A bout of initial volatility was witnessed as key benchmark indices slipped into the red after opening higher as weakness in rupee against the dollar and weakness in Asian stocks dampened sentiment. The S&P BSE Sensex was down 90.64 points or 0.48%, off close to 130 points from the day's high and up about 10 points from the day's low. The market breadth, indicating the overall health of the market, was positive.
IT stocks rose after US based IT firm Cognizant Technology Solutions Corp reported better-than-expected second quarter results and raised its forecast for the year. Tata Power Company extended Tuesday's steep losses triggered by the company reporting reverse turnaround in Q1. Tata Motors dropped ahead of its Q1 results today, 7 August 2013.
Most Asian stocks dropped on Wednesday, 7 August 2013, after overnight losses in the US triggered by monetary-policy concerns.
The rupee weakened on Wednesday morning tracking some losses in regional share markets and currencies while dollar demand from domestic importers also weighed. The partially convertible rupee was hovering at 61.32, weaker than its close of 60.77/78 on Tuesday, 6 August 2013. The rupee had staged a strong intraday rebound on Tuesday after hitting record low of 61.80.
At 9:30 IST, the S&P BSE Sensex was down 90.64 points or 0.48% to 18,642.40. The index fell 99.37 points at the day's low of 18,633.67 in early trade. The index rose 38.73 points at the day's high of 18,771.77 in early trade.
The CNX Nifty was down 9.70 points or 0.18% to 5,532.55. The index hit a low of 5,520.60 in intraday trade. The index hit a high of 5,553.90 in intraday trade.
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The market breadth, indicating the overall health of the market, was positive. On BSE, 488 shares rose and 403 shares fell. A total of 41 shares were unchanged.
Among the 30-share Sensex pack, 16 stocks rose and rest of them fell. Maruti Suzuki India (down 1.62%), Hindalco Industries (down 1.4%) and L&T (down 1.16%), edged lower.
IT stocks rose after Cognizant Technology Solutions Corp reported better-than-expected second quarter results and raised its forecast for the year.
Wipro gained 0.54% to Rs 453.75. Infosys gained 0.35%. HCL Technologies advanced 1.17%.
IT major TCS rose 0.97% to Rs 1,888.70 after hitting a record high of Rs 1,890.30 in intraday trade today, 7 August 2013.
Cognizant on Tuesday said it had earned a profit of $300 million for the June quarter, beating street expectations and surpassing its own guidance. The profit is up 5.7% sequentially and 19.2% compared to the year-ago quarter. The revenue stood at $2.16 billion, up 7% quarter on quarter and 20.4% compared to the same quarter a year ago. Teaneck, New Jersey-based Cognizant, which has most of its employees in India, said it expects 2013 earnings of at least $3.96 per share on revenue growth of at least 19% to $8.74 billion. It had previously forecast earnings of at least $3.95 per share on revenue growth of at least 17% to $8.60 billion.
Tata Power Company fell 1.54% to Rs 70.25, with the stock extending Tuesday's heavy losses triggered by the company reporting reverse turnaround in Q1. The scrip had tumbled 14.76% in a single trading session on Tuesday, 6 August 2013. The stock had hit 52-week low of Rs 68.25 in intraday trade on Tuesday. The company reported a consolidated net loss of Rs 114.70 crore in Q1 June 2013, compared with net profit of Rs 145.93 crore in Q1 June 2012. The company's total income rose 24.53% to Rs 9111.57 crore in Q1 June 2013 over Q1 June 2012. The company announced Q1 result during market hours on Tuesday, 6 August 2013.
NMDC fell 0.53% ahead of its Q1 results today, 7 August 2013.
Lupin rose 0.2% ahead of its Q1 results today, 7 August 2013.
Ranbaxy Laboratories declined 2.24% ahead of its Q2 results today, 7 August 2013.
Tata Motors dropped 1.22% ahead of its Q1 results today, 7 August 2013.
CRISIL rose 0.57%. The stock turned ex-dividend today, 7 August 2013, for interim dividend of Rs 3 per share for the year ending 31 December 2013.
Sun TV Network declined 0.21% as the stock turned ex-dividend, for interim dividend of Rs 2.25 per share for the year ending 31 March 2014.
PTC India fell 2.02% as the stock turned ex-dividend today, 7 August 2013, for dividend of Rs 1.60 per share for the year ended 31 March 2013 (FY 2013).
The government on Tuesday, 6 August 2013, named Dr. Raghuram Rajan as the next Governor of the Reserve Bank of India (RBI) for a term of three years after D Subbarao's tenure ends on 4 September 2013. Rajan, who is currently Chief Economic Adviser in the finance ministry, joined the government last August, having previously been chief economist at the International Monetary Fund and a professor at the University of Chicago.
Most Asian stocks dropped on Wednesday, 7 August 2013, after overnight losses in the US on monetary-policy concerns, with Japan taking an especially heavy hit from gains for the yen. Key benchmark indices in Japan, Hong Kong, Taiwan, and South Korea were off 0.28% to 2.31%. Key benchmark indices in China and Singapore rose by 0.33% to 0.34%.
The Bank Of Japan (BoJ) holds two-day policy meet on 7 and 8 August 2013. The BoJ is widely expected to maintain its pledge of increasing the monetary base at an annual pace of about 60 trillion to 70 trillion yen ($600 billion-$700 billion).
US stocks extended losses into a second day Tuesday after Fed Bank of Chicago President Charles Evans, who has been among the strongest proponents of the record monetary accommodation in the US said he expects the central bank to begin tapering its asset-purchase program by the end of the year.
The US central bank currently buys $85 billion a month in US debt and mortgage-backed securities. 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.
Data yesterday showed the US trade deficit narrowed more than economists expected in June to the least since October 2009. Separately, job openings rose to 3.94 million in June from 3.91 million in May, the US Department of Labor reported.
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