Monday, 29 September 2014

Markets end lower ahead of RBI policy review

Benchmark shares indices ended tad lower on Monday, amid a volatile trading session,  with financials leading the decline ahead of the RBI monetary policy review tomorrow.

The 30-share ended down 29 points at 26,597 and the 50-share lost 10 points to close at 7,959.

In the broader market, the BSE Mid-cap index ended up 1% and Small-cap index gained 1.5%.

The market breadth ended strong on the BSE with 1,855 shares advancing and 1,087 shares declining.

Global Markets: 
Asian remained volatile following political unrest in Hong Kong, the worst since China took control 20 years ago. Japanese shares ended up 0.5% led by exporters' shares following the weakness in the yen. Shanghai Composite gained 0.4% while shares in Hong Kong witnessed selling pressure and the Hang Seng ended 1.9% lower. Meanwhile, Singapore's Straits Times ended flat with negative bias.

European markers are trading lower 0.2-0.4% each ahead of key economic data due for release later today.

The Indian rupee extended losses and was trading lower at Rs 61.50 to the US dollar compared to Friday's close of Rs 61.14 because of month-end dollar demand from importers. Meanwhile, RBI's stance on interest rates tomorrow would dictate the trend in the Indian currency.

Sectors & Stocks:
On the sectoral front, BSE Healthcare, IT and Consumer Durables were the top sectoral indices up 1.8% 2.2% each followed. However, Auto, Bankex, Metal and FMCG indices ended down between 0.4%-1.1%.

Shares of IT and pharma shares which generate most of their revenues from exports ended higher on the back of a weakening rupee against the US dollar.

Sun Pharma gained 3.4% while Cipla ended 0.7% higher.

Further, US GDP growth also boosted sentiment for IT majors.US GDP expanded at an annual rate of 4.6% in the second quarter ended June 2014 after contracting by 2.1% in the first three months of the year.

TCS gained 3% after it was awarded as the "Best Technology Provider" by "Reactions," a leading insurance publication covering the global insurance and reinsurance market on September, 26 2014. Infosys and Wipro ended up between 1.2-1.9% each.

SBI ended tad higher after international rating firm Standard and Poor's  upgraded its outlook to 'stable' from 'negative'.

On the flip side, FMCG majors ended down after a recent market research report suggests that rural consumption declined 7% in May-July against a fall of 1% in the year-ago period. In value terms, consumption rose just 1%, compared with 2% last year. Further, downgrade by Morgan Stanley to 'underweight' from 'equalweight' weighed on HUL and the stock ended down 0.7%. ITC ended 1.4% lower.

Financial stocks ended lower as investors booked profits after private surveys showed that the RBI is likely to keep interest rates steady at its policy review tomorrow. HDFC, HDFC Bank, ICICI Bank and Axis Bank ended down between 0.7-1.4% each.

Auto stocks also ended lower. Mahindra and Mahindra, Tata Motors, Hero Motocorp, Maruti Suzuki and Bajaj Auto ended lower between 0.1-1.4% each.

Metal shares continue to trade lower following the Supreme Court verdict with Sesa Sterlite and Tata Steel down over 1.6% each.

Among other shares, shares of travel companies such as Cox and Kings and Thomas Cook (India) rallied 6-11% in otherwise weak market after PM Narendra Modi eased visa rules for U.S. tourists.

HOV Services ended in upper circuit of 20% at Rs 121 on back of heavy volumes after its business process outsourcing (BPO) firm SourceHOV said it has entered into an agreement with BancTec Group LLC.

Valecha Engineering ended locked in upper circuit of 10% at Rs 68.40 on National Stock Exchange after the company said its board approved the sale of three Build, Operate and Transfer (BOT) basis road assets to New Generation Infrastructure, Inc for Rs 309 crore.

Patel Integrated Logistics ended locked in upper circuit of 20% at Rs 54.30 on National Stock Exchange (NSE) on reports that the Amazon, the world’s biggest e-commerce company, has entered into an air cargo alliance with the company for domestic deliveries.

Financial Technologies (India) ended 5% higher at Rs 228,extending its friday's rally of 7%, after the company announced the detailed cost structure of the agreement with MCX.

Mayur Uniquoters jumped 8% after DSP Blackrock Mutual Fund bought about 3% stake in the textile company for Rs 51 crore through open market transactions.

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