A bout of volatility was witnessed as key benchmark indices trimmed gains after hitting fresh record high in afternoon trade. The barometer index, the S&P BSE Sensex, was up 84.26 points or 0.38%, off about 30 points from the day's high up almost equal points from the day's low. The market breadth, indicating the overall health of the market, was positive. The market sentiment was boosted by data showing that foreign institutional investors (FIIs) made substantial purchases of Indian stocks on Tuesday, 25 March 2014. Gains in Asian stocks also boosted sentiment on the domestic bourses.
Capital goods stocks edged higher, with L&T hitting 52-week high. Most auto stocks edged higher, with Maruti Suzuki India hitting record high.
The market opened on a firm note on higher Asian stocks. Key benchmark indices trimmed initial gains in morning trade. Key benchmark indices moved in a narrow range in positive zone in mid-morning trade. Key benchmark indices extended intraday gains in early afternoon trade. A bout of volatility was witnessed as key benchmark indices trimmed gains after hitting fresh record high in afternoon trade.
Asian shares edged higher on Wednesday, 26 March 2014, after US consumer confidence climbed to a six-year high, buoying investor optimism about the outlook for the world's biggest economy.
Indian stocks may remain volatile in the near future as traders roll over positions in the futures & options (F&O) segment from the near-month March 2014 series to April 2014 series. The near-month March 2014 F&O contracts expire tomorrow, 27 March 2014.
Foreign institutional investors (FIIs) bought shares worth a net Rs 1223.28 crore on Monday, 25 March 2014, as per provisional data from the stock exchanges.
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At 13:20 IST, the S&P BSE Sensex was up 84.26 points or 0.38% to 22,139.47. The index jumped 116.99 points at the day's high of 22,172.20 in afternoon trade, record high for the barometer index. The index rose 55.50 points at the day's low of 22,110.71 in mid-morning trade.
The CNX Nifty was up 23.05 points or 0.35% to 6,612.80. The index hit a high of 6,627.45 in intraday trade, a record high. The index hit a low of 6,607.55 in intraday trade.
The BSE Mid-Cap index was up 38.91 points or 0.57% at 6,881.07. The BSE Small-Cap index was up 38.33 points or 0.56% at 6,891.44. Both these indices outperformed the Sensex.
The market breadth, indicating the overall health of the market, was positive. On BSE, 1,324 shares gained and 1,315 shares fell. A total of 166 shares were unchanged.
Among the 30-share Sensex pack, 22 stocks gained and rest of them declined.
Hindalco Industries (up 3.56%), Sesa Sterlite (up 3.06%) and Coal India (up 2.39%) edged higher from the Sensex pack.
Capital goods stocks gained. ABB India (up 1.26%), Bharat Electronics (up 1.12%), BEML (up 0.92%), Crompton Greaves (up 3.08%), Siemens (up 0.86%) and Praj Industries (up 2.45%) gained.
Bharat Heavy Electricals (Bhel) extended recent gains triggered by the company securing a large contract worth Rs 3000 crore from NTPC. The stock was up 1.04%.
Engineering and construction major L&T rose 1.93% to Rs 1,272.55 after hitting a 52-week high of Rs 1,273.65 in intraday trade.
Most auto stocks edged higher. Ashok Leyland (up 7.65%), and Tata Motors (up 2.5%) edged higher. Mahindra & Mahindra (M&M) fell 0.01%.
Maruti Suzuki India gained 2.1% to Rs 1,943.10 after hitting a record high of Rs 1,944.65 in intraday trade.
Shares of most two wheeler makers gained. TVS Motor Company (up 0.21%) and Bajaj Auto (up 1.37%) gained.
Hero MotoCorp shed 0.37% to Rs 2,183.65, with the stock sliding on profit booking after recent rally. Shares of Hero MotoCorp had rallied 5.98% in three trading sessions to settle at Rs 2,190.60 on Tuesday, 25 March 2014, from a recent low of Rs 2,066.90 on 21 March 2014.
Tech Mahindra declined 0.41%. The company today, 26 March 2014, announced that the company has successfully upgraded the Infinys postpaid billing system at Nawras, a member of Ooredoo Group, from IRB 2.2. to RBM 5.3.7. This enables the telecom major to ensure transparent billing system and better revenues, Tech Mahindra said in a statement. The project also involved a hardware platform change from HP Unix to IBM AIX and migration of all data from the legacy system. This upgrade will enable Nawras to improve customer experience and as part of their drive to increase efficiency and reduce costs, Tech Mahindra said.
Tech Mahindra said that the company has a well-established strategy for the Middle East and Africa region.
Tech Mahindra after market hours on Tuesday, 25 March 2014, announced the launch of Managed Data Service (MDS), a fully managed end-to-end reference data management Business Process as a Service (BPaaS) solution for the financial services industry in North America. This solution has already witnessed a significant traction in European markets.
The Managed Data Service (MDS) solution is designed around a utility model and comprises 3 integrated components - technology infrastructure, operational outsourcing and specialized software IP. The key benefits include assured data quality, operating cost reduction, CAPEX to OPEX transformation and improved operational efficiency.
In the foreign exchange market, the rupee edged higher against the dollar, helped by hopes of continued foreign fund inflows while gains in other Asian currencies also underpinned sentiment. The partially convertible rupee was hovering at 60.185, compared with its close of 60.48/49 on Tuesday, 25 March 2014.
