Key benchmark indices edged lower, in what was a highly volatile trading session after global credit rating agency Standard and Poor's (S&P) today, 7 November 2013, warned that it may lower India's rating to speculative grade from investment grade next year if the government that takes office after the general election fails to provide a credible plan to reverse the country's low economic growth. The barometer index, the S&P BSE Sensex, provisionally settled below the psychological 21,000 mark, after regaining that level in early afternoon trade. The Sensex and the 50-unit CNX Nifty, both, hit their lowest level in over one week in late trade. The Sensex was provisionally down 82.73 points or 0.4%, off close to 330 points from the day's high and up about 15 points from the day's low. The market breadth, indicating the overall health of the market, was negative.
Indian stocks fell for the third day in a row today, 7 November 2013.
IT stocks extended Wednesday's gains as the rupee hit one-month low against the dollar. Infosys hit 52-week high. Bharat Heavy Electricals (Bhel) extended Wednesday's losses triggered by the company's weak Q2 results. Index heavyweight Reliance Industries (RIL) declined in choppy trade. Most bank pivotals edged lower in choppy trade.
A bout of initial volatility was witnessed as key benchmark alternately swung between positive and negative terrain. Volatility continued in morning trade. Key benchmark indices moved in a narrow range in mid-morning trade. A sudden surge took the key benchmark indices to fresh intraday high in early afternoon trade. The Sensex regained the psychological 21,000 mark. Key benchmark indices pared gains in afternoon trade. High volatility was witnessed as key benchmark cut almost entire intraday gains in mid-afternoon trade. It slipped into the red and hit fresh intraday low in late trade.
Foreign institutional investors (FIIs) bought shares worth a net Rs 271.70 crore on Wednesday, 6 November 2013, as per provisional data from the stock exchanges.
Global credit rating agency Standard and Poor's (S&P) today, 7 November 2013, affirmed its 'BBB-/A-3' sovereign credit rating on India while retaining negative rating outlook on Asia's third-largest economy. S&P said in its statement that India's institutional strengths and high international reserves supported its investment-grade rating on India. However, the agency noted a marked slowdown in India's real growth, which complicates the government's debt dynamics and ability to implement reforms. S&P added that the outlook remained negative, indicating that it may lower the rating to speculative grade next year if the government that takes office after the general election does not appear capable of reversing India's low economic growth. Alternatively, the credit ratings agency said it may revise India's outlook back to "stable" should a new government have an agenda to restore growth, improve the country's finances, or allow the implementation of an effective monetary policy. S&P added it will conduct its next review on India's ratings after the elections, which are due by May 2014, unless the country's fiscal or external standing deteriorates.
As per provisional figures, the S&P BSE Sensex was down 82.73 points or 0.4% to 20,812.21. The index fell 97.88 points at the day's low of 20,797.06 in late trade, its lowest level since 29 October 2013. The index jumped 247.91 points at the day's high of 21,142.85 in early afternoon trade, its highest level since 5 November 2013.
More From This Section
The CNX Nifty was down 30.10 points or 0.48% to 6,185.05, as per provisional figures. The index hit a low of 6,180.80 in intraday trade, its lowest level since 29 October 2013. The index hit a high of 6,288.95 in intraday trade, its highest level since 5 November 2013.
The total turnover on BSE amounted to Rs 2077 crore, higher than Rs 1882.43 crore on Wednesday, 6 November 2013.
The market breadth, indicating the overall health of the market, was negative. On BSE, 1,397 shares fell and 1,087 shares rose. A total of 147 shares were unchanged.
Among the 30-share Sensex pack, 19 stocks fell and rest of them rose.
Most bank pivotals edged lower. ICICI Bank declined 2.85% to Rs 1049.45. The stock hit high of Rs 1091.70 and low of Rs 1048.30.
HDFC Bank declined 0.53% to Rs 664.50. The stock hit high of Rs 677.10 and low of Rs 661.55.
Among PSU bank stocks, State Bank of India, Canara Bank, Union Bank of India, Bank of India, Bank of Baroda and Punjab National Bank shed 2.16% to 6%.
Index heavyweight Reliance Industries (RIL) fell 1.57% to Rs 884.60. The stock hit high of Rs 904.95 and low of Rs 882.50.
