Weakness persisted on the bourses in afternoon trade. The market breadth, indicating the overall health of the market, was weak. Except BSE IT index, all the other sectoral indices on BSE were in the red. The market sentiment was hit adversely by Reserve Bank of India (RBI) governor Raghuram Rajan's comments on Thursday, 23 January 2014, that inflation is a destructive disease which is forcing the central bank to keep interest rates high. Weakness in Asian stocks and overnight losses for US stocks also hit sentiment on the domestic bourses adversely. The barometer index, the S&P BSE Sensex, was down 187.53 points or 0.88%, off 147.53 points from the day's high and up 44.58 points from the day's low. The BSE Small-Cap and Mid-Cap indices were off more than 1% each.
Reliance Power declined in volatile trade amid massive volume. Index heavyweight and cigarette maker ITC slipped in volatile trade on high volume. Index heavyweight Reliance Industries (RIL) rose in volatile trade. Among side counters, Page Industries scaled record high.
A bout of volatility was witnessed as key benchmark indices trimmed losses after a weak start triggered by weak Asian stocks. The Sensex languished in negative zone in morning trade. The Sensex extended losses and hit fresh intraday low in mid-morning trade. Volatility continued as key benchmark indices weakened once again after trimming intraday losses in early afternoon trade. Weakness persisted on the bourses in afternoon trade.
At 13:18 IST, the S&P BSE Sensex was down 187.53 points or 0.88% to 21,186.13. The index dropped 232.11 points at the day's low of 21,141.55 in mid-morning trade, its lowest level since 20 January 2014. The index declined 40 points at the day's high of 21,333.66 in early trade.
The CNX Nifty was down 63 points or 0.99% to 6,282.65. The index hit a low of 6,269.15 in intraday trade, its lowest level since 20 January 2014. The index hit a high of 6,331.45 in intraday trade.
The BSE Mid-Cap index was off 1.3%. The BSE Small-Cap index was off 1.24%. Both these indices underperformed the Sensex.
The market breadth, indicating the overall health of the market, was weak. On BSE, 1,693 shares fell and 746 shares rose. A total of 115 shares were unchanged.
The total turnover on BSE amounted to Rs 1995 crore by 13:20 IST.
Among the 30-share Sensex pack, 25 stocks fell and only five of them gained. Sesa Sterlite (down 3.5%), Tata Motors (down 3.23%) and Tata Steel (down 2.99%) edged lower from the Sensex pack.
Wipro (up 0.86%), TCS (up 0.71%) and Coal India (up 0.15%) edged higher from the Sensex pack.
Reliance Power lost 1.69% to Rs 66.80 in volatile trade amid massive volume. The stock hit a high of Rs 68.75 and low of Rs 66.60 so far during the day. On BSE, so far 9.60 crore shares were traded in the counter as against average daily volume of 15.30 lakh shares in the past one quarter.
Index heavyweight and cigarette maker ITC fell 0.96% to Rs 325.80 in volatile trade amid high volume. The stock hit high of Rs 330.10 and low of Rs 323.80 so far during the day. On BSE, so far 45.55 lakh shares were traded in the counter as against average daily volume of 4.64 lakh shares in the past one quarter.
FMCG stocks dropped. Britannia Industries (down 0.73%), Colgate-Palmolive (India) (down 0.67%), Godrej Consumer Products (down 2.32%), Hindustan Unilever (down 0.54%), Marico (down 1.94%), Nestle India (down 0.19%) and Tata Global Beverages (down 2.36%) declined. Dabur India rose 1.79%.
Page Industries gained 3.82% to Rs 5,827 after striking a record high of Rs 5,961.45 in intraday trade.
Index heavyweight Reliance Industries (RIL) rose 0.54% to Rs 870.75 in volatile trade. The stock hit a high of Rs 871.50 and low of Rs 862.35 so far during the day. The company's net profit rose 0.2% to Rs 5511 crore on 10.5% growth in revenue to Rs 106383 crore in Q3 December 2013 over Q3 December 2012. The Q3 result was announced on 17 January 2014.
