Key benchmark indices edged lower in choppy trade as weakness in European stocks hit sentiment on the domestic bourses adversely. The barometer index, the S&P BSE Sensex, was provisionally down 187.16 points or 0.73%, off close to 340 points from the day's high and up about 30 points from the day's low. The BSE Mid-Cap index was off more than 1%. The market breadth indicating the overall health of the market turned positive from negative in late trade.
Indian stocks snapped four-day winning streak today, 11 June 2014.
Metal and mining stocks declined. Realty stocks tumbled.
Key benchmark indices edged higher in morning trade. A sudden slide was witnessed after the barometer index, the S&P BSE Sensex, and the 50-unit CNX Nifty, both, hit record high in mid-morning trade. Key benchmark indices slipped into the red in early afternoon trade. Volatility ruled the roost in afternoon trade as fresh selling derailed an intraday recovery on the bourses triggered data showing that India's merchandise exports jumped 12.4% in May 2014. Volatility continued as key benchmark indices weakened once again after trimming losses in late trade.
As per provisional figures, the S&P BSE Sensex was down 187.16 points or 0.73% to 25,396.53. The index fell 218.04 points at the day's low of 25,365.65 in mid-afternoon trade. The index jumped 152.18 points at the day's high of 25,735.87 in mid-morning trade, a lifetime high for the index.
The CNX Nifty was down 54.05 points or 0.71% to 7,602.35, as per provisional figures. The index hit a low of 7,589.05 in intraday trade. The index hit a high of 7,700.05 in intraday trade, a lifetime high for the index.
The BSE Mid-Cap index was off 92.96 points or 1.01% at 9,118.89. The BSE Small-Cap index was off 67.41 points or 0.67% at 9,950.03. Both these indices underperformed the Sensex.
The total turnover on BSE amounted to Rs 4704 crore, higher than Rs 4696.17 crore on Tuesday, 10 June 2014.
The market breadth indicating the overall health of the market turned positive from negative in late trade. On BSE, 1,618 shares rose and 1,517 shares fell. A total of 69 shares were unchanged. Earlier, the market breadth had turned negative from positive in mid-afternoon trade.
Tata Power Company (down 5.51%), Coal India (down 3.99%) and Bharat Heavy Electricals (Bhel) (down 3.83%) edged lower from the Sensex pack.
Metal and mining stocks declined. Hindustan Zinc (down 3.45% to Rs 170.50), NMDC (down 4.06% to Rs 182.15), Hindalco Industries (down 4.48% to Rs 162.10), Sesa Sterlite (down 3.09% to Rs 291.20), Steel Authority of India (Sail) (down 4.36% to Rs 103.10), Jindal Steel & Power (down 3.45% to Rs 325), Tata Steel (down 2.24% to Rs 546.30), National Aluminium Company (down 0.71% to Rs 55.60), and Hindustan Copper (down 2.7% to Rs 117), edged lower.
JSW Steel dropped 1.94% to Rs 1,283.35. The company clarified during market hours with respect to the news articles in the media titled "JSW Steel to buy Welspun Maxsteel for Rs 1100 crore", that the company doesn't offer any comments on market rumours and speculation. However, as a long term strategy, the company will like to expand both organically by means of brownfield and greenfield expansions and inorganically by acquiring some existing assets. In that perspective, the company keeps scanning suitable opportunities, which have a strategic fit, JSW Steel said.
Realty stocks reversed intraday gains. Housing Development & Infrastructure (HDIL) (down 8.43% to Rs 100.45), DLF (down 5.28% to Rs 220.85), and Anant Raj (down 1.61% to Rs 79.50) declined. Sobha Developers rose 0.89% to Rs 530.
Unitech dropped 7.11% to Rs 33.95. The stock hit high of Rs 37.90 and low of Rs 33.25. With reference to an announcement made by Unitech Corporate Parks PLC to sell its entire interest in the portfolio of 6 IT SEZ/Parks in India, Unitech announced during market hours today, 11 June 2014, that the interest of two of the affiliates of Unitech in 4 of these 6 IT SEZ/Parks stands transferred to an independent third party. These 4 SEZs are the most mature in terms of their development status, Unitech said. As part of this transaction, certain affiliates of Unitech will continue to manage and develop these assets to ensure that there is no impact on tenants and other stakeholders, Unitech said.
In the foreign exchange market, the rupee edged higher against the dollar. The partially convertible rupee was hovering at 59.27, compared with its close of 59.29/30 on Tuesday, 10 June 2014.
