Banking and oil stocks led recovery as key benchmark indices moved into the green from red in mid-morning trade. The barometer index, the S&P BSE Sensex, was currently up 34.54 points or 0.13% at 26,306.51. The market breadth indicating the overall health of the market was positive. Crude oil prices slumped which augurs well for India. Asian stocks dropped, extending a global selloff. Meanwhile, India's international border with Pakistan remains tense as firing continued in 7 sectors of Jammu and Kashmir, according to reports.
Software stocks declined. Capital goods stocks gained on renewed buying. L&T advanced after its owned subsidiary L&T Technology Services announced the intent to acquire the asset of US based Dell Product and Process Innovation Services.
The International Monetary Fund yesterday, 7 October 2014, raised its growth forecast for India to 5.6% for FY 2015 from 5.4% predicted earlier. It has forecast 6.4% growth for India for FY 2016.
In overseas markets, Asian stocks declined, extending a global selloff, amid concern that the global economic outlook is worsening. US stocks tumbled on Tuesday, 7 October 2014, as weak data out of Germany raised concerns about the strength of global growth ahead of the start of earnings season.
Earlier, high volatility was witnessed as key indices had bounced back after an initial slide took the barometer index, the S&P BSE Sensex, and the 50-unit CNX Nifty to their lowest level in more than 7 weeks.
In the foreign exchange market, the rupee edged lower against the dollar.
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Brent crude oil prices dropped sharply after the International Monetary Fund (IMF) yesterday, 7 October 2014, cut its outlook for global growth in 2015.
At 11:15 IST, the S&P BSE Sensex was up 34.54 points or 0.13% at 26,306.51. The index fell 84.16 points at the day's low of 26,187.81 in early trade, its lowest level since 18 August 2014. The index gained 62.38 points at the day's high of 26,334.35 in morning trade.
The CNX Nifty was up 13.10 points or 0.17% at 7,865.50. The index hit a low of 7,826.70 in intraday trade, its lowest level since 18 August 2014. The index hit a high of 7,869.90 in intraday trade.
The market breadth indicating the overall health of the market was positive. On BSE, 1,203 shares gained and 1,064 shares fell. A total of 81 shares were unchanged.
The BSE Mid-Cap index was up 9.66 points or 0.1% at 9,435.05, underperforming the Sensex. The BSE Small-Cap index was up 26 points or 0.25% at 10,583.96, outperforming the Sensex.
The total turnover on BSE amounted to Rs 1106 crore by 11:20 IST, compared to Rs 782 crore by 10:20 IST.
Software stocks declined. Tata Consultancy Services (TCS) (down 2.35%), Wipro (down 2.74%), HCL Technologies (down 1.18%), Oracle Financial Services Software (down 0.09%), Tech Mahindra (down 3.98%), Hexaware Technologies (down 4.21%) and MphasiS (down 1.03%) declined.
Infosys dropped 2.75%. Investors will keenly watch Infosys' commentary regarding changes in its strategy under the new CEO, Dr. Vishal Sikka, when the company unveils its Q2 September 2014 results on Friday, 10 October 2014. At the time of announcing Q1 June 2014 results in July 2014, Infosys had forecast 7% to 9% growth in the company's revenue in dollar terms for the year ending 31 March 2015 (FY 2015). At that time, the company had forecast 5.6% to 7.6% growth in revenue in rupee terms for FY 2015. The guidance was based on rupee dollar exchange rate of 60. With deprecation of rupee against the dollar since that time, there is a room for upward revision in revenue guidance in rupee terms.
Hinduja Global Solutions rose 1.32% to Rs 658.50. Birla Sun Life Mutual Fund bought 5.78 lakh shares at Rs 650 per share in a bulk deal on BSE on Tuesday, 7 October 2014. However, Credit Suisse (Singapore) A/C Credit Suisse (Singapore) sold 3.34 lakh shares at Rs 650.31 per share and Goldman Sachs Investments Mauritius sold 2.90 lakh shares at Rs 650.01 per share in bulk deals on BSE on Tuesday, 7 October 2014.
