A bout of volatility was witnessed as key benchmark indices trimmed intraday losses in mid-afternoon trade. The barometer index, the S&P BSE Sensex, was down 99.98 points or 0.41%, up 120.43 points from the day's low and off 142.64 points from the day's high. Weakness in Asian and European stocks hit sentiment on the domestic bourses adversely. However, the broad market regained strength in mid-afternoon trade. The market breadth, indicating the overall health of the market was strong. The BSE Small-Cap and Mid-Cap indices were up more than 1% each.
Index heavyweight and cigarette major ITC slipped in highly volatile trade. IT stocks were mixed. Sugar stocks also edged higher.
Key benchmark indices edged lower amid initial volatility on weak Asian stocks. Key benchmark indices cut losses after hitting fresh intraday low in morning trade. Key benchmark indices languished in negative zone in mid-morning trade. Key benchmark indices extended losses and hit fresh intraday low in afternoon trade. A bout of volatility was witnessed as key benchmark indices trimmed intraday losses in mid-afternoon trade.
At 14:15 IST, the S&P BSE Sensex was down 99.98 points or 0.41% to 24,276.90. The index lost 220.41 points at the day's low of 24,156.47 in afternoon trade, its lowest level since 19 May 2014. The index gained 42.66 points at the day's high of 24,419.54 in early trade.
The CNX Nifty was down 31.20 points or 0.43% to 7,244.30. The index hit a low of 7,206.70 in intraday trade, its lowest level since 19 May 2014. The index hit a high of 7,287.15 in intraday trade.
The BSE Mid-Cap index was up 83.19 points or 1.01% at 8,315.59. The BSE Small-Cap index was up 113.68 points or 1.32% at 8,714.01. Both these indices outperformed the Sensex.
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The market breadth, indicating the overall health of the market, was strong. On BSE, 1,944 shares gained and 904 shares fell. A total of 98 shares were unchanged.
Among the 30-share Sensex pack, 20 stocks declined and rest of them gained.
Index heavyweight and cigarette major ITC shed 0.44% to Rs 339.80. The stock was volatile. The stock hit high of Rs 342.10 and low of Rs 329 so far during the day.
IT stocks were mixed. Infosys (up 0.91%), TCS (up 0.82%) and HCL Technologies (up 1.82%) gained. Wipro (down 0.83%) and Tech Mahindra (down 1.21%) edged lower.
Sugar stocks edged higher. Bajaj Hindusthan (up 1.52%), Dhampur Sugar Mills (up 4.48%), Sakthi Sugars (up 4.76%), Balrampur Chini Mills (up 1.99%), Shree Renuka Sugars (up 4.52%), Simbhaoli Sugar Mills (up 4.72%) and Dwarikesh Sugar Industries (up 4.99%) gained.
HMT (up 19.94%), Essar Oil (up 13.92%), Rashtriya Chemicals & Fertilisers (up 13.21%), MMTC (up 12.3%), PVR (up 8.21%), Hindustan Copper (up 7.78%), SKS Microfinance (up 7.56%), Indiabulls Power (up 6.77%), Torrent Power (up 6.41%) and IFCI (up 6.09%) were the top gainers from the BSE Mid-Cap index.
ITI (up 20%), Nava Bharat Ventures (up 19.99%), National Fertilisers (up 19.94%), Opto Circuits (up 14.95%), J Kumar Infraprojects (up 14.39%), Voltamp Transformers (up 13.72%), NIIT (up 13.4%), Sanwaria Agro Mills (up 13.38%), Andrew Yule & Company (up 12.55%) and Geometric (up 12.3%) were the top gainers from the BSE Small-Cap index.
In the foreign exchange market, the rupee edged lower against the dollar as importers stepped in to buy dollars to pay bills. The partially convertible rupee was hovering at 58.715, compared with its close of 58.63/64 on Tuesday, 20 May 2014.
Reserve Bank of India Governor Raghuram Rajan on Tuesday, 20 May 2014, reiterated his call for fiscal discipline, saying it is essential for India to achieve sustainable economic growth. Rajan said India would not always be able to rely on banks to buy a large portion of its government debt as it usually does. "(Bank) deposits will not continue to be cheap, while the government cannot continue to pre-empt financing at the scale it has in the past if we are to have a modern entrepreneurial economy. This is yet another reason why fiscal discipline will be central to sustainable growth going forward," Rajan said at an event in New Delhi. Rajan suggested the need for India to offer more specialised banking licences that would result in smaller banks offering niche services. The RBI on April granted two new commercial banking licences, its first new ones in 10 years.
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.
