Volatility continued as key benchmark indices weakened once again after trimming losses after hitting fresh intraday low in mid-afternoon trade. The market breadth indicating the overall health of the market turned negative from positive. Weakness in European stocks weighed on sentiment on the domestic bourses. The barometer index, the S&P BSE Sensex, was down 129.46 points or 0.51%, off close to 280 points from the day's high and up about 90 points from the day's low. The BSE Mid-Cap index was off more than 1%.
Auto stocks edged lower. But, shares of two wheeler makers gained. State Bank of India (SBI) edged higher in volatile trade and shares of its associates surged on reports that SBI is planning to merge its three listed and two unlisted associate banks with itself.
Key benchmark indices edged higher in morning trade. A sudden slide was witnessed after the barometer index, the S&P BSE Sensex, and the 50-unit CNX Nifty, both, hit record high in mid-morning trade. Key benchmark indices slipped into the red in early afternoon trade. Volatility ruled the roost in afternoon trade as fresh selling derailed an intraday recovery on the bourses triggered data showing that India's merchandise exports jumped 12.4% in May 2014. Volatility continued as key benchmark indices weakened once again after trimming losses after hitting fresh intraday low in mid-afternoon trade. .
Foreign portfolio investors (FPIs) bought shares worth a net Rs 682.26 crore on Tuesday, 10 June 2014, as per provisional data from the stock exchanges.
At 14:20 IST, the S&P BSE Sensex was down 129.46 points or 0.51% to 25,454.23. The index fell 218.04 points at the day's low of 25,365.65 in mid-afternoon trade. The index jumped 152.18 points at the day's high of 25,735.87 in mid-morning trade, a lifetime high for the index.
The CNX Nifty was down 44.60 points or 0.58% to 7,611.80. The index hit a low of 7,589.05 in intraday trade. The index hit a high of 7,700.05 in intraday trade, a lifetime high for the index.
The BSE Mid-Cap index was off 99.27 points or 1.08% at 9,112.58. The BSE Small-Cap index was off 80.41 points or 0.8% at 9,937.03. Both these indices underperformed the Sensex.
The market breadth indicating the overall health of the market turned negative from positive in mid-afternoon trade. On BSE, 1,550 shares fell and 1,484 shares rose. A total of 74 shares were unchanged.
Tata Power Company (down 4.04%) , Hindalco Industries (down 3.65%) and Bharat Heavy Electricals (Bhel) (down 3.27%) edged lower from the Sensex pack.
India's largest commercial bank by branch network State Bank of India (SBI) rose 0.8% to Rs 2,686. The stock hit high of Rs 2,731.05 and low of Rs 2,662.25 so far during the day. With regard to a news report regarding merger of associate banks of SBI with the parent bank, SBI today, 11 June 2014, clarified that no such proposal has been formally taken up for approval. While SBI has always had plans to consider merger of the associate banks eventually, a position which has been stated by the bank from time to time since long, the matter had not been under active consideration for quite some time, SBI said. Going forward, SBI may examine the merger options afresh, when considered appropriate, but preparation of a possible roadmap would take a few months, SBI said.
Shares of three listed associate banks of SBI rallied. State Bank of Mysore advanced 12.59% to Rs 607.40 after hitting 52-week high of Rs 647.40 in intraday trade.
State Bank of Travancore surged 7.53% to Rs 648 after hitting 52-week high of Rs 662.90 in intraday trade.
State Bank of Bikaner and Jaipur jumped 7.01% to Rs 611.05 after hitting 52-week high of Rs 660 in intraday trade. State Bank of Bikaner and Jaipur it its own clarification regarding reports of likely merger of SBI associate banks with SBI said that no such negotiations are taking place at the moment.
As at 31 March 2014, SBI owned 75.07% stake in State Bank of Bikaner and Jaipur, 78.91% in State Bank of Travancore and 90% in State Bank of Mysore. State Bank of Hyderabad and State Bank of Patiala are the other two unlisted associates of the SBI.
Shares of Kotak Mahindra Bank edged higher after a foreign brokerage upgraded the stock to buy from hold and increased the price target to Rs 1,080 from earlier Rs 770, after raising the bank's earnings estimates for the year ending 31 March 2015 (FY 2014) and for the year ending 31 March 2016 (FY 2016). The stock was up 3.4% at Rs 928.40. High operating leverage in banking, broking and other businesses of the bank is driving strong earnings for the bank, the brokerage has reportedly said in a note.
Auto stocks edged lower. Tata Motors (down 2.53% to Rs 440.85), Maruti Suzuki India (down 0.6% to Rs 2,452.50), Mahindra & Mahindra (M&M) (down 0.93% to Rs 1,218.65) and Ashok Leyland (down 4.92% to Rs 31.90) edged lower.
Shares of two wheeler makers gained. TVS Motor Company (up 4.99% to Rs 131.85), Bajaj Auto (up 0.08% to Rs 2,152.55), Hero MotoCorp (up 1.36% to Rs 2,698.80) edged higher.
