Key benchmark indices languished in the negative terrain in mid-afternoon trade. The barometer index, the S&P BSE Sensex, was down 103.07 points or 0.46%, off close to 225 points from the day's high and up about 55 points from the day's low. The market breadth, indicating the overall health of the market was negative. Weakness in Asian and European stocks hurt sentiment on the domestic bourses adversely.
Capital goods stocks declined. Bharat Heavy Electricals (Bhel) dropped after the company reported weak results on provisional basis for the year ended 31 March 2014.
Key benchmark edged higher in early trade. Key benchmark indices trimmed gains after hitting fresh intraday high in morning trade. Key benchmark indices slipped into the red in mid-morning trade. Key benchmark indices extended losses and hit fresh intraday low in early afternoon trade. The Sensex, and the 50-unit CNX Nifty, both, hit their lowest level in more than a week. The Sensex languished in the negative terrain in mid-afternoon trade as European stocks dropped in early trade there.
Asian and European stocks dropped on Monday, 7 April 2014, in the aftermath of a mostly disappointing US jobs report released on Friday, 4 April 2014.
At 14:20 IST, the S&P BSE Sensex was down 103.07 points or 0.46% to 22,256.43. The index declined 161.99 points at the day's low of 22,197.51 in afternoon trade, its lowest level since 28 March 2014. The index jumped 122.12 points at the day's high of 22,481.62 in morning trade.
The CNX Nifty was down 27.45 points or 0.41% to 6,666.90. The index hit a low of 6,650.40 in intraday trade, its lowest level since 28 March 2014. The index hit a high of 6,725.15 in intraday trade.
The BSE Mid-Cap index was down 43.19 points or 0.6% at 7,154.43, underperforming the Sensex. The BSE Small-Cap index was down 4.66 points or 0.06% at 7,260.39, outperforming the Sensex.
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The market breadth, indicating the overall health of the market, was negative. On BSE, 1,216 shares fell and 1,112 shares rose. A total of 114 shares were unchanged.
Among the 30 Sensex shares, 23 fell and the remaining shares rose. Maruti Suzuki India (down 1.86%), Cipla (down 2.12%), and Hindalco Industries (down 1.93%), edged lower from the Sensex pack.
MMTC rose 4.73% on reports that Coal India has received a single expression of interest from MMTC for its plan to import the fuel to meet supply agreements with power plants. Coal India is currently in the process of evaluation of the expression of interest, media reports said.
Capital goods stocks declined. ABB India (down 2.28%), BEML (down 3.82%), Crompton Greaves (down 3.7%), L&T (down 0.23%) and Siemens (down 0.75%) dropped.
Bharat Heavy Electricals (Bhel) dropped 3.62% after the company reported weak results on provisional basis for the year ended 31 March 2014. The company's net profit on provisional basis fell 51.2% to Rs 3228 crore on 19.51% decline in turnover to Rs 40366 crore in the year ended 31 March 2014 (FY 2014) over the year ended 31 March 2013 (FY 2013). The orders inflow declined 11.51% to Rs 28007 crore in FY 2014 over FY 2013. The provisional result was announced on Saturday, 5 April 2014.
Bhel has retained its market leadership position during FY 2014 even while operating in a difficult business environment. Improved focus on project execution enabled the company record highest ever commissionin &/synchronization of 13,452 megawatts (MW) of power plants in domestic and international markets in FY 2014.
Both power & industrial market segments in which the company operates continued to witness fewer project finalizations. Bhel secured orders worth Rs 28007 crore from its diversified business segments covering both domestic and international markets. Orders in jndustrial segment at Rs 5007 crore witnessed a 23% jump; Spares & Services at Rs 3433 crore saw a jump of 19% and lnternational segment at Rs 2567 crore witnessed a jump ot 28% in 20I3-I4. The company ended the year with an orderbook of Rs 101538 crore.
Bhel bagged a mega EPC order worth Rs 7900 crore for 3x660 MW Supercritical units from NTPC for North Karanpura project against stiff lnternational competition. With this, the company's market share in Power Sector in the country was 72% during 2013-14, further strengthening its leadership position.
Bhel said profit impact is due to low volumes, certain ongoing projects have got impacted as the lndian Power Sector continues to be besieged with issues relating to fund constraints, land acquisition, clearances and coal linkages. Focus on cost optimization through increased localization of super critical technologies, higher value additions; increased vendor base and design optimization efforts aided the company in its margins.
The company's focus on cash realization during the year has resulted in coming back to cash surplus situation after a gap of four years. The rising trend of debtors has also been arrested.
