MUMBAI: Key benchmark indices edged lower as investors turned cautious ahead of beginning of the 9-phase Lok Sabha elections on Monday, 7 April 2014. The barometer index, the S&P BSE Sensex hit lowest closing level in one week. The 50-unit CNX Nifty hit over one-week low. The Sensex was down 149.57 points or 0.66%, off close to 165 points from the day's high and about 20 points from the day's low. The market breadth, indicating the overall health of the market, was positive.
Indian stocks fell for the second day in a row today, 4 April 2014. From a recent high of 22,551.49 on 2 April 2014, the Sensex has declined 191.99 points or 0.85% in two trading sessions. The Sensex has gained 1,188.82 points or 5.61% in calendar year 2014 (so far till 4 April 2014). The Sensex has fallen 26.77 points or 0.11% in first four sessions of April (so far till 4 April 2014). From a record high 22,620.65 on 3 April 2014, the Sensex has declined 261.15 points or 1.15%. From a 52-week low of 17,448.71 on 28 August 2013, the Sensex has risen 4,910.79 points or 28.14%.
Coming back to today's trade, capital goods shares extended Thursday's losses. Realty stocks edged higher on renewed buying.
The Sensex edged lower in early trade on weak Asian stocks. The barometer index extended initial losses and hit fresh intraday low in morning trade. The Sensex trimmed losses after hitting fresh intraday low in mid-morning trade. Key benchmark indices hovered in negative zone in afternoon trade. The Sensex extended losses and hit fresh intraday low in mid-afternoon trade.
The S&P BSE Sensex was down 149.57 points or 0.66% to 22,359.50, its lowest closing level since 28 March 2014. The index declined 169.67 points at the day's low of 22,339.40 in late trade. The index rose 16.14 points at the day's high of 22,525.21 in early trade.
The CNX Nifty was down 41.75 points or 0.62% to 6,694.35, its lowest closing level since 27 March 2014. The index hit a low of 6,685.15 and a high of 6,741.85 in intraday trade.
The BSE Mid-Cap index was up 26.87 points or 0.37% to 7,197.62. The BSE Small-Cap index rose 57.60 points or 0.8% to 7,265.05. Both these indices outperformed the Sensex.
The total turnover on BSE amounted to Rs 2483 crore lower than Rs 2967.41 crore on Thursday, 3 April 2014.
The market breadth, indicating the overall health of the market, was positive. On BSE, 1,648 shares gained and 1,135 shares fell. A total of 146 shares were unchanged.
Among the 30 Sensex shares, 24 stocks fell and the remaining stocks rose.
Bharti Airtel fell 1.74% to Rs 316.25 on profit booking after the stock rose 11.54% in the preceding nine trading sessions to Rs 326.10 on 2 April 2014, from a recent low of Rs 292.35 on 21 March 2014.
Shares of state-run oil marketing companies (PSU OMCs) were in demand. HPCL (up 4.66%), Indian Oil Corporation (up 3.21%) and BPCL (up 0.98%), gained.
Most metal shares rose. Hindustan Zinc (up 0.15%), Tata Steel (up 0.84%), Hindalco Industries (up 0.44%), Bhushan Steel (up 0.49%), Hindustan Copper (up 5.49%), and National Aluminum Company (up 1.94%) edged higher. Steel Authority of India (Sail) (down 1.11%), Sesa Sterlite (down 0.18%) and Jindal Steel & Power (down 0.05%) declined.
JSW Steel rose 0.77% to Rs 1066.50. The stock hit 52-week high of Rs 1070 in intraday trade. The company early this week said it has reduced prices for its two steel products -- hot rolled coil and wire rod with effect from 1 April 2014. The quantum of the cut will be Rs 500-750 per tonne for HRC and Rs 500 for Wire rod, the company said after trading hours on Tuesday, 1 April 2014.
NMDC declined 0.11%. The company said after market hours on Thursday, 3 April 2014 that for the first time in history it has produced more than 30 million tonnes in a single year. NMDC has registered iron ore production of around 30.18 million tonnes in the year ended 31 March 2014 (FY 2014) which is approximately 11% more than last year. The iron ore sales of the company stood at 30.50 million tonnes which is approximately 16% more than last year.
