Volatility continued as key benchmark indices trimmed losses in mid-afternoon trade. The barometer index, the S&P BSE Sensex, was currently hovering below the psychological 25,000 level, having alternately moved above and below that level so far during the day. The Sensex was down 48.68 points or 0.19%, up 83.67 points from the day's low and off 120.09 points from the day's high. The market breadth indicating the overall health of the market was weak.
The market sentiment was affected adversely by data showing that foreign portfolio investors (FPIs) were net sellers of Indian stocks on Friday, 11 July 2014. Foreign portfolio investors (FPIs) sold shares worth a net Rs 723.48 crore on Friday, 11 July 2014, as per provisional data from the stock exchanges.
Shares of firms operating in the power sector gained. Shares of power finance companies also edged higher.
At 14:15 IST, the S&P BSE Sensex was down 48.68 points or 0.19% to 24,975.67. The index rose 71.41 points at the day's high of 25,095.76 at the onset of the trading session. The index fell 132.35 points at the day's low of 24,892 in afternoon trade, its lowest level since 23 June 2014.
The CNX Nifty was down 12.65 points or 0.17% to 7,446.95. The index hit a high of 7,471.65 in intraday trade. The index hit a low of 7,422.15 in intraday trade, its lowest level since 5 June 2014.
The market breadth, indicating the overall health of the market, was weak. On BSE, 1,649 shares declined and 1,021 shares rose. A total of 99 shares were unchanged.
The BSE Mid-Cap index was down 7.75 points or 0.09% at 8,867.49, outperforming the Sensex. The BSE Small-Cap index was off 60.87 points or 0.63% at 9,627.24, underperforming the Sensex.
Among the 30-share Sensex pack, 16 stocks declined and rest of them gained.
Infosys (down 3.03%), Sesa Sterlite (down 2.76%) and Wipro (down 2.3%) edged lower from the Sensex pack.
Shares of firms operating in the power sector gained. JSW Energy (up 0.78%), Reliance Infrastructure (up 0.45%), Power Grid Corporation of India (up 2.53%), Reliance Power (up 0.76%), Adani Power (up 1.59%), NHPC (up 1.06%), CESC (up 1.52%) edged higher. NTPC shed 1.04%.
Tata Power Company gained 2.9%. According to the notice sent out by Tata Power Company to its shareholders for company's annual general meeting (AGM) to be held on 13 August 2014, approval has been sought for raising up to Rs 7000 crore through issue of non-convertible debentures (NCDs) on private placement basis.
The S&P BSE Power index rose 1.12% on Thursday, 10 July 2014, after the Finance Minister Arun Jaitley in Union Budget 2014-15 announced a ten-year tax holiday to the power sector undertakings, which begin generation, distribution and transmission of power by 31 March 2017. The index dropped 4.54% on Friday, 11 July 2014.
Further, the Finance Minister has proposed to allocate an initial sum of Rs 100 crore for preparatory work for a new scheme "Ultra-Modern Super Critical Coal Based Thermal Power Technology" to promote cleaner and more efficient thermal power.
The assurance of finance minister in his speech that adequate coal supply will be made available for already completed generation projects and those that would be completed by March 2015 will spring back lot of power projects that are idle or commercially unviable to operate on imported coal.
To further improve rural life, the government will launch the Deen Dayal Upadhyay Gram Jyoti Yojana to augment power supply at a cost of Rs 500 crore.
To promote wind energy, the basic customs duty has been reduced from 10% to 5% on forged steel rings used in the manufacture of bearings of wind operated electricity generators. The finance minister has also withdrwan the SAD of 4% on parts and raw materials required for the manufacture of wind operated generators.
Shares of power finance companies also edged higher. REC gained 2.7% to Rs 339.10. Power Finance Corporation jumped 5.34% to Rs 285.10.
Key benchmark indices reversed direction after a higher opening triggered by gains in Asian stocks. Key benchmark indices reversed intraday fall to regain positive zone in morning trade. Volatility continued on the bourses as the key benchmark indices reversed intraday gain in mid-morning trade. Volatility ruled the roost in early afternoon trade as the key benchmark indices edged lower once again after staging an intraday recovery after the latest data showed easing of inflation based on the wholesale price index (WPI) in June 2014 and upward revision in WPI inflation for April 2014. Key benchmark indices trimmed losses after hiting fresh intraday low in afternoon trade. The Sensex hit its lowest level in three weeks. The 50-unit CNX Nifty hit its lowest level in 5-1/2 weeks. Volatility continued as key benchmark indices trimmed losses in mid-afternoon trade.
Revenue Secretary Shaktikanta Das was quoted by the media as saying on Saturday, 12 July 2014, that the government would shortly take a view on whether tax law General Anti-Avoidance Rules (GAAR) should be implemented from the scheduled date of April 2015. Reports that the government has reiterated that General Anti Avoidance Rules (GAAR) will be applicable from 1 April 2015 spooked the market on Friday, 11 July 2014 -- a day after the presentation of the Union Budget 2014-15 on 10 July 2014. The Sensex lost 1.37% on Friday, 11 July 2014.
There was an expectation that the new government will postpone the implementation of GAAR to a future date. GAAR is a tool to curb tax avoidance. GAAR announced by the previous government had sparked alarm among foreign investors because of provisions that included tightening rules on investments from countries that have double taxation treaties with India.
In the foreign exchange market, the rupee edged lower against the dollar. The partially convertible rupee was hovering at 60.0650, compared with its close of 59.93/94 on Friday, 11 July 2014.
On the macro front, inflation based on the wholesale price index eased to 5.43% in June 2014, from 6.01% in May 2014, data released by the government during trading hours today, 14 July 2014, showed. Core inflation or non-food manufacturing inflation edged up to 3.9% in June 2014, from 3.8% in May 2014. Meanwhile, WPI inflation for April 2014 was revised upwards to 5.55%, from 5.2% reported earlier.
The government is scheduled to announce the data of inflation based on consumer price index (CPI) for the month of June 2014 after trading hours today, 14 July 2014.
Industrial output grew at its strongest pace in 19 months at 4.7% in May 2014, higher than 3.4% growth in April 2014, data released by the government after market hours on Friday, 11 July 2014, showed.
European stocks advanced on Monday, 14 July 2014, as oil dropped as the threat of supply disruptions in the Middle East abated. Key benchmark indices in France, UK and Germany rose 0.66% to 0.82%.
European markets had risen on Friday, 11 July 2014, as investors decided that losses associated with the founding family of Banco Espirito Santo were unlikely to disrupt Portugal's financial system or revive broader worries about the bloc's weaker economies.
Asian markets edged higher on Monday, 14 July 2014, as euro zone banking jitters faded. Key benchmark indices in South Korea, China, Taiwan, Hong Kong and Japan were up 0.26% to 0.96%. Key benchmark indices in Indonesia and Singapore were off 0.07% to 0.19%.
The Bank of Japan concludes a two-day monetary policy meeting tomorrow, 15 July 2014.
Singapore's economy unexpectedly contracted in the second quarter as a tight labor supply and company moves to shift production overseas hurt manufacturing. Gross domestic product fell an annualized 0.8% in the three months through June from the previous quarter, when it expanded a revised 1.6%, the trade ministry said in a statement today, 14 July 2014.
Trading in US index futures indicated that the Dow could rise 60 points at the opening bell on Monday, 14 July 2014. US stocks rose on Friday, 11 July 2014 as a rally in Amazon.com Inc. and EBay Inc. led an intraday rebound from declines spurred by concern over financial stress in Europe.
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