Key benchmark indices slumped on the first trading session of the week as weakness in Asian and European stocks and a steep slide in US stocks on Friday, 24 January 2014, hit sentiment on the domestic bourses adversely. The rupee's weakness against the dollar also hit investor sentiment adversely. The barometer index, the S&P BSE Sensex, fell below the psychological 21,000 mark. The Sensex hit its lowest level in more than two weeks. The 50-unit CNX Nifty hit its lowest level in more than 5-1/2 weeks. The Sensex was provisionally down 389.88 points or 1.84%, up 55.65 points from the day's low and off 155.35 points from the day's high. The market breadth indicating the overall health of the market was quite weak with more than three losers for every gainer on BSE. Small-Cap and Mid-Cap indices witnessed an even sharper slide. The BSE Mid-Cap index was off 2.75%. The Small-Cap index was off 164.73 points or 2.56%.
Asian and European stocks dropped on Monday, 27 January 2014, as concern that the global economic recovery is faltering spurred investors to sell riskier assets. Emerging-market stocks fell amid concern that slower Chinese growth and reduced Federal Reserve stimulus will spark more capital outflows.
Shares of FMCG major Hindustan Unilever (HUL) rose after the company announced its Q3 results. Reliance Industries (RIL) dropped in volatile trade. Capital goods stocks edged lower.
Key benchmark indices slumped in early trade on weak Asian stocks. The Sensex fell below the psychological 21,000 mark. The Sensex and the 50-unit CNX Nifty, both, hit their lowest level in over two weeks. Weakness persisted on the bourses in mid-morning trade. Key benchmark indices extended losses and hit fresh intraday low in early afternoon trade. The Sensex trimmed intraday losses in afternoon trade. Intraday recovery witnessed in afternoon trade proved short lived, with key benchmark indices weakening once again in mid-afternoon trade. Key benchmark indices extended losses in late trade.
The market sentiment was hit adversely by data showing that foreign funds were net sellers of Indian stocks on Friday, 24 January 2014. Foreign institutional investors (FIIs) sold shares worth a net Rs 230.96 crore on Friday, 24 January 2014, as per provisional data from the stock exchanges.
The market may remain volatile this week 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 on Thursday, 30 January 2014.
As per provisional closing, the S&P BSE Sensex was down 389.88 points or 1.84% to 20,743.68. The index plunged 445.53 points at the day's low of 20,688.03 in late trade, its lowest level since 10 January 2014. The index fell 234.53 points at the day's high of 20,899.03 in early trade.
The CNX Nifty was down 121.35 points or 1.94% to 6,145.40. The index hit a low of 6,130.25 in intraday trade, its lowest level since 18 December 2013. The index hit a high of 6,188.55 in intraday trade.
The market breadth indicating the overall health of the market was quite weak with more than three losers for every gainer on BSE. On BSE, 1,953 shares declined and 642 shares gained. A total of 118 shares were unchanged.
The BSE Mid-Cap index shed 177.20 points or 2.75% at 6,278.06. The Small-Cap index lost 164.73 points or 2.56% at 6,279.73. Both these indices underperformed the Sensex.
Tata Motors slumped 5.65%. The company before market hours today, 27 January 2014, announced the demise of its Managing Director, Karl Slym. "Tata Motors deeply regrets to announce the untimely and tragic demise of its Managing Director, Karl Slym, in Bangkok on Sunday, 26 January 2014. Karl Slym was in Bangkok to attend a meeting of the Board of Directors of Tata Motors Thailand. Karl Slym joined Tata Motors in October 2012, and was providing leadership to the company through a challenging market environment. The company shares in the grief of Karl Slym's wife and family at their irreparable loss," Tata Motors said in a statement.
Steel major Tata Steel slumped 5.96% to Rs 354, with the stock extending intraday decline in late trade. The stock hit a high of Rs 370 and low of Rs 352.20.
Shares of FMCG major Hindustan Unilever (HUL) rose after the company announced its Q3 results. The stock rose 2.46% to Rs 579.80. HUL said its profit after tax before exceptional items, PAT (bei), rose 9% to Rs 995 crore in Q3 December 2013 over Q3 December 2012. Total income from operations (net) rose 8.54% to Rs 7223.35 crore in Q3 December 2013 over Q3 December 2012. The result was announced during trading hours today, 27 January 2014.
During the quarter, the domestic consumer business grew ahead of market, at 10%, with 4% underlying volume growth, HUL said in a statement. The operating context during the quarter remained challenging with market growth under pressure, firm input costs given the rupee depreciation, an uncertain media environment and the high competitive intensity. HUL said that the cost inflation was managed through a combination of judicious pricing action, unwinding of promotions and substantial cost savings. Investment behind brands was sustained at competitive levels; overall A&P was up by Rs 107 crore (+40 bps) in the quarter, HUL said.
Commenting on the Q3 results, Harish Manwani, Chairman, HUL, said: "Our growth has been competitive and profitable and the results are a reflection of how we dynamically managed the business despite the headwinds in the environment. Looking forward, we are conscious of the uncertain macro context but remain positive on the mid to long term opportunities in our sector. We are determined to stay the course on our strategy and will continue to invest in the business for the long term".
Reliance Industries (RIL) dropped 2.48% at Rs 845.50. The stock was volatile. The scrip hit high of Rs 860.55 and low of Rs 840.10.
