A bout of volatility was witnessed as key benchmark indices trimmed losses soon after hitting fresh intraday low in mid-afternoon trade. The barometer index, the S&P BSE Sensex, was down 76.92 points or 0.37%, up about 70 points from the day's low and off close to 15 points from the day's high. The market breadth, indicating the overall health of the market, was negative. Weakness in Asian and European stocks hit sentiment on the domestic bourses adversely.
IT stocks were mixed. Index heavyweight Reliance Industries (RIL) edged lower in volatile trade. Among pharma stocks, Dr. Reddy's Laboratories scaled record high.
The market edged lower in early trade on weak Asian stocks. A bout of volatility was witnessed as key benchmark indices trimmed losses after hitting fresh intraday low in morning trade. Volatility continued as key benchmark indices weakened once again after trimming intraday losses in mid-morning trade. Weakness continued on the bourses in afternoon trade. A bout of volatility was witnessed as key benchmark indices trimmed losses soon after hitting fresh intraday low in mid-afternoon trade.
Asian and European stocks edged lower on Thursday, 20 February 2014, after a Chinese manufacturing index dropped more than estimated this month and after US Federal Reserve minutes signaled stimulus cuts will continue.
At 14:20 IST, the S&P BSE Sensex was down 76.92 points or 0.37% to 20,646.05. The index dropped 145.25 points at the day's low of 20,577.72 in mid-afternoon trade, its lowest level since 18 February 2014. The index fell 60.31 points at the day's high of 20,662.66 in mid-morning trade.
The CNX Nifty was down 28.15 points or 0.48% to 6,124.60. The index hit a low of 6,105.50 in intraday trade, its lowest level since 18 February 2014. The index hit a high of 6,129.10 in intraday trade.
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The BSE Mid-Cap index was up 12.03 points or 0.19% at 6,388.97. The BSE Small-Cap index was up 3.89 points or 0.06% at 6,376.09. Both these indices outperformed the Sensex.
The market breadth, indicating the overall health of the market, was negative. On BSE, 1,394 shares fell and 1,105 shares rose. A total of 165 shares were unchanged.
Among the 30-share Sensex pack, 19 stocks fell and rest rose. ICICI Bank (down 2.15%), Bharti Airtel (down 1.73%) and Tata Steel (down 1.71%) edged lower from the Sensex pack.
Dr. Reddy's Laboratories rose 1.66% to Rs 2,709.20 after hitting record high of Rs 2,709.60 in intraday trade.
Index heavyweight Reliance Industries (RIL) fell 0.56% at Rs 808. The scrip hit high of Rs 813.75 and low of Rs 806.45 so far during the day.
IT stocks were mixed. Wipro rose 0.18%. HCL Technologies declined 1.28%. Infosys shed 0.82%.
TCS rose 0.32%. The company said during market hours that Diageo, the world's leading premium spirits maker, has selected the company as its new global IT provider. The decision by Diageo to partner with TCS is the latest milestone in a programme to transform the way it provides IS services to around 36,000 employees, operating in 100 countries across the world, TCS and Diageo said in a joint statement. In the future, TCS will manage Diageo's global IT infrastructure, data centres and servers, in addition to providing service desk support to employees. This solution will provide a greater level of flexibility and differentiation of services to meet market needs, allow for swift adoption of future technology trends, and an enhanced current self-serve capability to deliver an improved end user experience, the two companies said.
Ivan Menezes, Chief Executive Officer, Diageo plc, commented: "Our partnership with Tata Consultancy Services is the latest milestone in our strategy to create a world-class IT service to support Diageo's global strategy and deliver efficient growth. Working together, I believe that we can make a significant step change in the way that IS supports our 36,000 employees around the world, giving them the freedom and agility to drive growth for Diageo in each of our markets".
Natarajan Chandrasekaran, Chief Executive Officer and Managing Director of Tata Consultancy Services, commented: "Globally businesses are embracing technology to enhance customer experience, drive innovation and propel their growth. Smarter IT -- from the data centre to the end user's experience -- is critical in this context and we are delighted to work with Diageo to help enable this transformation using our strong industry expertise and technology capabilities".
Financial Technologies (India) (FTIL) rose 2.85%. Tech Mahindra fell 0.6%. Financial Technologies (India) after market hours on Wednesday, 19 February 2014, in a clarification to the stock exchanges with reference to the news item titled "Tech M and FT Come Closer on Deal Talks" said, "As a policy of the company, we do not wish to comment on any speculative news article; hence we would not like to offer any comments on the said news reporting and also on the price rise of the company's share".
FTIL further clarified, "We have no comments. It is not our policy to comment on market rumours or speculation. Any definitive development of any substantive nature will be first notified to the stock exchanges in full compliance with Listing Agreement, so as to ensure uniform and simultaneous disclosure to all the investors".