The production of diamonds from India's only Diamond Mine being operated by NMDC in Panna, Madhya Pradesh also registered a remarkable growth of 17% at 37,047 carats in FY 2014 compared to 31,533 carats during FY 2013.
Pursuing its capital investment schemes, as against an envisaged target of Rs 2720 crore for FY 2014, the company has incurred Rs 2518 crore for its various expansion and diversification projects which is 57% more than FY 2013. The projects of development of two new mines viz. Deposit-11B Iron Ore Project and Kumaraswamy Iron Ore Mine, as part of its expansion programme and the installation of 3 million tonnes per annum (MTPA) steel plant at Nagarnar in Chhattisgarh, as part of NMDC's forward integration programme and value addition, are in various stages of execution.
Incidentally, Chairman, NMDC Mr. C.S.Verma received the Most Efficient Navratna award for the company from Mr. T.K.A.Nair, Advisor to the Hon'ble Prime Minister of India on 2nd April 2014. It is pertinent to mention that NMDC is one of the lowest cost producers of iron ore in the world with very high EBITDA margins, company said.
Shri C.S. Verma, CMD commended the performance of the company and congratulated the employees for surpassing the 30 MT mark in iron ore production and sales and urged them to grow exponentially to cope up with demand of the steel industry. NMDC collective deserves appreciation for the commendable results inspite of evacuation and other problems
Private sector banks fell. Axis Bank (down 0.64%), HDFC Bank (down 0.45%) and ICICI Bank (down 0.39%) declined.
Kotak Mahindra Bank was down 0.72%. Kotak Mahindra Bank Managing Director Uday Kotak today, 4 April 2014, said that bank capitalisation will be a significant challenge and constraint for Indian lenders in coming years. Kotak was speaking at a banking event in Pune.
IndusInd Bank rose 1.3%.
PSU bank stocks rose. Punjab National Bank (up 1.04%), Bank of Baroda (up 0.06%), Bank of India (up 0.37%), State Bank of India (up 0.47%), and Canara Bank (up 0.13%), edged higher.
Most auto stocks declined. Maruti Suzuki India (down 0.58%), Tata Motors (down 1.5%), and Mahindra & Mahindra (M&M) (down 0.91%) edged lower. Ashok Leyland rose 0.86%.
Shares of most two wheeler makers declined. TVS Motor Company (down 3.16%), Hero MotoCorp (down 0.12%) and Bajaj Auto (down 1%) declined.
IT stocks reversed intraday gains. HCL Technologies (down 1.86%), Infosys (down 0.69%), TCS (down 1.25%), and Wipro (down 1.29%) declined. Tech Mahindra rose 0.02%.
Index heavyweight and cigarette maker ITC declined 0.55% to Rs 344.45. The stock hit high of Rs 349.45 and low of Rs 342.60.
Capital goods shares extended Thursday's losses. ABB (India) (down 1.04%), Bharat Heavy Electricals (Bhel) (down 2.19%), Thermax (down 2.14%) and Siemens (down 2.12%) edged lower.
Shares of engineering and construction major L&T shed 1.22%. L&T on Thursday, 3 April 2014, said that the company evaluates its order book position on a regular basis. The slow moving orders in that process may be removed to enable carry forward of healthy backlog of orders, L&T said. There is no negotiation with the clients for this process, L&T said. Removal of such orders has no impact on revenue, L&T said. The new orders which the company has received has compensated for any such removal of orders, L&T said. The company as part of its communication to the press in January 2014 during the announcement of results had disclosed this aspect, L&T said.
Realty stocks edged higher on renewed buying. D B Realty (up 3.39%), Unitech (up 5.91%), DLF (up 2.15%), Anant Raj (up 2.4%), Peninsula Land (up 5.6%), Indiabulls Real Estate (up 5.6%), D S Kulkarni Developers (up 8.1%), Nitesh Estates (up 8.2%), Orbit Corporation (up 12.3%), Kolte Patil Developers (up 9.65%) and Housing Development & Infrastructure (HDIL) (up 15.73%) edged higher.
