Key benchmark indices provisionally settled almost unchanged for the day ahead of commentary about monetary policy from the US Federal Reserve later in the global day. The barometer index, the S&P BSE Sensex, was provisionally up 2.08 points or 0.01%, off close to 60 points from the day's high and up about 50 points from the day's low. The market breadth, indicating the overall health of the market was positive.
Metal and mining stocks edged higher. JSW Steel rose after the company said its crude steel production rose 10% to 9.63 lakh tonnes in February 2014 over February 2013. Shares of IT major TCS dropped after the company's management at a recent analyst meet warned about a seasonal slowdown and said that the overall dollar revenue growth in Q4 March 2014 could be lower than that in Q3 December 2013. Shares of other IT stocks also declined after TCS warned of slower revenue growth in Q4 March 2014.
A bout of volatility was witnessed in early trade as key benchmark indices regained strength after slipping into the red for the brief period after opening higher. Intraday volatility continued as key benchmark indices alternately swung between positive and negative zone in morning trade. Volatility continued as key benchmark indices trimmed gains after hitting fresh intraday high in mid-morning trade. Key benchmark indices alternately swung between positive and negative zone near the flat line in early afternoon trade. Key benchmark indices moved in a narrow range in positive terrain in mid-afternoon trade.
As per provisional figures, the S&P BSE Sensex was up 2.08 points or 0.01% to 21,834.69. The index gained 63.22 points at the day's high of 21,895.83 in mid-morning trade. The index fell 50.60 points at the day's low of 21,782.01 in morning trade, its lowest level since 14 March 2014.
The CNX Nifty was up 6.85 points or 0.11% to 6,523.50, as per provisional figures. The index hit a high of 6,541.20 in intraday trade. The index hit a low of 6,506 in intraday trade.
The BSE Mid-Cap index was up 19.72 points or 0.29% at 6,739.09. The BSE Small-Cap index was up 26.03 points or 0.39% at 6,717.71. Both these indices outperformed the Sensex.
The total turnover on BSE amounted to Rs 2566 crore, lower than Rs 2572.40 crore on Tuesday, 18 March 2014.
The market breadth, indicating the overall health of the market, was positive. On BSE, 1,457 shares rose and 1,343 shares fell. A total of 152 shares were unchanged.
HDFC (up 1.91%), Bharti Airtel (up 1.27%), ITC (up 1.15%) and AXIS Bank (up 1.51%) edged higher from the Sensex pack.
Shares of IT major TCS dropped after the company's management at a recent analyst meet warned about a seasonal slowdown and said that the overall dollar revenue growth in Q4 March 2014 could be lower than that in Q3 December 2013. The stock lost 3.94%.
TCS' Q4 March 2014 revenue growth is likely to be impacted adversely by the seasonal slowness of budgeting quarter. Additionally, Q4 which is seasonally strong quarter for India geography is expected to see decline in India revenues this quarter. TCS has maintained its outlook of better growth in FY 2015 verses FY 2014, implying yet another year of industry leading growth. The India region is the only notably sluggish segment currently for the IT major.
Shares of other IT stocks also declined after TCS warned of slower revenue growth in Q4 March 2014. Tech Mahindra (down 1.03%), and HCL Technologies (down 0.78%) declined. Wipro rose 0.87%.
Infosys declined 2.39%. The company after market hours on Tuesday, 18 March 2014, said it has signed a five-year agreement with Lansforsakringar AB (LFAB) to provide application development and management support for its life and non-life insurance business. The new agreement with Infosys will see LFAB, owned by Lansforsakringar Alliance, a mutual organization of 23 regional insurance companies with a strong local brand, improve the quality of service and time to market for its alliance members at a reduced cost, Infosys said in a statement.
Metal and mining stocks edged higher. Sesa Sterlite (up 2.35%), Hindustan Zinc (up 2.12%), Bhushan Steel (up 0.28%), NMDC (up 1.58%), Jindal Steel & Power (up 2.6%), Hindalco Industries (up 4.27%), Hindustan Copper (up 3.19%), Tata Steel (up 4.48%), and Steel Authority of India (SAIL) (up 1.98%) gained. National Aluminum Company fell 0.72%.
