IT stocks decline

Volatility ruled the roost as key benchmark indices regained positive zone in early afternoon trade. The barometer index, the S&P BSE Sensex, was up 29.27 points or 0.15%, up 135.47 points from the day's low and off 88.22 points from the day's high. The market breadth, indicating the overall health of the market, was positive.

Auto stocks edged higher on fresh buying. IT stocks declined on recent strong rebound of the rupee against the dollar.

A bout of volatility was witnessed as the key benchmark indices reversed initial losses triggered by weak Asian stocks. Key benchmark indices pared gains after striking fresh intraday high in morning trade. Key benchmark indices reversed intraday gains after Prime Minister's Economic Advisory Council (PMEAC) sharply trimmed India's GDP growth forecast to 5.3% for the year ending 31 March 2014 (FY 2014) from earlier estimate 6.4% and said that the current stance of monetary policy has to continue until stability in the rupee is achieved. Key benchmark indices regained positive zone in early afternoon trade.

Foreign institutional investors (FIIs) bought shares worth a net Rs 930.54 crore on Thursday, 12 September 2013, as per provisional data from the stock exchanges.

In the foreign exchange market, the rupee weakened against the dollar. The partially convertible rupee was hovering at 63.71, weaker than its close of 63.50/51 on Thursday, 12 September 2013.

At 12:15 IST, the S&P BSE Sensex was up 29.27 points or 0.15% to 19,811.15. The index gained 117.49 points at the day's high of 19,899.37 in morning trade. The index fell 106.20 points at the day's low of 19,675.68 in mid-morning trade, its lowest level since 10 September 2013.

The CNX Nifty was up 18.30 points or 0.31% to 5,869. The index hit a high of 5,884.30 in intraday trade. The index hit a low of 5,822.90 in intraday trade.

The market breadth, indicating the overall health of the market, was positive. On BSE, 1,193 shares gained and 880 shares fell. A total of 125 shares were unchanged.

The total turnover on BSE amounted to Rs 908 crore by 12:20 IST, compared to Rs 705 crore by 11:20 IST.

Among the 30-share Sensex pack, 20 stocks gained and rest of them declined. Bhel (up 4.78%), L&T (up 2.31%) and Coal India (up 2.31%) edged higher from the Sensex pack.

Auto stocks edged higher on renewed buying. Mahindra & Mahindra (M&M) rose 2.24%. The company on Tuesday, 10 September 2013, said that it has crossed yet another milestone with over 4 lakh sales of its special utility vehicle (SUV), Scorpio.

Tata Motors rose 0.62% to Rs 335. The stock had hit a record high of Rs 352 in intraday trade on 10 September 2013. The company's unit Jaguar Land Rover (JLR) on 10 September 2013 reported 28% rise in sales to 27,852 vehicles in August 2013 over August 2012.

Maruti Suzuki India shed 0.17%.

Two-wheeler stocks rose. Hero MotoCorp (up 2.27%) and Bajaj Auto (up 0.43%) gained.

IT stocks declined on recent strong rebound of the rupee against the dollar. A firm rupee adversely affects operating profit margins of IT firms as the sector derives a lion's share of revenue from exports.

Wipro lost 2.87%.

TCS shed 0.13%. The company on Tuesday, 10 September 2013, said it has bagged a five-year multi-million euros deal from Scandinavian Airlines (SAS) to help transform and optimise SAS' IT processes, applications and infrastructure. TCS will implement its proprietary cloud-based solutions to simplify and standardize the SAS IT landscape. The initiative is a part of the SAS "4 Excellence Next Generation" strategy, aimed at improving the competitiveness of the SAS Group. Through this partnership, SAS will also tap into TCS' Aviation and Digital Innovation Labs to develop solutions addressing the needs of the new digital consumer.

Infosys lost 1.01%. Infosys BPO during market hours on Thursday, 12 September 2013, announced that it has been selected by AkzoNobel, a leading global paint and coatings company and a major producer of specialty chemicals, to transform its finance and accounting (F&A) processes to deliver higher operational efficiencies and performance. Infosys BPO will play a key role in accelerating AkzoNobel's finance transformation program and streamline accompanying operations for AkzoNobel's decorative business in over 30 countries across Europe, the Middle East and Africa.

HCL Technologies declined 2.57%. HCL Technologies and Anglo American announced on Tuesday, 10 September 2013, that they have entered into an engagement whereby HCL will deliver IT services for Anglo American businesses across the globe. As a part of this contract, HCL will transform Anglo American's end user computing and data center landscape to improve operational efficiency, business agility and the user experience. The scope of the service covers end to end infrastructure services, including data centre and hosting services, email services, service desk, local area network and security management, end user computing and on-site IT services, utilizing hybrid on-premise and cloud delivery models.

Tech Mahindra dropped 1.2%. The company during market hours on Thursday, 12 September 2013, said it has been chosen as a strategic partner for application maintenance and development by Volvo Car Corporation. This partnership will provide Volvo Car Corporation with a service to maintain and develop a wide range of applications across the business and to develop and implement new applications as part of its drive to increase efficiency and reduce costs, Tech Mahindra said in a statement.