Sobha Developers rose 1.2%. Sobha Developers announced after market hours on Thursday, 3 April 2014, that at the close of the financial year ended March 2014 (FY2014), the company has registered new sales area of 3.59 Million Square Feet valued at Rs 2343 crore at an average price realisation of Rs 6534 per square feet. The new sales value has increased by 5.78% and average price realisation has registered a growth of 10.80% yearon-year.
The growth in sales volume and new sales value, excluding NCR Gurgaon, is 6.47% and 28.32% respectively as compared to the fiscal year ending March 2013 (FY2013). The sharp slowdown in the NCR~Gurgaon market saw its contribution to the company's performance declining to 3.59% (Sales Volumes) and 6.01% (Sales Value) in FY2014 as compared to 13.56% (Sales Volume) and 22.52% (Sales Value) respectively in FY2013.
At the beginning of FY2014, the company had set a guidance of new sales valued at Rs 2600 crore comprising of 4.20 Million Square Feet for FY2014. Owing to the tough economic conditions and its consequent impact on the real estate market, particularly, in NCRGurgaon, the Company achieved 3.59 Million Square Feet of news sales area valued at Rs 2343 crore, the company said.
Suprajit Engineering gained 5.16% after the company said its consolidated sales grew by 18% in the year ended 31 March 2014 over the year ended 31 March 2013. The company made the announcement during trading hours today, 4 April 2014. Suprajit Engineering's sales grew by 15% in the year ended 31 March 2014 (FY 2014) over the year ended 31 March 2013 (FY 2013).
Suprajit Engineering said that the automotive industry in India grew by less than 5% during the year, 2013-14.
Steel Strips Wheels rose 2.84% after the company said it has secured patent on disc forming process, from Patent Office, Government of India. The announcement was made during trading hours today, 4 April 2014. Steel Strips Wheels (SSWL) said that the innovation in disc forming process helps to get better endurance life & reducing the input material weight. This also has an impact on finish weight of the wheel rim and brings a saving upto the extent of 2%, SSWL said. This weight reduction shall help in improving fuel efficiency & environment norms compliance for passenger cars, SSWL said in a statement.
In the foreign exchange market, the rupee pared intraday losses and was almost unchanged against the dollar. The partially convertible rupee was hovering at 60.17, compared with its close of 60.165/175 on Thursday, 3 April 2014. Reserve Bank of India Governor Raghuram Rajan said in a newspaper interview published on Thursday, 3 April 2014, that the Indian rupee at 55 to the dollar would be too strong. Rajan said a study by economists at the finance ministry had suggested a range of 60 to 62 was reasonable, after taking into account inflation and export competitiveness.
The next major trigger for the stock 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.
The Reserve Bank of India (RBI) next undertakes monetary policy review on 3 June 2014. The RBI left its main lending rate viz. the repo rate unchanged at 8% after a monetary policy review on Tuesday, 1 April 2014.
On the political front, the Bharatiya Janata Party (BJP) will release its poll manifesto on Monday, 7 April 2014, the day the 9-phase Lok Sabha election begins. The party on Thursday, 3 April 2014, issued its manifesto for the North East region, wherein it stated that it will develop the area as a BPO hub if voted to power. The BJP has already released a Delhi-specific manifesto wherein it has made an array of promises like granting full statehood, reducing power tariff by 30% and controlling price rise within one month if BJP is voted to power. The party, which had lost all the seats in the national capital to Congress in 2009 Lok Sabha polls, said it will set up a helpline for the national capital to receive complaints of corruption. It also promised to bring police, DDA and other land-owning agencies under one roof to streamline governance in the national capital.
The Aam Aadmi Party (AAP) on Thursday, 3 April 2014, made a pitch to win back its middle-class supporters ahead of the national elections by promising to be more business-friendly. During the release of the party's manifesto, AAP's leader Arvind Kejriwal tried to brush off the anti-corporate image that has come to be associated with the party's politics. As a party that was created to combat corruption, big businesses have frequently been at the receiving end of Mr. Kejriwal's ire. "AAP believes the government should not be in the business of running businesses," the party's manifesto said, promising to revive the economy and create more jobs by easing rules for doing business. One of the hurdles it has promised to remove is the harassment of business owners by officials, who are often accused of demanding bribes in order to provide basic services such as approving licenses. In its manifesto the party has said that participation of the private sector can help enterprises thrive and create jobs. It has also promised a simple, progressive and stable tax structure.
