Key benchmark indices alternately swung between positive and negative zone near the flat line in mid-morning trade. The barometer index, the S&P BSE Sensex, was currently down 8.42 points or 0.04%, up 51.16 points from the day's low and off 57.17 points from the day's high. The market breadth, indicating the overall health of the market, was positive. In the foreign exchange market, the rupee edged lower against the dollar tracking broad gains in dollar versus major currencies.
Sesa Sterlite extended intraday gain. NTPC also extended intraday gain. ONGC edged higher in choppy trade on rumours that the company will announce a hefty interim dividend. Media stocks gained on renewed buying, with Zee Entertainment Enterprises hitting 52-week high. Shares of gold loan financing companies hit the roof after the Reserve Bank of India (RBI) relaxed norms for non-banking finance companies' (NBFCs) lending against gold jewellery.
Key benchmark indices edged higher amid initial volatility. Volatility continued as the key benchmark indices trimmed losses after reversing initial gains. Key benchmark indices alternately swung between positive and negative zone near the flat line in mid-morning trade.
Foreign institutional investors (FIIs) bought shares worth a net Rs 79.68 crore on Wednesday, 8 January 2014, as per provisional data from the stock exchanges.
At 11:15 IST, the S&P BSE Sensex was down 8.42 points or 0.04% to 20,720.96. The index gained 48.75 points at the day's high of 20,778.13 in early trade. The index fell 59.58 points at the day's low of 20,669.80 in morning trade, its lowest level since 7 January 2014.
The CNX Nifty was down 5.80 points or 0.09% to 6,168.80. The index hit a high of 6,188.05 in intraday trade. The index hit a low of 6,154.10 in intraday trade, its lowest level since 7 January 2014.
The market breadth, indicating the overall health of the market, was positive. On BSE, 1,102 shares gained and 925 shares fell. A total of 144 shares were unchanged.
The total turnover on BSE amounted to Rs 789 crore by 11:15 IST, compared with Rs 526 crore by 10:15 IST.
Among the 30-share Sensex pack, 16 stocks declined and rest of them gained.
Sesa Sterlite surged 4.18% to Rs 199.60, with the stock extending intraday gain. The stock hit a high of Rs 200.60 and low of Rs 191 so far during the day.
NTPC gained 2.2% to Rs 132.40, with the stock extending intraday gain. The stock hit a high of Rs 132.60 and low of Rs 129.95 so far during the day.
ONGC edged higher in choppy trade on rumours that the company will announce a hefty interim dividend. The stock was up 1.49% at Rs 277.30. The stock hit a high of Rs 277.40 and low of Rs 271.25 so far during the day. The market has been abuzz with rumours that the government may force cash rich state-run firms to declare hefty interim dividend to enable the government to meet the fiscal deficit target for the current year.
Media stocks gained on renewed buying. TV18 Broadcast (up 1.01%), Entertainment Network (India) (up 1.13%), Jagran Prakashan (up 2.36%), HT Media (up 1.67%), D B Corp (up 0.34%), Sun TV Network (up 2.41%), NDTV (up 0.62%) edged higher.
Zee Entertainment Enterprises rose 2.02% to Rs 291.10 after hitting 52-week high of Rs 298 in intraday trade.
Shares of gold loan financing companies hit the roof after the Reserve Bank of India (RBI) on Wednesday, 8 January 2014, relaxed norms for non-banking finance companies' (NBFCs) lending against gold jewellery.
Manappuram Finance was locked at 20% upper circuit at Rs 18.15.
Muthoot Finance was locked at 20% upper circuit at Rs 129.10.
The central bank on Wednesday, 8 January 2014, hiked loan-to-value ratio (LTV) to up to 75% for loans against the collateral of gold jewellery from 60% with immediate effect. The central bank further said the value of the jewellery for the purpose of determining the maximum permissible loan amount will be only the intrinsic value of the gold content therein and no other cost elements should be added thereto. The intrinsic value will continue to be arrived as per way suggested by RBI. However, RBI clarified that the need to give a certificate on the purity of gold cannot be dispensed with.
The certified purity shall be applied for determining the maximum permissible loan and the reserve price for auction. The NBFCs can, however, include suitable caveats to protect themselves against disputes on redemption, RBI said.
It is also clarified that the ownership verification need not necessarily be through original receipts for the jewellery pledged but a suitable document may be prepared to explain how the ownership was determined, particularly in each and every case where the gold jewellery pledged by a borrower at any one time or cumulatively on loan outstanding is more than 20 grams. NBFCs shall have an explicit policy in this regard as approved by the board in their overall loan policy, RBI said in a statement.
