Key benchmark indices were trading slightly higher in mid-afternoon trade. The market breadth, indicating the overall health of the market once again turned positive from negative. The barometer index, the BSE Sensex, was up 8.08 points or 0.04%, up about 125 points from the day's low and off 80 points from the day's high.
GlaxoSmithKline Pharmaceuticals extended its recent steep losses. Sun Pharmaceutical Industries fell after the US Food and Drug Administration reportedly said the drug maker was voluntarily recalling 2,528 bottles of its generic version of diabetes drug Glumetza from US based Santarus Inc. Index heavyweight Reliance Industries gained on reports that the company's KG-D6 block partner BP Plc has highlighted recent discoveries in two blocks as "potentially commercial".
Immense volatility was witnessed in initial trade as the two key benchmark indices -- the BSE Sensex and the 50-unit CNX Nifty -- after opening lower surged to hit fresh record high. Key benchmark indices soon slipped into the red once again later. Key benchmark indices traded a tad lower for the day in early afternoon trade. A bout of volatility was witnessed as key benchmark indices cut intraday losses in afternoon trade. The Sensex was trading slightly higher for the day in mid-afternoon trade.
Foreign institutional investors (FIIs) bought shares worth a net Rs 2,577.44 crore on Friday, 7 March 2014, as per provisional data from the stock exchanges.
At 14:25 IST, the S&P BSE Sensex was up 8.08 points or 0.04% to 21,927.87. The index jumped 85.75 points at the day's high of 22,005.54 in early trade, a new record high for the barometer index. The index shed 114.57 points at the day's low of 21,805.22 in early trade.
The CNX Nifty was up 7.20 points or 0.11% to 6,533.85. The index hit a high of 6,548.75 in intraday trade, a new record high. The index hit a low of 6,487.35 in intraday trade.
The BSE Mid-Cap index was up 34.59 points or 0.52% at 6,728.03. The BSE Small-Cap index was up 45.77 points or 0.69% at 6,658.22. Both these indices outperformed the Sensex.
The market breadth, indicating the overall health of the market once again turned positive from negative in mid-afternoon trade. On BSE, 1,371 shares rose and 1,312 shares dropped. A total of 161 shares were unchanged. The market breadth alternately moved between positive and negative zone since afternoon trade.
Among the 30 Sensex shares, 16 declined and the remaining shares rose. Maruti Suzuki India (up 3.61%), Bharat Heavy Electricals (up 3.43%), and M&M (up 3.16%), edged higher from the Sensex pack.
GlaxoSmithKline Pharmaceuticals extended its recent steep losses. The stock was off 4.69% at Rs 2,525. GlaxoSmithKline PLC said late on Sunday, 9 March 2014, that following the voluntary open offer undertaken by its subsidiary, GlaxoSmithKline Pte, it has increased its stake in GlaxoSmithKline Pharmaceuticals, from 50.7% to 75%. GlaxoSmithKline Pte accepted 20.61 million shares from the shareholders of GlaxoSmithKline Pharmaceuticals, representing 24.33% of the total shares outstanding through the open offer, which started on 18 February 2014 and ended on 5 March 2014. The offer of Rs 3,100 per share values the transaction at Rs 6400 crore.
Sun Pharmaceutical Industries fell 1.94% after the US Food and Drug Administration reportedly said the drug maker was voluntarily recalling 2,528 bottles of its generic version of diabetes drug Glumetza from US based Santarus Inc. Sun began recalling the bottles of metformin HCL extended-release tables in the United States on 28 January 2014, after it received a customer complaint that one of the bottles contained tablets of epilepsy drug Gabapentin.
The FDA classified the recall as a "Class II," which signifies a remote chance of severe adverse consequences or death due to the product flaw.
Index heavyweight Reliance Industries gained 2.71% to Rs 892.40. The stock hit high of Rs 902.40 and low of Rs 863 so far during the day. The company's KG-D6 block partner BP Plc has reportedly highlighted recent discoveries in two blocks as "potentially commercial" in its annual report released last week. BP did not provide any indication of the size, but one of the leading foreign brokerage firm sees potential for "the largest" discovery in KG-D6, noting that another partner in the block, Niko Resources, had last year also cited a significant gas recovery.
Meanwhile, Reliance Industries after market hours on Friday, 7 March 2014, said it is planning to shut down one of its four crude distillation units, for Maintenance & Inspection (M&I) activities from 20th March 2014 for about 3.5 weeks. As a normal practice, the opportunity would be utilized to carry out necessary modifications to improve the reliability and performance of the unit. This planned shutdown period will also be utilized for catalyst replacement of VGO and Naphtha hydrotreater, RIL said. The rest of the refinery will continue at normal levels of operations, RIL said.
ONGC rose 3.03%.
Aam Admi Party (AAP) leader and activist lawyer Prashant Bhushan has sought the Supreme Court's urgent intervention to stop the increase in natural gas prices, saying that the new rates would enrich Reliance Industries (RIL) and hurt the people of the country, on whose behalf the state is a trustee of natural resources, as ruled earlier by the top judicial authority. Bhushan, representing NGO Common Cause, said the government's decision should be stayed at least for a few months so that the new regime after the elections, which will bear the consequences of higher gas prices, can look at the matter afresh. Bhushan had earlier filed a petition challenging higher gas rates. It was listed for 4 March 2014 but it could not be taken up.