Bharat Heavy Electricals (Bhel) extended Wednesday's losses triggered by the company's weak Q2 results. The stock shed 4.38%. The company's net profit fell 64.22% to Rs 455.95 crore on 11.31% decline in total income to Rs 9482.25 crore in Q2 September 2013 over Q2 September 2012. The Q2 result was announced during trading hours on Wednesday, 6 November 2013.
Bhel's order book stood at Rs 102300 crore as on 30 September 2013.
IT stocks extended Wednesday's gains as the rupee hit one-month low against the dollar. A weak rupee boosts revenue of IT firms in rupee terms as the sector derives a lion's share of revenue from exports. TCS (up 1.25%) and HCL Technologies (up 1.77%), edged higher. But, Wipro fell 0.07%.
Infosys rose 1.33% to Rs 3,350 after hitting 52-week high of Rs 3,399.20 in intraday trade.
US based IT services firm Cognizant Technology Solutions Corp, which has most of its employees in India, raised its full-year forecast for both profit and revenue at the time of announcing its Q3 September 2013 results early this week. Cognizant reported a better-than-expected 22% rise in revenue in third quarter, helped by contracts from insurers setting up online exchanges as part of President Barack Obama's healthcare reforms. The company, which also raised its full-year forecast for both profit and revenue, said it would focus on winning more business from governments. The company's net income rose to $319.6 million, or $1.05 per share in the third quarter, from $276.9 million, or 91 cents per share, a year earlier. The company said it expects earnings of at least $4.01 per share on revenue growth of at least 20.3% to $8.84 billion for the year ending 31 December 2013. It had previously forecast earnings of at least $3.96 per share on revenue growth of at least 19% to $8.74 billion for 2013.
Titan Industries lost 2.79% after the Reserve Bank of India put restriction on fresh foreign portfolio investment in the company's shares. The Reserve Bank of India (RBI) after market hours on Wednesday, 6 November 2013, notified that the aggregate net purchases of equity shares in Titan Industries by foreign institutional investors (FIIs) in the primary/secondary markets under Portfolio Investment Scheme (PIS) had reached the trigger limit. Hence, further purchases of equity shares of the company would be allowed only after obtaining prior approval of the RBI.
FIIs, at the end of September 2013, controlled 22.43% stake in Titan Industries, while promoters holding stood at 53.05%.
In the foreign exchange market, the rupee edged lower against the dollar in choppy trade after global credit rating agency Standard and Poor's (S&P) warned that it may lower India's rating to speculative grade from investment grade next year if the government that takes office after the general election does not appear capable of reversing India's low economic growth. The partially convertible rupee was hovering at 62.5425, compared with its close of 62.39/40 on Wednesday, 6 November 2013. The rupee had declined sharply on Wednesday.
Most European stocks edged lower on Thursday, 7 November 2013, as investors awaited the European Central Bank's interest rate decision. Key benchmark indices in France and UK shed 0.13% to 0.2%. Germany's DAX rose 0.02%.
The European Central Bank (ECB) holds a monetary policy meeting today, 7 November 2013. The ECB is seen retaining its key policy rate at a record-low 0.5%. The Bank of England is expected to keep monetary policy unchanged after a monetary policy review today, 7 November 2013.
Asian stocks fell on Thursday, 7 November 2013, before US economic reports and the European Central Bank's policy meeting. Key benchmark indices in Singapore, China, Japan, Hong Kong and South Korea shed 0.1% to 0.76%. Key benchmark indices in Taiwan and Indonesia and rose 0.02% to 0.82%.
China's leaders will meet in Beijing on November 9-12 to map out economic policies as the country heads for its slowest annual growth in more than two decades.
Trading in US index futures indicated that the Dow could fall 9 points at the opening bell on Thursday, 7 November 2013. Most US stocks rose on Wednesday, 6 November 2013, with the Dow Jones Industrial Average notching another record close, as investors bought into optimism that the Federal Reserve would continue its stimulus longer than thought, ahead of economic reports this week on the economy and the labor market.
Data on US GDP growth for Q3 September 2013 is due for release today, 7 November 2013. The GDP grew 2.5% in Q2 June 2013.
The US government will tomorrow, 8 November 2013, release nonfarm payrolls figures for October 2013. The job data is a key economic indicator that has been watched closely in recent months to see whether the US Federal Reserve will roll back its bond-buying program.
Powered by Capital Market - Live News