A bout of volatility was witnessed as key benchmark indices trimmed losses after hitting fresh intraday low in mid-afternoon trade. The market breadth indicating the overall health of the market was weak. The barometer index, the S&P BSE Sensex, was currently down 53.27 points or 0.2% at 26,296.06. The BSE Small-Cap index was off almost 1%. Foreign portfolio investors sold shares worth a net Rs 694.67 crore during the previous trading session on Tuesday, 14 October 2014, as per provisional data. Meanwhile, India's merchandise export registered a muted growth of 2.7% in September 2014, data released the government early this week showed.
Meanwhile, various exit polls released after assembly elections in Maharashtra and Haryana showed that the BJP is set to wrest power from the Congress party in Haryana and will emerge as the single largest party in Maharashtra. Polling was held yesterday, 15 October 2014, for assembly elections in Maharashtra and Haryana. The counting of votes for elections in both these states takes places on Sunday, 19 October 2014, and the results will be out on the same day. BJP's seat tally in Maharashtra, according to various exit polls, varied from just over 100 to 150-plus, the latter a clear majority mark in a 288-member assembly. In 90-seat Haryana, exit polls gave BJP between 37 and 50-plus seats; the latter a majority mark. BJP's strong showing in assembly elections in Maharashtra and Haryana could boost Prime Minister Narendra Modi's ability to carry forward legislative reforms.
IT stocks edged lower. DLF edged higher in volatile trade after a steep slide in the stock during the previous trading session. Strides Arcolab tumbled on turning ex-dividend. Cairn India tumbled to 52-week low on lower crude oil prices.
Earlier, a high volatility was witnessed at the onset of the trading session as key indices staged a strong recovery after a weak opening.
In overseas markets, European stocks edged higher in volatile trade. Asian stocks declined amid growing concerns over economic growth around the world. US index futures fluctuated after yesterday's decline for US stocks.
Brent crude fell to near four-year lows amid growing concerns over the global economy.
In the foreign exchange market, the rupee edged lower against the dollar as India's trade deficit more than doubled to $14.25 billion in September 2014 from $6.12 billion in September 2013.
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At 14:14 IST, the S&P BSE Sensex was off 53.27 points or 0.2% at 26,296.06. The index lost 129.46 points at the day's low of 26,219.87 in mid-afternoon trade. The index jumped 112.75 points at the day's high of 26,462.08 in early trade.
The CNX Nifty was down 23.80 points or 0.3% at 7,840.20. The index hit a low of 7,817.80 in intraday trade, its lowest level since 13 October 2014. The index hit a high of 7,893.90 in intraday trade.
The BSE Mid-Cap index was off 75.21 points or 0.79% at 9,397.87. The BSE Small-Cap index was off 104.92 points or 0.99% at 10,526.33.
The market breadth indicating the overall health of the market was weak. On BSE, 1,751 shares declined while 1,000 shares gained. A total of 107 shares were unchanged.
IT stocks fell. HCL Technologies (down 1.95%), Tech Mahindra (down 0.89%), Infosys (down 0.48%), and Wipro (down 0.11%) declined.
MindTree lost 3.1% at Rs 1,003. The company's net profit rose 6.2% to Rs 137.4 crore on 5.3% rise in revenue to Rs 888.60 crore in Q2 September 2014 over Q1 June 2014. The company announced Q2 results on 15 October 2014, when stocks markets were closed on account of assembly elections in Maharashtra.
Persistent Systems lost 4.82% to Rs 1,359.60. The stock was volatile. The stock hit a high of Rs 1,499 and a low of Rs 1,336.20 so far in the day. On Tuesday, 14 October 2014, the Reserve Bank of India (RBI) notified that the foreign shareholding by Foreign Institutional Investors (FIIs)/Registered Foreign Portfolios Investors (RFPIs) in Persistent Systems have gone below the revised threshold limit. Hence, the restrictions placed on the purchase of shares of the company are withdrawn with immediate effect. The RBI further advised that FIIs/RFPIs can now invest upto 49% of the paid up capital of Persistent Systems under the Portfolio Investment Scheme.
TCS rose 0.87% at Rs 2,723.20 ahead of its Q2 September 2014 earnings today, 16 October 2014.
DLF rose 3% at Rs 108.10. The stock was volatile. The stock hit a record low of Rs 100 in intraday. The scrip hit high of Rs 115.85 so far during the day. Rating agency CRISIL yesterday, 15 October 2014, placed its ratings on the bank facilities and debt instruments of DLF on 'Rating Watch with Negative Implications'. This rating action follows Securities and Exchange Board of India's (Sebi) order on 10 October 2014, restraining DLF and some of its key executives from accessing the securities market, and from buying, selling or dealing in securities, directly or indirectly for a period of three years. The Sebi order will adversely impact DLF's ability to access the capital markets and constrain its financial flexibility, which has been one of its key rating strengths, CRISIL said. The order will impact DLF's plans to raise funds through capital market instruments such as equity, commercial mortgage-backed securities (CMBS) and real estate investment trusts (REITs) over the medium term, CRISIL said.
