MUMBAI: Key benchmark indices extended losses and hit fresh intraday low in afternoon trade. The barometer index, S&P BSE Sensex, hit its lowest level in more than 10 weeks. The market breadth, indicating the overall health of the market, was negative. The Sensex was down 209.24 points or 1.02%, off about 176 points from the day's high and about 5 points from the day's low. The market sentiment was hit adversely as the government revised downwards the GDP growth rate for the year ended 31 March 2013 (FY 2013) to 4.5% from 5% reported earlier. Weakness in Asian stocks also dampened sentiment on the domestic bourses.
L&T edged lower in choppy trade. Realty stocks edged lower.
The market edged lower in early trade on weak Asian stocks. A recovery from lower level after initial losses proved short lived as key benchmark indices weakened once again. The Sensex languished in negative terrain in mid-morning trade. The Sensex extended losses and hit fresh intraday low in afternoon trade. The barometer index hit its lowest level in more than 10 weeks.
The market sentiment was affected adversely by data showing that foreign funds were net sellers of Indian stocks on Friday, 31 January 2014. Foreign institutional investors (FIIs) sold shares worth a net Rs 652.97 crore on Friday, 31 January 2014, as per provisional data from the stock exchanges. Key benchmark indices slipped further and hit fresh intraday low in afternoon trade.
Global investors pulled out $6.3 billion from emerging-market equities in the week through 29 January 2014, according to reports.
Asian stocks fell on Monday, 3 February 2014, as slowdown in Chinese manufacturing growth added to concern the global economic recovery is faltering.
At 13:15 IST, the S&P BSE Sensex was down 209.24 points or 1.02% to 20,304.61. The index lost 213.96 points at the day's low of 20,299.89 in afternoon trade, its lowest level since 22 November 2013. The index declined 33.50 points at the day's high of 20,480.35 in early trade.
The CNX Nifty was down 61.40 points or 1.01% to 6,028.10. The index hit a low of 6,027.30 in intraday trade, its lowest level since 30 January 2014. The index hit a high of 6,074.85 in intraday trade.
The BSE Mid-Cap index was off 26.89 points or 0.43% at 6,281.16. The BSE Small-Cap index was off 12.66 points or 0.20% at 6,250.69. Both these indices outperformed the Sensex.
The market breadth, indicating the overall health of the market was negative. On BSE, 1250 dropped and 1,049 shares rose. A total of 118 shares were unchanged.
Among the 30-share Sensex pack, 22 stocks declined and rest of them rose. Hindalco Industries (down 3.97%), Tata Motors (down 3.2%), Bharti Airtel (down 2.84%), Tata Steel (down 2.77%), ICICI Bank (down 2.37%), ONGC (down 1.8%), TCS (down 1.53%), State Bank of India (SBI) (down 1.5%) and Sesa Sterlite (down 1.33%), edged lower from the Sensex pack.
GAIL (India) (up 1.81%), Dr. Reddy's Laboratories (up 1.61%), Sun Pharmaceutical Industries (up 0.96%), Hero MotoCorp (up 0.90%), Hindustan Unilever (up 0.11%), HDFC Bank (up 0.10%), Axis Bank (up 0.06%) and Bajaj Auto (up 0.04%), edged higher from the Sensex pack.
L&T was down 0.65% at Rs 979. L&T Power has successfully completed commissioning and testing of the first unit of its 2x700 megawatts (MW) supercritical thermal power plant of Nabha Power on 31 January 2014, L&T said in a statement today, 3 February 2014. The plant was constructed on a turnkey basis by L&T Power with more than 90% of the equipment sourced from the group companies of L&T.
Describing the Rajpura Plant as another important milestone in L&T's history, Mr Shailendra Roy, Member of the Board, L&T, said: "We have demonstrated our capability as the leading Power Plant EPC player in the country with the successful commissioning of the first unit of the Rajpura plant. The timely completion and stable operations further establishes L&T's ability to build large complex engineering marvels of global standards."
Commercial operations of the plant will significantly augment Punjab's generation capacity making the state power surplus, and will enable it to export power to the national grid. Based on supercritical technology, it will be one of the most eco-friendly and efficient coal-based thermal plants in India, L&T said.
