A bout of volatility was witnessed as key benchmark indices trimmed losses after hitting fresh intraday low in afternoon trade. The barometer index, the S&P BSE Sensex, and the 50-unit CNX Nifty, both, trimmed losses after hitting their lowest level in more than a week. The Sensex was down 277.34 points or 1.34%, up close to 60 points from the day's low and off about 225 points from the day's high. The market breadth, indicating the overall health of the market, was weak. Investor sentiment was hit adversely after minutes from the Federal Reserve's last meeting signaled US stimulus may be reduced in coming months. The US central bank currently buys bonds worth $85 billion a month in a bid to hold interest rates low and encourage economic growth in the world's biggest economy. Fed's bond-buying program has been a source of liquidity for most Asian and emerging markets this year. In the foreign exchange market, the rupee edged lower against the dollar due to broad dollar gains after minutes from the US Federal Reserve's October policy meeting showed the US central bank considering an imminent slowing of its bond-buying program.
Index heavyweight and cigarette major ITC extended intraday losses. Auto stocks dropped across the board. IT stocks also declined. IT major and index heavyweight Infosys extended intraday losses.
Key benchmark indices edged lower in early trade as Asian stocks fell after minutes from the Federal Reserve's last meeting signaled US stimulus may be reduced in coming months and as a preliminary gauge showed that China's manufacturing activity decelerated this month. The market extended initial losses in morning trade. The Sensex and the 50-unit CNX Nifty, both, hit one-week low. Weakness continued on the bourses in early afternoon trade. The Sensex and the 50-unit CNX Nifty, both, trimmed losses after hitting their lowest level in more than a week in afternoon trade.
At 13:20 IST, the S&P BSE Sensex was down 277.34 points or 1.34% to 20,357.79. The index lost 339.93 points at the day's low of 20,295.20 in afternoon trade, its lowest level since 13 November 2013. The index fell 55.87 points at the day's high of 20,579.26 in opening trade.
The CNX Nifty was down 84.35 points or 1.38% to 6,039. The index hit a low of 6,020.30 in intraday trade, its lowest level since 13 November 2013. The index hit a high of 6,097.35 in intraday trade.
The market breadth, indicating the overall health of the market, was weak. On BSE, 1,381 shares declined and 835 shares gained. A total of 146 shares were unchanged.
Among the 30-share Sensex pack, 27 stocks declined and only three of them gained.
HDFC (down 2.89%), L&T (down 2.54%) and Sun Pharmaceutical Industries (down 2.23%), edged lower from the Sensex pack.
Index heavyweight and cigarette major ITC fell 2.93% to Rs 311.60. The stock hit high of Rs 320.25 and low of Rs 311.55 so far during the day.
Auto stocks dropped across the board. Tata Motors fell 0.78%. Tata Motors' British luxury car unit Jaguar Land Rover (JLR) on Wednesday, 20 November 2013, said it will enhance its research and product development on future vehicle infotainment technologies through a new collaboration with Intel and the opening of a new Technology R&D centre in Portland, Oregon. JLR's new research facility on the West Coast will help lead the development of future vehicle infotainment systems and will be responsible for collaborative work with a number of technology partners, JLR said in a statement. The location of the centre has been chosen for its proximity to the technology industry hubs in Silicon Valley and Seattle, where JLR has been developing collaborative partnerships with the world's leading IT businesses and creative and technical talent.
JLR and Intel have already begun work on multiple levels across engineering, research and marketing as JLR progresses its ambitions to deliver the best in-car infotainment experience, JLR said. The close proximity of JLR's new research facility to Intel Labs is enabling a collaborative relationship on research projects, JLR said. Multiple programs are underway to explore and develop next-generation digital vehicle prototypes with in-vehicle cockpit experiences that connect car, device and cloud. The insights gained from the research programs along with alignment on engineering efforts will speed development on new innovative in-vehicle experiences, JLR said.
Dr Wolfgang Ziebart, Jaguar Land Rover Engineering Director, said: "Our aim is to innovate and develop the ultimate user experience for our customers and by taking a collaborative approach with both technology start-ups and large organisations such as Intel, we will push the boundaries of future infotainment technology. Working with Intel will help both partners define and develop platforms and systems appropriate for premium global brands like Jaguar and Land Rover. This will ultimately develop unique and innovative technologies that will continue to drive the appeal of our products. Our research and the partnerships we are developing in the US will help us ensure our new products remain innovative and globally competitive."
Elliot Garbus, vice president and general manager, Automotive Solutions Division, Intel Corporation, said: "Consumers expect their in-vehicle experiences to be an integrated part of their digitally connected lifestyle; this requires enhanced levels of connectivity and intelligence in the car. As part of our work with Jaguar Land Rover, we are exploring innovative ways to inform, entertain and assist drivers and passengers in a safe way; speeding development of unique experiences from the car to the cloud. Our goal is to accelerate opportunities for new types of in-vehicle services and applications in the Internet of Things."
Maruti Suzuki India declined 0.04%. M&M dropped 0.57%. Ashok Leyland fell 1.92%.
Shares of two-wheeler makers declined. Hero MotoCorp (down 0.53%) and Bajaj Auto (down 1.28%), fell.
IT stocks edged lower. TCS (down 0.5%), HCL Technologies (down 1.36%), and Wipro (down 0.33%), declined.
IT major and index heavyweight Infosys lost 2.12% to Rs 3,330.40, with the stock extending intraday losses. The stock had hit a 52-week high of Rs 3,447.90 in intraday trade on 19 November 2013.