JSW Steel rose 2.6% after the company said its crude steel production rose 10% to 9.63 lakh tonnes in February 2014 over February 2013. Production of flat rolled products rose 12% to 7.99 lakh tonnes in February 2014 over February 2013. Production of long rolled products rose 16% to 1.53 lakh tonnes in February 2014 over February 2013. The figures for the corresponding period in the previous year are on a pro forma basis after giving effect to the scheme of amalgamation and arrangement between JSW Steel, JSW ISPAT Steel and others.
NTPC dropped 1.82%. Delhi's High Court has reportedly agreed to hear a petition by state-run power producer NTPC challenging a recent regulatory ruling on electricity pricing. The Central Electricity Regulatory Commission said last month that it would tighten incentive structures on capacity utilisation and tax treatments for NTPC. The High Court will hear the company's petition at the next hearing on 19 May 2014.
In the foreign exchange market, the rupee edged higher against the dollar as foreign banks sell dollars, likely for FII clients. The partially convertible rupee was hovering at 61.025, compared with its close of 61.19/20 on Tuesday, 18 March 2014.
Global credit rating agency Standard & Poor's Ratings Services today, 19 March 2014, said that Indian companies are improving their credit profile by selling equity and assets, or using free operating cash flows to reduce debt. The quest to improve credit profiles comes after a weak economy and high interest rates have adversely impacted their cash flows, while companies are also refocusing on cutting debt after years of fast expansion. S&P also said that infrastructure companies with high leverage are also considering selling assets or stakes in subsidiaries to cut down on their debt levels.
The Reserve Bank of India will announce the First Bi-monthly Monetary Policy Statement, 2014-15 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.
European stocks edged lower on Wednesday, 19 March 2014, as investors awaited a policy decision from the US Federal Reserve. Key benchmark indices in France and UK were off 0.16% to 0.2%. Germany's DAX rose 0.3%.
Asian stocks edged lower on Wednesday, 19 March 2014, as investors weighed the prospect of further sanctions against Russia and awaited the Federal Reserve's policy statement. Key benchmark indices in Hong Kong, China, Taiwan, Singapore and South Korea were off 0.07% to 0.49%. Key benchmark indices in Indonesia and Japan were up 0.33% to 0.35%.
Japan's trade deficit exceeded estimates in February, underscoring drags on the nation's recovery ahead of a sales-tax increase in April that will weigh on domestic demand. The 800 billion yen ($7.9 billion) shortfall reported by the finance ministry in Tokyo today. Imports expanded 9% from a year earlier, and exports rose 9.8%.
Trading in US index futures indicated that the Dow could advance 11 points at the opening bell on Wednesday, 19 March 2014. US stocks edged higher on Tuesday, 18 March 2014, as housing data bolstered confidence in the economy.
A Commerce Department report showed housing starts were little changed in February after declining less than previously estimated a month earlier, indicating the home-building industry is stabilizing after bad winter weather curbed construction. Permits filed for future projects increased 7.7% to a 1.02 million pace in February, the most since October.
Consumer prices in the US rose slightly in February because of higher food and housing costs, but overall inflation remained quiet, according to the latest government figures.
The Federal Reserve's two-day policy-setting meeting concludes today, 19 March 2014. The central bank is expected to reduce its bond-buying program by another $10 billion and change its 6.5% unemployment threshold to keep its fund rate near zero into 2015. 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.
The US and Europe pledged more sanctions against Russia while Russian President Vladimir Putin, pushing to annex Crimea, said his country didn't intend to further split Ukraine. Russia cemented its claim to Crimea as Putin showed no sign of backing down in the standoff over Ukraine's breakaway Black Sea region, prompting Western leaders to vow further sanctions this week.
Putin on Tuesday, 18 March 2014, signed a treaty to annex Crimea after an overwhelming majority of its citizens on Sunday, 16 March 2014, voted to leave Ukraine. In his prepared remarks, Putin also said he does not want to partition Ukraine.
Leaders of Poland and Estonia, two of the countries on the front line of turmoil in Ukraine, told US Vice President Joe Biden they want a more aggressive stance toward Russia. Biden is on a two-day trip to the region aimed at assuring North Atlantic Treaty Organization allies that the US will support them against any attempt by Russia to encroach on their territory.
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