Key benchmark indices extended losses and hit fresh intraday low in afternoon trade. The barometer index, the S&P BSE Sensex, was down 169.82 points or 0.78%, off close to 110 points from the day's high and up about 21 points from the day's low. The market breadth, indicating the overall health of the market, was weak. Weakness in Asian stocks hit sentiment on the domestic bourses adversely.
IT shares declined. MphasiS edged lower after reporting after weak Q1 results. Infosys edged higher on bargain hunting after Thursday's steep slide.
The market edged lower in early trade on weak Asian stocks. The Sensex languished in negative terrain in morning trade. Key benchmark indices extended losses and hit fresh intraday low in mid-morning trade. The Sensex and the 50-unit CNX Nifty, both, hit one-week low. Key benchmark indices languished in negative terrain in early afternoon trade after the data showed that inflation based on the wholesale price index (WPI) eased to 4.68% in February 2014 from 5.05% in January 2014 and after the government revised upwards WPI inflation for December 2013 to 6.4% from 6.16% reported earlier. Key benchmark indices extended losses and hit fresh intraday low in afternoon trade.
The stock market remains closed on Monday, 17 March 2014, on account of Holi.
Asian stocks edged lower on Friday, 14 March 2014, after at least four investment banks lowered forecasts for China's 2014 economic expansion after reports on Thursday, 13 March 2014, showed factory output rose in January and February from a year earlier by the least since the global financial crisis, while retail sales grew at the slowest rate for the period since 2004.
At 13:15 IST, the S&P BSE Sensex was down 169.82 points or 0.78% to 21,604.79. The index lost 191.23 points at the day's low of 21,583.38 in mid-morning trade, its lowest level since 7 March 2014. The index dropped 60.17 points at the day's high of 21,714.44 in morning trade.
The CNX Nifty was down 52.70 points or 0.81% to 6,440.40. The index hit a low of 6,434.05 in intraday trade, its lowest level since 7 March 2014. The index hit a high of 6,472.95 in intraday trade.
The BSE Mid-Cap index was off 45.08 points or 0.68% at 6,626.46, outperforming the Sensex. The BSE Small-Cap index was off 51.31 points or 0.77% at 6,598.88, outperforming the Sensex..
The market breadth, indicating the overall health of the market, was weak. On BSE, 1,647 shares fell and 857 shares rose. A total of 134 shares were unchanged.
Among the 30 Sensex shares, 22 declined and 8 shares rose. Bharti Airtel (down 3.14%), Axis Bank (down 2.65%), ICICI Bank (down 2.15%), HDFC Bank (down 1.84%), Hindustan Unilever (down 1.56%), M&M (down 1.52%), Sesa Sterlite (down 1.59%) and Larsen & Toubro (down 1.25%), edged lower from the Sensex pack.
Dr Reddy's Laboratories (up 1.89%), GAIL (India) (up 1.04%), Tata Steel (up 0.95%), Cipla (up 0.93%), Sun Pharmaceutical Industries (up 0.56%), Hero MotoCorp (up 0.21%) and Bajaj Auto (up 0.1%), edged higher from the Sensex pack.
IT shares declined. HCL Technologies (down 2.72%), Wipro (down 2.2%), Hexaware Technologies (down 1.53%), CMC (down 0.78%), Oracle Financial Services Software (down 0.76%) and TCS (down 0.51%), edged lower.
MphasiS lost 3.21% after consolidated net profit fell 5.05% to Rs 180.60 crore on 1.88% decline in net sales to Rs 1563.97 crore in Q1 January 2014 over Q4 October 2013. The Q1 result was announced after market hours on Thursday, 13 March 2014.
MphasiS' direct business revenues rose 1% quarter-on-quarter (QoQ) or 2.2% net of rupee appreciation in Q1 January 2014 despite being a seasonally weak quarter. Direct business revenue stood at 63% of revenue in Q1 January 2014 against 48% of revenue in Q1 January 2013. Gross profit rose 3.3% QoQ at Rs 415 crore in Q1 January 2014. EBIT margin was at 15% in Q1 January 2014 as against 15.3% in Q4 October 2013. Cash and cash equivalents increased by Rs 159 crore in Q1 January 2014 to Rs 2647 crore.
The company added 11 new clients in Q1 January 2014 of which 10 were in Direct business.
Commenting on the company's Q1 performance, Ganesh Ayyar, CEO, MphasiS said, "We are building an innovation led, high value, specialized and customer focused organization. We firmly believe IT services in its current state would cease to exist in time to come. To deliver greater business value to our clients, we continue to invest in portfolio specialization thereby resulting in improved margins".