Meanwhile, Tech Mahindra in a clarification to the exchanges on the aforesaid news item clarified, "the report is speculative in nature and therefore the answers to both your questions is in negative".
Financial Technologies (India) stock turned ex-dividend today, 20 February 2014, for third interim dividend of Rs 2 per share for the year ending 31 March 2014.
In the foreign exchange market, the rupee edged lower against the dollar on concern inflows will slow after a Federal Reserve report on Wednesday, 19 February 2014, showed support for a plan to reduce monetary stimulus for the US economy. The partially convertible rupee was hovering at 62.2775, compared with its close of 62.20/21 on Tuesday, 18 February 2014. The Indian currency, bond and money markets were closed on Wednesday, 19 February 2014, for a holiday.
The Reserve Bank of India next undertakes monetary policy review on 1 April 2014. Citing price pressures, the Reserve Bank of India raised its key lending rates by 25 basis points after Third Quarter Review of Monetary Policy for 2013-14 on 28 January 2014.
European stocks dropped on Thursday, 20 February 2014, as US Federal Reserve minutes signaled stimulus cuts will continue and as Chinese manufacturing shrank. Key benchmark indices in France, Germany and UK were off 0.83% to 1.47%.
Asian stocks edged lower on Thursday, 20 February 2014, after a Chinese manufacturing index dropped more than estimated this month. Key benchmark indices in Indonesia, Taiwan, Singapore, Japan, Hong Kong and South Korea were off by 0.07% to 2.15%.
China's Shanghai Composite fell 0.18%. A Chinese manufacturing index fell to the lowest level in seven months in February, adding to challenges for Communist Party officials grappling with risks to the financial system from trust defaults and soured loans. The preliminary February reading of 48.3 for a Purchasing Managers' Index released today by HSBC Holdings Plc and Markit Economics compares with January's final figure of 49.5. A number below 50 indicates contraction.
Japan's trade deficit widened more than expected to 2.79 trillion ($27.2 billion) in January, compared to December's 1.30 trillion, data released by the Japanese government today, 20 February 2014, showed. Imports rose 25% from a year earlier and outbound shipments gained 9.5%.
Singapore's economy expanded last quarter after a pick-up in manufacturing at the year end, with the government predicting an improvement in overseas demand in 2014 amid a global recovery. Gross domestic product rose an annualized 6.1% in the three months through December from the previous quarter, when it climbed a revised 0.3%, the trade ministry said in a statement today.
Trading in US index futures indicated that the Dow could drop 30 points at the opening bell on Thursday, 20 February 2014. US stocks edged lower on Wednesday, 19 February 2014, after data showed US housing starts sank last month by the most in almost three years and after the Federal Reserve indicated stimulus cuts will likely continue. Construction on new US homes tumbled 16% in January to a seasonally adjusted annual rate of 880,000, with drops for single-family homes and apartments, according to Commerce Department. Building permits, a sign of future demand, fell to the lowest rate since August. US producer prices rose in January under the government's new formula for measuring wholesale inflation, the Labor Department said on Wednesday, 19 February 2014.
Federal Reserve policy makers backed away from their year-old commitment to consider raising interest rates when unemployment falls below 6.5%, according to minutes of their January meeting released on Wednesday, 19 February 2014. With joblessness falling faster than expected even as other labor-market indicators show weakness, policy makers agreed it would "soon be appropriate" to revise their guidance about how long the era of record-low interest rates will remain, the minutes showed. "Several" Federal Reserve officials said that in "the absence of an appreciable change in the economic outlook, there should be a clear presumption in favor of continuing to reduce the pace" of bond buying at each meeting, the minutes showed.
Ahead of the release of the Fed minutes, Atlanta Federal Reserve President Dennis Lockhart on Wednesday, 19 February 2014, said he expects a mid-2015 interest-rate hike.
Federal Reserve Chairwoman Janet Yellen said last week that US growth has strengthened and that only a "notable change in the outlook" for the economy would prompt policy makers to slow the pace of cuts to the monthly bond-buying program.
The Federal Open Market Committee (FOMC) next undertakes monetary policy review on 18-19 March 2014. After a monetary policy review, the FOMC on 29 January 2014 announced it will reduce monthly bond purchases by another $10 billion to $65 billion.
The International Monetary Fund, in a staff report prepared for central bankers and finance ministers from the Group of 20, said Wednesday, 19 February 2014, that significant downside risks remain for the world economy. Risks of prolonged market turmoil in emerging markets and of deflation in the euro area are threatening the world's improved economic prospects, IMF staff wrote in the report. The ministers meet this weekend in Sydney.
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