the open market at a price not exceeding Rs 250 per equity share for an aggregate amount not exceeding Rs 54.50 crore. The buyback offer size represents 14.92% of the aggregate of the company's paid up equity capital and free reserves as on 31 March 2013, the company said.
Shares of gold financing firms extended Thursday's rally triggered by the central bank allowing non-banking finance companies to lend up to 75% of the value of gold from 60%.
Manappuram Finance (up 11.57%) and Muthoot Finance (up 6.82%), edged higher.
Shares of Muthoot Finance and Manappuram Finance had surged by maximum permissible limit of 20% each on Thursday, 9 January 2014.
The central bank on Wednesday, 8 January 2014, hiked loan-to-value ratio (LTV) to up to 75% for loans against the collateral of gold jewellery from 60% with immediate effect. The central bank further said the value of the jewellery for the purpose of determining the maximum permissible loan amount will be only the intrinsic value of the gold content therein and no other cost elements should be added thereto. The intrinsic value will continue to be arrived as per way suggested by RBI. However, RBI clarified that the need to give a certificate on the purity of gold cannot be dispensed with.
The certified purity shall be applied for determining the maximum permissible loan and the reserve price for auction. The NBFCs can, however, include suitable caveats to protect themselves against disputes on redemption, RBI said.
It is also clarified that the ownership verification need not necessarily be through original receipts for the jewellery pledged but a suitable document may be prepared to explain how the ownership was determined, particularly in each and every case where the gold jewellery pledged by a borrower at any one time or cumulatively on loan outstanding is more than 20 grams. NBFCs shall have an explicit policy in this regard as approved by the board in their overall loan policy, RBI said in a statement.
Industrial production is seen registering a muted growth of 0.9% in November 2013, as per the median estimate of a poll of economists carried out by Capital Market. Industrial production had declined 1.8% in October 2013, against 2% growth in September 2013. The decline in the output of manufacturing sector at 2% and mining sector at 3.5% mainly led to decline in industrial production in October 2013. The government will unveil industrial production data for November 2013 after trading hours today, 10 January 2014.
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 Reserve Bank of India's Third Quarter Review of Monetary Policy for 2013-14 is scheduled on 28 January 2014.
In the foreign exchange market, the rupee edged higher against the dollar. The partially convertible rupee was hovering at 61.9450, compared with its close of 62.07/08 on Thursday, 9 January 2014.
Asian markets were trading mostly higher ahead of US jobs data due later in the global day. Key benchmark indices in Indonesia, Hong Kong, Singapore and Taiwan rose by 0.12% to 0.68%. Key benchmark indices in China, Japan and South Korea fell by 0.28% to 0.64%.
China's exports rose 4.3% in December from a year earlier, according to reported data, after surging 12.7% in November. Imports were 8.3% higher than the year-ago month, accelerating from 5.3% growth in November. The resulting trade surplus was $25.6 billion, narrowing from the previous month's $33.8 billion.
The S&P 500 index eked out a marginal gain on Thursday, 9 January 2014 while the Dow Jones Industrial Average and the Nasdaq Composite index dropped, weighed down by losses for Verizon Communications Inc. and AT&T Inc.
The number of Americans who applied to receive unemployment benefits in the first week of the new year fell to the lowest level since the end of November. In the week ended Jan. 4, initial jobless claims fell by 15,000 to a seasonally adjusted 330,000, the U.S. Department of Labor said Thursday.
The US government will unveil the influential non-farm payroll report for December 2013 today, 10 January 2014.
The Federal Open Market Committee (FOMC) holds a two-day monetary policy meeting on 28 and 29 January 2014. The US central bank is poised to continue winding down its stimulus measures gradually this year.
The Bank of England on Thursday, 9 January 2014, left the size of its bond-buying program unchanged and held its key lending rate at a record low of 0.5%, where it has stood since March 2009. The central bank's Monetary Policy Committee left its asset purchases, the centerpiece of its quantitative-easing strategy, at 375 billion pounds ($617 billion). The minutes from the January meeting will be published on 22 January 2014.
The European Central Bank also left policy unchanged at 0.25% on Thursday, 9 January 2014, with its president Mario Draghi detailing the bank's commitment to its low-rate policies. Mario Draghi said at a press conference that the central bank will be ready to act when it believes the inflation outlook is changing for the worse.
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