Volatility continued on the bourses as key benchmark indices trimmed losses after hitting fresh intraday low in morning trade. The barometer index, the S&P BSE Sensex, was down 22.86 points or 0.11%, up about 30 points from the day's low and off close to 40 points from the day's high. Weakness in Asian stocks weighed on investor sentiment.
TCS reversed direction after hitting record high. Lead acid batteries maker Exide Industries extended Monday's losses triggered by the company's weak Q3 results. Shares of organised retailers declined on reports that the Aam Aadmi Party-headed Delhi government has written to the department of industrial policy and promotion (DIPP) seeking to withdraw its permission to allow FDI in multi-brand retail in the state.
The market breadth, indicating the overall health of the market, was positive.
A bout of volatility was witnessed as key benchmark indices alternately swung between gains and losses in early trade. Volatility continued as key benchmark indices trimmed losses after hitting fresh intraday low in morning trade.
Foreign institutional investors (FIIs) bought shares worth a net Rs 413.85 crore on Monday, 13 January 2014, as per provisional data from the stock exchanges.
At 10:20 IST, the S&P BSE Sensex was down 22.86 points or 0.11% to 21,111.35. The index fell 53.79 points at the day's low of 21,080.42 in morning trade. The index rose 20.55 points at the day's high of 21,154.76 in morning trade.
The CNX Nifty was down 6.60 points or 0.11% to 6,266.15. The index hit a low of 6,258.85 in intraday trade. The index hit a high of 6,280.35 in intraday trade.
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The market breadth, indicating the overall health of the market, was positive. On BSE, 947 shares gained and 710 shares fell. A total of 90 shares were unchanged.
Among the 30-share Sensex pack, 16 stocks fell and rest of them rose. ONGC (down 1.52%), Tata Motors (down 1.26%) and Wipro (down 1.25%) declined.
CMC lost 6.43% after the company reported 4.79% rise in consolidated net profit to Rs 70.54 crore on 0.03% increase in net sales to Rs 560.93 crore in Q3 December 2013 over Q2 September 2013. Net profit rose 15.5% to Rs 70.54 crore on 13.9% growth in net sales to Rs 560.93 crore in Q3 December 2013 over Q3 December 2012. The Q3 result was announced after market hours on Monday, 13 January 2014.
Commenting on the results, CMC CEO and MD R Ramanan said: "The revenue growth in this quarter has been in line with our expectation, considering that traditionally Q3 is not a growth quarter in the international markets. The company continues to find good traction across geographies and added 14 clients during the quarter. The company continues to focus on people excellence and was assessed at PCMM level 5 by SEI during the quarter".
CMC is a pioneer information technology solutions provider in India and is a subsidiary of Tata Consultancy Services (TCS).
TCS dropped 1.05% to Rs 2,345.50, with the stock reversing direction after hitting a record high of Rs 2,384.20 in intraday trade. The company unveils Q3 results on Thursday, 16 January 2014.
Lead acid batteries maker Exide Industries extended Monday's losses triggered by the company's poor Q3 December 2013 results. The stock lost 1.57%. The stock had slumped 6.2% on Monday. Exide Industries' net profit fell 25.52% to Rs 77.52 crore on 11.28% decline in total income to Rs 1308.85 crore in Q3 December 2013 over Q3 December 2012. The result was announced during trading hours on Monday, 13 January 2014.
Shares of organised retailers declined on reports that the Aam Aadmi Party-headed Delhi government has written to the department of industrial policy and promotion (DIPP) seeking to withdraw its permission to allow FDI in multi-brand retail in the state. The decision of the Aam Aadmi Party government may make foreign retailers more wary of entering the Indian market. It also throws the FDI policy in retail into more political uncertainty ahead of general elections expected in April-May. Trent (down 2.43%), Shoppers Stop (down 1.25%) and Future Retail (down 1.26%) declined.
