Intraday recovery witnessed in afternoon trade proved short lived, with key benchmark indices weakening once again in mid-afternoon trade. The barometer index, the S&P BSE Sensex, and the 50-unit CNX Nifty, both, hit their lowest level in more than two weeks. The Sensex was down 365.12 points or 1.73%, off 130.59 points from the day's high and up 16.42 points from the day's low. The market breadth indicating the overall health of the market was quite weak with more than three losers for every gainer on BSE. The BSE Mid-Cap and Small-Cap indices were off more than 2% each. Weakness in Asian and European stocks and a steep slide in US stocks on Friday, 24 January 2014, hit sentiment on the domestic bourses adversely.
Capital goods stocks edged lower. Shares of jewellery retailers declined after Finance Minister P. Chidambaram said that the restrictions on gold imports will remain intact at least until the end of this financial year to keep a lid on the country's current-account deficit. Shree Cement fell after weak Q2 result.
Asian and European stocks dropped on Monday, 27 January 2014, as concern that the global economic recovery is faltering spurred investors to sell riskier assets. Emerging-market stocks fell amid concern that slower Chinese growth and reduced Federal Reserve stimulus will spark more capital outflows.
Key benchmark indices slumped in early trade on weak Asian stocks. The Sensex fell below the psychological 21,000 mark. The Sensex and the 50-unit CNX Nifty, both, hit their lowest level in over two weeks. Weakness persisted on the bourses in mid-morning trade. Key benchmark indices extended losses and hit fresh intraday low in early afternoon trade. The Sensex trimmed intraday losses in afternoon trade. Intraday recovery witnessed in afternoon trade proved short lived, with key benchmark indices weakening once again in mid-afternoon trade.
The market sentiment was hit adversely by data showing that foreign funds were net sellers of Indian stocks on Friday, 24 January 2014. Foreign institutional investors (FIIs) sold shares worth a net Rs 230.96 crore on Friday, 24 January 2014, as per provisional data from the stock exchanges.
The market may remain volatile this week as traders roll over positions in the futures & options (F&O) segment from the near month January 2014 series to February 2014 series. The January 2014 F&O contracts expire on Thursday, 30 January 2014.
At 14:20 IST, the S&P BSE Sensex was down 365.12 points or 1.73% to 20,768.44. The index lost 381.54 points at the day's low of 20,752.02 in mid-afternoon trade, its lowest level since 10 January 2014. The index fell 234.53 points at the day's high of 20,899.03 in early trade.
The CNX Nifty was down 111.15 points or 1.77% to 6,155.60. The index hit a low of 6,151.70 in intraday trade, its lowest level since 10 January 2014. The index hit a high of 6,188.55 in intraday trade.
The market breadth indicating the overall health of the market was quite weak with more than three losers for every gainer on BSE. On BSE, 1,853 shares declined and 591 shares gained. A total of 100 shares were unchanged.
The BSE Mid-Cap index was off 145.17 points or 2.25% at 6,310.09. The Small-Cap index was off 136.84 points or 2.12% at 6,307.62. Both these indices underperformed the Sensex.
Capital goods stocks edged lower. ABB (down 2.63%), Bharat Heavy Electricals (Bhel) (down 1.18%), BEML (down 5.02%), Bharat Electronics (down 2.77%), Crompton Greaves (down 3.04%), L&T (down 2.84%), Siemens (down 4.98%) and Thermax (down 0.19%) declined.
Shares of jewellery retailers declined after Finance Minister P. Chidambaram said that the restrictions on gold imports will remain intact at least until the end of this financial year to keep a lid on the country's current-account deficit. Gitanjali Gems (down 2.79%), Tribhovandas Bhimji Zaveri (TBZ) (down 0.73%), Titan Company, (down 1.76%), PC Jeweller (down 4.38%), Rajesh Exports (down 2.69%), Shree Ganesh Jewellery House (down 1.45%) edged lower.
The government raised the import duty on gold to 10% in 2013 from 2% in 2012 to rein in its ballooning current-account deficit. Gold supplies have also dried up because the central bank has mandated that importers prove that they will keep aside 20% of any imported gold for re-export as jewelry. Gold is the country's second-biggest imported commodity after crude oil. "We can revisit the curbs on gold by the end of the year. But let me hasten to add, this will happen only when we get a firm grip on the current-account deficit," Mr. Chidambaram told reporters today, 27 January 2014.
Last week, Congress party chief Sonia Gandhi asked the Ministry of Commerce to consider easing tough restrictions on gold imports, which have triggered a surge in gold prices and smuggling in India. The finance ministry makes all final decisions on taxation issues but takes advice about such issues from the commerce ministry. India's gem and jewelry industry has been lobbying for removing the import barriers as the cost of gold has risen, pushing up costs for making jewelry. Mr. Chidambaram said gold smuggling is estimated at 1-3 tons a month due to the import curbs, but added that the curbs are needed to keep control over the trade deficit.
Shree Cement fell 3.59% after net profit fell 46.89% to Rs 115.49 crore on 7.22% decline in total income to Rs 1328.03 crore in Q2 December 2013 over Q2 December 2012. The result was announced during trading hours today, 27 January 2014.
