Selling intensified in afternoon trade as key benchmark indices extended losses to hit fresh intraday low. The barometer index, the S&P BSE Sensex, hit two-week low. The CNX Nifty hit 2-1/2-week low. The market breadth indicating the overall health of the market was weak. The Sensex was down 228.45 points or 0.90%, off close to 404 points from the day's high and up close to 70 points from the day's low. BSE Mid-Cap and Small-Cap indices were off more than 2% each. Concerns about euro zone's financial sector weighed on Indian stocks for the second day in a row after a parent of Portugal's No. 2 lender missed a debt payment.
Shares of firms operating in the power sector tumbled on profit booking. IT major Infosys rose in volatile trade after the company retained its revenue guidance for the year ending 31 March 2015 at the time of announcing Q1 June 2014 results.
At 13:15 IST, the S&P BSE Sensex was down 228.45 points or 0.90% to 25,144.30. The index shed 298.91 points at the day's low of 25,073.84 in afternoon trade, its lowest level since 27 June 2014. The index jumped 175.58 points at the day's high of 25,548.33 in morning trade.
The CNX Nifty was down 71.10 points or 0.94% at 7,496.65. The index hit a low of 7,469.95 in intraday trade, its lowest level since 23 June 2014. The index hit a high of 7,625.85 in intraday trade.
The market breadth indicating the overall health of the market was weak. On BSE, 1,941 shares fell and 715 shares rose. A total of 86 shares were unchanged.
The BSE Mid-Cap index was off 200.77 points or 2.20% at 8,931.41. The BSE Small-Cap index was off 239.10 points or 2.39% at 9,780.87. Both these indices underperformed the Sensex.
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Among the 30 Sensex shares, 22 declined and the remaining shares rose. Hindalco Industries (down 3.97%), Tata Steel (down 3.06%), HDFC (down 3%), State Bank of India (down 2.84%), Coal India (down 2.73%), NTPC (down 2.51%), GAIL (India) (down 2.45%), Sesa Sterlite (down 2.31%), Reliance Industries (down 2.18%), Larsen & Toubro (down 2.15%), ONGC (down 1.87%) and Maruti Suzuki India (down 1.7%), edged lower from the Sensex pack.
Sun Pharmaceuticals Industries (up 1.94%), TCS (up 1.91%), Dr Reddy's Laboratories (up 1.56%), Hindustan Unilever (up 1.52%), Wipro (up 1.41%), ITC (up 1.37%), Hero MotoCorp (up 0.61%) and Cipla (up 0.31%), edged higher from the Sensex pack.
IT major Infosys gained 1.73% to Rs 3,350 after announcing its Q1 result. The stock was volatile. The stock hit high of Rs 3,429.35 and low of Rs 3,305 so far during the day. The company's consolidated net profit as per International Financial Reporting Standards (IFRS) fell 3.5% to Rs 2886 crore on 0.8% decline in revenue to Rs 12770 crore in Q1 June 2014 over Q4 March 2014. The result was announced before market hours today, 11 July 2014. Infosys said it added 61 clients during the quarter.
Infosys expects its consolidated revenue to grow 7%-9% in dollar terms in the year ending 31 March 2015 (FY 2015). The guidance is unchanged compared to the one the company had given at the time of announcement of Q4 March 2014 results in April this year. The guidance in rupee terms has also been kept unchanged from that given in April as the company has assumed rupee dollar conversion rate of 60 which is exactly the same conversion rate given in April guidance. The company expects its revenue to grow 5.6%-7.6% in rupee terms in FY 2015.
Shares of firms operating in the power sector tumbled on profit booking. GMR Infrastructure (down 7.56%), Bharat Heavy Electricals (down 6.40%), Crompton Greaves (down 6.57%), JSW Energy (down 6.24%), Reliance Infrastructure (down 5%), Lanco Infratech (down 4.93%), Suzlon Energy (down 4.85%), Power Grid Corporation of India (down 4.60%), Reliance Power (down 4.02%), Adani Power (down 3.53%), Tata Power (down 3.41%), NHPC (down 3.61%), Siemens (down 2.78%), Torrent Power (down 2.52%), NTPC (down 2.55%) and ABB (down 1.53%), edged lower.
