Key benchmark indices extended initial losses and hit fresh intraday low in morning trade. The barometer index, the S&P BSE Sensex, and the 50-unit CNX Nifty, both, hit their lowest level in more than nine weeks. The market breadth, indicating the overall health of the market, was weak. The market sentiment was hit adversely by the US Federal Reserve's announcement of a further reduction in its monthly bond purchases and Fed's indication that it is likely to keep reducing its purchases in the coming months, citing a pickup in US economic activity and improvement in the US labor market. The Sensex was down 218.48 points or 1.06%, off 73.10 points from the day's high and up 13.80 points from the day's low. The BSE Small-Cap and Mid-Cap indices were off more than 1% each.
Index heavyweight and cigarette major ITC dropped. Bank stocks edged lower. ICICI Bank extended Wednesday's losses triggered by the bank reporting rise in ratio of net non-performing asset in Q3 December 2013 at the time of announcing Q3 results during trading hours on Wednesday, 29 January 2014.
Key benchmark indices edged lower in early trade on weak Asian stocks. Key benchmark indices extended initial losses and to hit fresh intraday low in morning trade. The Sensex and the 50-unit CNX Nifty, both, hit their lowest level in more than nine weeks.
The market may remain volatile today, 30 January 2014, as traders roll over positions in the futures & options (F&O) segment from the near month January 2014 series to February 2014 series. The January 2014 F&O contracts expire today, 30 January 2014.
Foreign institutional investors (FIIs) bought shares worth a net Rs 250.48 crore on Wednesday, 29 January 2014, as per provisional data from the stock exchanges.
Asian stocks dropped on Thursday, 30 January 2014, after the US Federal Reserve pressed on with cuts to US economic stimulus and as a report showed China's manufacturing industry contracted.
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After a monetary policy review, the Federal Open Market Committee (FOMC) on Wednesday, 29 January 2014, announced it will reduce monthly bond purchases by another $10 billion to $65 billion. The Fed also signaled that it is likely to keep reducing its purchases in the coming months, citing a pickup in economic activity and improvement in the labor market. In emerging markets, the reduction in bond purchases by the Fed has triggered worries of slowdown in capital inflows and fears of capital outflows. Fed's bond-buying program has been a source of liquidity for most Asian and emerging markets in recent years.
The South Africa Reserve Bank unexpectedly raised the repurchase rate to 5.5% from 5% on Wednesday, 29 January 2014, following Turkey's decision early this week to more than double its benchmark rate amid a rout in its currency.
At 10:23 IST, the S&P BSE Sensex was down 218.48 points or 1.06% to 20,428.82. The index lost 232.28 points at the day's low of 20,415.02 in morning trade, its lowest level since 27 November 2013. The index fell 145.38 points at the day's high of 20,501.92 in early trade.
The CNX Nifty was down 68.25 points or 1.12% to 6,052. The index hit a low of 6,048.65 in intraday trade, its lowest level since 27 November 2013. The index hit a high of 6,072.95 in intraday trade.
The BSE Mid-Cap was off 76.18 points or 1.21% at 6,206.32. The BSE Small-Cap index was of 75.48 points or 1.2% at 6,198.47. Both these indices underperformed the Sensex.
The market breadth, indicating the overall health of the market, was weak. On BSE, 1,205 shares declined and 454 shares rose. A total of 71 shares were unchanged.
Among the 30-share Sensex pack, 27 stocks declined and only three of gained.
Hindalco Industries (down 2.37%), Tata Steel (down 2.01%) and Tata Power Company (down 1.78%) edged lower from the Sensex pack.
Bharti Airtel (up 1.74%), GAIL (India) (up 0.81%) and Tata Motors (up 0.75%) edged higher from the Sensex pack.
Index heavyweight and cigarette major ITC fell 1.88% to Rs 318.90.
Bank stocks edged lower. Among PSU bank stocks, State Bank of India (SBI) (down 2.02%), Punjab National Bank (down 2.81%), Bank of Baroda (down 2.36%), Bank of India (down 2.14%) and Union Bank of India (down 1.43%) dropped.
