Key benchmark indices edged lower on the first trading session of 2014 after the latest data raised concerns about the government's fiscal deficit and after another data showed a muted growth in the core sector in November 2013. The barometer index, the S&P BSE Sensex, was provisionally down 21.25 points or 0.1%, off close to 95 points from the day's high and up about 15 points from the day's low. The Sensex alternately swung between positive and negative zone during the course of the trading session.
Shares of a number of small-cap companies surged. The market breadth, indicating the overall health of the market, was strong. The BSE Small-Cap index and the BSE Mid-Cap indices, both, rose.
Realty stocks edged higher on renewed buying. Telecom stocks also rose. IT stocks edged lower. Shares of private sector banks declined. Shares of PSU banks rose.
As per provisional figures, the S&P BSE Sensex was down 21.25 points or 0.1% to 21,149.43. The index fell 36.86 points at the day's low of 21,133.82 in late trade. The index rose 73.67 points at the day's high of 21,244.35 in early trade, its highest level since 30 December 2013.
The CNX Nifty was up 0.35 points or 0.01% to 6,304.35, as per provisional figures. The index hit a high of 6,327.20 in intraday trade, its highest level since 30 December 2013. The index hit a low of 6,298.25 in intraday trade.
The BSE Small-Cap index rose 1.5% and the BSE Mid-Cap index gained 0.47%. Both these indices outperformed the Sensex.
The total turnover on BSE amounted to Rs 1433 crore, lower than Rs 1658.21 crore on Tuesday, 31 December 2013.
The market breadth, indicating the overall health of the market, was strong. On BSE, 1,600 shares gained and 896 shares fell. A total of 133 shares were unchanged.
Among the 30-share Sensex pack, 15 stocks gained and rest of them declined. Bhel (down 0.96%), Tata Motors (down 0.56%) and Tata Power Company (down 0.99%) declined.
IT stocks edged lower. TCS fell 0.87%.
Wipro declined 1.44% to Rs 551. The stock reversed direction after hitting 52-week high of Rs 562.10 at the onset of the trading session.
Infosys slipped 0.62% to Rs 3,464. The stock had hit record high of Rs 3,575 in intraday trade on 30 December 2013.
HCL Technologies fell 0.44% to Rs 1,257.50. The stock reversed direction after hitting record high of Rs 1,270.10 at the onset of the trading session.
Tech Mahindra fell 0.7% to Rs 1,825.10. The stock had hit 52-week high of Rs 1,875 in intraday trade on 30 December 2013.
Shares of private sector banks mostly declined. HDFC Bank (down 0.12%), and AXIS Bank (down 0.58%) declined. ICICI Bank rose 0.52%.
Shares of PSU banks rose. Bank of India (up 3.05%), Bank of Baroda (up 2.33%), Union Bank of India (up 1.15%), State Bank of India (SBI) (up 0.2%) and Punjab National Bank (up 1.67%) gained.
Canara Bank rose 1.28%. The state-run bank said before market hours that it has allotted 1.82 crore shares on 31 December 2013 to Government of India on preferential basis.
Lakshmi Vilas Bank rose 4.41% after the bank said its board will meet on 3 January 2014 to consider a rights issue of shares. The company made the announcement on 31 December 2013.
Realty stocks gained. DLF (up 2.04%), D B Realty (up 16.89%), HDIL (up 3.833%) and Unitech (up 2.94%) rose. Top lenders announced reduction in home loan rates for new borrowers last month. Lower interest rates may help perk up demand for properties. Purchases of both residential and commercial property are largely driven by finance.
Index heavyweight Reliance Industries fell 0.68% to Rs 888.70. The stock hit a high of Rs 898 and low of Rs 887.20.
Telecom stocks rallied. MTNL (up 3.84%), Tata Teleservices (Maharashtra) (up 6.34%), Reliance Communications (up 6.55%), Idea Cellular (up 0.75%) and Bharti Airtel (up 2.16%) gained.
In the foreign exchange market, the rupee edged lower against the dollar on the first trading session of the New Year. The partially convertible rupee was hovering at 61.91, compared with its close of 61.80/81 on Tuesday, 31 December 2013.
On the macro front, the eight core industries with a combined weight of 37.90% in the Index of Industrial Production (IIP) has shown an increase of 1.7% in November 2013. During April-November 2013, the eight-core sector has shown growth of 2.5% against 6.7% growth registered in April-November 2012.
The government's fiscal deficit touched Rs 5.1 lakh crore during April-November 2013, or 93.9% of the full-year target, government data showed on Tuesday, 31 December 2013, raising concerns that India may overshoot its ambitious target of containing fiscal deficit at 4.8% of GDP this year. Net tax receipts touched Rs 3.96 lakh crore in the first eight months of the current fiscal year to March 2014, while total expenditure was Rs 10.21 lakh crore.
In the annual budget presented in February, Finance Minister P. Chidambaram had committed to narrow the fiscal deficit to 4.8% of gross domestic product (GDP) this fiscal year from 4.9% a year ago.
The next major trigger for the market is Q3 December 2013 corporate earnings. The Q3 earnings season will begin around mid-January 2014 and continue till mid-February 2014. 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 Reserve Bank of India's Third Quarter Review of Monetary Policy for 2013-14 is scheduled on 28 January 2014.
European and Asian markets were closed today, 1 January 2014, for New Year Holidays.
A Chinese manufacturing index slipped to a four-month low in December, underscoring challenges for President Xi Jinping as he tries to sustain economic momentum while rolling out reforms. The Purchasing Managers' Index was at 51, the statistics bureau and the logistics federation said today, 1 January 2014, in Beijing.
US stocks rose to records on Tuesday, 31 December 2013, with the Standard & Poor's 500 Index posting its biggest annual advance since 1997, as gains in consumer confidence and housing prices bolstered confidence in the world's largest economy. The Conference Board's index of US consumer confidence rose to 78.1 in December from 72 in the prior month while the S&P/Case-Shiller index showed property prices in 20 cities rose in October from a year ago by the most in more than seven years.
The US stock market is closed today, 1 January 2014, for New Year's Day holiday.
The US Federal Reserve said after a two-day monetary policy review on 18 December 2013 that it will cut its monthly bond purchases to $75 billion from $85 billion starting in January 2014 amid an improved outlook for the job market in the world's largest economy. The US central bank is poised to continue winding down its stimulus measures gradually over the next year.
The Federal Open Market Committee (FOMC) holds a two-day monetary policy meeting on 28 and 29 January 2014.
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