Key benchmark indices moved in a narrow range in positive zone in afternoon trade. The market breadth, indicating the overall health of the market was negative. The barometer index, the S&P BSE Sensex, was up 76.04 points or 0.36%, off close to 60 points from the day's high and up about 75 points from the day's low.
IT stocks were mixed. Infosys reversed direction after scaling a record high in early trade. Tech Mahindra rose after the National Stock Exchange on Thursday, 27 February 2014, announced changes in the constituents of the 50-unit Nifty index whereby Tech Mahindra will replace Jaiprakash Associates and United Spirits will replace Ranbaxy Laboratories in Nifty with effect from 28 March 2014. Realty stocks were also mixed. Among auto component makers, Motherson Sumi Systems scaled record high.
A bout of volatility was witnessed as key benchmark indices trimmed gains after an initial rally. The Sensex moved past the psychological 21,000 mark. The Sensex and the 50-unit CNX Nifty, both, scaled 5-week high. Key benchmark indices extended initial gains in morning trade. Key benchmark indices retained positive zone in early afternoon trade. Key benchmark indices trimmed intraday gains in early afternoon trade. Key benchmark indices moved in a narrow range in positive zone in afternoon trade
Foreign institutional investors (FIIs) bought shares worth a net Rs 511.15 crore on Wednesday, 26 February 2014, as per provisional data from the stock exchanges. The stock market was closed on Thursday, 27 February 2014, on account of Mahashivratri.
At 13:20 IST, the S&P BSE Sensex was up 76.04 points or 0.36% to 21,063.03. The index jumped 133.26 points at the day's high of 21,120.25 in early trade, its highest level since 24 January 2014. The index rose 2.67 points at the day's low of 20,989.66 in early trade.
The CNX Nifty was up 17.90 points or 0.29% to 6,256.70. The index hit a high of 6,274.25 in intraday trade, its highest level since 24 January 2014. The index hit a low of 6,228.10 in intraday trade.
The BSE Mid-Cap index was up 19.91 points or 0.31% at 6,488.94. The BSE Small-Cap index was up 5.82 points or 0.09% at 6,442.09. Both these indices underperformed the Sensex.
The market breadth, indicating the overall health of the market was negative. On BSE, 1,250 shares dropped and 1,196 shares rose. A total of 156 shares were unchanged.
Hindalco Industries (up 4.42%), Tata Motors (up 3.6%), Dr. Reddy's Laboratories (up 3.58%), AXIS Bank (up 2.19%), Bhel (up 2.22%), ONGC (up 2.41%) and Sun Pharmaceutical Industries (up 2.21%) edged higher from the Sensex pack.
Motherson Sumi Systems rose 3.95% to Rs 232.90 after hitting record high of Rs 234.80 in intraday trade.
IT stocks were mixed. HCL Technologies fell 0.83%. Wipro dropped 0.9%.
Infosys shed 0.23% to Rs 3795, with the stock reversing direction after scaling a record high of Rs 3,832.10 in initial trade. Infosys BPO, a subsidiary of Infosys, on Thursday, 27 February 2014, unveiled its Process Progression Model (PPM), a holistic and innovative framework to accelerate optimization and end-to-end transformation of business processes. PPM brings together multiple transformation levers and competencies developed by Infosys, to help clients progress their business processes in a phased way and maximize efficiency and effectiveness of each process, Infosys said. The new framework maps the progress of each process against pre-defined client-centric benchmarks to deliver enhanced value and improved business outcomes for clients, Infosys said.
Among the gainers from the IT pack, TCS rose 3.46%.
Tech Mahindra gained 3.2%. Tech Mahindra replaces Jaiprakash Associates in the 50-unit CNX Nifty index effective from 28 March 2014 as per the changes announced on Thursday, 27 February 2014, by India Index Services & Products, which maintains the index.
Meanwhile, Tech Mahindra GmbH, Dusseldorf, a wholly-owned German subsidiary of Tech Mahindra, on Thursday, 27 February 2014, announced that it has signed an agreement with BASF Business Services Holding GmbH to acquire its business with third party customers. This includes the 100%-owned subsidiary BASF Business Services Consult GmbH, based in Hamburg. BASF Business Services Holding GmbH will in future focus on providing information services, supply chain operations and business process management for BASF Group.
Legal closing of the transaction is expected to happen in the first quarter of FY 2015. All 60 employees of BASF Business Services Consult GmbH will be transitioned to Tech Mahindra as part of this transaction, Tech Mahindra said.
BASF Business Services Holding GmbH (earlier called as BASF IT Services Holding GmbH) is an indirect wholly owned group company of BASF SE. The innovative and competitive service portfolio ranges from consulting, development and operation of IT systems to the design and optimization of business processes throughout the value chain.
Vikram Nair, Head - Europe (Enterprise), Tech Mahindra, said, This is a strategic move and a testimony of our commitment to the region. It will bring us closer to our customers and will help us to deliver holistic solutions. I'm confident that the acquisition will spur rapid growth in this region.
This acquisition will see the creation of a strong ICT player in the region with strengths in Application and Infrastructure Business Services. The transaction will be carried out by Tech Mahindra GmbH, a wholly owned subsidiary of Tech Mahindra.
