 "Market languishes at lower levels; heavyweights kneel to Fed")
Benchmark indices continue to languish at low levels after hitting day’s low ahead of F&O expiry. Nifty continues to take support at 6,050 levels after breaking the key psychological level earlier in the day. Market experts say that current crash is a temporary bump and markets will rebound from current levels as the economy is better placed on the macro front owing to sustainable fiscal position and relative strength in rupee among other factors.
The Finance Ministry today in a statement assured investors and market participants that the fundamentals of the economy are strong and they should not have any worries over external factors viz. fed taper. The ministry said that it will take necessary steps along with the central bank to ensure stablity in the financial markets.
"...there should be no undue concern over external factors... However, both the Government and the Reserve Bank of India will continue to remain vigilant and will take whatever steps are necessary to ensure that there is stability in the financial markets," the finance ministry said.
"This decision was expected and should not in any way surprise or affect the Indian markets. However, it may be noted that USD 65 billion is not a small sum and will continue to infuse a large amount of liquidity into the world markets."
The Federal Reserve has not announced a sequential taper and has made it clear that “asset purchases are not on a pre-set course” and that they will take “further measured steps at future meetings, ” the ministry said.
The US Federal Reserve (US Fed) sprung no surprises at its meeting and decided to taper its bond buying programme as planned. At the start of next month, the pace of agency Mortgage Backed Securities (MBS) purchases will be reduced to $30 billion/month (from $35 billion/month in January) and the pace at which the US Fed purchases longer-term Treasuries will slow down to $35 billion/month (from $40 billion/month).
This caused a rout in emerging markets currecies as investors pulled money from exchange traded funds (ETFs) that track emerging markets at a record pace.
At 1300hrs, the Sensex was down 230.20 points at 20,417.10 and the Nifty slipped below the crucial 6,050 mark, currently trading at 6049.60, down 70.65 points.
Advance delicne ratio stands at 1:5, indicating a weak market breath today. The broader markets are underperforming the benchmark indices- BSE Midcap and Smallcap indices are down by over 1.1 - 1.2%.
Top Sensex losers at this hour include: ITC down 1.54% down, ICICI Bank down 2.24%, HDFC Bank down 1.74%, Infosys down 1.11%, Reliance down 1.16%.
Adds Mudit Goyal, Technical Analyst, SMC Global, “Currently index is moving below its 21EMA, 50EMA and 100EMA on daily charts which indicates that Short term and medium term bias remains negative for the markets. For near term, Key support is seen around 5980-5970 levels and on the upper side, index can face hurdle around 6180-6200 levels.”
Traders will roll over positions in the futures & options (F&O) segment from the near month January 2014 series to February 2014 series. The January 2014 F&O contracts expire today.
Meanwhile, Foreign institutional investors (FIIs) bought shares worth a net Rs 250.48 crore on Wednesday, as per provisional data from the stock exchanges.
On the global front, Japan's Nikkei share average tumbled more than 3% on Thursday morning after the US Federal Reserve scaled back stimulus amid emerging market turmoil, while a rise in the yen soured overall sentiment.
The Nikkei dropped 3.3% to 14,873.03 in mid-morning trade after falling to as far as 14,853.83, the lowest since November 14. The index's support is seen at 14,731.17, a 61.8 retracement from an October low to a December high.
A spike in the yen soured market sentiment after the Fed, in a widely expected move, cut its bond purchases by another $10 billion to $65 billion a month. The decision sent investors scurrying to the safety of bonds and yen.
Back home, the rupee weakened in early trades as the US Fed announced further tapering of $ 10 billion. It is currently trading at 62.69-a-adollar. The first round of tapering of an equal quantum was announced last month.
Bank of India, Hero Motocorp, HCC, Indbulls Real Estate, JSW Energy, Phoenix Mills, Shoppers Stop, Siemens, Sintex Inds and Voltas will unveil their third quarter earnings today.
On the sectoral front, BSE Realty and Metal indices have surged by nearly 3% each followed by counters like Banks, FMCG, Capital Goods, Power, Oil & Gas and Auto, all falling between 1-2%. Infact all the major BSE sectoral indices are trading in red zone.
Banking shares continue under pressure in six straight trading sessions with the National Stock Exchange (NSE) Bank Nifty hits its lowest level since October last year. The BSE Bankex index is down over 2% currently.
Punjab National Bank, Bank of Baroda and Indusind Bank have slipped by 3% each, while State Bank of India, ICICI Bank, Axis Bank, Bank of India, Canara Bank, Union Bank of India, Kotak Mahindra Bank and HDFC Bank are down by 2% each.
The NSE banking share index, Bank Nifty is down 2% or 210 points at 10,228, hits three month low following the US Federal Reserve announcing plans to scale back its bond purchases by another US$10 billion.
Other notable losers are Sesa Sterlite, Tata Steel, BHEL, Hindalco, Hero Moto, ITC and Tata Power.
Other shares
Crompton Greaves is trading higher by 4% at Rs 106 after reporting a consolidated net profit at Rs 62 crore for the third quarter ended December 31, 2013 (Q3), on back of higher sales. The company had recorded loss of Rs 189 crore in the same quarter year ago.
Titan Company is trading lower by 3% at Rs 208 on reporting 19% year-on-year (yoy) decline in net profit at Rs 166 crore for the third quarter ended December 31, 2013 (Q3) on account of extremely poor retail sales during the quarter. The company had profit of Rs 204 crore in the same quarter previous fiscal.
TVS Motor Company is trading higher by 2.5% at Rs 72.65, extending its previous day’s 5% rally, after reporting a healthy 31% year-on-year (yoy) growth its net profit at Rs 68.80 crore for the third quarter ended December 31, 2013 (Q3), driven by a strong operating performance and sharp decline in finance cost. The two-three wheeler manufacture had a profit of Rs 52.45 crore in the same period previous fiscal.
