Key benchmark indices reversed initial gains as signs of a quickening economic recovery in the United States boosted speculation the US Federal Reserve will keep reducing monthly debt purchases. The reduced availability of cash in the global financial system could temper the flow of foreign money into India, which has been one of the biggest beneficiaries of foreign capital. 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 in 2014. The barometer index, the S&P BSE Sensex, was down 13.59 points or 0.06%, up about 55 points from the day's low and off close to 125 points from the day's high.
Capital goods stocks edged lower. IT stocks edged lower on profit booking after recent strong gains. The market breadth, indicating the overall health of the market, was positive.
A bout of volatility was witnessed in early trade as key benchmark indices trimmed gains after a firm start. The Sensex and the 50-unit CNX Nifty, both, hit their highest level in nearly three weeks at the onset of the trading session. Intraday volatility continued as key benchmark indices reversed initial gains in morning trade.
Foreign institutional investors (FIIs) bought shares worth a net Rs 295.76 crore on Friday, 27 December 2013, as per provisional data from the stock exchanges.
At 10:20 IST, the S&P BSE Sensex was down 13.59 points or 0.06% to 21,179.99. The index declined 70.28 points at the day's low of 21,123.30 in morning trade. The index jumped 111.12 points at the day's high of 21,304.70 at the onset of the trading session, its highest level since 10 December 2013.
The CNX Nifty was down 9.95 points or 0.16% to 6,303.95. The index hit a low of 6,287.70 in intraday trade, its lowest level since 26 December 2013. The index hit a high of 6,344.05 in intraday trade, its highest level since 10 December 2013.
The market breadth, indicating the overall health of the market, was positive. On BSE, 977 shares gained and 670 shares fell. A total of 99 shares were unchanged.
Among the 30-share Sensex pack, 18 stocks declined and rest of them rose. Bajaj Auto (down 1.37%), Tata Power Company (down 0.57%) and Cipla (down 0.31%) declined.
Capital goods stocks edged lower. Bhel (down 0.58%), L&T (down 1.29%), Crompton Greaves (down 0.31%) and Punj Lloyd (down 1.54%) declined.
IT stocks edged lower on profit booking after recent strong gains. Tech Mahindra fell 0.19% to Rs 1,857. The stock reversed direction after hitting 52-week high of Rs 1,875 in intraday trade.
TCS dropped 0.32%.
Wipro lost 1.11% to Rs 549.25. The stock had hit 52-week high of Rs 558 in intraday trade on Friday, 27 December 2013.
Infosys shed 0.69% to Rs 3,537.55. The stock reversed direction after hitting record high of Rs 3,575 in intraday trade.
HCL Technologies rose 0.14% to Rs 1,251.90 after hitting record high of Rs 1,269 in intraday trade. The company after market hours on Friday, 27 December 2013, announced that Vineet Nayar, Director of the company since 2008, has decided to retire from the board in order to devote more time to his Foundation. HCL Technologies also announced on Friday, 27 December 2013, the appointment of Vineet Nayar as a Senior Advisor to HCL Technologies and HCL Corporation.
"Vineet has been a friend and a colleague for over two decades now. His bold ideas and passion for the organisation, has inspired many others to think and dream big. His contribution to HCL and the Board has been a benchmark for others to follow and we all are very proud of him. On behalf of the Board, I thank him for all that he has done and I look forward to his continued association with HCL as a Senior Advisor," said Shiv Nadar, Chief Strategy Officer and Chairman HCL Technologies.
"I am grateful to Shiv, Board Members and the employees of HCL Technologies, for giving me an opportunity to dream, learn, explore and experiment along with them. There are very few organisations where one could rise up the ranks and become the CEO and Vice Chairman. I applaud Shiv for creating such a culture at HCL and thank him for his mentorship, guidance and friendship over these years. As I pursue my dream, of creating a Million Smiles through Sampark Foundation, I carry with me goodwill, best wishes and lots of learning. I also hope to continue to add value to both HCL Technologies and HCL Corporation through my continued association. I wish all the HCLites, exciting and energized years' ahead," said Vineet Nayar Founder, Sampark Foundation.
As a Senior Advisor, Vineet will advise HCL Corporation on key strategic issues and also work with the board of HCL Technologies on initiatives such as driving a high performance culture amongst senior managers and new strategies for growth.
Power Grid Corporation of India (PGCIL) dropped 0.7%. The company has received shareholders' approval to increase the limit of shareholding by foreign institutional investors to 30% from 24% currently. Shareholders also approved a proposal to increase the company's borrowing limit to Rs 130000 crore from the current cap of Rs 100000 crore. Both proposals were cleared through postal ballots.
In the foreign exchange market, the rupee edged lower against the dollar tracking strength in dollar against other currencies in Asia as signs of a quickening economic recovery in the United States boosted speculation the US Federal Reserve will keep reducing monthly debt purchases. The partially convertible rupee was hovering at 61.95, compared with its close of 61.85/86 on Friday, 27 December 2013.
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.
Asian stocks edged higher on Monday, 30 December 2013, with Japan's Nikkei 225 Stock Average poised for its biggest annual gain since 1972, as the yen touched a five-year low versus the dollar. Key benchmark indices in China, Hong Kong, Indonesia, Japan, Taiwan, South Korea and Singapore were up 0.05% to 0.9%.
Chinese Premier Li Keqiang said China has the conditions to keep its economy and financial markets stable next year by deepening reform and further opening up, according to a statement posted on the central government website yesterday, 29 December 2013.
Trading in US index futures indicated that the Dow could fall 6 points at the opening bell on Monday, 30 December 2013. US stocks slipped on Friday on light trading after stocks reached record highs earlier last week.
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.
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