CRISIL said it will remove the ratings from watch and take an appropriate rating action once it gets clarity on above issues, the extent of the impact that the order has on DLF's financial flexibility and its liquidity profile. CRISIL will continue to monitor the developments, and is in discussions with the company to understand the issues in detail, and its plans, it added.
CRISIL has also placed its ratings on the bank facilities of DLF Info City Developers (Kolkata) (DLFICDK) on 'Rating Watch with Negative Implications'. DLFICDK is a wholly owned subsidiary of DLF and was set up to undertake the Kolkata Information Technology Park project. The company has completed the construction work and has leased out the project.
Strides Arcolab tumbled 17.03% to Rs 659.95 as the stock turned ex-dividend today, 16 October 2014, for a special dividend of Rs 105 per share.
Cairn India fell 3.54% at Rs 274.05. The stock hit 52-week low of Rs 274 in intraday as Brent crude fell to the lowest level in four years amid growing concerns over the global economy. Lower crude oil prices will result in lower realizations from crude sales for oil exploration firms like Cairn India.
Meanwhile, the provisional data released by the stock exchanges after trading hours on Tuesday, 14 October 2014, showed that foreign portfolio investors (FPIs) sold shares worth a net Rs 694.67 crore on that day. The stock market was closed yesterday, 15 October 2014, on account of assembly election in Maharashtra.
In the foreign exchange market, the rupee edged lower against the dollar as India's trade deficit more than doubled to $14.25 billion in September 2014 from $6.12 billion in September 2013. The partially convertible rupee was hovering at 61.63, compared with its close of 61.42 during the previous trading session.
India's merchandise export rose 2.7% to $28.90 billion in September 2014, data released after market hours on Tuesday, 14 October 2014 showed. Exports of engineering goods exports jumped 20.2%, exports of gems & jewellery rose 11.1%, exports of readymade garments rose 15.9%, rice exports rose 17.7% and exports of organic and inorganic chemicals rose 7.1%. The merchandise imports surged at more than two-and-half year pace of 26% to $43.15 billion in September 2014. Thus, the trade deficit more than doubled to $14.25 billion in September 2014 from $6.12 billion in September 2013, while also galloped from $10.84 billion in August 2014.
Brent crude fell to near four-year lows amid growing concerns over the global economy. Brent for November settlement was off 80 cents at $82.98 a barrel. The contract expires today, 16 October 2014. Brent for December settlement was off 82 cents at $83.30 a barrel.
Lower crude oil prices will help India in containing its fiscal deficit, current account deficit and fuel price inflation. India imports 80% of its crude oil requirement.
European stocks edged higher in volatile trade today, 16 October 2014. Key benchmark indices in UK and Germany were up 0.12% to 0.15%. In France, the CAC 40 Index was off 0.34%.
German Chancellor Angela Merkel told parliament today, 16 October 2014, that Europe must push ahead with efforts to cut public deficits and improve competitiveness because the euro zone debt crisis has not yet been overcome and its causes have not been eliminated. Merkel said European Union leaders must bear in mind, as they debate ways to boost growth, that painful fiscal reforms have begun to pay off.
The European Union has reportedly started a two-week probe of euro-area governments' draft budgets. As yields on 10-year securities from Europe's most-indebted nations surged yesterday, 15 October 2014, led by Greece and sweeping up Portugal, Ireland and Italy, the European Commission started a process of picking apart nations' 2015 spending plans, seeking to defuse potential fiscal time bombs.
Mounting anxiety over global growth and the spread of Ebola dragged Asian bourses lower today, 16 October 2014. Key indices in China, Hong Kong, Singapore, Japan, South Korea, Indonesia and Taiwan were off 0.25% to 2.22%. In Indonesia, the Jakarta Composite index rose 0.03%.
China attracted $9 billion of foreign direct investment in September, up 1.9% from a year earlier, the Ministry of Commerce said in a statement today, 16 October 2014. The figure was up from August's $7.2 billion, which was down 14% from a year earlier and the lowest level since July 2010.
Trading in US index futures indicated that the Dow could gain 27 points at the opening bell today, 16 October 2014. US stocks closed lower on Wednesday, 15 October 2014, but retraced some lost ground in late trading from historic intraday losses, as disappointing economic data fueled growth fears, which were compounded by the spread of Ebola after a second case was reported in the US. Data yesterday, 15 October 2014, showed that US retail sales fell 0.3% last month on a broad pullback in consumer spending in the world's largest economy.
According to the Fed's Beige Book of economic conditions data released yesterday, 15 October 2014, officials there see the economy moving at a modest-to-moderate pace, with consumer spending gaining at a slight-to-moderate pace.
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