Zensar Technologies declined 1.11%. Zensar Technologies today, 21 November 2013, announced an end-to-end suite of multivendor support service (MVS) offerings, which will help enterprise customers accelerate how they monitor, identify and remedy issues in server, storage and networking environments.
Commenting on the development, Vivek Gupta, Chief Executive, Zensar Global IM Services said, "Zensar has expanded its suite of multivendor support services beyond hardware break-fix to include infrastructure monitoring as well as the migration of IT infrastructure to hybrid cloud. Today Zensar is able to provide MVS services with a global SLA and single point of contact across our client's entire infrastructure stack".
In the foreign exchange market, the rupee edged lower against the dollar due to broad dollar gains after minutes from the US Federal Reserve's October policy meeting showed the US central bank considering an imminent slowing of its bond-buying program. The partially convertible rupee was hovering at 62.875, compared with its close of 62.57/58 on Wednesday, 20 November 2013.
Indian government bond prices dropped after minutes from the US Federal Reserve's October policy meeting showed the US central bank considering an imminent slowing of its bond-buying program. The yield on most traded federal paper, 8.28% GS 2027, was hovering at 9.0678%, higher than its close of 9.0262% on Wednesday, 20 November 2013. The yield on 10-year benchmark federal paper, 7.16% GS 2023, was hovering at 9.0825%, higher than its close of 9.0355% on Wednesday, 20 November 2013. Bond yield and bond prices are inversely related.
The annual headline inflation is expected to moderate to near 5% as there was reasonable price stability in some major commodities, the finance minister said on Thursday, 21 November 2013. P. Chidambaram made the comment in a lecture at the National University of Singapore. Government data on 14 November 2013 showed that the headline inflation had accelerated to an eight-month high of 7% in October, mainly driven by higher fuel and manufactured goods prices. Chidambaram also said the fiscal deficit target of 4.8% of gross domestic product in 2013/14 would not be breached under any circumstances.
Fitch Ratings said in a report published on Wednesday, 20 November 2013, that the spillover effects of a weaker rupee have not significantly hurt India's creditworthiness, and hence would not trigger any rating action as this point. India's ratings already incorporate both the sovereign's vulnerabilities and tolerance for volatility in global financial market conditions, Fitch said.
The rating agency said that India's economy has not lost much momentum, with both agriculture and exports remaining resilient and providing a cushion. Fitch therefore expects the economy to recover with real GDP forecast to rise 4.8% in FY 2014 (financial year ending March 2014) and 5.8% in FY 2015, compared with a 5% rise in FY 2013. The modest economic recovery, however, will continue to undermine India's banking sector, which is facing a combination of weakening asset quality, eroding profit and declining capital. Nonetheless, these factors are likely to have only a moderate effect on the banking sector's ability to supply credit to the economy. Inflation has risen only moderately, despite higher import prices stemming from the weaker rupee. The Reserve Bank of India (RBI) has also signalled that it has started to place a greater focus on capping CPI. The current account deficit is narrowing, following measures to curb gold imports, a weaker exchange rate, and softer domestic demand. Fitch forecasts the current account deficit to decline to 3.1% of GDP in FY 2014 (versus 4.8% in FY 2013). This fall, however, will not be enough to shield India from further pressures related to the eventual start of Fed tapering.
India's budget remains under pressure as the central government's (CG) fiscal deficit in the first six months of FY 2014 stood at 76% of the full-year target, Fitch said. The authorities have indicated that they are still committed to lowering the fiscal deficit to 4.8% of GDP (versus 4.9% in FY 2013). To achieve this, the CG is likely to clamp down heavily on expenditures in 2H FY 2014.
Fitch rates India at "BBB-minus", the lowest investment grade rating. It revised its outlook for the country to "stable" from "negative" in June.
Asian stocks fell on Thursday, 21 November 2013, after minutes from the Federal Reserve's last meeting signaled US stimulus may be reduced in coming months and as a preliminary gauge showed that China's manufacturing activity decelerated this month. Key benchmark indices in Taiwan, Hong Kong, China, Singapore, Indonesia and South Korea fell by 0.04% to 1.28%. Japan's Nikkei 225 index rose 1.92%.
China manufacturing activity growth slipped to a two-month low as export orders swung to a decline, according to preliminary results from HSBC's monthly gauge of the sector, released Thursday. The "flash" version of the HSBC/Markit China manufacturing Purchasing Managers' Index eased to 50.4, compared to last month's 50.9 reading.
China may not be able to end its reliance on investment and exports for growth over the next three to five years despite plans for economic restructuring, an adviser to the central bank said on Thursday, 21 November 2013. Speaking at a financial seminar, Song Guoqing said that China's high savings rate is hindering the government's efforts to boost domestic consumption and reduce the role of exports and investment in driving growth. China's high savings rate is partly due to an aging population combined with a lack of a reliable social safety net, he noted.
The Bank of Japan kept its policy rates and asset-purchasing program unchanged Thursday, as widely expected. The decision, which came just three weeks after the central bank's previous policy statement, was unanimous. It also made no changes to its assessment of the economy, which it said "has been recovering moderately" as "exports have generally been picking up." It also cited gains for businesses' fixed investment and corporate profits.
Trading in US index futures indicated a flat opening of US stocks on Thursday, 21 November 2013. US stocks fell on Wednesday, 20 November 2013, after the minutes of the Federal Reserve's October meeting minutes signaled the central bank is on track to slow down its $85 billion a month bond bond-buying program that has boosted the equity market. Central bank policy makers "generally expected that the data would prove consistent with the committee's outlook for ongoing improvement in labor-market conditions and would thus warrant trimming the pace of purchases in coming months," according to minutes of the Federal Open Market Committee's Oct. 29-30 meeting.
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