The NGO said RIL had written to the directorate general of hydrocarbons on 22 May 2009 giving its cost calculations which show that the cost of production is less than $1 per mmbtu. It had also offered natural gas to NTPC and the Anil Ambani group for $2.34 per unit for 17 years. "Evidently, the demand for an increase in gas price was motivated by RIL's greed and not by any considerations," the NGO said. The government and the oil industry have argued that no company would explore India's deep-water regions if they are not allowed market-linked prices. This would only encourage the import of LNG that costs double the new domestic price, they say.
RIL, its partner BP that holds 30% in Reliance-operated blocks, and ONGC have argued that many fields will be unviable at the current price. RIL has argued in its affidavit that since it produces only 15% of the country's gas, it cannot be said to be the major beneficiary of the price increase. RIL says gas output fell because of geological reasons and has initiated arbitration against the government's decision to penalise the company for the fall in output. RIL and BP say that initial estimates of output are not binding commitments and the actual production has turned out to be different in many fields across the world.
In the foreign exchange market, the rupee reversed intraday losses against the dollar. The partially convertible rupee was hovering at 61.04, compared with its close of 61.08/09 on Friday, 7 February 2014.
The Reserve Bank of India next undertakes monetary policy review on 1 April 2014. Citing price pressures, the Reserve Bank of India raised its key lending rates by 25 basis points after Third Quarter Review of Monetary Policy for 2013-14 on 28 January 2014.
The next major trigger for the stock market is the outcome of the upcoming Lok Sabha elections. Lok Sabha elections will be held between 7 April 2014 and 12 May 2014 in nine phases. The counting of votes will be take place on 16 May 2014. The term of the current Lok Sabha expires on June 1 and the new House has to be constituted by May 31. Along with the Lok Sabha election, Andhra Pradesh (AP), including the regions comprising Telangana, Odisha and Sikkim will go to polls to elect new assemblies. AP, Odisha and Sikkim assemblies come to end on June 2, June 7 and May 7 respectively.
With the election code of conduct coming into force, government authorities will not be able to announce any major policy initiatives. However, they can announce routine or unavoidable policy measures after taking the approval of the election commission.
European stocks edged higher on Monday, 10 March 2014, as deal activity offset a report showing that Chinese exports unexpectedly slumped last month.Key benchmark indices in France and UK were up 0.08% to 0.5%. Germany's DAX index was off 0.33%.
Asian stocks edged lower on Monday, 10 March 2014, after reports showed an unexpected slump in Chinese exports and slower growth in Japan than economists had projected. Key benchmark indices in South Korea, Indonesia, China, Hong Kong, Taiwan, Singapore and Japan were down 0.42% to 2.86%.
China's exports unexpectedly tumbled in February, swinging the trade balance into deficit and adding to fears of a slowdown in the world's second-largest economy despite the Lunar New Year holidays being blamed for the slide. The sharp drop in exports follows a series of factory surveys since the start of 2014 that point to weakness in economic activity as demand falters at home and abroad.
Exports in February fell 18.1% from a year earlier, following a 10.6% jump in January, the General Administration of Customs said on Saturday, 8 March 2011. Imports rose 10.1%, yielding a trade deficit of $23 billion ($25.4 billion) for the month versus a surplus of $32 billion in January.
Producer prices slid 2%, the most since July, while the inflation rate was 2% for February, reports at the weekend showed. The National People's Congress, an annual meeting of China's lawmakers, continues this week, with People's Bank of China Governor Zhou Xiaochuan speaking tomorrow, 11 March 2014.
Japan's economy expanded less than estimated in the fourth quarter and the current-account deficit widened to a record in January, highlighting risks to Abenomics as a sales-tax increase looms. Gross domestic product grew an annualized 0.7% from the previous quarter, the Cabinet Office said today, 10 March 2014, in Tokyo. The current-account deficit widened to 1.59 trillion yen ($15.4 billion), a record in data back to 1985, the finance ministry said.
Trading in US index futures indicated that the Dow could drop 21 points at the opening bell on Monday, 10 March 2014. Most US stocks rose on Friday, 7 March 2014, with the Standard & Poor's 500 index closing at a record, as data showing stronger-than-forecast jobs growth overshadowed concern the situation in Ukraine could worsen.
Employers added more workers than projected in February, indicating the US economy is starting to shake off the effects of the severe winter weather that slowed growth at the start of 2014. The 175,000 gain in employment followed a 129,000 increase the prior month that was bigger than initially estimated, Labor Department figures showed in Washington. The jobless rate rose to 6.7% from 6.6% as the number of people joining the workforce swamped the quantity of jobs available. The pickup following the weakest two-month hiring gain in more than a year shows employers remain confident the economic expansion will recover after winter storms slowed consumer spending.
Separately, the US trade deficit rose slightly to $39.1 billion in January from a revised $39 billion in the prior month, the Commerce Department said on Friday, 7 March 2014.
The Federal Open Market Committee (FOMC) next undertakes monetary policy review on 18-19 March 2014. After a monetary policy review, the FOMC on 29 January 2014 announced it will reduce monthly bond purchases by another $10 billion to $65 billion.
Germany's Angela Merkel delivered a rebuke to President Vladimir Putin on Sunday, 9 March 2014, telling him that a planned Moscow-backed referendum on whether Crimea should join Russia was illegal and violated Ukraine's constitution. Putin defended breakaway moves by pro-Russian leaders in Crimea, where Russian forces tightened their grip on the Ukrainian region by seizing another border post.
Russian forces' seizure of the Black Sea peninsula has been bloodless but tensions are mounting following the decision by pro-Russian groups there to make Crimea part of Russia. Putin declared a week ago that Russia had the right to invade Ukraine to protect Russian citizens, and his parliament has voted to change the law to make it easier to annex territory inhabited by Russian speakers.
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