Key benchmark indices extended losses and hit fresh intraday low in early afternoon trade. The market breadth indicating the overall health of the market was weak. The barometer index, the S&P BSE Sensex, was down 156.75 points or 0.62%, off close to 330 points from the day's high and up close to 30 points from the day's low. Concerns about euro zone's financial sector weighed on Indian stocks for the second day in a row after a parent of Portugal's No. 2 lender missed a debt payment.
Realty stocks were mixed after Thursday's gains triggered by favourable announcements in Union Budget 2014-15. Diamond jewellery makers declined after the finance minister in Union Budget 2014-15 increased customs duty from NIL to 2.5% on half?cut or broken diamonds and on cut & polished diamonds and colored gemstones from 2% to 2.5%. Footwear stocks were mostly higher after Finance Minister proposed to cut excise duty to 6% from 12% on footwear.
IT major Infosys rose in volatile trade after the company retained its revenue guidance for the year ending 31 March 2015 at the time of announcing Q1 June 2014 results.
At 12:20 IST, the S&P BSE Sensex was down 156.75 points or 0.62% to 25,216.18. The index shed 184.12 points at the day's low of 25,188.63 in early afternoon trade. The index jumped 175.58 points at the day's high of 25,548.33 in morning trade.
The CNX Nifty was down 37.10 points or 0.49% at 7,530.65. The index hit a low of 7,508.75 in intraday trade. The index hit a high of 7,625.85 in intraday trade.
The market breadth indicating the overall health of the market was weak. On BSE, 1,549 shares fell and 922 shares rose. A total of 90 shares were unchanged.
The BSE Mid-Cap index was down 93.40 points or 1.02% at 9,038.78. The BSE Small-Cap index was down 89.38 points or 0.89% at 9,930.59. Both these indices underperformed the Sensex.
HDFC (down 2.69%), Hindalco Industries (down 5.45%) and Bharat Heavy Electricals (Bhel) (down 4.21%) edged lower from the Sensex pack.
IT major Infosys gained 1.14% to Rs 3,333.50 after announcing its Q1 result. The stock was volatile. The stock hit high of Rs 3,429.35 and low of Rs 3,305 so far during the day. The company's consolidated net profit as per International Financial Reporting Standards (IFRS) fell 3.5% to Rs 2886 crore on 0.8% decline in revenue to Rs 12770 crore in Q1 June 2014 over Q4 March 2014. The result was announced before market hours today, 11 July 2014. Infosys said it added 61 clients during the quarter.
Infosys expects its consolidated revenue to grow 7%-9% in dollar terms in the year ending 31 March 2015 (FY 2015). The guidance is unchanged compared to the one the company had given at the time of announcement of Q4 March 2014 results in April this year. The guidance in rupee terms has also been kept unchanged from that given in April as the company has assumed rupee dollar conversion rate of 60 which is exactly the same conversion rate given in April guidance. The company expects its revenue to grow 5.6%-7.6% in rupee terms in FY 2015.
Realty stocks were mixed after Thursday's gains triggered by favourable announcements in Union Budget 2014-15. Housing Development & Infrastructure (HDIL) (up 0.56%), and Sobha Developers (up 1.48%), edged higher. DLF (down 1.68%), Unitech (down 0.36%) and D B Realty (down 0.44%) declined.
Finance Minster Arun Jaitley on Thursday said that the government will provide tax incentives for Real Estate Investment Trusts. The goverment hike the deduction limit on interest on housing loan in respect of self occupied house property from Rs 1.5 lakh to Rs 2 lakh in Union Budget 2014-15.
Jaitley proposed setting up a Mission on Low Cost Affordable Housing to be anchored in the National Housing Bank. A sum of Rs 4000 crore has been earmarked for National Housing Bank with a view to increase the flow of cheaper credit for affordable housing to the urban poor/EWS/LIG segment.