A major near term 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.
The International Monetary Fund (IMF) warned that emerging markets may suffer as growth slows in China, where the government this week announced policies designed to shore up the economy. Developing nations, which are increasingly dependent on China for growth, may suffer as the world's second-largest economy decelerates, according to the IMF in its latest World Economic Outlook report. The probability of defaults in China is relatively high, Alfred Schipke, the International Monetary Fund's senior resident representative for China, said yesterday, 3 April 2014.
Business activity across emerging markets fell for the fourth straight month in March, with output contracting in three of the four biggest economies, a survey showed on Friday. HSBC's composite emerging markets index of manufacturing and services purchasing managers' surveys slipped to 50.3 from 51.1 in February, teetering on the 50 threshold that marks the difference between expansion and contraction.
European stocks edged higher on Friday, 4 April 2014, after the latest data showed that German manufacturing orders grew more than expected in February on the back of strong domestic orders. Key benchmark indices in UK, France and Germany were up 0.24% to 0.41%.
German manufacturing orders grew more than expected in February on the back of strong domestic orders, data from the country's statistics office showed today, 4 April 2014, reinforcing expectations for strong first-quarter economic growth. Total manufacturing orders grew 0.6% in monthly terms adjusted for inflation, workdays, and seasonal effects. Figures for January were, however, reduced sharply. Growth in January was only 0.1%, far below the 1.2% originally reported. Total domestic orders grew 1.2% on the month in February, after a 2% gain in January, while total foreign orders were up only 0.2%. This masked significant differences between the euro zone and non-euro zone. Foreign orders from within the currency bloc rose 5.9%, partially recovering from January's massive 9.4% drop. Orders from outside the euro zone fell 3.1%, after January's 3.9% rise.
In an accompanying press release, the country's economy ministry said that orders for the first two months of the year were on average 0.7% above the average of the last quarter of 2013 and that the upward momentum was broad-based across all industry classifications. It also said that bulk orders were above average for the month of February. The data suggest a further pick up in industrial output in the coming months and strengthened momentum in the domestic economy in the first quarter, the release said. Germany is Europe's biggest economy.
The Governing Council of the European Central Bank (ECB) left key policy unchanged after a monetary policy review on Thursday, 3 April 2014. ECB President Mario Draghi said there was discussion of quantitative easing at the latest meeting, adding to speculation that the ECB would implement unconventional measures to fight falling inflation.
Asian stocks declined on Friday, 4 April 2014, after a fresh move by China's central bank on Thursday, 3 April 2014, to drain liquidity. Key benchmark indices in South Korea, Taiwan, Hong Kong, Indonesia, Japan and Singapore were off 0.05% to 0.68%. China's Shanghai Composite rose 0.74%.
The monetary authority, at its first-quarter monetary policy committee meeting, reiterated it will "keep moderate liquidity" and "realize reasonable growth in loans and social financing," according to a statement on the People's Bank of China's (PBOC) website yesterday, 3 April 2014. The PBOC will closely monitor new global and domestic economic and financial developments and continue to keep prudent monetary policy, according to the statement.
In February and March, a total of $3.5 billion flowed out of China equity funds, according to EPFR data, as investors worried about rising risks of an economic slowdown and fears of corporate defaults.
Trading in US index futures indicated that the Dow could advance 19 points at the opening bell on Friday, 4 April 2014. US stocks slipped on Thursday, 3 April 2014, as investors turned cautious ahead of Friday's monthly jobs report.
On the economic front, the US trade deficit unexpectedly widened in February to $42.3 billion as exports hit a five-month low, suggesting that first-quarter growth could be much weaker than initially expected.
A bright spot came from the services sector, where growth accelerated in March after being hampered by unusually cold weather, according to the Institute for Supply Management's services-sector index.
The influential US non-farms payroll data for March 2014 will be released today, 4 April 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.