Bhel's commissioning/svnchronization of 13,452 MW included 11,266 MW in the utility segment; 1,698 MW Captive/lndustrial sets in the country and 488 MW in overseas market. The significant among them was the commissioning of first Bhel manufactured 660 MW Super-critical unit for NTPC at Barh and the first 800 MW Boiler for APPDCL at Krishnapatnam.
ln addition, company commissioned the first indigenously built 765 kV substation at PGGIL-Raichur, six months ahead of schedule, enabling Southern grid getting connected to National grid system - a long cherished dream of having One Natignone Grid-One Frequency' realized successfully.
The company successfully manufactured, tested and supplied new generation Ac-Acvariable frequency drive (VFD) 2000 HP Oil Rig to ONGC.
The plant load factor of all Bhel supplied sets in the country was 1.6% more than that of all lndia average. 35 Bhel supplied sets achieved a PLF of over 90% while 79 sets achieved a PLF of 80-90% during 2013-14 - a testimony of better performance from Bhel supplied sets.
Bhel which ranks among the highest R&D spenders in the country in the engineering and manufacturing segment spent 2.78% of turnover on R&D in 2013-14 compared to 2.49% in 2012-13. lncreased R&D efforts have led to filing of nearly two patents/copyrights every working day. 434 patents/copyrights filed during 2013-14 were an increase of 13% over 2012-13. The company's R&D efforts are being directed towards developing new products using state-of-the-art technologies and processes, relevant to the needs of the country to remain current both in terms of technology and features vis-i-vis global benchmarks.
Fiscal 2013-14 was a year in which Bhel has made significant progress in consolidating its strengths and value propositions to emerge even more competitive for tapping opportunities in the next phase of economic growth of the country.
IL&FS Transportation Networks rose 3.85% after the company said it has emerged as the lowest bidder for two road projects in Kerala. IL&FS Transportation Networks (ITNL) said that the company has emerged as the lowest bidder for two road projects in Kerala. ITNL had submitted bids with the Road Infrastructure Company Kerala for Rehabilitation of State Highways and Major District Road - Package III(A) total 96.72 KM and Package III(B) total 97.54 KM in Southern Region in Kerala under DBFMT on annuity basis. The projects are on annuity (fixed semi-annual payment) basis with a concession period of 15 years including construction period of 730 days and the estimated cost of the project III(A) is Rs 121.44 crore and project III(B) is Rs 168.16 crore, ITNL said in a statement.
ITNL said it had quoted an annuity (fixed semi-annual payment) of Rs 35.35 crore for project III(A) and Rs 44.50 crore for project III(B).
Kilburn Engineering fell 1.42%. The company said it won five separate orders worth over Rs 90 crore. The company made the announcement on Saturday, 5 April 2014.
Kilburn Engineering announced that it won a Rs 31 crore order from a large Fertilizer Company for supplying equipment for a new DAP/ NPK fertilizer project. It also won export orders worth $1.67 million from two US-based companies for rotary dryers for carbon black/phosphate. The company won a Rs 18 crore order for coolers for NPCIL's projects in Gujarat & Rajasthan for nuclear reactor building cooling systems. Further, the company said it won orders worth Rs 10 crore for fluid bed and other dryers for salt, ABS and fertilizer etc. The company also won orders worth Rs 23 crore for dryers for food processing industry (including export worth Rs 5 crore).
In the foreign exchange market, the rupee reversed intraday gains against the dollar on global risk-off sentiment. The partially convertible rupee was hovering at 60.1825, compared with its close of 60.08/09 on Friday, 4 April 2014.
The Reserve Bank of India conducted two term repurchase auctions on Friday, 4 April 2014, to add cash to the banking system.
The next major trigger for the stock market is Q4 March 2014 and year ended 31 March 2014 (FY 2014) corporate earnings. Investors and analysts will closely watch the management commentary that would accompany the results to see if there is any revision in their future earnings forecast of the company for the year ending 31 March 2015 (FY 2015) and/or for the year ending 31 March 2016 (FY 2016). Indian companies will start reporting their Q4 and full year results from mid-April 2014. The result season will conclude in end-May 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.
On the political front, the Bharatiya Janata Party (BJP) today, 7 April 2014, accused its main political rival, Congress, of driving away investors during its decade in power and promised more business-friendly policies if it wins Lok Sabha polls. In its election manifesto, released today, 7 April 2014, in New Delhi, the BJP attacked the incumbent Congress-led government for using 'tax terrorism' against companies. The BJP said it would provide a non-adversarial administration and simplify the country's complicated tax laws. The BJP said that economic revival will be the party's priority if it comes to power after elections. In its manifesto, the BJP has promised faster infrastructure development, job creation and measures to control inflation. The BJP said that it will bring on board all state governments in adopting the GST, addressing all their concerns. The party also promised a massive low cost housing program.