The S&P BSE Power index rose 1.12% to 2,231.05 on Thursday, 10 July 2014, after the Finance Minister Arun Jaitley in Union Budget 2014-15 announced a ten-year tax holiday to the power sector undertakings, which begin generation, distribution and transmission of power by 31 March 2017.
Jaitley proposed Rs 200 crore for power reforms. Further, the Finance Minister has proposed to allocate an initial sum of Rs 100 crore for preparatory work for a new scheme "Ultra-Modern Super Critical Coal Based Thermal Power Technology" to promote cleaner and more efficient thermal power.
Jaitley also announced comprehensive measures for enhancing domestic coal production with a stringent mechanism for quality control and environmental protection. Measures will be initiated to provide adequate quantity of coal to power plants which are already commissioned or would be commissioned by March 2015 to unlock dead investments.
To further improve rural life, the government will launch the Deen Dayal Upadhyay Gram Jyoti Yojana to augment power supply at a cost of Rs 500 crore.
To promote wind energy, Jaitley proposed to reduce the basic customs duty from 10% to 5% on forged steel rings used in the manufacture of bearings of wind operated electricity generators. Also, he proposed to exempt the SAD of 4% on parts and raw materials required for the manufacture of wind operated generators. Further, he proposed to prescribe a concessional basic customs duty of 5% on machinery and equipment required for setting up of compressed biogas plants (Bio-CNG).
A bout of initial volatility was witnessed as key benchmark indices regained positive terrain after slipping into the red for a brief period after opening higher. Volatility continued as key benchmark indices once again regained positive terrain after slipping into the negative terrain from positive terrain in morning trade. Volatility continued as key benchmark indices slipped into the red and hit fresh intraday low in mid-morning trade. Key benchmark indices extended losses and hit fresh intraday low in early afternoon trade. Selling intensified in afternoon trade as key benchmark indices extended losses to hit fresh intraday low.
In the foreign exchange market, the rupee edged higher against the dollar. The partially convertible rupee was hovering at 60.16, compared with its close of 60.19/20 on Thursday, 10 July 2014.
Industrial output is seen rising 3.8% in May 2014, higher than 3.4% growth in April, as per the median estimates of a poll of economists carried out by Capital Market. The government will unveil industrial production data for May 2014 today, 11 July 2014.
Finance Minster Arun Jaitley made a number of announcements in Union Budget 2014-15 on Thursday, 10 July 2014, such as a proposal to increase in foreign direct investment in insurance and defence manufacturing, a sharp increase in plan expenditure, measures to boost long term financing for infrastructure by banks and provided clarity on taxation with respect to foreign portfolio investors. But, market expectations that the Finance Minster would scrap the law on retrospective taxation were not met. Government spending on plan expenditure was substantially increased to support growth.
European market was trading higher in early trade on Friday, 11 July 2014. Key benchmark indices in UK, France and Germany were up by 0.30% to 0.45%.
European stocks dropped on Thursday after a parent of Portugal's No. 2 lender missed a debt payment. Shares of Banco Espirito Santo were suspended yesterday after sliding more than 17%, while its bonds sank to record lows even as Portugal's central bank said it can avoid contagion risks. Espirito Santo International missed payments on commercial paper to a few clients, according to a July 8 statement. The company is the biggest shareholder of Espirito Santo Financial Group (ESFG), which owns 25% of the bank. Trading in ESFG shares and debt was also halted yesterday.
Asian stocks edged lower in choppy trade on Friday, 11 July 2014, amid concern that Europe's debt problems haven't been resolved. Key benchmark indices in Hong Kong, Taiwan, Indonesia, South Korea and Japan fell 0.05% to 1.72%. Key benchmark indices in China and Singapore were up 0.42% to 0.60%.
Trading in US index futures indicated that the Dow could gain 19 points at the opening bell on Friday, 11 July 2014. US stocks fell on Thursday, 10 July 2014, on concerns that trouble at a European bank might spread.
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