A bout of volatility was witnessed as key benchmark indices trimmed intraday losses in mid-morning trade. The barometer index, the S&P BSE Sensex, was down 38.50 points or 0.18%, up about 65 points from the day's low and off close to 25 points from the day's high. The market breadth, indicating the overall health of the market, was positive. Indian stocks declined today, 20 March 2014 tracking weakness in Asian stocks.
IT stocks rose on weak rupee and improving outlook on US economy.
The market edged lower in early trade. It extended initial losses and hit fresh intraday low in morning trade. The barometer indices, the S&P BSE Sensex and the 50-unit CNX Nifty, both, hit their lowest level in almost one week. It trimmed intraday losses in mid-morning trade.
Asian stocks fell on Thursday after the Federal Reserve signaled a faster timetable for raising rates.
At 11:27 IST, the S&P BSE Sensex was down 38.50 points or 0.18% to 21,794.36. The index declined 105.80 points at the day's low of 21,727.06 in morning trade, its lowest level since 14 March 2014. The index fell 13.95 points at the day's high of 21,818.91 in mid-morning trade.
The CNX Nifty was down 16.60 points or 0.25% to 6,507.45. The index hit a low of 6,488.50 in intraday trade, its lowest level since 14 March 2014. The index hit a high of 6,516.70 in intraday trade.
The BSE Mid-Cap index rose 11.07 points or 0.16% to 6,750.65. The BSE Small-Cap index gained 26.21 points or 0.39% to 6,748.56. Both these indices outperformed the Sensex.
The market breadth, indicating the overall health of the market, was positive. On BSE, 1,052 shares rose and 1,040 shares fell. A total of 123 shares were unchanged.
Bharat Heavy Electricals (Bhel) (down 2.12%), GAIL (India) (down 2.69%) and ITC (down 1.82%) edged lower from the Sensex pack.
IT stocks rose as rupee edged lower against the dollar. A weak rupee boosts revenue of IT firms in rupee terms as the sector derives a lion's share of revenue from exports. Improving economic outlook of US after the Federal Reserve continued tapering bond purchases and hinted at rising interest rates by next year also aided gains in IT stocks. US is the biggest outsourcing market for the Indian IT firms.
Infosys (up 1.31%), Tech Mahindra (up 1.48%), Wipro (up 1.75%) and HCL Technologies (up 1.13%) gained.
TCS rose 2.16%, with the stock reversing intraday losses. The company said after market hours on Wednesday, 19 March 2014 announced the go-live of a new maintenance, repair and overhaul (MRO) application programme with PT Garuda Indonesia (Persero) Tbk. (Garuda Indonesia Airlines), Indonesia's national airline, via its aircraft maintenance subsidiary GMF Aeroasia.
Judi Rifajantoro, EVP Strategy, Business Development and Risk Management, Garuda Indonesia said, Garuda went through a rigorous MRO vendor selection process, and we chose TCS' SWIFT MRO solution based on Garuda's futuristic roadmap, ease of enterprise integration, lower TCO and proven track record. The first phase of Garuda's MRO transformation is now complete and in production, and phase two is coming soon, further helping the airline deliver exemplary aircraft maintenance services in line with our strong growth and development of a global leading airline brand."
Vish lyer, President, TCS Asia Pacific said, "Garuda's go-live announcement today is another outstanding milestone in the airline sector for TCS Asia Pacific, further solidifying our marquee list of national and top-tier carriers from all corners of the region. TCS looks forward to continued growth in our partnership with Garuda, and we are committed to delivering the highest level of technology and services to help grow the rapidly expanding aviation market in Indonesia, Iyer added.
Garuda Indonesia, the national airline of Indonesia connects more than 64 destinations, which include 40 domestic and 20 international destinations worldwide.
Polaris Financial Technology jumped 7.28%, with the stock extending recent rally triggered by the company announcing the demerger of its products business into a separately listed company.
The gains were triggered by the company's board giving an in-principle approval for demerging the products business undertaking of the company into a separate listed firm at its meeting held on Tuesday, 18 March 2014. The company made the announcement during trading hours on Tuesday, 18 March 2014. Shares of Polaris Financial Technology jumped 11.57% in a single trading session to settle at Rs 152.80 on Tuesday, 18 March 2014. The scrip rose by maximum permissible level of 20% to Rs 183.35 on Wednesday, 19 March 2014. .
The scheme/structure is subject to the approval by the various regulatory authorities like stock exchanges, Securities and Exchange Board of India (Sebi), Madras High Court, Registrar of Companies, shareholders and creditors, Polaris Financial Technology said in a statement.
After demerger, the product company will be known as Intellect Design Arena (Intellect) and comprise of four distinct businesses: global universal banking; risk and treasury management; global transaction banking and insurance, the company said in a statement.
Polaris Financial Technology said it will continue to run the services business with a strong vertical and solution focus. As consideration for the demerger (technically called a vertical split), every shareholder of Polaris Financial Technology, will receive one share of Intellect.