The party said it wouldn't allow foreign direct investment (FDI) in multi-brand retail in India -- a sign a BJP government would rollback a key liberalization of the Congress government. Barring the multi-brand retail sector, FDI will be allowed in sectors wherever needed for job and asset creation, infrastructure and acquisition of niche technology and specialized expertise, BJP's manifesto stated. The BJP is committed to protecting the interest of small and medium retailers, SMEs and those employed by them, it said. The FIPBs (Foreign Investment Promotion Board) functioning shall be made more efficient and investor friendly, the manifesto stated.
The BJP and Telugu Desam Party on Sunday, 6 April 2014, finalised their pre-poll alliance in Andhra Pradesh. The BJP will contest on eight seats in Telangana and five seats in Seemandhra region of Andhra Pradesh. Telangana has 17 Lok Sabha seats and Seemandhra has 25. The BJP will contest on 47 Assembly seats out of 119 in Telangana and 15 Assembly seats out of 125 in Seemandhra. Assembly polls in Andhra Pradesh and Telangana are to be held along with the ongoing Lok Sabha polls.
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 today, 7 April 2015, in 6 Lok Sabha constituencies of Assam and Tripura and will finally 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 June 1 and the new House has to be constituted by May 31.
European market edged lower on Monday, 7 April 2014, as technology shares tumbled following a selloff in America. Key benchmark indices in UK, France and Germany were off 0.72% to 1.34%.
A monthly meeting of the Monetary Policy Committee of the Bank of England's (BoE) for monetary policy review is scheduled on Thursday, 10 April 2014.
German industrial output rose for a fourth month in February in a sign that growth in Europe's largest economy continued to accelerate. Production adjusted for seasonal swings, climbed 0.4% from January, when it gained a revised 0.7%, the Federal Statistics Office in Wiesbaden said today.
Asian stocks edged lower on Monday, 7 April 2014, in the aftermath of a mostly disappointing US jobs report. Key benchmark indices in Hong Kong, Singapore and Japan were down 0.59% to 1.69%. Indonesia's Jakarta Composite rose 1.18 %. South Korea's Kospi rose 0.08%. Markets in mainland China and Thailand are closed for a holiday.
The World Bank trimmed its 2014 growth forecast for developing East Asia but said the region's economies were likely to see steady growth in the next couple of years, helped by a pick-up in global growth and trade. The Washington-based development bank expects the developing East Asia and Pacific (EAP) region to grow 7.1% in 2014 and 2015, down from the 7.2% rate it had previously forecast for both years. Growth in 2016 is also seen at 7.1%, staying slightly below the 2013 growth rate of 7.2%.
Fitch Ratings has affirmed China's Long-Term Foreign and Local Currency Issuer Default Ratings (IDRs) at 'A+'. The issue ratings on China's senior unsecured foreign and local currency bonds are also affirmed at 'A+'. The Outlooks on the Long-Term IDRs are Stable. The Country Ceiling is affirmed at 'A+' and the Short-Term Foreign Currency IDR at 'F1'.
Trading in US index futures indicated that the Dow could fall 52 points at the opening bell on Monday, 7 April 2014. US stocks fell on Friday, 4 April 2014, with the Nasdaq Composite Index sliding the most in two months, after large technology stocks from Google Inc. to Yahoo Inc. plunged as investors sold the bull market's biggest winners.
Companies led the US job market past a milestone in March as private employment exceeded its pre-recession peak for the first time, progress that will allow the Federal Reserve to stick to its policy course. Payrolls excluding government agencies rose 192,000 after a 188,000 gain in February that was larger than first estimated, the Labor Department reported in Washington. That brought the job count to 116.1 million, beating the January 2008 high of 116 million. The jobless rate held at 6.7% even as half a million Americans entered the workforce.
The Federal Open Market Committee (FOMC) next undertakes monetary policy review at a two-day meeting on 29-30 April 2014. The Federal Reserve on 19 March 2014 said after the conclusion of a monetary policy review that it will trim its monthly bond purchases by $10 billion to $55 billion. The Federal Reserve will end its bond-buying program before the end of the year with an interest-rate increase likely to follow in "around six months," Chair Janet Yellen said on 19 March 2014. Quarterly Fed forecasts on 19 March 2014 showed more officials predicting that the benchmark interest rate, now close to zero, will rise to at least 1% by the end of 2015 and 2.25% a year later.
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