After Bharatiya Janata Party (BJP) led National Democratic Alliance's (NDA) landslide victory in the recently concluded Lok Sabha election, investors are expecting measures from the incoming government to revive the Indian economy. There are expectations that Gujarat chief minister and Prime Minister-designate Narendra Modi will be in a position to replicate the economic success he enjoyed in Gujarat state when he takes over as the country's Prime Minister. Gujarat's economy expanded by 10.1% a year, on average and adjusting for inflation, from 2001 and 2012, compared with 7.7% growth a year for India's economy as a whole. India's GDP growth slowed sharply at 4.7% in Q3 December 2013. Investors hope that a BJP-led government would be able to accelerate policy reforms and overhaul the country's poor infrastructure. Investors will now be keenly watching policy announcements from the new government to drive a turnaround in the investment cycle.
Ever since NDA's victory in the election last week, speculation has been rife about the likely allocation of key ministerial portfolios in the Modi-led NDA government.
Modi will be sworn in as India's next Prime Minister on Monday, 26 May 2014, evening at the Rashtrapati Bhawan. India will invite the leaders of Pakistan and other neighbours to Narendra Modi's inauguration as prime minister, a spokeswoman for the Bharatiya Janata Party (BJP) said today, 21 May 2014, in a bold step to embark on a policy of regional engagement. Pakistani Prime Minister Nawaz Sharif will be on the guest list of leaders from the eight-member South Asia Association for Regional Cooperation (SAARC) invited to attend Modi's swearing in next Monday, spokeswoman Nirmala Sitharaman said.
The first budget of the new government is expected by July 2014. An interim budget was presented by P. Chidambaram in February this year. Essentially, in the nature of a vote on account, the interim budget was intended to get Parliament approval for expenditure to be incurred during the first few months of fiscal year 2014-15 due to Lok Sabha elections.
European stocks edged lower on Wednesday, 21 May 2014, as investors awaited data on consumer confidence in the euro area. Key benchmark indices in France and UK were off 0.08% to 0.29%. Germany's DAX was up 0.03%.
The Bank of England's Monetary Policy Committee at its May 7-8 meeting voted 9-0 in favor of keeping interest rates on hold and making no changes to its 375 billion pound ($632 billion) asset-purchase program, according to minutes released today, 21 May 2014. But, in a sign of emerging divisions, the minutes also record that there was a range of views on the committee over how much slack remains in the labor market to bear down on inflation and what the best strategy is for eventually raising rates. There were "a variety of views on the appropriate path of monetary policy," the minutes record. "The committee would continue to refine its views as the economy evolved, and for some members the monetary policy decision was becoming more balanced," according to the minutes, a sign that some officials are moving closer to reassessing their ultra-low rate stance. The minutes record some officials saw merit in tightening policy sooner in order to meet the central bank's aim of lifting rates gradually.
Asian markets edged lower on Wednesday, 21 May 2014, as US stocks edged lower on Tuesday, 20 May 2014. Key benchmark indices in Taiwan, South Korea, Singapore, Japan and Indonesia were off 0.15% to 0.29%. Key benchmark indices in Hong Kong, China and Indonesia rose 0.01% to 0.84%.
The Bank of Japan refrained from boosting stimulus as the economy shows signs of weathering the impact of the first sales-tax increase since 1997. The central bank will continue to expand the monetary base at a pace of 60 trillion yen to 70 trillion yen per year, it said in a statement in Tokyo today, 21 May 2014.
Japan posted a trade deficit of 808.9 billion yen ($8 billion) for April, data showed today, 21 May 2014. Exports gained 5.1% year on year, while imports increased 3.4%.
Trading in US index futures indicated that the Dow could advance 28 points at the opening bell on Wednesday, 21 May 2014. US stocks ended Tuesday with broad-based losses after disappointing earnings from TJX Companies, Inc, Staples, Inc. and weak sales numbers from Caterpillar Inc. weighed on investor sentiment. Selling intensified in the afternoon after comments from Philadelphia Fed President Charles Plosser, who said that Fed may need to act sooner rather than later should the economy accelerate.
New York Fed President William Dudley, who gets a vote at every Federal Open Market Committee meeting and is vice chairman of the interest-rate setting committee, told the New York Association for Business Economics on Tuesday, 20 May 2014, said that there will be a considerable period of time between the end of its asset purchases and the first rate hike.
The Federal Reserve releases minutes from the April 29-30 meeting of Federal Open Market Committee today, 21 May 2014. The minutes are expected to contain details of when, and by how much, interest rates will be raised.
The Federal Open Market Committee (FOMC) next undertakes monetary policy review at a two-day meeting on 17-18 June 2014. The Fed on 30 April 2014 said after a monetary policy review that it will keep the benchmark interest-rate target at almost zero for a "considerable time" after its bond-buying program ends. The FOMC also reduced monthly debt purchases to $45 billion, its fourth straight $10 billion cut, and said further reductions are likely in "measured steps" if the economy continues to improve.
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