Key benchmark indices languished in the negative terrain in mid-morning trade. The market extended recent losses triggered by the India Meteorological Department (IMD) on Thursday, 24 April 2014, announcing that the country will likely get below-normal levels of monsoon rain this year. Investors also maintained caution ahead of the announcement of Federal Reserve's monetary policy review tomorrow, 30 April 2014. The barometer index, the S&P BSE Sensex, was down 120.97 points or 0.53%, off close to 170 points from the day's high and up about 40 points from the day's low. The market breadth, indicating the overall health of the market, was negative. Bank stocks dropped across the board.
The market dropped in early trade. It extended initial losses and hit fresh intraday low in morning trade. The Sensex and the 50-unit CNX Nifty, both, hit their lowest level in almost two weeks. It languished in the negative terrain in mid-morning trade.
Foreign institutional investors (FIIs) bought shares worth a net Rs 77.02 crore on Monday, 28 April 2014, as per provisional data from the stock exchanges.
At 11:20 IST, the S&P BSE Sensex was down 120.97 points or 0.53% to 22,510.64. The index fell 161.18 points at the day's low of 22,470.43 in morning trade, its lowest level since 17 April 2014. The index rose 50.28 points at the day's high of 22,681.89 in early trade.
The CNX Nifty was down 32.40 points or 0.48% to 6,728.85. The index hit a low of 6,711.10 in intraday trade, its lowest level since 17 April 2014. The index hit a high of 6,779.70 in intraday trade.
The BSE Mid-Cap index was up 2.57 points or 0.03% to 7,441.06. The BSE Small-Cap index was up 12.49 points or 0.16% to 7,629.77. Both these indices outperformed the Sensex.
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The market breadth, indicating the overall health of the market, was negative. On BSE, 1,046 shares fell and 1,017 shares rose. A total of 96 shares were unchanged.
Among the 30-share Sensex pack, 23 stocks declined and rest of them rose. Tata Steel (down 3.11%), Hindustan Unilever (down 2.08%) and Bajaj Auto (down 2.07%) edged lower from the Sensex pack.
Bank stocks dropped across the board. Among private sector banks, ICICI Bank (down 1.13%), IndusInd Bank (down 1.17%), Yes Bank (down 1.67%), Federal Bank (down 2.27%), HDFC Bank (down 1.09%), Kotak Mahindra Bank (down 1.12%) and Axis Bank (down 0.49%), declined.
Among PSU bank stocks, State Bank of India (SBI) (down 0.41%), Canara Bank (down 1.29%), Union Bank of India (down 1.33%), Bank of India (down 1.99%), Bank of Baroda (down 0.81%) and Punjab National Bank (down 0.77%) declined.
GMR Infrastructure lost 2.85% after the company said that its subsidiary has withdrawn its draft prospectus for the initial public offering due to various business reasons. GMR Infrastructure after market hours on Monday, 28 April 2014 said that one of the company's subsidiaries GMR Energy along with the selling shareholders have withdrawn the draft red herring prospectus (DRHP) filed with the Securities and Exchange Board of India (Sebi) on Monday, 28 April 2014 due to various business reasons.
GMR Infrastructure had on 28 March 2014 intimated that GMR Energy had filed a DRHP dated 28 March 2014 with Sebi.
Noida Toll Bridge Company gained 6.99% after net profit surged 43.2% to Rs 16.14 crore on 7.5% growth in net sales to Rs 30.46 crore in Q4 March 2014 over Q4 March 2013. The company announced the result after market hours on Monday, 28 April 2014. On a consolidated basis, Noida Toll Bridge Company's net profit rose 28.7% to Rs 53.91 crore on 11.2% growth in net sales to Rs 119.71 crore in the year ended 31 March 2014 over the year ended 31 March 2013.
Meanwhile, Noida Toll Bridge Company's Board of Directors at its meeting held on Monday, 28 April 2014 recommended a final dividend of Rs 2.5 per share (inclusive of interim dividend of Rs 1.50 per share paid in the month of March 2014), to the equity shareholders of the company, for the financial year ended 31 March 2014.
The country will likely get below-normal levels of monsoon rain this year, the India Meteorological Department (IMD) said on Thursday, 24 April 2014. The IMD said that the rainfall during the June-September summer rainy season will likely be 95% of the long-term average for the country. India's weather department defines a normal monsoon as one with rainfall between 96% and 104% of the 50-year average, which is 89 centimeters this year. This year could be a below normal monsoon, the weather department said, as there is a 60% possibility of the emergence of the El Ni weather phenomenona warm weather system that starts in the southern Pacific can affect weather around the world. El Ni last affected India's monsoon in 2009 when the monsoon rainfall was 23% below normal.
Annual rains are important for India as most of its farmlands are dependent or rain for irrigation and more than half of its workforce is employed in agriculture. The monsoon rains usually arrive over the southern state of Kerala by the end of May or the first week of June, and gradually cover the entire country by July. The IMD will issue the update forecasts in June 2014 as a part of the second stage forecast. Along with the update forecast, separate forecasts for the monthly (July and August) rainfall over the country as a whole and seasonal (June-September) rainfall over the four geographical regions of India will also be issued.
In the foreign exchange market, the rupee edged higher against the dollar. The partially convertible rupee was hovering at 60.54, compared with its close of 60.6450/65 on Monday, 28 April 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, as consumer-price inflation eased to a two-year low and as the rupee firmed up against the dollar.
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 on 7 April 2014 and will 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 1 June and the new House has to be constituted by 31 May.
Asian stocks swung between gains and losses on Tuesday as investors weighed corporate earnings and after US equities advanced. Key benchmark indices in Taiwan, China and Hong Kong rose 0.16% to 0.63%. Key benchmark indices in Indonesia, South Korea and Singapore were off 0.16% to 0.42%.
Trading in US index futures indicated that the Dow could gain 26 points at the opening bell on Tuesday, 29 April 2014. US stocks rose, with the Standard & Poor's 500 Index erasing an earlier slide on Monday, 28 April 2014,, as Internet and smaller companies pulled back from a selloff amid optimism over merger activity.
A report by the National Association of Realtors showed contracts to purchase previously owned US homes climbed in March by the most in almost three years, showing residential real estate was starting to stabilize entering the spring selling season. The pending home sales index rose 3.4%, the first gain in nine months, after a 0.5% drop in February that was smaller than initially reported.
A two-day meet of the Federal Open Market Committee (FOMC) on monetary policy review resumes today, 29 April 2014. The Federal Reserve on 19 March 2014 decided after the conclusion of a monetary policy review to trim its monthly bond purchases by $10 billion to $55 billion.
Investors are also watching developments in Ukraine. The Obama administration imposed sanctions on seven Russian officials and 17 companies linked to Russian President Vladimir Putin's inner circle involved in banking, energy and infrastructure. The sanctions, announced by the White House, are being imposed in conjunction with the European Union, which said it is adding 15 names to its list of previously sanctioned individuals.
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