Key benchmark indices languished in the negative terrain in morning trade. Weakness in Asian stocks dampened sentiment. The barometer index, the S&P BSE Sensex, was down 30.19 points or 0.12%, off about 100 points from the day's high and up close to 25 points from the day's low. The market breadth, indicating the overall health of the market, was strong. The BSE Mid-Cap and the BSE Small-Cap indices rose over 1% each. Both these indices outperformed the Sensex.
Index heavyweight and cigarette maker ITC fell. Capital goods stocks gained. L&T extended recent gains triggered by strong Q4 result. Siemens rose after the company said that Siemens AG, Germany has entered into an agreement with Mitsubishi-Hitachi Metals Machinery, Inc., and Mitsubishi Heavy Industries for setting up a joint venture to operate in the business of metallurgical industry as a complete provider of plant, products and services for the iron, steel and aluminium industry.
A bout of volatility was witnessed in initial trade as key benchmark indices regained positive terrain after slipping into the red after opening higher. The Sensex and the 50-unit CNX Nifty, both, hit their highest level in over one-week. Indices languished in the negative terrain in morning trade.
Foreign institutional investors (FIIs) bought shares worth a net Rs 575.09 crore on Tuesday, 3 June 2014, as per provisional data from the stock exchanges.
At 10:20 IST, the S&P BSE Sensex was down 30.19 points or 0.12% to 24,828.40. The index fell 53.42 points at the day's low of 24,805.17 in morning trade. The index rose 67.31 points at the day's high of 24,925.90 in early trade, its highest level since 26 May 2014.
The CNX Nifty was down 8.90 points or 0.12% to 7,406.95. The index hit a low of 7,399.10 in intraday trade. The index hit a high of 7,433.30 in intraday trade, its highest level since 26 May 2014.
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The BSE Mid-Cap index was up 98.86 points or 1.14% to 8,803.92. The BSE Small-Cap index was up 109.79 points or 1.18% to 9,415.66. Both these indices outperformed the Sensex.
The market breadth, indicating the overall health of the market, was strong. On BSE, 1,409 shares rose and 543 shares fell. A total of 62 shares were unchanged.
TCS (down 2.13%), Mahindra & Mahindra (M&M) (down 1.49%) and Wipro (down 0.96%) edged lower from the Sensex pack.
Index heavyweight and cigarette maker ITC fell 0.84% to Rs 330.75. The stock hit high of Rs 334 and low of Rs 329.05 so far during the day.
Capital goods stocks gained. ABB (India) (up 0.46%), Bharat Heavy Electricals (Bhel) (up 1.58%), Crompton Greaves (up 3.19%), Punj Lloyd (up 0.69%) and Thermax (up 0.23%) gained.
L&T rose 0.34% to Rs 1,659.20, with the stock exteding recent gains triggered by strong Q4 result. The company's net profit surged 69% to Rs 2723.48 crore on 11% growth in gross revenue to Rs 20229 crore in Q4 March 2014 over Q4 March 2013. The strong growth in bottom-line can be explained by strong operating performance and higher extraordinary income. The result was announced after market hours on Friday, 30 May 2014.
Consequent to completion of demerger of hydro carbon business to wholly owned subsidiary effective from 1 April 2013 in pursuant to approval of said demerger scheme by Bombay High Court vide its order dated 20 December 2013, the numbers of corresponding previous quarter/nine month and FY 2013 figures were restated and the growth figures are in comparison to restated P&L figures.
The growth in L&T's top line during Q4 March 2014 was due to progress in various jobs under execution. The international revenue rose 25% to Rs 2966 crore in Q4 March 2014 over Q4 March 2013. International revenue constituted 15% of total revenue in Q4 March 2014.
L&T's order intake during the quarter was steady at Rs 26737 crore. International order inflow during the quarter at Rs 11389 crore constituted 43% of the total order inflow for the quarter.
The order book at Rs 162952 crore as at 31 March 2014, grew 13% on YoY basis. International order book constituted 21% of the total order book, L&T said in a statement.