Realty stocks were mixed. D B Realty (up 0.31%), HDIL (up 0.73%), Sobha Developers (up 0.5%) gained. DLF (down 0.57%) and Unitech (down 3.4%) declined.
In the foreign exchange market, the rupee edged lower against the dollar on dollar demand from oil firms to meet month-end payment commitments. The partially convertible rupee was hovering at 62.02, compared with its close of 61.98/99 on Wednesday, 26 February 2014. The foreign exchange market was closed on Thursday, 27 February 2014, on account of Mahashivratri.
Indian government bond prices rose after dovish remarks from Federal Reserve Chairwoman Janet Yellen before the Senate Banking Committee on Thursday, 27 February 2014. The yield on 10-year benchmark federal paper, 8.83% GS 2023, was hovering at 8.8777%, lower than its close of 8.9158% on Wednesday, 26 February 2014. The bond and money markets were closed on Thursday, 27 February 2014, on account of Mahashivratri. Bond yield and bond prices move in opposite direction.
Narendra Modi, the BJP's prime ministerial candidate, said on Thursday, 27 February 2014, that India's traders and grocery store owners must learn to compete with large modern stores and online retailers. "We should not worry about the challenges from global trade," he told a gathering of the Confederation of All India Traders. Rather, he said, small traders should emphasise on quality of their products to compete better and could enter into contracts with big online retailers to create "virtual malls in small shops".
With the general elections fast approaching, Modi also laid out his economic views separately at a conference on the Indian economy on Thursday, 27 February 2014. "Speedy, yet sustainable economic growth that is inclusive of all is the need of the hour," he told a crowd of businessmen, bankers, economists and diplomats. As India is vast, he said there are no tailor-made solutions for the problems of the entire country. "The government must identify the strengths of each state and devise strategies accordingly," he said. Modi, chief minister of Gujarat, said he also favoured introducing a nationwide goods and services tax (GST), a long-pending reform expected to bring a uniform market, reduce costs of businesses and increase government revenue.
Modi answered only two questions from members of the audience, one of which was related to energy security. He said he preferred using the country's own natural resources such as solar energy and wind energy to energy imports.
Reserve Bank of India (RBI) Governor Raghuram Rajan on Wednesday, 26 February 2014, defended his decision to repeatedly raise interest rates when he said that reducing inflation is the best way to foster stable growth. "We cannot wait until the public's expectations of inflation get more entrenched, and the inflationary spiral gains momentum," Mr. Rajan said in a speech, defending RBI's decision to raise key policy rate three times by a combined 0.75 percentage points since he took over as head of the central bank in September 2013.
Mr. Rajan indicated that he agreed with the recommendations of a central bank panel which had suggested the RBI start using a consumer price inflation target to determine monetary policy. The panel suggested that RBI should bring down the consumer price inflation rate to 8% by January 2015 and to 6% by January 2016. After that it should aim to keep it within two percentage points of 4%, the panel said.
Mr. Rajan said the gradual raising of interest rates now rather than later is the best way to slowly squeeze inflation out of the economy. "Rather than administer shock therapy to a weak economy, the RBI prefers to dis-inflate over time rather than abruptly, while being prepared to do what is necessary if the economy deviates from the projected inflation path," Mr. Rajan said. He said keeping inflation in check will also bolster the rupee and business confidence. "Greater public faith that inflation will be low will add stability to our currency, and prevent the kind of gyrations we saw last summer," he said.
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 India government will unveil data on gross domestic product (GDP) for Q3 December 2013 after trading hours today, 28 February 2014. The GDP grew at improved pace of 4.8% in Q2 September 2013, from 4.4% growth recorded in Q1 June 2013.
Asian stocks edged higher on Friday, 28 February 2014, after dovish remarks from Federal Reserve Chairwoman Janet Yellen before the Senate Banking Committee on Thursday, 27 February 2014. Key benchmark indices in Hong Kong, Indonesia, China and South Korea were up 0.08% to 0.56%. Key benchmark indices in Singapore and Japan were off 0.07% to 0.55%. The stock market in Taiwan was closed for Peace Memorial Day.
A meeting of China's lawmakers to set economic policy and growth targets begins next week in Beijing. The National People's Congress annual gathering begins on 5 March 2014.
Trading in US index futures indicated that the Dow could fall 9 points at the opening bell on Friday, 28 February 2014. US markets edged higher on Thursday, 27 February 2014, with the benchmark S&P 500 closing at a fresh record as investors welcomed dovish remarks from Federal Reserve Chairwoman Janet Yellen before the Senate Banking Committee.
Yellen told senators it was difficult to tell how much of the recent decline in US economic growth was due to weather, adding the central bank might consider a pause in its reduction of bond buying if the weakness persists. 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
In latest US economic news, the number of people applying for unemployment benefits rose last week to match the highest level of 2014, suggesting that progress in a gradually recovering US labor market has slackened off. However, the average of new claims over the past month, usually a more reliable gauge than the up-and-down weekly number, was unchanged at 338,250.
Orders for US durable goods fell 1% in January as demand tapered off for most big-ticket items except military hardware, the government said Thursday.
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