Telecom stocks were in red. Idea Cellular (down 1.94%), Tata Teleservices (Maharashtra) (down 1.33%) and Reliance Communications (down 3.36%) declined. Bharti Airtel declined 1.16%.
Bharti Infratel (up 3.63%), Mahindra & Mahindra Financial Services (up 2.77%), Amara Raja Batteries (up 1.58%), Muthoot Finance (up 1.3%) and Coromandel International (up 1.03%) edged higher from BSE's 'A' group.
Canara Bank (down 5.67%), Financial Technologies (India) (down 5%), United Breweries (down 4.58%), Gitanjali Gems (down 4.4%) and Bank of India (down 4.19%) were among the major losers from BSE's 'A' group.
In the foreign exchange market, the rupee edged lower against the dollar on global risk off sentiment. The partially convertible rupee was hovering at 62.13, compared with its close of 61.9275/9375 on Thursday, 23 January 2014.
Bond prices dropped after Reserve Bank of India (RBI) governor Raghuram Rajan on Thursday, 23 January 2014, called inflation a "destructive disease" that was forcing the central bank to keep interest rates high, according to reports. "Industrialists complain about high interest rates but we don't have a choice but to keep interest at a high rate because inflation is high at 8%", Rajan said. The strong warning against inflation comes ahead of the central bank's policy review early next week. The yield on 10-year benchmark federal paper, 8.83% GS 2023, was hovering at 8.704%, higher than its close of 8.6653% on Thursday, 23 January 2014. Bond yield and bond prices move in opposite direction.
The Reserve Bank of India's Third Quarter Review of Monetary Policy for 2013-14 is scheduled on 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.
Asian stocks edged lower on Friday, 24 January 2014, amid concern earnings growth will miss estimates on signs of weakness in China's economy. Key benchmark indices in South Korea, Singapore, Indonesia, and Hong Kong were down 0.36% to 1.01%. Taiwan's Taiwan Weighted rose 0.04% in choppy trade.
Japanese stocks slumped after the yen strengthened against the dollar yesterday by the most since Sept. 18. The Nikkei 225 average lost 1.94%.
China's Shanghai Composite rose 0.6%. A preliminary reading of HSBC's January China manufacturing Purchase Manufacturing Index fell to 49.6, below the 50 boundary between expansion and contraction, and down from 50.5 in the final result for December. It was the first contraction for the sector in six months, according to the HSBC data which was released on Thursday, 23 January 2014.
China's central bank on 21 January 2014 announced that it is injecting more liquidity into the system ahead of the Lunar New Year holiday.
Funds investing in emerging markets had outflows of $2.4 billion in the week ended 22 January 2014, according to a report by Citigroup Inc., citing data from EPFR Global.
Trading in US index futures indicated that the Dow could drop 5 points at the opening bell on Friday, 24 January 2014. US stocks closed sharply lower on Thursday as weak economic data from China prompted investors to sell resource stocks and emerging-markets assets and seek safety in bonds, gold, and high-dividend paying sectors.
Among economic data, an early gauge of US manufacturing dipped in January from the prior month, but some of the slowdown was due to cold weather, Markit reported Thursday. The US flash purchasing managers index slipped to 53.7 in January, down from December's level of 55, which was an 11-month high. This is the slowest improvement in conditions since October. US initial jobless claims rose slightly to 326,000 last week. The leading economic index rose 0.1% in December, marking its sixth gain in a row, the nonprofit Conference Board said Thursday. In the housing sector, sales of existing homes rose 1% in December to a 4.98 million annual rate, while the median sale price climbed 9.9% to $198,000.
The Federal Open Market Committee (FOMC) holds a two-day monetary policy meeting on 28 and 29 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.
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