The product business is significantly different from the services stream, in terms of investments into product development, talent and sales & distribution. Given this, the Polaris board, taking into consideration the recommendations made by the Special Committee comprising of independent directors of the Board as well as the Audit Committee, has decided to offer a special option to the shareholders of Intellect to exchange the shares (should they wish to) allotted pursuant to the demerger against fully secured non-convertible debentures (NCD). These NCDs shall have a face value of Rs 42, with a coupon of 7.75% per annum, redeemable at par after 90 days.
SKS Microfinance rose 2.12% after the company said that it has completed the tenth securitization transaction during the current financial year of Rs 26.73 crore. The announcement was made after trading hours on Wednesday, 19 March 2014.
With this, the total sum of securitizations completed for the fiscal year ending March 2014 (FY 2014) (year-to-date) is Rs 1377.94 crore, SKS Microfinance said in a statement. The company said that the entire pool qualifies for priority sector treatment as per RBI's priority sector lending guidelines. The pool is rated A1+ (SO) by a leading rating agency signifying a very strong degree of safety regarding timely payment of financial obligations'. Such instruments carry the lowest credit risk, the company said.
Persistent Systems rose 2.31% after the company said it has set up Accelerite to take a portfolio of products and related solutions to market. The company made the announcement after market hours on Wednesday, 19 March 2014.
Persistent Systems announced the creation of Accelerite to take a portfolio of products and related solutions to market. Accelerfte will be a business unit of Persistent Systems, headquartered in Silicon Valley and led by Nara Rajagopalan.
The formation of Accelerite will bring product-centric alignment to business models, strategies, sales, and operations. Persistent Systems will continue to focus on product development and technology services where it is a well-respected market leader, the company said in a statement.
"The business model for products is distinctly different from services. Over the last few years, we invested in building a portfolio of products and IP focused on SMAC technologies," said Dr. Anand Deshpande, Chairman, Managing Director and CEO of Persistent Systems. "The creation of Accelerite brings the organizational alignment to achieve global leadership for these products."
Bombay Rayon Fashions fell 0.76% after the company said it has declared a lock-out at its mill division located at Dodaballapur in Bangalore. The company made the announcement after market hours on Wednesday, 19 March 2014.
In the foreign exchange market, the rupee edged lower against the dollar tracking weakness in Asian equities. The partially convertible rupee was hovering at 61.195, compared with its close of 60.95/96 on Wednesday, 19 March 2014.
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.
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 stocks fell on Thursday after the Federal Reserve signaled a faster timetable for raising rates. Key benchmark indices in Hong Kong, Taiwan, Singapore, South Korea, Indonesia and Japan were down 0.44% to 1.91%.
China's Shanghai Composite rose 0.35%. China will keep economic growth at a reasonable rate while keeping inflation stable, Premier Li Keqiang reportedly said on Wednesday. Li also told a regular meeting of the State Council, or the cabinet, that China will continue to push forward reforms.
New Zealand's annual economic growth exceeded 3% for a second straight quarter, buoyed by dairy exports, adding to signs of increasing inflation pressure that may require higher borrowing costs. Gross domestic product increased 3.1% in the fourth quarter from a year earlier, Statistics New Zealand said in Wellington today. That's slower than the revised 3.3% pace in the third quarter. GDP rose 0.9% from the third quarter.
Trading in US index futures indicated that the Dow could fall 45 points at the opening bell on Thursday, 20 March 2014. US stocks slipped on Wednesday as the Federal Reserve's latest policy statement raised jitters about the prospect of interest rates rising sooner than anticipated.
The Federal Reserve gave itself room to keep borrowing costs low at least until next year by dropping a linkage between the benchmark interest rate and a specific level of unemployment. The US Federal Reserve will probably end its massive bond-buying programme this fall, and could start raising interest rates around six months later, Fed chairwoman Janet Yellen said on Wednesday. "We know we're not close to full employment, not close to an employment level consistent with our mandate, and unless inflation were a significant concern, we wouldn't dream of raising the federal funds rate target," Chair Janet Yellen said on Wednesday after her first time leading a meeting of the Federal Open Market Committee.
In deciding how long to keep rates low, the committee will look at a "wide range of information," including labor market conditions, inflation expectations and financial markets, she said. The Fed also reduced the monthly pace of bond purchases by $10 billion, to $55 billion.
Meanwhile, President Barack Obama ruled out US military involvement in Ukraine on Wednesday, emphasizing diplomacy in the US standoff with Russia over Crimea. Obama, who imposed sanctions on 11 Russian and Ukrainian officials on Monday, said the United States will push diplomatic efforts to bring pressure on Russia to loosen its grip on the Crimea region of southern Ukraine.
Russia and the United States exchanged threats on Wednesday at a tense UN security council meeting over the Ukraine crisis, with the Russian envoy saying the US ambassador's "insults'' are jeopardizing Moscow's willingness to cooperate with Washington on other diplomatic matters.
It was the council's eighth meeting in three weeks on Ukraine, a show of determination by Western powers to highlight Russia's diplomatic isolation over the Crimean Peninsula -- even if the council is powerless to act because of Moscow's veto power as a permanent council member.
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