Telecommunication companies buying airwaves in an Indian auction next month will pay 5% of their revenue as an annual fee, a ministerial panel decided on Monday, 27 January 2014, a move that means lower payments for bigger carriers Bharti Airtel and the Indian unit of Vodafone. The move scraps the 3-8 percent fee range the country currently levies in an effort to coax previously reluctant operators into taking part in India's third attempt at auctioning two frequency bands for billions of dollars. The government may lose some revenue it collects as annual fees due to the new rate, Telecommunications Minister Kapil Sibal said after the meeting of the ministerial group, but expects it to help companies buy more spectrum in the auction starting 3 February 2014. "A successful auction means greater investment in the sector," he said, explaining the rationale for the new rate. The total spectrum fee for carriers' existing spectrum and new spectrum from the February auction will be calculated based on a weighted average of the old and new fee, Sibal said.
Sibal said companies like Reliance Industries, which bought 4G spectrum in a 2010 auction, will continue to pay 1 percent of their revenue as annual fee for that spectrum.
Capital goods stocks edged lower. ABB (down 2.26%), Bharat Heavy Electricals (Bhel) (down 1.79%), BEML (down 5.87%), Bharat Electronics (down 5.87%), Crompton Greaves (down 6.35%), L&T (down 2.56%), Siemens (down 7.23%) declined.
Jaiprakash Power Ventures (down 13.06%), HDIL (down 12.9%), GMR Infrastructure (down 11.3%), IRB Infrastructure Developers (down 10.88%), Dewan Housing Finance Corporation (down 9.7%), Indiabulls Real Estate (down 8.82%), Allahabad Bank (down 8.52%), UCO Bank (down 8.23%), Coromandel International (down 8.22%), Unitech (down 8.21%), Prestige Estates Projects (down 7.88%), JSW Energy (down 7.62%) were among the major losers from the BSE Mid-Cap index.
Dishman Pharmaceuticals and Chemicals (down 14.37%), Astra Microwave Products (down 13.61%), Automotive Axles (down 10.33%), HeidelbergCement India (down 10.28%), ABG Shipyard (down 9.87%), REI Agro (down 9.1%), Gujarat Natural Resources (down 8.67%), Eros International Media (down 8.64%), Infinite Computer Solutions (India) (down 8.34) and JSW Holdings (down 8.14%) were among the major losers from the BSE Small-Cap index.
In the foreign exchange market, the rupee edged lower against the dollar in choppy trade as equities fell sharply. A broad fall in other regional currencies also weighed on the domestic currency which extended Friday's steep slide. The partially convertible rupee was hovering at 63.20, compared with its close of 62.66/67 on Friday, 24 January 2014.
India's record high foreign exchange reserves and "strong" fundamentals should reduce concerns about the rupee currency, Economic Affairs Secretary Arvind Mayaram said on Monday, 27 January 2014. "Today, our current account deficit is going to be below $50 billion, foreign exchange reserves are (at an) all-time high, and we believe that we have very strong fundamentals in place," Mayaram told reporters in New Delhi. Mayaram added he did not believe the rupee would tumble and track steep falls in the Argentina peso. "There is no reason why we should believe that if Argentina is in trouble today, that the Indian rupee should follow," he said.
The Ministry of Consumer Affairs, Food & Public Distribution on Friday, 24 January 2014, said that as per data monitored by the Ministry of Consumer Affairs and Food, prices of rice, wheat and sugar during the week -- 16 January 2014 to 23 January 2014 -- remained steady in wholesale markets across the country. The Price Monitoring Cell of the Ministry monitors prices of twenty two essential commodities regularly at 55 wholesale centers. During the period, prices of rice remained steady at all wholesale centers and decreased at one center (Aizwal). Prices of wheat also were steady at all wholesale centers except one centre at Ludhiana. While sugar prices decreased at eight centers and remain steady at rest of the reporting centers, the Ministry of Consumer Affairs and Food said in a statement.
Prices of twenty two essential commodities are regularly monitored by Department of Consumer Affairs for taking suitable action to keep the prices under check. Price data is collected on daily basis from the State Civil Supplies Departments of the respective State Governments.
The Reserve Bank of India announces Third Quarter Review of Monetary Policy for 2013-14 at 11:00 IST tomorrow, 28 January 2014. The RBI 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.
European stocks edged lower on Monday, 27 January 2014, after a rout in emerging-market currencies spurred concern the global economic recovery is faltering. Key benchmark indices in UK, France and Germany were off 0.4% to 1.06%.
Asian stocks slumped on Monday, 27 January 2014, as concern that the global economic recovery is faltering spurred investors to sell riskier assets. Key benchmark indices in Taiwan, Hong Kong, China, Singapore, Japan, Indonesia and South Korea were off 1.03% to 2.51%.
Emerging-market stocks fell amid concern that slower Chinese growth and reduced Federal Reserve stimulus will spark more capital outflows. In recent years, emerging markets have been supported by the Fed's policy of easy money, but any cut could pull more money out of these risky markets and hurt growth.
Japan reported a record annual trade deficit for last year as energy shipments and weakness in the yen pumped up the nation's import bill. The shortfall was 11.5 trillion yen ($113 billion), almost double the previous year's 6.9 trillion yen, a finance ministry report showed in Tokyo today, 27 January 2014. Imports rose 25% in December from a year earlier and exports gained 15%, leaving a monthly deficit of 1.3 trillion yen.
South Korea has accepted the North Korea's offer to renew reunions of families separated by the Korean War, a move that may signal thawing tensions between the two nations.
Trading in US index futures indicated that the Dow could gain 6 points at the opening bell today, 27 January 2014. US stocks tumbled on Friday, 24 January 2014, as investors fled equities and emerging-markets currencies on concerns about a contagion effect from China's manufacturing slowdown. The CBOE Volatility Index, known as the Vix, surged 32%, its steepest rise since the April 15 Boston Marathon bombings.
A two-day monetary policy meeting of the Federal Open Market Committee (FOMC) begins tomorrow, 28 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.
Global stocks tumbled the most since June on Friday, 24 January 2014, as a sell-off in emerging-market currencies prompted investors to seek havens in Treasuries, gold and the yen.
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