Key benchmark indices edged lower to hit fresh intraday low in afternoon trade. The market breadth, indicating the overall health of the market, was negative. The barometer index, the S&P BSE Sensex, was down 88.13 points or 0.42%, off close to 109 points from the day's high and up about 11 points from the day's low. Weakness in Asian stocks weighed on investor sentiment. Metal shares witnessed selling pressure.
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. The Sensex languished in the negative terrain in early afternoon trade. Key benchmark indices edged lower to hit fresh intraday low in afternoon 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 13:15 IST, the S&P BSE Sensex was down 88.13 points or 0.42% to 21,046.08. The index fell 99.11 points at the day's low of 21,035.10 in afternoon trade. The index rose 20.55 points at the day's high of 21,154.76 in morning trade.
The CNX Nifty was down 29.20 points or 0.47% to 6,243.55. The index hit a low of 6,242.35 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, was negative. On BSE, 1,382 shares dropped and 1,060 shares rose. A total of 142 shares were unchanged.
Among the 30-share Sensex pack, 23 stocks fell and rest of them rose. TCS (down 1.62%), Wipro (down 1.51%), NTPC (down 1.17%), Tata Motors (down 1.08%), Hindustan Unilever (down 0.94%), Bajaj Auto (down 0.92%), Tata Power (down 0.7%), Bhel (down 0.58%) and ICICI Bank (down 0.55%), edged lower from the Sensex pack.
M&M (up 0.86%), HDFC (up 0.74%), Cipla (up 0.56%), Dr Reddy's Laboratories (up 0.49%), HDFC Bank (up 0.48%), Larsen & Toubro (up 0.44%), Infosys (up 0.19%), Reliance Industries (up 0.19%) and ITC (up 0.08%), edged higher from the Sensex pack.
Tata Steel declined 2.14% to Rs 377.90. Tata Steel said during market hours on Monday, 13 January 2014, that it registered 1.6% rise in hot metal production to 2.31 million tonnes in Q3 December 2013 over Q2 December 2012. Crude Steel production rose 3.7% to 2.16 million tonnes in Q3 December 2013 over Q2 December 2012. Saleable Steel production was higher by 3.9% to 2.15 million tonnes in Q3 December 2013 over Q2 December 2012. Steel sales rose 9.4% to 2.06 million tonnes in Q3 December 2013 over Q2 December 2012. Flat Product saleable steel production was best ever in Q3 December 2013 at 1.48 million tonnes (previous best was 1.46 million tonnes in Q4 March 2013), Tata Steel said. Shares of Tata Steel rose 0.48% to Rs 386.15 on Monday.
Meanwhile, Tata Steel in its clarification with respect to a news item titled "Tata Steel bags French rail contract" said during market hours that the news report was based on a press release dated 8 January 2014 issued by Tata Steel Europe from United Kingdom and relates to an order placed on them for supply of rails to a French Rail Operator. The press release is mainly addressed to the related trade segment and represents a very small contract as compared to the annual sales turnover in terms of value or volume, Tata Steel said.
Tata Steel said on 8 January 2014 that it has won a two-year contract to supply more than 200,000 tonnes of track to French rail operator SNCF. The contract will see Tata Steel supply the majority of SNCF's rail requirements in lengths of up to 108 metres from its plant in Hayange, Northern France.
Among other metal shares, Jindal Steel & Power (down 1.92%), Bhushan Steel (down 0.69%), NMDC (down 0.6%), Sail (down 0.52%), JSW Steel (down 0.49%), Sesa Sterlite (down 0.46%) and Hindalco Industries (down 0.36%), edged lower.
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 0.15% to 3.08%. China's Shanghai Composite rose 0.86%.
Japan's current-account deficit widened to a record in November 2013 at 592.8 billion yen ($5.75 billion) before seasonal adjustment, data showed today, 14 January 2014.
Trading in US index futures indicated that the Dow could drop 18 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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