Key benchmark indices hovered in negative zone in early afternoon trade. The barometer index, the S&P BSE Sensex, was down 38.70 points or 0.16%, off close to 195 points from the day's high and up about 35 points from the day's low. The market breadth, indicating the overall health of the market was weak.
IT stocks edged lower as rupee edged higher against the dollar.
The Sensex edged higher amid initial volatility. Key benchmark indices trimmed initial gains in morning trade. While the barometer index, the S&P BSE Sensex, retained positive zone in mid-morning trade, the 50-unit CNX Nifty slipped into the red. Key benchmark indices hovered in negative zone in early afternoon trade.
Foreign institutional investors (FIIs) bought shares worth a net Rs 1520.08 crore on Wednesday, 14 May 2014, as per provisional data from the stock exchanges.
At 12:20 IST, the S&P BSE Sensex was down 38.70 points or 0.16% at 23,776.42. The index shed 72.37 points at the day's low of 23,742.75 in early afternoon trade, its lowest level since 13 May 2014. The index jumped 156.66 points at the day's high of 23,971.78 in early trade, its highest level since 13 May 2014.
The CNX Nifty was down 15.15 points or 0.21% at 7,093.60. The index hit a low of 7,082.55 in intraday trade. The index hit a high of 7,152.55 in intraday trade, its highest level since 13 May 2014.
The BSE Mid-Cap index was off 34.74 points or 0.45% at 7,669.80. The BSE Small-Cap index was down 53.96 points or 0.69% at 7,805.07. Both these indices underperformed the Sensex.
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The market breadth, indicating the overall health of the market was weak. On BSE, 1,547 shares dropped and 1,009 shares rose. A total of 141 shares were unchanged.
Among the 30-share Sensex pack, 16 stocks declined and rest of them rose. Coal India (down 1.88%), ICICI Bank (down 1.46%) and Bajaj Auto (down 1.25%) edged lower from the Sensex pack.
IT stocks edged lower as rupee edged higher against the dollar. A firm rupee adversely affects operating profit margins of IT firms as the sector derives a lion's share of revenue from exports. Infosys (down 0.78%) and TCS (down 0.89%) declined.
Wipro fell 1.06% to Rs 518.65, with the stock reversing initial gains triggered by the company securing 7-year deal from UK-based Xoserve. The stock hit high of Rs 528 and low of Rs 517.30 so far during the day. Wipro announced on Wednesday, 14 May 2014, that it has won a seven-year engagement with Xoserve, an organization which is an integral part of the gas distribution and transmission market in Britain.
The contract is part of the UK Link Programme which will involve the replacement of Xoserve's two decade old legacy UK Link suite of applications by best-in-class enterprise applications with more contemporary technologies. UK Link is a suite of highly complex information and technology systems, managed by Xoserve on behalf of the UK Gas Industry that ensure the smooth running of Britain's competitive gas market. The new platform will enable Xoserve to meet the expected demand growth generated by the roll-out of Smart Meters in the United Kingdom as well as enable Xoserve to be more responsive to changes in the gas market.
HCL Technologies gained 0.23%.
Tech Mahindra edged higher in choppy trade after the company announced Q4 March 2014 results after trading hours on Wednesday, 14 May 2014. The stock was up 1.05% at Rs 1,857.40. The stock hit high fo Rs 1,873 and low of Rs 1,813.90 so far during the day. The company's consolidated net profit declined 39.18% to Rs 614.20 crore on 3.25% growth in revenue from services to Rs 5058.10 crore in Q4 March 2014 over Q3 December 2013.
Tech Mahindra's operating profit declined 5.67% to Rs 1071.80 crore in Q4 March 2014 over Q3 December 2013.
Tech Mahindra's profit after tax (PAT) surged 54.9% to Rs 3029 crore on 31.4% growth in revenue to Rs 18831 crore in the year ended 31 March 2014 (FY 2014) over the year ended 31 March 2013 (FY 2013).
EBITDA (earnings before interest, taxation, depreciation and amortization) rose 36.6% to Rs 4184 crore in FY 2014 over FY 2013.
Tech Mahindra said that the results for the quarter and year ended 31 March 2014 include the results of merged entities giving effect to the scheme, while the results of the corresponding periods of the previous years and the previous year ended 31 March 2013 do not include the results of the merged entities and hence the same are not comparable.
The company's debt as of 31 March 2014 stood at Rs 363 crore. The company said it repaid Rs 796 crore in FY 2014. Cash and cash equivalent stood at Rs 3599 crore as of 31 March 2014. Active client count stood at 629 as against 516 in FY 2013, the company said in a statement.
Vineet Nayyar, Executive Vice Chairman, Tech Mahindra said, "This has been a landmark year for Tech Mahindra with the creation of an integrated entity through one of the largest mergers in India. Our superioe execution capabilities and ability to offer expanded service lines to our customers will help in aiding our future growth".
C P Gurnani, MD & CEO, Tech Mahindra said, "Our result this year is a reflection of our commitment towards growth and our passion to help our customers deal with the needs of a dramatically changing world, fuelled by hyper connectivity, and decisions at the speed of thought. I want the world to know that Tech Mahindra is well tuned to these aspects of modern business and we look at this a differentiator for growth".
Tech Mahindra's board of directors at its meeting held on Wednesday, 14 May 2014, recommended a dividend of Rs 20 per share for FY 2014.