Infosys edged higher on bargain hunting after Thursday's steep slide. The stock was up 0.67%. The scrip had slumped 8.54% in a single trading session to settle at Rs 3,357.50 on Thursday, 13 March 2014. The sell off was triggered by the company's CEO and Managing Director S.D. Shibulal's comments on Wednesday, 12 March 2014, that the company's sales growth for the current fiscal year may be near the lower end of its forecast as some of its clients are tightening spending on technology. Shibulal said that the company's revenue growth in the fiscal year that begins in April may also be slow if business momentum remains weak. Infosys's clients in the retail and manufacturing sectors are facing spending pressure, he said. Many of the factors that have led to the recent slowdown will continue to impact client spending at least in the initial part of fiscal year 2015, Shibulal said.
It may be recalled that Infosys had at the time of the announcement of Q3 December 2013 results on 10 January 2014 raised its revenue growth guidance in both rupee and dollar terms for the year ending 31 March 2014 (FY 2014). At that time, the company forecast 11.5% to 12% growth in revenue in dollar terms for FY 2014. At that time, the company had forecast 24.4% to 24.9% in revenue in rupee terms for FY 2014 based on rupee dollar conversion rate of 61.81 for the rest of the financial year.
Tech Mahindra gained 0.42% after the Reserve Bank of India on Thursday, 13 March 2014, notified that Foreign Institutional Investors (FIIs), through primary market and stock exchanges, can now purchase up to 48% (revised from earlier limit of 45%) of the paid up capital of Tech Mahindra under the Portfolio Investment Scheme (PIS). Tech Mahindra has passed resolutions at the board of directors' level and a special resolution by the shareholders, agreeing for enhancing the limit from 45% to 48% for the purchase of its equity shares and convertible debentures by Foreign Institutional Investors (FIIs).
The Reserve Bank has notified this under FEMA 1999, regarding raising of aggregate ceiling for investments by FIIs in Indian companies under Portfolio Investment Scheme (PIS).
In the foreign exchange market, the rupee edged lower against the dollar on global risk-off sentiment. The partially convertible rupee was hovering at 61.34, compared with its close of 61.17/18 on Thursday, 13 March 2014.
The economy can grow an annual 5.2% in the quarter to end-March on higher farm output growth, the chairman of the Prime Minister's Economic Advisory Council said today, 14 March 2014. C. Rangarajan also said he expects the economic growth to pick up to 5.5% to 6% in the fiscal year that begins on 1 April 2014.
Inflation based on the wholesale price index (WPI) eased to 4.68% in February 2014, from 5.05% in January 2014 and 7.28% during the corresponding month of the previous year, data released by the government today, 14 March 2014, showed. Build up inflation rate in the financial year so far was 5.17% compared to a build up rate of 6.15% in the corresponding period of the previous year. The government revised upwards the rate of WPI inflation for December 2013 to 6.4%, from 6.16% reported on 15 January 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.
Asian stocks edged lower on Friday, 14 March 2014, after at least four investment banks lowered forecasts for China's 2014 economic expansion after reports on Thursday, 13 March 2014, showed factory output rose in January and February from a year earlier by the least since the global financial crisis, while retail sales grew at the slowest rate for the period since 2004. Key benchmark indices in China, Indonesia, South Korea, Taiwan, Hong Kong, Japan and Singapore were off 0.27% to 3.3%.
China's Premier Li Keqiang told reporters on Thursday, 13 March 2014, that the nation's 2014 goal of 7.5% economic growth is flexible and some financial-product defaults may be unavoidable.
Trading in US index futures indicated that the Dow could drop 13 points at the opening bell on Friday, 14 March 2014. US stocks tumbled on Thursday, 13 March 2014, as disappointing China data and ongoing tension in Ukraine overshadowed reports showing improvement in the American economy. The implied volatility on the S&P 500 as measured by the CBOE Vix index, dubbed "Wall Street fear gauge" jumped 12.1% to the highest level since early February.
Global concerns overshadowed better-than-forecast data in the US retail sales rose in February for the first time in three months, as Americans ventured out to shop last month even as colder-than-normal temperatures and severe snowstorms blanketed parts of the US.
The number of Americans filing applications for unemployment benefits unexpectedly fell last week to the lowest level since the end of November, a sign of further improvement in the labor market. Jobless claims dropped by 9,000 to 315,000 in the week ended March 8, a Labor Department report showed in Washington.
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.
The Black Sea region of Crimea votes March 16 on becoming independent or rejoining Russia, with the US and Germany threatening Moscow with sanctions over its support for the secession. Russia launched new military exercises near its border with Ukraine on Thursday, showing no sign of backing down in its plans to annex its neighbour's Crimea region despite a stronger than expected drive for sanctions from the EU and United States.
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