Indian government bond prices rose after the Reserve Bank of India (RBI) allotted Rs 10004 crore in a 7 day term repo variable rate auction held today, 26 March 2014. The reversal of the 7 day term repo will take place on 2 April 2014, the RBI said on Tuesday, 25 March 2014. The yield on 10-year benchmark federal paper, 8.83% GS 2023, was hovering at 8.7801%, lower than its close of 8.7878% on Tuesday, 25 March 2014. Bond yields and bond prices move in opposite direction.
The Reserve Bank of India will announce the First Bi-monthly Monetary Policy Statement, 2014-15 on 1 April 2014. Citing price pressures, the Reserve Bank of India raised its key lending rates by 25 basis points after Third Quarter Review of Monetary Policy for 2013-14 on 28 January 2014.
On the political front, the ruling Congress at the Centre promised inclusive growth in its manifesto for the 2014 Lok Sabha elections which was released today, 26 March 2014.
The next major trigger for the stock market is the outcome of the upcoming Lok Sabha elections. Lok Sabha elections will be held between 7 April 2014 and 12 May 2014 in nine phases. The counting of votes will be take place on 16 May 2014. The term of the current Lok Sabha expires on June 1 and the new House has to be constituted by May 31. Along with the Lok Sabha election, Andhra Pradesh (AP), including the regions comprising Telangana, Odisha and Sikkim will go to polls to elect new assemblies. AP, Odisha and Sikkim assemblies come to end on June 2, June 7 and May 7 respectively.
Asian shares edged higher on Wednesday, 26 March 2014, after US consumer confidence climbed to a six-year high, buoying investor optimism about the outlook for the world's biggest economy. Key benchmark indices in Taiwan, Hong Kong, Singapore, Japan, Indonesia and South Korea were up 0.37% to 1.19%. In mainland China, the Shanghai Composite was off 0.18%.
Trading in US index futures indicated that the Dow could advance 13 points at the opening bell on Wednesday, 26 March 2014. US stocks Tuesday finished a choppy trading session higher, boosted by stronger-than-expected consumer confidence data. The main indexes recorded small gains after two days of losses.
Markets were reassured by comments from Philadelphia Fed president Charles Plosser, who said in a television interview that short-term interest rates should hit 4% at the end of 2016. He also said the market reaction to Federal Reserve Chairwoman Janet Yellen's comments after last week's Federal Open Market Committee meeting was "puzzling." He said her timetable of a rate hike six months after the end of bond buying "wasn't a wildly unexpected time frame."
Led by rosier expectations, a gauge of US consumer confidence jumped in March 2014 to the highest level in more than six years. The Conference Board on Tuesday reported that its gauge of consumer confidence reached 82.3 in March the highest level since January 2008 compared with an upwardly revised 78.3 in February.
US home prices slipped in January for a third straight month after a particularly harsh winter, according to data released Tuesday, as strong year-over-year appreciation showed signs of moderating. New US homes sold at an annual rate of 440,000 in February, down 3.3% from January's one-year high, the government said Tuesday.
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 said after the conclusion of a monetary policy review that it will trim its monthly bond purchases by $10 billion to $55 billion. The Federal Reserve will end its bond-buying program before the end of the year with an interest-rate increase likely to follow in "around six months," Chair Janet Yellen said on 19 March 2014. Quarterly Fed forecasts on 19 March 2014 showed more officials predicting that the benchmark interest rate, now close to zero, will rise to at least 1% by the end of 2015 and 2.25% a year later.
US President Barack Obama on Tuesday, 25 March 2014, urged Russia to de-escalate the crisis over Ukraine or face the consequences of more sanctions if it encroaches further into the east of the country after its annexation of Crimea. Russian President Vladimir Putin "has to understand that there's a choice to be made here," Obama told reporters after a 53-nation nuclear-security summit in The Hague, saying there's "another path open" to the Russian leader. "It is now up to Russia to act responsibly and show itself once again willing to abide by international rules and international norms," Obama said.
In Europe, European Central Bank officials sent strong signals Tuesday that they are willing to consider dramatic steps to guard against dangerously low inflation, including negative interest rates and asset purchases. "We haven't exhausted our maneuvering room" on interest rates, Bank of Finland Gov. Erkki Liikanen said in an interview in Helsinki. The ECB's main lending rate to banks is 0.25%, a record low. A separate deposit rate set by the ECB for overnight funds parked at the central bank has been at zero for nearly two years. Asked what tools the ECB has remaining, Mr. Liikanen, who has headed Finland's central bank since 2004 and is on the ECB's 24-member governing council, cited a negative deposit rate as well as additional loans to banks and asset purchases. Bundesbank President Jens Weidmann, in an interview with news agency MNI, didn't rule out large-scale asset purchases, known as quantitative easing. Mr. Liikanen also said it was an option for the ECB and wouldn't run afoul of rules prohibiting the central bank from financing governments.
"Several [ECB] policy makers are ready to adopt nonstandard measures to prevent slipping into a deflationary environment," Slovakian central bank Gov. Josef Makuch said on Tuesday, adding that quantitative easing was one option.
ECB President Mario Draghi was less specific on what the central bank might do. But in a speech in Paris on Tuesday, he sought to underscore the bank's resolve in fighting excessively low inflation, which weakens consumer spending, business profit and investment. "We will do what is needed to maintain price stability," he said, adding that the ECB is paying close attention to the euro's exchange rate.
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