Key benchmark indices extended losses and hit fresh intraday low in mid-morning trade. The barometer index, the S&P BSE Sensex, was down 50.63 points or 0.22%, up about 15 points from the day's low and off close to 75 points from the day's high. The market breadth, indicating the overall health of the market, was positive. Weakness in Asian stocks hit sentiment on the domestic bourses adversely.
Shares of PSU OMCs edged higher on renewed buying, with HPCL hitting 52-week high. Pharma stocks gained. Lupin rose ahead of its Q4 results today, 7 May 2014. IT stocks edged lower as rupee edged higher against the dollar. But, HCL Technologies bucked the weak trend among IT shares after the company bagged a $400-million contract from Norway's DNB Bank ASA to provide IT infrastructure services and application operations.
The market edged lower amid initial volatility. Key benchmark indices trimmed losses after hitting fresh intraday low in morning trade. The Sensex extended losses and hit fresh intraday low in mid-morning trade.
Foreign institutional investors (FIIs) bought shares worth a net Rs 45.93 crore on Tuesday, 6 May 2014, as per provisional data from the stock exchanges.
At 11:20 IST, the S&P BSE Sensex was down 50.63 points or 0.22% to 22,457.79. The index fell 63.45 points at the day's low of 22,444.97 in mid-morning trade, its lowest level since 5 May 2014. The index rose 24.40 points at the day's high of 22,532.82 in early trade.
The CNX Nifty was down 13.35 points or 0.2% to 6,701.95. The index hit a low of 6,697.25 in intraday trade, its lowest level since 5 May 2014. The index hit a high of 6,718.75 in intraday trade.
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The BSE Mid-Cap index was up 38.98 points or 0.53% at 7,409.67. The BSE Small-Cap index was up 34.33 points or 0.46% at 7,567.16. Both these indices outperformed the Sensex.
The market breadth, indicating the overall health of the market, was positive. On BSE, 1,207 shares gained and 973 shares fell. A total of 111 shares were unchanged.
Among the 30-share Sensex pack, 16 stocks declined and rest of them rose. Hindalco Industries (down 1.12%), Bharti Airtel (down 1.73%) and HDFC (down 0.98%) edged lower from the Sensex pack.
IT stocks edged lower as rupee edged higher 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. Infosys (down 1.51%), TCS (down 1.04%), Wipro (down 1.67%) and Tech Mahindra (down 0.9%) declined.
HCL Technologies rose 0.95%. HCL Technologies and DNB Bank ASA, Norway's largest bank and one of the world's leading maritime shipping banks, today, 7 May 2014, announced $400 million strategic engagement. HCL will manage the IT infrastructure services and application operations for all DNB businesses across Norway and its key international locations.
As part of the deal HCL will migrate and transform DNB systems and infrastructure from its existing IT partner to create two new data centers in Norway. The key focus will be driving a world-class user experience to the bank's 2.5 million retail banking customers and end-users across all DNB's products, including retail and online banking, cards, insurance, capital markets, payments and finance, HCL Technologies said in a statement.
Pharma stocks gained. Cipla (up 1.04%), Ranbaxy Laboratories (up 1.07%), Divi's Laboratories (up 0.94%), Strides Arcolab (up 1.66%), Wockhardt (up 1.06%) and Sun Pharmaceutical Industries (up 1.37%) gained. Dr. Reddy's Laboratories fell 0.1%.
Lupin rose 1.38% ahead of its Q4 results today, 7 May 2014.
Hikal lost 3% after net profit declined 66.8% to Rs 3.07 crore on 20% growth in net sales to Rs 227.54 crore in Q4 March 2014 over Q4 March 2013. The Q4 result was announced after market hours on Tuesday, 6 May 2014.
Hikal's net profit jumped 151.2% to Rs 64.08 crore on 25.6% growth in net sales to Rs 829.21 crore in the year ended 31 March 2014 (FY 2014) over the year ended 31 March 2013 (FY 2013).
On consolidated basis, Hikal's net profit jumped 153.1% to Rs 63.90 crore on 25.6% growth in net sales to Rs 829.21 crore in FY 2014 over FY 2013.
Hikal's board of directors at its meeting held on Tuesday, 6 May 2014, recommended dividend of Rs 4.50 per share for FY 2014, subject to the approval of shareholders in the ensuing Annual General Meeting.
Shares of PSU OMCs edged higher on renewed buying. Indian Oil Corporation (IOCL) was up 1.55%.
HPCL was up 1.55% at Rs 348.35. The stock hit 52-week high of Rs 348.75 in intraday trade.