Prime Minister's Economic Advisory Council (PMEAC) today, 13 September 2013, sharply trimmed India's GDP growth forecast to 5.3% for the year ending 31 March 2014 (FY 2014) from earlier estimate of 6.4% and said that the current stance of monetary policy has to continue until stability in the rupee is achieved. The full impact of various measures taken over the last six months will be reflected later in this year, PMEAC said. Depreciation of the rupee may put some upward pressure on inflation, it said. On balance, WPI inflation by end March 2014 will be around 5.5% as against the average of 7.4% in 2012-13 and 5.7% at end March 2013.

Controlling current account deficit (CAD) remains main concern at present, the council said. Current account deficit is projected at $70 billion (3.8% of GDP) in 2013-14 against an estimated $88.2 billion (4.8% of GDP) in 2012-13, it said. The CAD may go even below $70 billion in 2013-14 if the recent trends in exports and imports are maintained through the year, the PMEAC said.

For India, the short-term problem is of financing the large CAD. The medium term objective should be to compress CAD to 2.5% of GDP and ensure price stability, the council said. Containing fiscal deficit within the budgeted estimate could be a challenge, it said adding discretionary expenditure budgeted may need to be compressed, and subsidies restructured.

Industrial production rose 2.6% in July 2013 as against a contraction of 1.8% in June 2013, data released by the government after trading hours on Thursday, 12 September 2013, showed. The manufacturing sector registered a growth of 3% and electricity generation rose 5.2%. Mining sector output registered a contraction of 2.3%. As per use-based classification, production of basic goods rose 1.7% in July 2013. Capital goods production jumped 15.6% and production of intermediate goods rose 2.4%. Production of consumer goods declined 0.9%. Within the consumer goods sector, production of consumer non-durables rose 6.8% whereas production of consumer durables witnessed a contraction of 9.3%.

Industrial production for June 2013 was revised upwards to de-growth of 1.8% from de-growth of 2.2% reported earlier. Industrial production growth for April 2013 was revised downward to 1.5% from 1.9% reported earlier. On cumulative basis, industrial production registered a contraction of 0.2% for the period April-July 2013 over the corresponding period of the previous year.

The rate of inflation based on the consumer price index decelerated in August 2013, data released by the government after trading hours on Thursday, 12 September 2013, showed. The rate of inflation based on the combined consumer price index (CPI) for urban and rural India decelerated to 9.52% in August 2013 from 9.64% in July 2013. Inflation for the category 'food and beverages' stood at 11.06% in August 2013, the data showed.

The Reserve Bank of India on Thursday, 12 September 2013, announced the details of its committee constituted to examine the current monetary policy framework and recommend ways to revise and strengthen it to make it more transparent and predictable. RBI Governor Raghuram Rajan, who took over on Sept. 4, had announced the committee would be headed by Deputy Governor Urjit Patel. The panel will review the objectives, structure, operating framework and instruments of monetary policy, particularly the multiple indicator approach and the liquidity management framework, the RBI said. It will also identify regulatory, fiscal and other impediments to monetary policy transmission, and recommend measures to improve transmission. The committee is expected to submit its report within three months, the RBI said.

Asian shares edged lower on Friday, 13 September 2013, as investors fretted stronger-than-expected US jobless-claims data on Thursday has increased the odds the Federal Reserve would begin trimming its monetary stimulus at next week's meeting. Key benchmark indices in Taiwan, Hong Kong, China, South Korea and Singapore fell by 0.1% to 0.89%. Key benchmark indices in Indonesia and Japan rose by 0.12% to 0.21%.

Trading in US index futures indicated that the Dow could fall 10 points at the opening bell on Friday, 13 September 2013. US stocks declined on Thursday, 12 September 2013, with the S&P 500 snapping its seven-session winning streak, as investors worried about developments related to Syria and Federal Reserve policy moves.

First-time claims for unemployment benefits declined by 31,000 to 292,000 in the week ending Sept. 7, but processing glitches involving two states clouded the reading, the US Labor Department reported on Thursday, 12 September 2013.

The US and Russia began talks on Thursday on Moscow's plan for Syria to surrender its chemical weapons as Damascus formally applied to join a global poison gas ban, but US Secretary of State John Kerry held fast to the position that the US may still use military force if diplomacy fails. Separately, Syria's President Bashar al-Assad reportedly said that the US needs to give up "its policy of threats" and stop shipping arms to Syrian rebels before his government surrenders its chemical weapons.

Investors across the globe are eyeing the next policy meeting of the Federal Open Market Committee (FOMC) scheduled next week, considered by many to provide an indication on the timing and size of the Fed's cutbacks in its bond-purchase program. The FOMC holds a two-day policy meeting on Tuesday 17 September and Wednesday 18 September 2013 to decide on interest rates in the United States. The US central bank currently buys $85 billion a month in US debt and mortgage-backed securities in a bid to hold interest rates low and encourage economic growth. Federal Reserve Chairman Ben Bernanke has on several occasions stressed that the tapering process is dependent on an improvement in data. Fed's bond-buying program has kept global markets flush with liquidity in recent years.

US President Barack Obama reportedly plans to name former US Treasury Secretary Lawrence Summers as the next chairman of the US Federal Reserve Board of Governors. An announcement is expected as early as late next week, following the conclusion of the Fed's policy meeting on Wednesday, 18 September 2013, a Japanese newspaper report said. Treasury Undersecretary Lael Brainard, who served as an economic adviser under the Clinton administration, will likely be named the central bank's vice chairman, the report said. Summers would succeed Fed Chairman Ben Bernanke, whose term expires in January 2014. Summers and current Fed Vice Chairman Janet Yellen had been considered the front-runners to become the Fed's next chief.

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