Jaiprakash Power Ventures (down 10.19%), Dewan Housing Finance Corporation (down 9.18%), IRB Infrastructure Developers (down 9.13%), HDIL (down 8.84%), GMR Infrastructure (down 7.17%), Indiabulls Real Estate (down 6.5%), Torrent Power (down 6.4%), JSW Energy (down 6.16%), Just Dial (down 5.97%), and IDBI Bank (down 5.93%) were among the major losers from the BSE Mid-Cap index.
Dishman Pharmaceuticals and Chemicals (down 15.06%), Astra Microwave Products (down 13.53%), REI Agro (down 9.66%), HeidelbergCement India (down 8.88%), Sintex Industries (down 7.41%), Vaibhav Global (down 6.89%), ABG Shipyard (down 6.59%), Sical Logistics (down 6.72%), IVRCL (down 6.09%) and Delta Corp (down 6.06%) were among the major losers from the BSE Small-Cap index.
In the foreign exchange market, the rupee edged lower against the dollar in choppy trade as equities fell sharply. The partially convertible rupee was hovering at 63.01, compared with its close of 62.66/67 on Friday, 24 January 2014.
India's record high foreign exchange reserves and "strong" fundamentals should reduce concerns about the rupee currency, Economic Affairs Secretary Arvind Mayaram said on Monday, 27 January 2014. "Today, our current account deficit is going to be below $50 billion, foreign exchange reserves are (at an) all-time high, and we believe that we have very strong fundamentals in place," Mayaram told reporters in New Delhi. Mayaram added he did not believe the rupee would tumble and track steep falls in the Argentina peso. "There is no reason why we should believe that if Argentina is in trouble today, that the Indian rupee should follow," he said.
The Ministry of Consumer Affairs, Food & Public Distribution on Friday, 24 January 2014, said that as per data monitored by the Ministry of Consumer Affairs and Food, prices of rice, wheat and sugar during the week -- 16 January 2014 to 23 January 2014 -- remained steady in wholesale markets across the country. The Price Monitoring Cell of the Ministry monitors prices of twenty two essential commodities regularly at 55 wholesale centers. During the period, prices of rice remained steady at all wholesale centers and decreased at one center (Aizwal). Prices of wheat also were steady at all wholesale centers except one centre at Ludhiana. While sugar prices decreased at eight centers and remain steady at rest of the reporting centers, the Ministry of Consumer Affairs and Food said in a statement.
Prices of twenty two essential commodities are regularly monitored by Department of Consumer Affairs for taking suitable action to keep the prices under check. Price data is collected on daily basis from the State Civil Supplies Departments of the respective State Governments.
The Reserve Bank of India announces Third Quarter Review of Monetary Policy for 2013-14 at 11:00 IST tomorrow, 28 January 2014. The RBI kept its main lending rate viz. the repo rate unchanged after its last policy review in December and said at that time that it expected inflation to ease in the following months.
European stocks edged lower on Monday, 27 January 2014, after a rout in emerging-market currencies spurred concern the global economic recovery is faltering. Key benchmark indices in UK and Germany were off 0.09% to 0.85%. In France, the CAC 40 index was up 0.08%.
Asian stocks slumped on Monday, 27 January 2014, as concern that the global economic recovery is faltering spurred investors to sell riskier assets. Key benchmark indices in Taiwan, Hong Kong, China, Singapore, Japan, Indonesia and South Korea were off 1.03% to 2.51%.
Emerging-market stocks fell amid concern that slower Chinese growth and reduced Federal Reserve stimulus will spark more capital outflows. In recent years, emerging markets have been supported by the Fed's policy of easy money, but any cut could pull more money out of these risky markets and hurt growth.
Japan reported a record annual trade deficit for last year as energy shipments and weakness in the yen pumped up the nation's import bill. The shortfall was 11.5 trillion yen ($113 billion), almost double the previous year's 6.9 trillion yen, a finance ministry report showed in Tokyo today, 27 January 2014. Imports rose 25% in December from a year earlier and exports gained 15%, leaving a monthly deficit of 1.3 trillion yen.
South Korea has accepted the North Korea's offer to renew reunions of families separated by the Korean War, a move that may signal thawing tensions between the two nations.
Trading in US index futures indicated that the Dow could drop 8 points at the opening bell today, 27 January 2014. US stocks tumbled on Friday, 24 January 2014, as investors fled equities and emerging-markets currencies on concerns about a contagion effect from China's manufacturing slowdown. The CBOE Volatility Index, known as the Vix, surged 32%, its steepest rise since the April 15 Boston Marathon bombings.
A two-day monetary policy meeting of the Federal Open Market Committee (FOMC) begins tomorrow, 28 January 2014. By a 9-to-1 vote, the Fed on 18 December 2013 decided to trim its asset-purchase program by $10 billion to $75 billion per month starting in January 2014.
Global stocks tumbled the most since June on Friday, 24 January 2014, as a sell-off in emerging-market currencies prompted investors to seek havens in Treasuries, gold and the yen.
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