India's merchandise exports jumped 12.4% to $28 billion in May 2014 over May 2013, data released by the government today, 11 June 2014, showed. Imports declined 11.41% to $39.23 billion in May 2014 over May 2013. Oil imports rose 2.5% at $14.46 billion in May 2014 over May 2013. Non-oil imports dropped 17.9% at $24.77 billion in May 2014 over May 2013.
The trade deficit declined to $11.23 billion in May 2014, from $19.37 billion in May 2013. Trade deficit for the first two months of this financial year declined to $21.32 billion, from $37.04 billion during the corresponding period in the previous year.
Industrial production is expected to register a growth of 1.7% in April 2014, as per the median estimates of a poll of economists carried out by Capital Market. The government is due to release industrial production data for April 2014 after trading hours tomorrow, 12 June 2014. Industrial production shrank for a second straight month in March 2014. Industrial production declined 0.5% in March 2014, compared with a contraction of 1.8% in February 2014.
The rate of inflation based on the combined consumer price index (CPI) for rural and urban India is seen easing at 8.4% in May 2014, from 8.59% in April 2014, as per the median estimates of a poll of economists carried out by Capital Market. The government is due to release CPI inflation for May 2014 after trading hours tomorrow, 12 June 2014. CPI inflation accelerated to 8.59% (provisional) in April 2014, from 8.31% (final) in March 2014. Core CPI which excludes food and energy prices eased to 7.8% in April 2014, from 7.81% in March 2014.
Finance Minister Arun Jaitley said on Tuesday, 10 June 2014, that the growth of the country has been below 5% in the recent years. He said that economic growth cannot be compromised at any cost. The Finance Minister said that the government is committed to bring the economy back on the track. He said that priority of the government would be to restore the economic growth, curb inflation, follow the path of fiscal consolidation and to create an environment for higher employability. The Finance Minister was making the opening remarks during his Pre-Budget consultation with economists.
Major suggestions from economists included doing away with retrospective tax amendments, removal of all kind of cess and surcharges and instead increase rate of tax if so required, removal of dividend distribution tax and introduction of inheritance tax above certain threshold limit as in case of many other capitalist countries.
The next major trigger for the market is the Union Budget for 2014-15. Jaitley is expected to table Union Budget for 2014-15 in Lok Sabha by mid-July 2014. An interim budget was presented by P. Chidambaram in February this year. Essentially, in the nature of a vote on account, the interim budget was intended to get Parliament approval for expenditure to be incurred during the first few months of fiscal year 2014-15 due to Lok Sabha elections.
European stocks fell from multiyear highs on Wednesday, 11 June 2014, after the World Bank cut its global growth forecast for 2014. Key benchmark indices in UK, Germany and France fell by 0.59% to 0.79%.
UK unemployment fell to the lowest level in more than five years as the strengthening economic recovery boosted payrolls by a record. The jobless rate dropped to 6.6% in the three months through April from 6.8% in the first quarter, the Office for National Statistics said in London today. While employment rose 345,000, the biggest increase since records began in 1971, the data also showed wage growth slowed.
Asian stocks edged higher in choppy trade on Wednesday, 11 June 2014. Key benchmark indices in China, Indonesia, Japan, Taiwan, and South Korea were up 0.08% to 0.52%. Key benchmark indices in Singapore and Hong Kong were off 0.25% each.
China will quicken interest rate liberalisation and preparations for setting up a deposit insurance system in 2014, the central bank said on Wednesday. The People's Bank of China (PBOC) reiterated elements from its 2013 annual report stating it would keep its monetary stance prudent, while still making pre-emptive moves to fine-tune policy.
Trading in US index futures indicated that the Dow could fall 40 points at the opening bell on Wednesday, 11 June 2014. Most US stocks managed small gains on Tuesday, with the Dow Jones Industrial Average closing at an all-time high.
Data showed US wholesale inventories increased 1.1% in April, more than the estimates. A separate report showed job openings rose to 4.5 million in April from 4.17 million in March.
The World Bank cut its global growth forecast amid weaker outlooks for the US, Russia and China, while calling on emerging markets to strengthen their economies before the Federal Reserve raises interest rates. The Washington-based lender predicts the world economy will expand 2.8% this year, compared with a January projection of 3.2%. The US forecast was reduced to 2.1% from 2.8% while outlooks for Brazil, Russia, India and China were also lowered. The 2015 estimate for world economic growth was unchanged at 3.4%.
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