With regard to future business outlook, L&T said it has weathered the challenging times of the past few years due to its inherent capabilities and strong balance sheet. Being well positioned to tap the emerging opportunities in its core businesses, the company looks forward to a period of renewed investment momentum and sustainable growth. Given its large order book, the company is optimistic to maintain its growth momentum in the medium term, as domestic and global economic environment improves, L&T said in a statement.
Siemens rose 0.57% after the company said during market hours that Siemens AG, Germany has entered into an agreement with Mitsubishi-Hitachi Metals Machinery, Inc., and Mitsubishi Heavy Industries for setting up a joint venture to operate in the business of metallurgical industry as a complete provider of plant, products and services for the iron, steel and aluminium industry.
Pursuant to this, the Board of Directors at its meeting held on 3 June 2014, has agreed in principle to transfer the Metals Technologies business of the company to a designated entity subject to such terms and conditions as may be decided later on.
In the foreign exchange market, the rupee edged higher against the dollar. The partially convertible rupee was hovering at 59.37, compared with its close of 59.3850/3950 on Tuesday, 3 June 2014.
Markit Economics will unveil the result of a monthly survey on the performance of India's services sector for May 2014 today, 4 June 2014.
The Reserve Bank of India kept its main lending rate viz. the repo rate unchanged at 8% and also kept the cash reserve ratio (CRR) of scheduled banks unchanged at 4% of net demand and time liabilities (NDTL) after a monetary policy review on Tuesday, 3 June 2014. The central bank announced reduction in the statutory liquidity ratio (SLR) of scheduled commercial banks by 50 basis points to 22.5% of their NDTL from 23% with effect from the fortnight beginning 14 June 2014.
The Union Finance Minister Shri Arun Jaitley with regard to The Reserve Bank of India (RBI) Monetary Policy announced on Tuesday, 3 June 2014 said: the RBI has reduced the SLR by 50 basis points while maintaining the repo rate as unchanged. It is a priority for the Government to maintain a balance between growth and inflation. The Government is also concerned with restarting the investment cycle and moving towards higher growth and employment generation. We would like to address the problem of inflation through supply side measures particularly in relation to food inflation. Fiscal consolidation is a priority for the Government. The RBI has also chosen to maintain a balance between growth and inflation while keeping the policy rates unchanged. It has allowed banks to lend more to the private sector since they will be required to subscribe less to government securities than earlier. It has followed a caliberated approach aimed in the direction of balancing between growth and inflation, he added.
Finance minister Arun Jaitley is expected to table Union Budget for 2014-15 in Lok Sabha 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.
Asian stocks fell on Wednesday as investors await a report on US jobs and a decision from the European Central Bank on monetary policy later in the week. Key benchmark indices in Indonesia, Singapore, Hong Kong, and China were down 0.07% to 0.94%. Key benchmark indices in Taiwan and Japan rose 0.1% to 0.23%.
Australia's economy grew at the fastest pace in two years as surging exports and home building showed record-low borrowing costs are sustaining a 22-year expansion even as mining investment slows. First-quarter gross domestic product advanced 1.1% from the previous three months, government data today showed.
Trading in US index futures indicated that the Dow could fall 18 points at the opening bell on Wednesday, 4 June 2014. US stocks edged lower on Tuesday, following all-time highs for benchmark indexes on Monday, as investors awaited a European Central Bank decision on stimulus measures and a report on American employment in May.
A Commerce Department report showed US factory orders climbed 0.7% in April.
The influential US nonfarm payroll data for May 2014 is due for release on Friday, 6 June 2014.
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.
In Europe, expectations are that the European Central Bank (ECB) will announce new stimulus measures when the Governing Council of the ECB holds a monthly meeting on euro area interest rates tomorrow, 5 June 2014.
Bank of England's Monetary Policy Committee will probably keep its benchmark interest rate at a record-low 0.5% and leave its bond-purchase program unchanged at a monthly meeting on interest rates in UK tomorrow, 5 June 2014.
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