Most realty shares declined. Oberoi Realty fell 5.09% to Rs 193.95 after consolidated net profit fell 49.4% to Rs 68.06 crore on 40.7% decline in net sales to Rs 169 crore in Q3 December 2013 over Q3 December 2012. The Q3 result was announced on Saturday, 1 February 2014.
Among other realty shares, HDIL (down 4.14%), Unitech (down 2.86%), D B Realty (down 2.83%), Indiabulls Real Estate (down 2.23%), Anant Raj Industries (down 1.58%), DLF (down 1.2%), Parsvnath Developers (down 0.42%), Godrej Properties (down 0.31%) and Peninsula Land (down 0.31%), edged lower.
Sobha Developers rose 3.22% to Rs 275.80 after net profit rose 10.46% to Rs 58.10 crore on 26.48% increase in total income to Rs 545.50 crore in Q3 December 2013 over Q3 December 2012. The result was announced on Saturday, 1 February 2014.
Sobha Developers registered new sales value of Rs 502 crore in Q3 December 2013. The company reported new sales volume of 0.74 million square feet in Q3 December 2013. The company achieved average price realisation of Rs 6,786 per square feet during the quarter.
The firm said it launched two new projects: 0.66 million square feet of developable area and 0.46 million square feet of saleable area.
Sobha Developers completed and handed over 2 real estate projects of 1.10 million square feet of developable area and 8 contractual projects of 2.76 million square feet of developable area.
Commenting on the company's performance, J C Sharma, Vice Chairman and Managing Director, Sobha Developers said, "Despite the prevailing economic headwinds, the company's unbilled revenue as of 31 December 2013 is Rs 2264 crore on the sales made so far, out of which we expect a minimum of Rs 355 crore to be recognised in the last quarter (Q4) of the fiscal year ending March 2014 (FY 13-14). In addition to this, income from new sales will also contribute to the revenue."
Commenting on the company's growth plans, J C Sharma said, "We are bullish about the industry and the markets in which we operate. We have scheduled 11 million square feet of new launches in the coming four to five quarters. We also plan to enter the Kochi market in Kerala during this financial year."
Delineating the company's core markets, Mr Sharma said, "We are optimistic that our key southern markets will drive the sales. With a strong pipeline of proposed new launches, we expect the sales to gain momentum in the coming few quarters. Our core market, Bangalore, has been the most resilient Indian real estate market. Thanks to the IT boom, this market has gained popularity as the preferred market for real estate investment. In the current financial year (until September), Bangalore alone has accounted for 18% of the nation-wide sales, making the city the fastest growing as well as the largest real estate market in India. We expect the trend to continue in the coming year and Bangalore to remain the most lucrative real estate market."
In the foreign exchange market, the rupee reversed initial gains against the dollar as equities dropped. The partially convertible rupee was hovering at 62.725, compared with its close of 62.68/69 on Friday, 31 January 2014.
Indian manufacturers signalled a further improvement in operating conditions during January, according to a survey. The headline HSBC India Purchasing Managers' Index (PMI) posted a reading of 51.4 for January 2014, up from 50.7 for December 2013. The latest reading was the highest since March 2013, but pointed to a marginal pace of expansion that was well below the series average (55.1). January saw new orders expand at the quickest rate in ten months, with survey participants reporting stronger demand from both domestic and overseas clients.
Concurrently, new business from abroad grew at a solid pace that was the fastest since June last year. Subsequently, Indian manufacturers raised their production levels for the third successive month. The rate of output growth was solid and the strongest since February 2013.
Sector data indicated that consumer goods continued to outperform the remaining two monitored categories, while operating conditions deteriorated at capital goods producers. Growth rates for output and new orders in the consumer goods sub-category surpassed those seen at intermediate goods companies.
Employment rose for the fourth month running in January, with all three broad areas of the manufacturing economy posting job creation. Despite being slight, the overall rate of expansion was broadly in line with the long-run series average. Companies operating in the Indian manufacturing sector signalled pressure on operating capacity in January, as backlogs of work increased solidly. Moreover, the latest increase in unfinished work was the eighteenth in as many months. All three market groups posted higher work-in-hand, with the sharpest increase noted at consumer goods firms.
Meanwhile, supplier performance improved in the latest month for the first time since September 2013. Anecdotal evidence suggested that shorter delivery times reflected a greater availability of raw materials at vendors.
