A bout of volatility was witnessed as key benchmark indices reversed intraday gains in mid-afternoon trade. The barometer index, the S&P BSE Sensex, was down 44.76 points or 0.2%, off close to 170 points from the day's high and up about 40 points from the day's low. The market breadth, indicating the overall health of the market was positive.
Auto stocks rose as the Reserve Bank of India (RBI) is widely expected to keep its main lending rate viz. the repo rate unchanged after a monetary policy review tomorrow, 1 April 2014, as inflation has eased. Maruti Suzuki India and Hero MotoCorp hit their record high. Capital goods pivotals declined.
The market opened on a firm note after provisional data released by the stock exchanges after trading hours on Friday, 28 March 2014, showed that foreign institutional investors (FIIs) made substantial purchases of Indian stocks on that day. The Sensex, and the 50-unit CNX Nifty, both, hit record high. The Sensex trimmed initial gains in mid-morning trade. The Sensex erased almost entire intraday gains in early afternoon trade. A bout of volatility was witnessed as key benchmark indices reversed intraday gains in mid-afternoon trade.
Foreign institutional investors (FIIs) bought shares worth a net Rs 1362.87 crore on Friday, 28 March 2014, as per provisional data from the stock exchanges.
At 14:20 IST, the S&P BSE Sensex was down 44.76 points or 0.2% to 22,295.21. The index fell 86.19 points at the day's low of 22,253.78 in mid-afternoon trade. The index jumped 127.24 points at the day's high of 22,467.21 in early trade, a record high for the barometer index.
The CNX Nifty was down 22.90 points or 0.34% to 6,673. The index hit a low of 6,662.40 in intraday trade. The index hit a high of 6,730.05 in intraday trade, a record high for the index.
The BSE Mid-Cap index was up 25.26 points or 0.36% at 7,035.55. The BSE Small-Cap index was up 42.46 points or 0.61% at 7,041.52. Both these indices outperformed the Sensex.
The market breadth, indicating the overall health of the market, was positive. On BSE, 1,548 shares gained and 1,062 shares fell. A total of 156 shares were unchanged.
Among the 30-share Sensex pack, 16 stocks declined and rest of them rose. Tata Power Company (down 2.08%), ONGC (down 2.01%) and ITC (down 1.85%) edged lower from the Sensex pack.
NTPC fell 0.66% to Rs 120.05 in volatile trade. The stock hit high of Rs 123.70 and low of Rs 118.80 so far during the day. NTPC today, 31 March 2014, said that Unit 2 of 500 megawatts (MW) of Mouda Super Thermal Power Station, Stage-I is declared for commercial operation from 30 March 2014. With this the total commercial capacity of Mouda Super Thermal Power Station has become 1,000 MW.
Earlier during the day, NPTC said that it has declared commercial operation of a 5 MW Solar PV Power Station at Faridabad, a 10 MW Solar PV Power Station at Unchahar and a 30 MW Solar PV Power Station at Rajgarh with effect from today, 31 March 2014. With the commissioning and commercial declaration of these units, the total capacity of non-conventional energy projects of the company has become 75 MW and the total commissioned and commercial capacity of NTPC group has become 43,019 MW and 41,859 MW respectively, the company said.
L&T fell 1.55% to Rs 1268.35, with the stock reversing direction after hitting 52-week high of Rs 1,301 in intraday trade. The company said before market hours today, 31 March 2014, that its construction division won new orders worth Rs 1009 crore across various business segments in March 2014.
Separately, the company clarified that the ongoing strike by some of the workers at the company's Hazira Campus, Gujarat has no material adverse impact on the operations and performance of the company.
Bharat Heavy Electricals (Bhel) dropped 1.4%. The company said during market hours today, 31 March 2014, that the company has secured a prestigious contract for setting up a 120 megawatts (MW) Hydro Electric Project (HEP) valued at Rs 125 crore in Uttarkhand. Significantly, this is the major order for electro-mechanical equipment in the hydro sector, to be finalised by a government utility company in Uttarkhand, after the devastating floods, Bhel said.
Auto stocks rose as the Reserve Bank of India (RBI) is widely expected to keep its main lending rate viz. the repo rate unchanged after a monetary policy review tomorrow, 1 April 2014 as inflation has eased. Purchases of automobiles, including that of cars, utility vehicles and commercial vehicles are substantially driven by financing.
Small car maker Maruti Suzuki rose 0.92% to Rs 1,948 after hitting record high of Rs 1,971.50 in intraday trade.
Tata Motors rose 0.39% on reports the company will increase prices of its vehicles in April 2014 due to inflationary pressure and higher input costs. The media quoted Tata Motors' spokeswoman as saying that the company will increase passenger vehicle prices by 1-2% and commercial vehicle prices by about 1% in April 2014.