The Finance Ministry today in a statement assured investors and market participants that the fundamentals of the economy are strong and they should not have any worries over external factors viz. fed taper. The ministry said that it will take necessary steps along with the central bank to ensure stablity in the financial markets.
"...there should be no undue concern over external factors... However, both the Government and the Reserve Bank of India will continue to remain vigilant and will take whatever steps are necessary to ensure that there is stability in the financial markets," the finance ministry said.
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The statement said that the Government has taken note of the US Federal Reserve’s decision to reduce the level of purchase of mortgage-backed securities and longer-term treasury securities to $65 billion per month as against $ 75 billion per month.
"This decision was expected and should not in any way surprise or affect the Indian markets. However, it may be noted that USD 65 billion is not a small sum and will continue to infuse a large amount of liquidity into the world markets."
The Federal Reserve has not announced a sequential taper and has made it clear that “asset purchases are not on a pre-set course” and that they will take “further measured steps at future meetings, ” the ministry said.
The US Federal Reserve (US Fed) sprung no surprises at its meeting and decided to taper its bond buying programme as planned. At the start of next month, the pace of agency Mortgage Backed Securities (MBS) purchases will be reduced to $30 billion/month (from $35 billion/month in January) and the pace at which the US Fed purchases longer-term Treasuries will slow down to $35 billion/month (from $40 billion/month).
This caused a rout in emerging markets currecies as investors pulled money from exchange traded funds (ETFs) that track emerging markets at a record pace.
At 1300hrs, the Sensex was down 230.20 points at 20,417.10 and the Nifty slipped below the crucial 6,050 mark, currently trading at 6049.60, down 70.65 points.
Advance delicne ratio stands at 1:5, indicating a weak market breath today. The broader markets are underperforming the benchmark indices- BSE Midcap and Smallcap indices are down by over 1.1 - 1.2%.
Top Sensex losers at this hour include: ITC down 1.54% down, ICICI Bank down 2.24%, HDFC Bank down 1.74%, Infosys down 1.11%, Reliance down 1.16%.
Adds Mudit Goyal, Technical Analyst, SMC Global, “Currently index is moving below its 21EMA, 50EMA and 100EMA on daily charts which indicates that Short term and medium term bias remains negative for the markets. For near term, Key support is seen around 5980-5970 levels and on the upper side, index can face hurdle around 6180-6200 levels.”
Traders will roll over positions in the futures & options (F&O) segment from the near month January 2014 series to February 2014 series. The January 2014 F&O contracts expire today.
Meanwhile, Foreign institutional investors (FIIs) bought shares worth a net Rs 250.48 crore on Wednesday, as per provisional data from the stock exchanges.
On the global front, Japan's Nikkei share average tumbled more than 3% on Thursday morning after the US Federal Reserve scaled back stimulus amid emerging market turmoil, while a rise in the yen soured overall sentiment.
The Nikkei dropped 3.3% to 14,873.03 in mid-morning trade after falling to as far as 14,853.83, the lowest since November 14. The index's support is seen at 14,731.17, a 61.8 retracement from an October low to a December high.
A spike in the yen soured market sentiment after the Fed, in a widely expected move, cut its bond purchases by another $10 billion to $65 billion a month. The decision sent investors scurrying to the safety of bonds and yen.
Back home, the rupee weakened in early trades as the US Fed announced further tapering of $ 10 billion. It is currently trading at 62.69-a-adollar. The first round of tapering of an equal quantum was announced last month.
Bank of India, Hero Motocorp, HCC, Indbulls Real Estate, JSW Energy, Phoenix Mills, Shoppers Stop, Siemens, Sintex Inds and Voltas will unveil their third quarter earnings today.
On the sectoral front, BSE Realty and Metal indices have surged by nearly 3% each followed by counters like Banks, FMCG, Capital Goods, Power, Oil & Gas and Auto, all falling between 1-2%. Infact all the major BSE sectoral indices are trading in red zone.
Banking shares continue under pressure in six straight trading sessions with the National Stock Exchange (NSE) Bank Nifty hits its lowest level since October last year. The BSE Bankex index is down over 2% currently.
Punjab National Bank, Bank of Baroda and Indusind Bank have slipped by 3% each, while State Bank of India, ICICI Bank, Axis Bank, Bank of India, Canara Bank, Union Bank of India, Kotak Mahindra Bank and HDFC Bank are down by 2% each.
The NSE banking share index, Bank Nifty is down 2% or 210 points at 10,228, hits three month low following the US Federal Reserve announcing plans to scale back its bond purchases by another US$10 billion.
Other notable losers are Sesa Sterlite, Tata Steel, BHEL, Hindalco, Hero Moto, ITC and Tata Power.
Other shares
Crompton Greaves is trading higher by 4% at Rs 106 after reporting a consolidated net profit at Rs 62 crore for the third quarter ended December 31, 2013 (Q3), on back of higher sales. The company had recorded loss of Rs 189 crore in the same quarter year ago.
Titan Company is trading lower by 3% at Rs 208 on reporting 19% year-on-year (yoy) decline in net profit at Rs 166 crore for the third quarter ended December 31, 2013 (Q3) on account of extremely poor retail sales during the quarter. The company had profit of Rs 204 crore in the same quarter previous fiscal.
TVS Motor Company is trading higher by 2.5% at Rs 72.65, extending its previous day’s 5% rally, after reporting a healthy 31% year-on-year (yoy) growth its net profit at Rs 68.80 crore for the third quarter ended December 31, 2013 (Q3), driven by a strong operating performance and sharp decline in finance cost. The two-three wheeler manufacture had a profit of Rs 52.45 crore in the same period previous fiscal.