BPCL rose 1.1%. The company after market hours on Tuesday, 6 May 2014, announced that Bharat PetroResources (BRPL), a wholly owned subsidiary of BPCL, advises that Anadarko Mozambique Area 1 Limitada, the operator of the offshore Area 1 block in the Rovuma Basin, Mozambique, announced on 5 May 2014, in its Q1 March 2014 results, that successful appraisal drilling activities in the Orca field increased the total estimated recoverable resources in Offshore Area 1 to a range of 50 to 70-plus trillion cubic feet of natural gas. In addition, the consortium continued to advance the Mozambique LNG project by adding incremental non-bidding LNG off-take agreements.
The consortium members in the block are Anadarko Mozambique Area 1 Limitada (26.5% PI), BRPL Ventures Mozambique B.V (10% PI), Beas Rovuma Energy Mozambique Limitada (10% PI), ONGC Videsh (10% PI), Cove Energy Mozambique Rovuma Offshore (8.5%PI) and Mitsui B&P Mozambique Area 1 (20% PI). The balance 15% PI is with Empressa Nacional de Hidrocarbonetos E.P (ENH) the national oil company of Mozambique, who are carried through the exploration phase.
Shares of ONGC rose 0.61%.
Kennametal India jumped 7.05% after the company reported net profit of Rs 5.28 crore in Q3 March 2014 as against net loss of Rs 3.10 crore in Q3 March 2013. The company announced the result after market hours on Tuesday, 6 May 2014. Kennametal India's net sales rose 17.06% to Rs 134.51 crore in Q3 March 2014 over Q3 March 2013.
In the foreign exchange market, the rupee edged higher against the dollar on speculation Federal Reserve Chair Janet Yellen will reiterate a pledge to keep US interest rates low in testimony later in the global day today, 7 May 2014. The partially convertible rupee was hovering at 60.04, compared with its close of 60.11/12 on Tuesday, 6 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, as consumer-price inflation eased to a two-year low and as the rupee firmed up against the dollar.
A major near term trigger for the stock market is the outcome of the ongoing Lok Sabha elections. The 36 days long voting process began on 7 April 2014 and will 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 1 June and the new House has to be constituted by 31 May.
Asian shares fell on Wednesday, 7 May 2014, amid mounting concern China's economy is slowing after the result of a survey released by HSBC Holdings Plc and Markit Economics showed that services index for China declined in April from March. Key benchmark indices in Japan, Hong Kong, China, Singapore, South Korea and Taiwan were down 0.22% to 2.49%. Indonesia's Jakarta Composite rose 0.24%.
A services index in China from HSBC Holdings Plc and Markit Economics dropped to 51.4 in April from 51.9 in the previous month.
Most members of the Bank of Japan agreed to keep easing monetary policy until inflation stabilizes at 2%, according to minutes of the April 7-8 policy meeting released today, 7 May 2014.
Trading in US index futures indicated that the Dow could slide 14 points at the opening bell on Wednesday, 7 May 2014. US stocks dropped broadly on Tuesday, 6 May 2014, closing at session lows, with AIG pulling financial shares lower after disappointing earnings and as a slide in Twitter took down other names in the technology and internet space.
The US trade deficit narrowed in March as exports grew by the most in nine months, the Commerce Department reported yesterday, 6 May 2014.
US Federal Reserve Chairwoman Janet Yellen is scheduled to testify before the congressional Joint Economic Committee today, 7 May 2014, and the Senate Budget Committee tomorrow, 8 May 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, a monthly meeting of the Monetary Policy Committee of the Bank of England's (BoE) for monetary policy review is scheduled tomorrow, 8 May 2014.
The European Central Bank (ECB) will hold monetary policy meeting tomorrow, 8 May 2014, in Brussels, Belgium.
The global economy will strengthen over the coming two years, but urgent action is still required to further reduce unemployment and address other legacies from the crisis, according to the OECD's latest Economic Outlook.
"Advanced economies are gaining momentum and driving the pick-up in global growth, while once-stalled cylinders of the economic engine, like investment and trade, are starting to fire again," OECD Secretary-General Angel Gurr said while launching the Outlook during the Organisation's annual Ministerial Council Meeting and Forum in Paris.
GDP growth across the 34-member OECD is projected to accelerate to a 2.2% rate in 2014 and 2.8% in 2015, according to the Outlook. The world economy will grow at a 3.4% rate in 2014 and 3.9% in 2015.
Among the major advanced economies, recovery is best established in the United States, which is projected to grow by 2.6% in 2014 and 3.5% in 2015. The euro area will see a return of positive growth after three years of contraction: 1.2% in 2014 and 1.7% in 2015. In Japan, growth will be dented by the launch of much-needed fiscal consolidation measures, and is expected to hover at 1.2% in 2014 and 2015.
The BRICS (Brazil, China, India, Indonesia, Russia and South Africa) are projected to see GDP growth of 5.3% this year on average and 5.7% in 2015. China will again have the fastest growth among these countries, with rates just below 7.5% in 2014 and 2015.
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