Aksh Optifibre rose 4.94% to Rs 24.45 after the company said that its wholly owned subsidiary has commissioned a manufacturing unit in Jebel Ali Free Zone (JAFZA), Dubai, with installed capacity of 4 lakh km of Fibre Reinforced Plastic (FRP) Rods.
Gulshan Polyols surged 11.57% to Rs 188 after the company said it has successfully commissioned ITC's cigarette paper making plant. The announcement was made after market hours on Tuesday, 10 June 2014. Gulshan Polyols (GPL) said that in competition with various MNC vendors, ITC had awarded GPL to set up an onsite PCC (percipated calcium carbonate) plant for ITC's specialty paper division at Tribeni, West Bengal. This is the third onsite PCC plant set up by the company in India for supply of specialty PCC suitable for paper industry, GPL said in a statement.
In the foreign exchange market, the rupee was unchanged against the dollar. The partially convertible rupee was hovering at 59.29, compared with its close of 59.29/30 on Tuesday, 10 June 2014.
India's merchandise exports jumped 12.4% to $28 billion in May 2014 over May 2013, data released by the government today, 11 June 2014, showed. Imports declined 11.41% to $39.23 billion in May 2014 over May 2013. Oil imports rose 2.5% at $14.46 billion in May 2014 over May 2013. Non-oil imports dropped 17.9% at $24.77 billion in May 2014 over May 2013.
The trade deficit declined to $11.23 billion in May 2014, from $19.37 billion in May 2013. Trade deficit for the first two months of this financial year declined to $21.32 billion, from $37.04 billion during the corresponding period in the previous year.
Finance Minister Arun Jaitley said on Tuesday, 10 June 2014, that the growth of the country has been below 5% in the recent years. He said that economic growth cannot be compromised at any cost. The Finance Minister said that the government is committed to bring the economy back on the track. He said that priority of the government would be to restore the economic growth, curb inflation, follow the path of fiscal consolidation and to create an environment for higher employability. The Finance Minister was making the opening remarks during his Pre-Budget consultation with economists.
Major suggestions from economists included doing away with retrospective tax amendments, removal of all kind of cess and surcharges and instead increase rate of tax if so required, removal of dividend distribution tax and introduction of inheritance tax above certain threshold limit as in case of many other capitalist countries.
The next major trigger for the market is the Union Budget for 2014-15. Jaitley is expected to table Union Budget for 2014-15 in Lok Sabha by mid-July 2014. An interim budget was presented by P. Chidambaram in February this year. Essentially, in the nature of a vote on account, the interim budget was intended to get Parliament approval for expenditure to be incurred during the first few months of fiscal year 2014-15 due to Lok Sabha elections.
The government will unveil industrial production data for April 2014 tomorrow, 12 June 2014. Industrial production shrank for a second straight month in March 2014. Industrial production declined 0.5% in March 2014, compared with a contraction of 1.8% in February 2014.
The government is scheduled to announce data on inflation based on the combined consumer price index (CPI) for rural and urban India for May 2014 tomorrow, 12 June 2014. Inflation based on the CPI accelerated to 8.59% (provisional) in April 2014, from 8.31% (final) in March 2014. Core CPI which excludes food and energy prices eased to 7.8% in April 2014, from 7.81% in March 2014.
European stocks fell from multiyear highs on Wednesday, 11 June 2014, after the World Bank cut its global growth forecast for 2014. Key benchmark indices in UK, Germany and France fell by 0.44% to 0.5%.
Asian stocks edged higher in choppy trade on Wednesday, 11 June 2014. Key benchmark indices in China, Indonesia, Japan, Taiwan, and South Korea were up 0.08% to 0.5%. Key benchmark indices in Singapore and Hong Kong were off 0.25% each.
China will quicken interest rate liberalisation and preparations for setting up a deposit insurance system in 2014, the central bank said on Wednesday. The People's Bank of China (PBOC) reiterated elements from its 2013 annual report stating it would keep its monetary stance prudent, while still making pre-emptive moves to fine-tune policy.
Trading in US index futures indicated that the Dow could fall 22 points at the opening bell on Wednesday, 11 June 2014. Most US stocks managed small gains on Tuesday, with the Dow Jones Industrial Average closing at an all-time high.
Data showed US wholesale inventories increased 1.1% in April, more than the estimates. A separate report showed job openings rose to 4.5 million in April from 4.17 million in March.
The World Bank cut its global growth forecast amid weaker outlooks for the US, Russia and China, while calling on emerging markets to strengthen their economies before the Federal Reserve raises interest rates. The Washington-based lender predicts the world economy will expand 2.8% this year, compared with a January projection of 3.2%. The US forecast was reduced to 2.1% from 2.8% while outlooks for Brazil, Russia, India and China were also lowered. The 2015 estimate for world economic growth was unchanged at 3.4%.
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