Jubilant FoodWorks fell 2.55% after the central bank put restrictions on purchases of additional shares of the company by foreign institutional investors (FIIs). The Reserve Bank of India (RBI) on Wednesday, 8 January 2014, notified that the aggregate net purchases of equity shares in Jubilant FoodWorks by foreign institutional investors (FIIs) in primary/secondary markets under portfolio investment scheme (PIS) have reached the trigger limit. Hence, further purchases of equity shares of the company by FIIs would be allowed only after obtaining prior approval of the RBI, the central bank said in a statement.
FII investment cap in Jubilant FoodWorks is 49%. As at 30 September 2013, FIIs held 45.35% stake in Jubilant FoodWorks.
In the foreign exchange market, the rupee edged lower against the dollar tracking broad gains in the dollar versus major currencies. The partially convertible rupee was hovering at 62.17, compared with its close of 62.07/08 on Wednesday, 8 January 2014.
The next major trigger for the stock market is Q3 December 2013 corporate earnings. Investors and analysts will closely watch the management commentary that would accompany the result to see if there is any revision in their future earnings forecast of the company for the current year and/or the next year. The Q3 earnings season begins tomorrow, 10 January 2014, the day when IT major Infosys and private sector bank IndusInd Bank unveil their earnings.
The Reserve Bank of India's Third Quarter Review of Monetary Policy for 2013-14 is scheduled on 28 January 2014.
Asian stocks edged lower on Thursday, 9 January 2014, as better-than-expected US private sector jobs numbers strengthened the case for further tapering of the Federal Reserve's bond-buying program. Key benchmark indices in Hong Kong, Singapore, Taiwan, South Korea and Japan were off 0.07% to 1.42%. Key benchmark indices in China and Indonesia were up 0.05% to 0.3%. Fed's bond-buying program has been a source of liquidity for most Asian and emerging markets over the past few years.
China's consumer-price inflation slowed in December 2013, according to government data out Thursday. China's consumer-price index rose 2.5% in December from a year earlier, the National Bureau of Statistics said in Beijing. That compares with 3% increase in November. The producer-price index fell 1.4% from a year earlier to record its longest series of losses since the Asian financial crisis in 1997.
A member of the Bank of Japan's (BOJ) policy board said the central bank should move quickly to step up its monetary easing if the country's economy or prices diverge from their predicted paths. "I believe that we should take additional easing measures without hesitation to avoid jeopardizing the Bank of Japan's credibility if it becomes clear that economic and price conditions have sharply diverged downward from our baseline scenario," Sayuri Shirai said in the text of speeches released Thursday by the BOJ. Ms. Shirai indicated she had doubts about the likelihood the BOJ will achieve its inflation goal in two years, saying "there may be high uncertainty regarding the duration in which to achieve the target." That is because it could take "some time" before the full impact of the BOJ's current easing program is felt, considering consumer worries about a rapid decline in real disposable income as well as firms' caution over raising sales prices.
She also said the BOJ needs to achieve stable 2% inflation paired with sustainable economic growth, "rather than merely achieving 2% in a specific year and failing to meet the target in subsequent years."
South Korea's central bank left its key interest rate unchanged at 2.5% for an eighth straight month after a monetary policy review today, 9 January 2014.
Trading in US index futures indicated that the Dow could advance 4 points at the opening bell on Thursday, 9 January 2014. US stocks closed mostly lower on Wednesday, 8 January 2014, after minutes from the last Federal Open Market Committee meeting showed that a majority of officials judged the effects of the monthly asset purchases to be diminishing over time. Federal Reserve officials saw diminishing economic benefits from Fed's bond-buying program and voiced concern about future risks to financial stability during their last meeting, when they began to cut the pace of purchases, according to minutes from their last meeting released Wednesday, 8 January 2014. The minutes didn't describe a set schedule for reductions in bond purchases, although a few officials mentioned the need for a more deterministic path. 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.
The Federal Open Market Committee (FOMC) holds a two-day monetary policy meeting on 28 and 29 January 2014. The US central bank is poised to continue winding down its stimulus measures gradually this year.
Automatic Data Processing (ADP) said on Wednesday that private employers created 238,000 jobs in December.
The US government will unveil the influential non-farm payroll report for December 2013 tomorrow, 10 January 2014.
The European Central Bank holds a monetary policy meeting today, 9 January 2014. UK's central bank -- Bank of England -- also undertakes monthly monetary policy review tomorrow, 9 January 2014. The Bank of England and the European Central Bank are both expected to keep monetary policy on hold.
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