Capital goods stocks gained on renewed buying. ABB India (up 2.23%), Bharat Heavy Electricals (Bhel) (up 3.21%), BEML (up 2.23%), Crompton Greaves (up 0.95%), Siemens (up 0.96%) gained. Thermax fell 1.8%.
Larsen & Turbo (L&T) advanced 2.57% to Rs 1,451. The stock was volatile. The stock hit high of Rs 1,451 and low of Rs 1,400 so far during the day. L&T Technology Services, the wholly owned subsidiary of L&T, today, 8 October 2014, announced the intent to acquire the asset of US based Dell Product and Process Innovation Services, the engineering services division of Dell. The Competition Commission of India (CCI) has approved the proposed transaction. The company is awaiting US regulatory approvals which are expected shortly, L&T said. The proposed transaction will significantly drive forward L&T Technology Services' position as a premier engineering services provider by adding local delivery centers in North America, L&T said. The proposed acquisition enables L&T Technology Services to consolidate its position as preferred vendor in the $4 billion Transportation Engineering Research & Development (RR&D) market.
In the foreign exchange market, the rupee edged lower against the dollar. The partially convertible rupee was hovering at 61.49, compared with its close of 61.425 during the previous trading session.
Brent crude oil prices dropped sharply after the International Monetary Fund (IMF) cut its outlook for global growth. Brent for November settlement was off $1.19 a barrel at $90.92 a barrel. The contract had declined 68 cents to settle at $92.11 a barrel yesterday, 7 October 2014, the lowest settlement price since June 2012.
Lower crude oil prices will help India in containing its fiscal deficit, current account deficit and fuel price inflation. India imports 80% of its crude oil requirement.
Meanwhile, the provisional data released by the stock exchanges after trading hours yesterday, 7 October 2014, showed that foreign portfolio investors (FPIs) sold shares worth a net Rs 332.84 crore on that day.
Meanwhile, India's international border with Pakistan remains tense as firing continued in 7 sectors of Jammu and Kashmir, according to reports. As many as 50 border security force (BSF) posts were targetted in the shelling that continued early this morning, according to reports. However, no fresh overnight firing has been reported along the Line of Control today, reports said. Pakistani troops had targeted over 40 Border Out Posts and 25 border hamlets with heavy mortar shells in Jammu sector and LoC areas in Poonch district on Tuesday. Twelve people including a Junior Commissioned Officer were injured in the firing.
The International Monetary Fund (IMF) yesterday, 7 October 2014, cut its outlook for global growth in 2015 and warned about the risks of rising geopolitical tensions and a financial-market correction as stocks reach frothy levels. The world economy will grow 3.8% next year, compared with a July forecast for 4%, after a 3.3% expansion this year, the Washington-based IMF said. Some financial markets may be overheating after a sustained period of near-zero rates, according to the report.
Asian stocks declined today, 8 October 2014, after the International Monetary Fund (IMF) cut its outlook for global growth in 2015. Key benchmark indices in Singapore, Taiwan, Hong Kong, Japan, Indonesia and South Korea were off 0.34% to 1.04%. China's Shanghai Composite index was up 0.59%.
The HSBC China services Purchasing Managers Index edged down to 53.5 in September, after recording a 17-month high of 54.1 in August, HSBC Holdings PLC today, 8 October said. A reading above 50 indicates a month-on-month expansion while below points to contraction.
Trading in US index futures indicated that the Dow could rise 25 points at the opening bell today, 8 October 2014. US stocks ended sharply lower on Tuesday, 7 October 2014, as weak data out of Germany raised concerns about the strength of global growth ahead of the start of earnings season.
The US Federal Reserve will today, 8 October 2014, release the minutes of its Sept. 16-17 meeting at which it had decided to cut its monthly bond purchases to $15 billion. Policy makers next begin their two-day meeting on 28 October 2014.
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