Key benchmark indices edged lower in early trade as weakness in Asian stocks dampened sentiment on bourses. The barometer index, the S&P BSE Sensex, was down 123.24 points or 0.54%, up about 40 points from the day's low and off close to 50 points from the day's high. The market breadth, indicating the overall health of the market, was weak.
HCL Technologies and HCL Infosystems, both, declined after HCL Tech denied talks of a merger between HCL Infosystems and HCL Technologies.
Asian stocks edged lower on Friday as a renewed selloff in US technology shares cut demand for riskier assets.
Foreign institutional investors (FIIs) bought shares worth a net Rs 342.75 crore on Thursday, 10 April 2014, as per provisional data from the stock exchanges.
At 9:31 IST, the S&P BSE Sensex was down 123.24 points or 0.54% to 22,592.09. The index declined 166.59 points at the day's low of 22,548.74 in early trade. The index fell 73.28 points at the day's high of 22,642.05 in opening trade.
The CNX Nifty was down 35.90 points or 0.53% to 6,760.50. The index hit a low of 6,743.15 in intraday trade. The index hit a high of 6,763 in intraday trade.
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The BSE Mid-Cap index fell 17.19 points or 0.23% to 7,314.09. The BSE Small-Cap index was down 17.89 points or 0.24% to 7,455.99. Both these indices outperformed the Sensex.
The market breadth, indicating the overall health of the market, was weak. On BSE, 558 shares fell and 371 shares rose. A total of 35 shares were unchanged.
Hindalco Industries (down 1.61%), L&T (down 1.35%) and Coal India (down 1.32%) edged lower from the Sensex pack.
Induslnd Bank dropped 2.08%. The Reserve Bank of India has on Thursday, 10 April 2014 notified that the foreign share holding through foreign institutional investors (FIIs)/non-resident Indians (NRIs)/persons of Indian origin (PIOs)/foreign direct investment (FDI)/American depository receipts (ADRs)/global depository receipts (GDRs) in Induslnd Bank has reached the trigger limit. Hence, further purchases of equity shares of Induslnd Bank would be allowed only after obtaining prior approval of the Reserve Bank of India.
HCL Technologies fell 0.46%. HCL Infosystems declined 3.08%. With reference to the news item appeared in leading news paper about speculating a merger between HCL Infosystems and HCL Technologies, HCL Technologies has clarified that no such matter is under consideration by the board or the shareholders of the company. Further, in response to the news item, HCL Corporation has issued a statement stating 'HCL Corporation and associate companies emphatically state there are no plans or possibility of any merger of HCL Infosystems and HCL Technologies'. The company made announcement after market hours on Thursday, 10 April 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.
The next major trigger for the stock market is Q4 March 2014 and year ended 31 March 2014 (FY 2014) corporate earnings. Investors and analysts will closely watch the management commentary that would accompany the results to see if there is any revision in their future earnings forecast of the company for the year ending 31 March 2015 (FY 2015) and/or for the year ending 31 March 2016 (FY 2016). Indian companies will start reporting their Q4 and full year results from mid-April 2014, with Infosys announcing its results on 15 April 2014. The results season will conclude in end-May 2014.
A major near term trigger for the stock market is the outcome of the upcoming Lok Sabha elections. Voting for the lone Lok Sabha constituency and an Assembly by-poll in Mizoram began today, 11 April 2014. 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 stocks edged lower on Friday as a renewed selloff in US technology shares cut demand for riskier assets. Key benchmark indices in China, Hong Kong, Japan, Singapore, South Korea and Taiwan were down 0.28% to 2.31%. Indonesia's Jakarta Composite rose 0.69%.
US stocks tumbled on Thursday, with the Nasdaq Composite Index falling the most since 2011, as a technology selloff resumed amid concern valuations may be too high at the start of earnings season.
A government report on Thursday showed the fewest number of Americans since before the last recession filed applications for unemployment benefits last week, pointing to more progress in the labor market.
The Federal Open Market Committee (FOMC) next undertakes monetary policy review at a two-day meeting on 29-30 April 2014. The Federal Reserve on 19 March 2014 decided after the conclusion of a monetary policy review to trim its monthly bond purchases by $10 billion to $55 billion.
In Europe, the Bank of England kept its key interest rate at a record low after a monetary policy review on Thursday, 10 April 2014, as policy makers try to gauge the amount of spare capacity in the economy. The Monetary Policy Committee (MPC) also kept its asset-purchase program on hold at 375 billion pounds ($629 billion), according to a statement released in London by the central bank.
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