In the foreign exchange market, the rupee edged higher against the dollar on signs Lok Sabha election results due tomorrow, 16 May 2014, will show a clear winner. The partially convertible rupee was hovering at 59.41, compared with its close of 59.66/67 on Tuesday, 13 May 2014. The foreign exchange market was closed on Wednesday, 14 May 2014, on account of a bank holiday.
Indian government bond prices rose after the latest data showed that the annual rate of inflation based on monthly wholesale price index eased to 5.2 in April 2014 from 5.7% in March 2014. The yield on 10-year benchmark federal paper, 8.83% GS 2023, was hovering at 8.7728%, lower than its close of 8.7833% on Tuesday, 13 May 2014. Bond yield and bond prices move in opposite direction. The Indian bond market was closed on Wednesday, 14 May 2014, on account of a bank holiday.
The annual rate of inflation based on monthly wholesale price index (WPI) eased to 5.2% for the month of April 2014 from 5.7% in March 2014, data released by the government today, 15 May 2014, showed. Simultaneously, the government revised upwards the rate of WPI inflation for February 2014 to 5.03%, from 4.68% reported on 14 March 2014.
The Reserve Bank of India (RBI) next undertakes monetary policy review on 3 June 2014. The RBI left its main lending rate viz. the repo rate unchanged at 8% after a monetary policy review on 1 April 2014, as consumer-price inflation eased to a two-year low and as the rupee firmed up against the dollar.
Indian stocks may see high intraday volatility tomorrow, 16 May 2014, as trends and actual results of wins by candidates/parties are announced during the process of counting of votes for the recently concluded Lok Sabha elections. The counting of votes will begin at 8:00 IST tomorrow, 16 May 2014, and results are expected by tomorrow itself. Various exit polls have predicted that the Bharatiya Janata Party (BJP) led National Democratic Alliance (NDA) would win a majority in the Lok Sabha elections which concluded on Monday, 12 May 2014. If exit polls prove correct, NDA's prime ministerial candidate Narendra Modi will become India's next Prime Minister. The term of the current Lok Sabha ends on 1 June and the new House has to be constituted by 31 May.
Modi is perceived as being more business-friendly and decisive by the business community. As chief minister for the fast-growing state of Gujarat, Modi has built a reputation for getting things done. While campaigning for the Lok Sabha elections, Modi has pledged to reinvigorate the country's manufacturing sector, create more jobs and overhaul the country's inadequate infrastructure. Investors are hoping that the BJP-led government will be better at getting things done and more business-friendly than the current Congress-party-led coalition government.
Investors are hoping that when the results of the Lok Sabha elections are out tomorrow, 16 May 2014, a stable government which will complete its full term of five years in office comes to power. A party or a pre-poll alliance will need 272 MPs to form government at the Centre, which is a simple majority in 543-member Lok Sabha. Investors are expecting measures for revival of the economy, business-friendly policies and good governance from the new government that comes to power after the elections. Investors expect policy measures from the new government to put India on a high-growth path on a sustainable basis.
The BJP in its Lok Sabha polls manifesto has promised more business-friendly policies if the party comes to power after elections. The BJP has said that measures for the revival of the economy are its priority if the party comes to power after elections. India's GDP growth has slowed to a decade low of below 5%. The GDP grew 4.7% in Q3 December 2013.
Asian stocks were mixed on Thursday, 15 May 2014. Key benchmark indices in China, South Korea, and Japan were off 0.03% to 0.96%. Key benchmark indices in Taiwan, Singapore and Hong Kong were up 0.06% to 0.33%.
Japan's economy grew at the fastest pace since 2011 in the first quarter as companies stepped up investment and consumers splurged before the first sales-tax rise in 17 years last month. Gross domestic product grew an annualized 5.9% from the previous quarter, the Cabinet Office said today in Tokyo.
Trading in US index futures indicated that the Dow could gain 8 points at the opening bell on Thursday, 15 May 2014. US stocks fell on Wednesday, with the Dow Jones Industrial Average and the S&P 500 index retreating from recent record highs, as small caps resumed their sell-off and consumer discretionary shares lagged.
Prices paid to American factories and service producers rose in April by the most in more than a year, indicating a diminishing risk of deflation as demand improves. The 0.6% increase in the producer price index was the biggest since September 2012 and exceeded all estimates, figures from the Labor Department showed.
Federal Reserve Chair Janet Yellen will speak later in the global day today, 15 May 2014, after saying last week the world's biggest economy still requires a strong dose of stimulus.
The Federal Open Market Committee (FOMC) next undertakes monetary policy review at a two-day meeting on 17-18 June 2014. The Fed on 30 April 2014 said after a monetary policy review that it will keep the benchmark interest-rate target at almost zero for a "considerable time" after its bond-buying program ends. The FOMC also reduced monthly debt purchases to $45 billion, its fourth straight $10 billion cut, and said further reductions are likely in "measured steps" if the economy continues to improve.
In Europe, German economic growth accelerated more than forecast in first quarter as mild weather boosted construction and domestic demand countered weaker exports. Gross domestic product expanded 0.8% from the fourth quarter, when it rose 0.4%, the Federal Statistics Office in Wiesbaden said today. Germany, as the euro area's largest economy, is key to the 18-nation currency bloc's drive to sustain a recovery from its longest-ever recession.
France's economic recovery stalled in the first quarter as tax increases used by President Francois Hollande to cut the budget deficit squeezed consumers. Gross domestic product was unchanged in the period, compared with a revised 0.2% gain in the previous three months, national statistics office Insee said.
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