Key benchmark indices extended losses and hit fresh intraday low in mid-morning trade. The market breadth, indicating the overall health of the market, turned negative from positive. The barometer index, the S&P BSE Sensex, was down 56.96 points or 0.27%, off close to 75 points from the day's high and up about 5 points from the day's low. Weakness in Asian stocks weighed on investor sentiment.
Capital goods stocks edged higher. Auto stocks were mixed. Index heavyweight and cigarette maker ITC rose on reports that it has increased Bristol cigarette price. Shares of pharmaceutical major Ranbaxy Laboratories extended Monday's losses triggered by the company's announcement that the US Food and Drug Administration found possible violations at the generic-drug maker's active pharmaceuticals ingredient (API) plant at Toansa, Punjab, India.
A bout of volatility was witnessed as key benchmark indices alternately swung between gains and losses in early trade. Volatility continued as key benchmark indices trimmed losses after hitting fresh intraday low in morning trade. The Sensex extended losses and hit fresh intraday low in mid-morning trade.
Foreign institutional investors (FIIs) bought shares worth a net Rs 413.85 crore on Monday, 13 January 2014, as per provisional data from the stock exchanges.
At 11:20 IST, the S&P BSE Sensex was down 56.96 points or 0.27% to 21,077.25. The index fell 63.90 points at the day's low of 21,070.31 in mid-morning trade. The index rose 20.55 points at the day's high of 21,154.76 in morning trade.
The CNX Nifty was down 15.20 points or 0.24% to 6,257.55. The index hit a low of 6,255.25 in intraday trade. The index hit a high of 6,280.35 in intraday trade.
The market breadth, indicating the overall health of the market, turned negative from positive in mid-morning trade. On BSE, 1039 shares dropped and 1,021 shares rose. A total of 125 shares were unchanged.
Among the 30-share Sensex pack, 17 stocks fell and rest of them rose. ONGC (down 1.37%), Tata Motors (down 1.6%) and Tata Steel (down 1.62%) declined.
Index heavyweight and cigarette maker ITC rose 0.41% on reports that it has increased Bristol cigarette price.
Capital goods stocks edged higher. ABB (up 1.52%), Bhel (up 0.15%), L&T (up 1.46%), and Punj Lloyd (up 0.7%) gained.
Auto stocks were mixed. M&M (up 0.83%), Ashok Leyland (up 2.05%) and Hero MotoCorp (up 0.1%) rose. Bajaj Auto (down 0.79%), Maruti Suzuki India (down 0.27%) and Tata Motors (down 1.56%) declined.
Shares of pharmaceutical major Ranbaxy Laboratories extended Monday's losses triggered by the company's announcement that the US Food and Drug Administration found possible violations at the generic-drug maker's active pharmaceuticals ingredient (API) plant at Toansa, Punjab, India. The stock was off 1.44%. The stock had fallen 5.42% on Monday, 13 January 2014, after the company said it has received the form 483 with certain observations as a result of the recent US FDA inspection at its active pharmaceuticals ingredient (API) plant at Toansa, Punjab, India. An FDA Form 483 is issued when an investigator observes conditions that might constitute a violation of the FDA's rules or standards.
Ranbaxy said that the company is assessing the US FDA observations, and will respond to the US FDA in accordance with the agency's procedure to resolve the concerns at the earliest. Ranbaxy said it continues to improve its systems and processes, and remains fully committed to upholding the highest standards that patients, prescribers, regulators and all other stakeholders expect from the company. The company added that it stays firmly committed to its philosophy of quality and patients first.
The Toansa factory is the fourth Ranbaxy plant to receive negative observations from the US drug regulator; its plants in Paonta Sahib in Himchal Pradesh, Dewas in Madhya Pradesh and Mohali in Punjab had come under the FDA scanner earlier. Imports from the three plants have been stopped by the US regulator.
Gujarat Apollo Industries rose 3.36% after the company said its board of directors will meet on 18 January 2014, to consider a proposal of buyback of equity shares of the company. The announcement was made after market hours on Monday, 13 January 2014.
Gati surged 5.38% to Rs 65.65, after a fund run by an independent investor hiked its stake in the firm on Monday, 13 January 2014. Investments Derive bought 4.68 lakh shares or 0.54% stake in Gati at Rs 61.22 per share in a bulk deal on the NSE on Monday, 13 January 2014.
The Reserve Bank of India (RBI) said on Monday, 13 January 2014, it had eased rules for hedging foreign exchange exposures, allowing greater flexibility for cancelling and rebooking forward contracts. The RBI is now allowing domestically-held forward contracts for all current as well as capital account transactions with a residual maturity of one year or less to be freely cancelled and taken out again, called rebooking. Before the changes domestic exporters could cancel and rebook up to 50% of the contracts booked in a financial year for hedging their contracted export exposures. Importers were allowed to cancel and rebook up to 25% of contracts booked in a financial year. These limits have been dropped. Foreign investors will be allowed to rebook 10% of the value of cancelled contracts, up from nothing previously.
On macro front, the rate of inflation based on the combined combined consumer price index (CPI) of urban and rural India slowed to 9.87% in December 2013, from 11.16% in November 2013, data released by the government after trading hours on Monday, 13 January 2014, showed. The moderation was largely driven by a fall in vegetable prices, which cooled nearly 19% from November on improved supplies. That helped slow down annual food inflation to 12.16% last month from 14.72% in November.
The core CPI inflation excluding the volatile food and fuel prices, edged up to 8.05% in December 2013, from 7.97% in November 2013.
Inflation based on the wholesale price index (WPI) is seen easing up a bit at 7.1% in December 2013, from 7.52% in November 2013, as per the median estimate of a poll of economists carried out by Capital Market. WPI had accelerated to 7.52% in November 2013, from 7% in October 2013. The government will unveil WPI data for December 2013 at 12 noon tomorrow, 15 January 2014.
The Reserve Bank of India's Third Quarter Review of Monetary Policy for 2013-14 is scheduled on 28 January 2014. The Reserve Bank of India 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 fell on Tuesday, 14 January 2014, after Federal Reserve Bank of Atlanta President Dennis Lockhart on Monday, 13 January 2014, said that the US economy is on solid footing and he would support continued cuts to stimulus. Fed's bond-buying program has been a source of liquidity for most Asian and emerging markets in recent years. Key benchmark indices in Hong Kong, Japan, Singapore, South Korea and Taiwan were down 0.13% to 3.02%. China's Shanghai Composite rose 0.33%.
Japan's current-account deficit widened to a record in November as imports climbed, data showed today, 14 January 2014.
Trading in US index futures indicated that the Dow could drop 17 points at the opening bell on Tuesday, 14 January 2014. US stocks sold off sharply Monday, resulting in the worst losses for benchmark indexes in several months, on concerns about the weak December jobs report and comments from a Federal Reserve official about a further reduction in stimulus. In a speech to the Rotary Club of America, Federal Reserve Bank of Atlanta President Dennis Lockhart said he supports "similar tapering steps" as the one taken to reduce bond-market purchases by $10 billion by the Federal Reserve last month, so long as the economy grows at the 2.5% to 3% clip he's forecasting this year. He pointed out that the labor market is not as healthy as a 6.7% unemployment rate suggests. He said continued disinflation could pose risks to economic performance.
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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