The central government approved a policy in September 2012 allowing 51% FDI in multi-brand retail, but left it to the discretion of individual state governments whether or not to allow supermarkets partially owned by foreign retailers. Delhi, Maharashtra, Jammu and Kashmir, Haryana, Rajasthan, Uttarakhand, Andhra Pradesh and Assam have in the past agreed to support the entry of foreign supermarket chains such as Wal-Mart Stores Inc. of the US and Tesco Plc of the UK. The previous Delhi government under Sheila Dikshit of the Congress, which was defeated in the 4 December Delhi assembly elections, supported FDI in multi-brand retail.
The Reserve Bank of India (RBI) said on Monday, 13 January 2014, it had eased rules for hedging foreign exchange exposures, allowing greater flexibility for cancelling and rebooking forward contracts. The RBI is now allowing domestically-held forward contracts for all current as well as capital account transactions with a residual maturity of one year or less to be freely cancelled and taken out again, called rebooking. Before the changes domestic exporters could cancel and rebook up to 50% of the contracts booked in a financial year for hedging their contracted export exposures. Importers were allowed to cancel and rebook up to 25% of contracts booked in a financial year. These limits have been dropped. Foreign investors will be allowed to rebook 10% of the value of cancelled contracts, up from nothing previously.
On macro front, the rate of inflation based on the combined combined consumer price index (CPI) of urban and rural India slowed to 9.87% in December 2013, from 11.16% in November 2013, data released by the government after trading hours on Monday, 13 January 2014, showed. The moderation was largely driven by a fall in vegetable prices, which cooled nearly 19% from November on improved supplies. That helped slow down annual food inflation to 12.16% last month from 14.72% in November.
The core CPI inflation excluding the volatile food and fuel prices, edged up to 8.05% in December 2013, from 7.97% in November 2013.
Inflation based on the wholesale price index (WPI) is seen easing up a bit at 7.1% in December 2013, from 7.52% in November 2013, as per the median estimate of a poll of economists carried out by Capital Market. WPI had accelerated to 7.52% in November 2013, from 7% in October 2013. The government will unveil WPI data for December 2013 at 12 noon tomorrow, 15 January 2014.
The Reserve Bank of India's Third Quarter Review of Monetary Policy for 2013-14 is scheduled on 28 January 2014. The Reserve Bank of India kept its main lending rate viz. the repo rate unchanged after its last policy review in December and said at that time that it expected inflation to ease in the following months.
Asian stocks fell on Tuesday, 14 January 2014, after Federal Reserve Bank of Atlanta President Dennis Lockhart on Monday, 13 January 2014, said that the US economy is on solid footing and he would support continued cuts to stimulus. Fed's bond-buying program has been a source of liquidity for most Asian and emerging markets in recent years. Key benchmark indices in Hong Kong, Japan, Singapore, South Korea and Taiwan were down 0.12% to 2.33%. China's Shanghai Composite rose 0.57%.
Japan's current-account deficit widened to a record in November as imports climbed, data showed today, 14 January 2014.
Trading in US index futures indicated that the Dow could gain 3 points at the opening bell on Tuesday, 14 January 2014. US stocks sold off sharply Monday, resulting in the worst losses for benchmark indexes in several months, on concerns about the weak December jobs report and comments from a Federal Reserve official about a further reduction in stimulus. In a speech to the Rotary Club of America, Federal Reserve Bank of Atlanta President Dennis Lockhart said he supports "similar tapering steps" as the one taken to reduce bond-market purchases by $10 billion by the Federal Reserve last month, so long as the economy grows at the 2.5% to 3% clip he's forecasting this year. He pointed out that the labor market is not as healthy as a 6.7% unemployment rate suggests. He said continued disinflation could pose risks to economic performance.
The Federal Open Market Committee (FOMC) holds a two-day monetary policy meeting on 28 and 29 January 2014. By a 9-to-1 vote, the Fed on 18 December 2013 decided to trim its asset-purchase program by $10 billion to $75 billion per month starting in January 2014.
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