Mahindra & Mahindra (M&M) rose 1.08%. The company said before market hours today, 31 March 2014, said that the scheme of arrangement between Mahindra Trucks and Buses, a wholly owned subsidiary of M&M and its shareholders and creditors and the company became effective from 30 March 2014. Accordingly the demerger of the trucks undertaking of MBTL and transfer and vesting thereof into M&M stands completed, M&M said.
Ashok Leyland gained 4.19%.
Shares of two wheeler makers also gained. Hero MotoCorp rose 1.45% to Rs 2,279.05 after hitting a record high of Rs 2,298 in intraday trade.
Bajaj Auto (up 1.25%) and TVS Motor Company (up 0.94%) gained.
The government will raise Rs 3.68 lakh crore ($61.4 billion) through bond sales in the first half of the fiscal beginning 1 April 2014, which is 61.6% of the total borrowing scheduled for fiscal year 2014-15. The borrowing programme for the first half of the fiscal year 2014-15 was announced by economic affairs secretary Arvind Mayaram and later notified by the Reserve Bank of India (RBI) on Friday, 28 March 2014. In the interim budget for the year 2014-2015, finance minister P. Chidambaram had announced that the government plans to borrow Rs 4.65 lakh crore from the market in 2014-15 against the Rs 4.54 lakh crore it borrowed in the current fiscal. The gross borrowing programme for the next fiscal will be Rs 5.97 lakh crore, while bonds worth about Rs 1.40 lakh crore are to be paid back to investors in the year to March, Chidambaram said. The gross borrowing plan for 2013-14 was at Rs 5.64 lakh crore.
In a separate announcement, RBI on Friday, 28 March 2014, said it will borrow Rs 1.9 lakh crore through issuance of short-term bills in the market in the April-June 2014 quarter.
The Reserve Bank of India will announce the First Bi-monthly Monetary Policy Statement, 2014-15 at 11:00 IST tomorrow, 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 market is Q4 March 2014 and year ended 31 March 2014 (FY 2014) corporate earnings. Investors and analysts will closely watch the management commentary that would accompany the results to see if there is any revision in their future earnings forecast of the company for the year ending 31 March 2015 (FY 2015) and/or for the year ending 31 March 2016 (FY 2016). Indian companies will start reporting their Q4 and full year results from mid-April 2014. The result season will conclude in end-May 2014.
Another 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 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 higher on Monday, 31 March 2014, before data today, 31 March 2014, which may show inflation slowed in the region, boosting bets the European Central Bank (ECB) will signal stimulus measures at a policy meeting this week. Key benchmark indices in UK, Germany and France were up 0.06% to 0.4%.
A policy meeting of the Governing Council of the European Central Bank (ECB) will be held on Thursday, 3 April 2014, in Frankfurt to decide euro zone interest rates.
In Germany, a report today, 31 March 2014, showed that retail sales rose 1.3% last month after a revised 1.7% gain in January.
Asian stocks edged higher on Monday, 31 March 2014, with investors holding out hopes that China would take steps to stimulate its economy. Key benchmark indices in Hong Kong, Singapore, South Korea, Japan and Taiwan were up 0.23% to 0.9%. China's Shanghai Composite shed 0.41%.
South Korea reportedly on Monday returned fire into North Korean waters after shells from a North Korean live-fire drill fell south of the rivals' disputed western sea boundary. Residents on one South Korean island near the artillery exchange have been evacuated, according to reports. Reports said North Korean forces had fired into the South's sea territory as part of a live-fire exercise, prompting South Korea to return fire.
Trading in US index futures indicated that the Dow could advance 59 points at the opening bell on Monday, 31 March 2014. US stocks climbed after a two-day slide on Friday, 28 March 2014, as consumer shares rebounded amid data showing household purchases rose the most in three months. Household purchases, which account for almost 70% of the US economy, climbed 0.3% in February 2014 after a 0.2% gain in January 2014 that was smaller than previously estimated, Commerce Department figures showed.
The influential US non-farms payroll data for March 2014 will be released this Friday, 4 April 2014.
Federal Reserve Chair Janet Yellen is scheduled to deliver remarks at a conference in Chicago today, 31 March 2014.
The Federal Open Market Committee (FOMC) next undertakes monetary policy review at a two-day meeting on 29-30 April 2014. The Federal Reserve on 19 March 2014 said after the conclusion of a monetary policy review that it will trim its monthly bond purchases by $10 billion to $55 billion. The Federal Reserve will end its bond-buying program before the end of the year with an interest-rate increase likely to follow in "around six months," Chair Janet Yellen said on 19 March 2014. Quarterly Fed forecasts on 19 March 2014 showed more officials predicting that the benchmark interest rate, now close to zero, will rise to at least 1% by the end of 2015 and 2.25% a year later.
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