US Fed taper knocks down markets to 2-month lows
Benchmark share indices ended at their lowest level in two months after further tapering by the US Fed led to a sell-off in emerging markets on concerns that foreign fund inflows would slowdown going forward. Further, expiry of January derivative contracts also weighed on the stock market.
The 30-share Sensex ended down 149 points at 20,498 and the 50-share Nifty ended down 46 points at 6,074. The Sensex had ended at 20,535 and the Nifty at 6,092 on November 28, 2013.
The rupee continued to remain weak following the US Fed's decision to further tapering of $ 10 billion. The first round of tapering of an equal quantum was announced last month.
The Indian currency was trading at 62.76 compared with previous close of 62.42 per dollar.
Meanwhile, the Finance Ministry today in a statement assured investors and market participants that the fundamentals of the economy are strong and they should not have any worries over external factors viz. fed taper. The ministry said that it will take necessary steps along with the central bank to ensure stablity in the financial markets.
All sectoral indices except Consumer Durables were trading lower. Bankex was the top loser among the sectoral indices on the BSE down 2.7% followed by Metal and Realty indices among others.
The NSE Bank Nifty ended down 2.7% after dropping to its lowest level since October last year. Bank shares were hit the hardest on concerns that the recent repo rate hike by RBI would hurt credit growth because of high interest rates. HDFC Bank, ICICI Bank, HDFC, SBI and Axis Bank down 2-3.6% each.
Profit taking was seen in index heavyweights with ITC, Reliance Industries and Infosys ended down 0.1-1.3% each.
Metal shares also took a hit on the back of weak economic data from China. Manufacturing output in China during January contracted to 49.5 from December's 50.5 and new order growth weakened, a private survey showed, indicating sluggish start for the economy in 2014. Sesa Sterlite, Tata Steel and Hindalco ended over 3% lower.
Among other shares, Bank of India ended down 10.5% at Rs 186 after reporting 27% year on year (yoy) declined in net profit at Rs 586 crore for the third quarter ended December 31, 2013 (Q3), due to higher provisioning for bad loans. The state-owned lender had profit of Rs 803 crore in the same quarter year ago.
Aurobindo Pharma ended 3.5% higher at Rs 453 in otherwise weak market. Since January 17, shares of the pharmaceutical company has outperformed the market by surging 17% after acquiring Actavis’ Western Europe business with gross consideration of Euro 30 million (about Rs 250 crore).
Inox Leisure slumped 14.1% to Rs 84 after reporting 38% year on year (yoy) decline in net profit at Rs 6.58 crore for the third quarter ended December 31, 2013 (Q3), due to lower revenues and higher expenditure.
TVS Motor Company gained 4.2% to end at Rs 73.85, extending its previous day’s 5% rally, after reporting a healthy 31% year-on-year (yoy) growth its net profit at Rs 68.80 crore for the third quarter ended December 31, 2013.
Titan Company ended down 3.7% at Rs 222 on reporting 19% year-on-year (yoy) decline in net profit at Rs 166 crore for the third quarter ended December 31, 2013 (Q3) on account of extremely poor retail sales during the quarter.
Crompton Greaves surged 7.9% to end at Rs 110.45 after reporting a consolidated net profit at Rs 62 crore for the third quarter ended December 31, 2013 (Q3), on back of higher sales. The company had recorded loss of Rs 189 crore in the same quarter year ago.
The broader markets also ended weak with BSE Mid-cap and Small-cap indices closing over 1% down.
Market breadth was weak with 1,713 losers and 867 gainers on the BSE.
Photographs: Uttam Ghosh/Rediff