Amid reports of new business gains, purchasing activity in the Indian manufacturing economy rose at the start of 2014, although the pace of expansion was only slight and well below the series average. Growth of buying activity was largely centred on the consumer goods sub-sector. Pre-production stocks increased at consumer goods producers, but fell at both capital and intermediate goods firms. This resulted in an overall decline of stocks of purchases across the Indian manufacturing economy as a whole.
Average input costs rose in January, with manufacturers reporting higher prices for a range of raw materials, including metals, chemicals and energy. The rate of cost inflation remained robust. Consequently, companies raised their tariffs again. Although the strongest in three months, the latest rise in output charges was moderate and much weaker than seen for input costs.
Commenting on the India Manufacturing PMI survey, Leif Eskesen, Chief Economist for India & ASEAN at HSBC said: "Manufacturing activity moved into higher gear led my faster growth in new orders. However, inflation pressures also firmed, suggesting that the RBI has to keep up its inflation guards".
The First Revised Estimates of National Income, Consumption Expenditure, Saving and Capital Formation, for the year 2012-13 released on Friday, 31 January 2014, showed India GDP revised down to 4.5% in 2012-13 from 5% earlier and as against a growth of 6.7% in the year 2011-12. The downward revision was mainly due to lower than provisionally estimated output in primary and secondary sectors. The data also showed lower-than-estimated growth numbers for exports, capital investment and consumption sectors, thereby pointing out to deeper underlying weaknesses.
The Eight Core Industries having a combined weight of 37.9% in the Index of Industrial Production (IIP) increased by 2.1% in December 2013 compared with a growth of 7.5% growth in December 2012 and 1.7% growth in November 2013, data released by the government after trading hours on Friday, 31 January 2014, showed.
The fiscal deficit reached Rs 5.16 lakh crore during April-December 2013, or 95.2% of the full-year target, compared with 78.8% a year earlier, data released by the government after trading hours on Friday, 31 January 2014, showed. Factory gate duties were down 6.9% at Rs 1.02 lakh crore during April-December from the year-earlier period, while customs tax receipts rose 4.3% to Rs 1.24 lakh crore -- much lower than the 13.6% annual growth target.
The Reserve Bank of India next undertakes monetary policy review on 1 April 2014. Sighting elevated consumer price inflation, 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.
Asian stocks fell on Monday, 3 February 2014, after a slowdown in Chinese manufacturing growth added to concern the global economic recovery is faltering. Key benchmark indices in Indonesia, Japan, Singapore and South Korea shed by 0.74% to 1.98%.
China's markets remain closed until 7 February 2014 for the Lunar New Year holiday, while markets in Hong Kong and Taiwan markets are shut until 4 February 2014.
A Chinese manufacturing gauge fell to a six-month low in January as output and orders slowed, adding to signs that government efforts to rein in excessive credit will cool growth in the world's second-largest economy. The Purchasing Managers' Index was at 50.5 in January 2014, compared with December's 51 reading, the National Bureau of Statistics and China Federation of Logistics and Purchasing said Feb. 1 in Beijing. The survey showed jobs and export orders shrinking, amplifying risks of a deeper slowdown as Communist Party leaders clamp down on the $6 trillion shadow-banking industry and interbank borrowing costs rise. A separate private manufacturing gauge released by HSBC Holdings Plc and Markit Economics on Jan. 30 pointed to the first contraction in six months.
Growth in China's services sector cooled in January to its slowest pace in at least a year, data showed on Monday, the latest sign that the Chinese economy lost momentum last month in the run-up to the Lunar New Year holiday. The official non-manufacturing Purchasing Managers' Index slipped to 53.4 from December's 54.6, the lowest reading in at least a year but still above the 50-point level that indicates growth.
South Korea's exports contracted 0.2% in January from a year before, according to government data released on Saturday, 1 February 2014.
Trading in US index futures indicated that the Dow could advance 51 points at the opening bell on Monday, 3 February 2014. US stocks fell sharply on Friday amid continued unease over emerging markets and a number of high-profile earnings disappointments.
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 Fed also signaled that it is likely to keep reducing bond purchases in the coming months, citing a pickup in US economic activity and improvement in the US labor market.