Among private bank stocks, HDFC Bank (down 1.63%), Kotak Mahindra Bank (down 1.65%), Axis Bank (down 1.9%), Yes Bank (down 1.99%) declined.
ICICI Bank extended Wednesday's fall triggered by the bank reporting rise in ratio of net non-performing asset to 0.81% as on 31 December 2013 from 0.73% as on 30 September 2013. The stock lost 2.19%. ICICI Bank's net profit rose 12.53% to Rs 2532.21 crore on 15.4% increase in total income to Rs 14255.96 crore in Q3 December 2013 over Q3 December 2012. The result was announced during trading hours on Wednesday, 29 January 2014.
Net non-performing assets at 31 December 2013 were Rs 3121 crore (US$ 505 million) compared to Rs 2707 crore (US$ 438 million) at 30 September 2013. The net non-performing asset ratio was 0.81% at 31 December 2013 compared to 0.73% at 30 September 2013. The bank's provision coverage ratio, computed in accordance with the RBI guidelines, was 70.0% at 31 December 2013. Net loans to companies whose facilities have been restructured were Rs 8602 crore (US$ 1.4 billion) at 30 December 2013 compared to Rs 6826 crore (US$ 1.1 billion) at 30 September 2013.
On a consolidated basis, ICICI Bank's net profit rose 8.6% to Rs 2872.30 crore on 9.76% increase in total income to Rs 20543.46 crore in Q3 December 2013 over Q3 December 2012.
In the foreign exchange market, the rupee edged lower against the dollar, tracking weakness in emerging markets after the Federal Reserve further pruned its monetary stimulus. The partially convertible rupee was hovering at 62.785, compared with its close of 62.41/42 on Wednesday, 29 January 2014.
Indian government bond prices dropped after the Federal Reserve further pruned its monetary stimulus. The yield on 10-year benchmark federal paper, 8.83% GS 2023, was hovering at 8.8158%, higher than its close of 8.7743% on Wednesday, 29 January 2014. Bond yield and bond price move in opposite direction.
Asian stocks dropped on Thursday, 30 January 2014, after the US Federal Reserve pressed on with cuts to US economic stimulus and as a report showed China's manufacturing industry contracted. Key benchmark indices in Hong Kong, China, Singapore, Japan and Indonesia fell by 0.48% to 2.87%. Stock markets in South Korea and Taiwan are closed today, 30 January 2014, and Hong Kong and Singapore will shut early for the Chinese New Year holidays. Stock markets in Taiwan are closed until 4 February 2014 for the Lunar New Year holiday.
The final reading on HSBC Holdings Plc and Markit Economics Ltd.'s January purchasing managers' index for Chinese manufacturing was 49.5, the first contraction in six months, from 50.5 in December. Readings above 50 indicate expansion.
China's markets close from tomorrow until Feb. 7 for the Lunar New Year holiday, while Hong Kong is shut until Feb. 4.
US stocks sank on Wednesday, 29 January 2014, as earnings forecasts from Yahoo! Inc. and AT&T Inc. disappointed investors. The Federal Reserve on Wednesday, 29 January 2014, took another gradual step toward exiting its controversial bond-buying program, remaining stoic in the face of market turmoil. As expected, the Fed decided to reduce the pace of monthly asset purchases to $65 billion, from January's $75 billion. The Fed will purchase mortgage-backed securities at a pace of $30 billion per month and add to its holdings of Treasurys at a pace of $35 billion per month beginning in February.
The Fed also signaled that it is likely to keep reducing its purchases in the coming months, citing a pickup in economic activity and improvement in the labor market.
In addition to proceeding with plans to scale back its bond buying, the Fed made no changes to its other main policy plank: its pledge to keep interest rates low for some time to come. It has pledged to hold rates steady "well past" the point that the unemployment rate falls below 6.5% as long as inflation remains low.
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