A bout of volatility was witnessed as key benchmark indices weakened once again after trimming intraday losses in mid-afternoon trade. The market breadth, indicating the overall health of the market, was weak. Except the BSE IT index, all other sectoral indices on BSE were in the red. The market sentiment was hit adversely by Reserve Bank of India (RBI) governor Raghuram Rajan's comments on Thursday, 23 January 2014, that inflation is a destructive disease which is forcing the central bank to keep interest rates high. Weakness in Asian and European stocks and overnight losses for US stocks also hit sentiment on the domestic bourses adversely. The barometer index, the S&P BSE Sensex, was down 195.23 points or 0.91%, off close to 155 points from the day's high and up about 35 points from the day's low. The BSE Small-Cap and Mid-Cap indices were off more than 1% each.
Most IT stocks edged higher on weak rupee, with Wipro hitting 52-week high.
A bout of volatility was witnessed as key benchmark indices trimmed losses after a weak start triggered by weak Asian stocks. The Sensex languished in negative zone in morning trade. The Sensex extended losses and hit fresh intraday low in mid-morning trade. Volatility continued as key benchmark indices weakened once again after trimming intraday losses in early afternoon trade. Weakness persisted on the bourses in afternoon trade. A bout of volatility was witnessed as key benchmark indices weakened once again after trimming intraday losses in mid-afternoon trade.
At 14:20 IST, the S&P BSE Sensex was down 195.23 points or 0.91% to 21,178.43. The index dropped 232.11 points at the day's low of 21,141.55 in mid-morning trade, its lowest level since 20 January 2014. The index declined 40 points at the day's high of 21,333.66 in early trade.
The CNX Nifty was down 65.50 points or 1.03% to 6,280.15. The index hit a low of 6,269.15 in intraday trade, its lowest level since 20 January 2014. The index hit a high of 6,331.45 in intraday trade.
The BSE Mid-Cap index was off 1.39%. The BSE Small-Cap index was off 1.26%. Both these indices underperformed the Sensex.
The market breadth, indicating the overall health of the market, was weak. On BSE, 1,732 shares fell and 807 shares rose. A total of 129 shares were unchanged.
Among the 30-share Sensex pack, 25 stocks fell and only five of them gained. Sesa Sterlite (down 3.64%), Tata Motors (down 3.16%) and Tata Steel (down 3.2%) edged lower from the Sensex pack.
Most IT stocks edged higher on weak rupee. A weak rupee boosts revenue of IT firms in rupee terms as the sector derives a lion's share of revenue from exports. Tata Consultancy Services (TCS) rose 0.8%. The company early this week the launch of the Digital Software & Solutions Group, a new business unit designed to help customers undergo critical digital transformations through modular, fully integrated, industry-tailored licensed software and solutions.
HCL Technologies gained 0.23%.
Wipro rose 0.92% to Rs 583.60 after hitting 52-week high of Rs 586.65 in intraday trade.
Tech Mahindra fell 0.64%.
Infosys fell on profit booking after recent gains triggered by the company raising its revenue growth guidance for the year ending 31 March 2014 at the time of announcement of Q3 December 2013 earnings on 10 January 2014. Infosys fell 0.22% to Rs 3,784.50. The stock had hit a record high of Rs 3,799 in intraday trade on Thursday, 23 January 2014.
Triveni Turbine fell 4.13% after net profit fell 31.80% to Rs 20.80 crore on 19.53% decline in net sales to Rs 140.90 crore in Q3 December 2013 over Q3 December 2012. The company announced results after market hours on Thursday, 23 January 2014.
Triveni Turbine's (TTL) EBITDA (earnings before interest, taxes, depreciation and amortization) fell 34.90% to Rs 31.90 crore in Q3 December 2013 over Q3 December 2012.
EBITDA margin stood at 22.7% in Q3 December 2013, lower than 28% in Q3 December 2012.
In the foreign exchange market, the rupee edged lower against the dollar on global risk off sentiment. The partially convertible rupee was hovering at 62.22, compared with its close of 61.9275/9375 on Thursday, 23 January 2014.
Bond prices dropped after Reserve Bank of India (RBI) governor Raghuram Rajan on Thursday, 23 January 2014, called inflation a "destructive disease" that was forcing the central bank to keep interest rates high, according to reports. "Industrialists complain about high interest rates but we don't have a choice but to keep interest at a high rate because inflation is high at 8%", Rajan said. The strong warning against inflation comes ahead of the central bank's policy review early next week. The yield on 10-year benchmark federal paper, 8.83% GS 2023, was hovering at 8.7192%, higher than its close of 8.6653% on Thursday, 23 January 2014. Bond yield and bond prices move in opposite direction.
The Reserve Bank of India's Third Quarter Review of Monetary Policy for 2013-14 is scheduled on 28 January 2014. The RBI 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.
European stocks edged lower in choppy trade on Friday, 24 January 2014. Key benchmark indices in France, Germany and UK were off 0.21% to 0.39%.
Fitch Ratings today affirmed Germany's credit rating at AAA with a stable outlook, citing a decline in the debt level of Europe's biggest economy. Germany continues to have the components of a declining public debt path, Fitch said in a statement. The economy is growing, the budget position is relatively favorable and nominal interest rates are low. Standard & Poor's on Jan. 10 affirmed Germany's AAA credit grade and the stable outlook for the rating. Germany had the outlook for its Aaa rating lowered to negative by Moody's Investors Service in July 2012.
Asian stocks edged lower on Friday, 24 January 2014, amid concern earnings growth will miss estimates on signs of weakness in China's economy. Key benchmark indices in South Korea, Singapore, Indonesia, and Hong Kong were down 0.36% to 1.25%. Taiwan's Taiwan Weighted rose 0.04% in choppy trade.
Japanese stocks slumped after the yen strengthened against the dollar yesterday by the most since Sept. 18. The Nikkei 225 average lost 1.94%.
China's Shanghai Composite rose 0.6%. A preliminary reading of HSBC's January China manufacturing Purchase Manufacturing Index fell to 49.6, below the 50 boundary between expansion and contraction, and down from 50.5 in the final result for December. It was the first contraction for the sector in six months, according to the HSBC data which was released on Thursday, 23 January 2014.
China's central bank on 21 January 2014 announced that it is injecting more liquidity into the system ahead of the Lunar New Year holiday.
Funds investing in emerging markets had outflows of $2.4 billion in the week ended 22 January 2014, according to a report by Citigroup Inc., citing data from EPFR Global.
Trading in US index futures indicated that the Dow could drop 53 points at the opening bell on Friday, 24 January 2014. US stocks closed sharply lower on Thursday as weak economic data from China prompted investors to sell resource stocks and emerging-markets assets and seek safety in bonds, gold, and high-dividend paying sectors.
Among economic data, an early gauge of US manufacturing dipped in January from the prior month, but some of the slowdown was due to cold weather, Markit reported Thursday. The US flash purchasing managers index slipped to 53.7 in January, down from December's level of 55, which was an 11-month high. This is the slowest improvement in conditions since October. US initial jobless claims rose slightly to 326,000 last week. The leading economic index rose 0.1% in December, marking its sixth gain in a row, the nonprofit Conference Board said Thursday. In the housing sector, sales of existing homes rose 1% in December to a 4.98 million annual rate, while the median sale price climbed 9.9% to $198,000.
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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