A bout of volatility was witnessed as key benchmark indices trimmed gains after hitting fresh intraday high in mid-morning trade. The barometer index, the S&P BSE Sensex, was up 79.91 points or 0.37%, off close to 55 points from the day's high and up about 215 points from the day's low. The market breadth, indicating the overall health of the market, was positive. The market sentiment was boosted by data showing that the consumer inflation eased to a 25-month low in February 2014. The market sentiment was also boosted by data showing that foreign funds remained net buyers of Indian stocks on Wednesday, 12 March 2014. Gains in Asian stocks also aided the upmove on the domestic bourses today, 13 March 2014.
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 firms edged higher. Sun Pharmaceutical Industries dropped on reports the United States Food and Drug Administration (FDA) has imposed an import alert, effectively a ban, on the generic drugmaker's plant in Gujarat. Tyre stocks edged higher on renewed buying.
A sharp initial decline in shares of index heavyweight Infosys triggered a weak opening for the key benchmark indices. The Sensex 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.
The market sentiment was boosted by data showing that foreign funds remained net buyers of Indian stocks on Wednesday, 12 March 2014. Foreign institutional investors (FIIs) bought shares worth a net Rs 864.35 crore on Wednesday, 12 March 2014, as per provisional data from the stock exchanges.
Asian stocks edged higher on Thursday, 13 March 2014, after a report signaled Australia's labor market is strengthening.
At 11:28 IST, the S&P BSE Sensex was up 79.91 points or 0.37% to 21,936.13. 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 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 CNX Nifty was up 28.70 points or 0.44% to 6,545.60. The index hit a high of 6,561.45 in intraday trade, its highest level cine 11 March 2014. The index hit a low of 6,487.55 in intraday trade.
The BSE Mid-Cap index was up 40.69 points or 0.61% at 6,748.91. The BSE Small-Cap index was up 31.05 points or 0.47% to 6,696.18. Both these indices outperformed the Sensex.
The market breadth, indicating the overall health of the market, was positive. On BSE, 1,267 shares rose and 936 shares fell. A total of 145 shares were unchanged.
HDFC Bank (up 2.29%), Dr. Reddy's Laboratories (up 2.26%) and M&M (up 2.2%) edged higher from the Sensex pack.
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 6.99% at Rs 3,414.20. The scrip was volatile. The stock hit high of Rs 3,449 and low of Rs 3,340 so far during the trading session.
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 gained. TCS (up 0.66%), Wipro (up 0.2%), Tech Mahindra (up 0.38%), and HCL Technologies (up 0.59%) edged higher.
Sun Pharmaceutical Industries dropped 1.81% on reports the United States Food and Drug Administration (FDA) has imposed an import alert, effectively a ban, on the generic drugmaker's plant in Gujarat. An import alert results in the detention without physical examination of drugs from firms that have not met so-called good manufacturing practices. The plant in Karkhadi in Gujarat makes both drug ingredients and formulations.
Tyre stocks edged higher. Apollo Tyres (up 3.15%), JK Tyre & Industries (up 3.02%), Goodyear India (up 1.36%), MRF (up 0.55%, and CEAT (up 3.47%) gained.
ISMT surged 4.28% after the company said it will receive a payment of euro 15.5 million from one of its equipment suppliers with regard to an arbitration case initiated by the company against the said supplier. The announcement was made before market hours today, 13 March 2014.
Noida Toll Bridge Company lost 4.77% as the stock turned ex-dividend today, 13 March 2014, for interim dividend of Rs 1.50 per share for the year ending 31 March 2014.
Indian government bond prices rose after data released by the government after trading hours on Wednesday, 12 March 2014, showed that the consumer inflation eased to a 25-month low in February 2014. The yield on 10-year benchmark federal paper, 8.83% GS 2023, was hovering at 8.7073%, lower than its close of 8.7158% on Wednesday, 12 March 2014. Bond yield and bond prices move in opposite direction.
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 inflation eased to a 25-month low in February 2014. The partially convertible rupee was hovering at 61.01, 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.
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, Hong Kong, Taiwan, and Japan were up 0.21% to 0.92%. Singapore's Straits Times fell 0.36%.
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.
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.
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 39 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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