Jaitley said that the Rural Housing Scheme has benefited a large percentage of rural population who have availed credit through Rural Housing Fund (RHF). In the light of the above, enhanced allocations to the tune of Rs 8000 crore has been made for National Housing Bank (NHB) for the year 2014-15 to expand and support Rural Housing in the country.
To encourage development of Smart Cities, requirement of the built up area and capital conditions for foreign direct investment (FDI) is being reduced from 50,000 square metres to 20,000 square metres and from $10 million to $5 million respectively with a three year post completion lock in. To further encourage this, projects which commit at least 30% of the total project cost for low cost affordable housing will be exempted from minimum built up area and capitalization requirements, with the condition of three year lock-in.
Diamond jewellery makers declined after the finance minister in Union Budget 2014-15 increased customs duty from NIL to 2.5% on half?cut or broken diamonds and on cut & polished diamonds and colored gemstones from 2% to 2.5%. Classic Diamonds (India) (down 4.57%), Gitanjali Gems (down 0.79%), Rajesh Exports (down 1.61%) and Winsome Diamonds & Jewellery (down 1.5%) declined.
Footwear stocks were mostly higher after Finance Minister proposed to cut excise duty to 6% from 12% on footwear. Liberty Shoes (up 1.45%) and Relaxo Footwear (up 3.38%) gained. Bata India fell 0.31%.
Finance Minister proposed to cut excise duty to 6% from 12% on footwear of retail price exceeding Rs 500 per pair but not exceeding Rs 1,000 per pair. Footwear of retail price upto Rs 500 per pair will continue to remain exempted.
A bout of initial volatility was witnessed as key benchmark indices regained positive terrain after slipping into the red for a brief period after opening higher. Volatility continued as key benchmark indices once again regained positive terrain after slipping into the negative terrain from positive terrain in morning trade. Volatility continued as key benchmark indices slipped into the red and hit fresh intraday low in mid-morning trade. Key benchmark indices extended losses and hit fresh intraday low in early afternoon trade.
In the foreign exchange market, the rupee edged higher against the dollar. The partially convertible rupee was hovering at 60.18, compared with its close of 60.19/20 on Thursday, 10 July 2014.
Industrial output is seen rising 3.8% in May 2014, higher than 3.4% growth in April, as per the median estimates of a poll of economists carried out by Capital Market. The government will unveil industrial production data for May 2014 today, 11 July 2014.
Finance Minster Arun Jaitley made a number of announcements in Union Budget 2014-15 on Thursday, 10 July 2014, such as a proposal to increase in foreign direct investment in insurance and defence manufacturing, a sharp increase in plan expenditure, measures to boost long term financing for infrastructure by banks and provided clarity on taxation with respect to foreign portfolio investors. But, market expectations that the Finance Minster would scrap the law on retrospective taxation were not met. Government spending on plan expenditure was substantially increased to support growth.
Asian stocks edged lower in choppy trade on Friday, 11 July 2014, amid concern that Europe's debt problems haven't been resolved. Key benchmark indices in Hong Kong, Taiwan, Indonesia, South Korea and Japan fell 0.3% to 1.66%. Key benchmark indices in China and Singapore were up 0.37% to 0.59%.
Trading in US index futures indicated that the Dow could gain 7 points at the opening bell on Friday, 11 July 2014. US stocks fell on Thursday, 10 July 2014, on concerns that trouble at a European bank might spread.
European bonds tumbled on Thursday after a parent of Portugal's No. 2 lender missed a debt payment. Shares of Banco Espirito Santo were suspended yesterday after sliding more than 17%, while its bonds sank to record lows even as Portugal's central bank said it can avoid contagion risks. Espirito Santo International missed payments on commercial paper to a few clients, according to a July 8 statement. The company is the biggest shareholder of Espirito Santo Financial Group (ESFG), which owns 25% of the bank. Trading in ESFG shares and debt was also halted yesterday.
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