Key benchmark indices slumped as better-than-expected US service industries data fueled speculation the US Federal Reserve will reduce stimulus to the US economy soon. Indo-Pak tension also weighed on equities after a heavily-armed team of terrorists and Pakistani troops ambushed an Indian Army patrol along the Line of Control in the Poonch sector of Jammu and Kashmir in the early hours of Tuesday, killing five Indian soldiers. The Sensex settled at its lowest level in nearly six weeks. The 50-unit CNX Nifty finished at its lowest level in more than 16 weeks. The Sensex was down 449.22 points or 2.34%, off 398.88 points from the day's high and up 65.74 points from the day's low. The market breadth, indicating the overall health of the market, was weak. All the thirteen sectoral indices on BSE were in the red.
The Sensex had gained marginally by 0.1% on Monday, 5 August 2013. Earlier, the Sensex had fallen 1,138.11 points or 5.6% in eight trading sessions to settle at 19,164.02 on Friday, 2 August 2013, from a recent high of 20,302.13 on 23 July 2013. The Sensex has declined 612.66 points or 3.17% in August so far (till 6 August 2013). The Sensex has declined 693.67 points or 3.57% in calendar 2013 so far (till 6 August 2013). From a 52-week high of 20,443.62 on 20 May 2013, the Sensex has fallen 1,710.58 points or 8.37%. From a 52-week low of 17,250.80 on 5 September 2012, the Sensex has surged 1,482.24 points or 8.59%.
Coming back to today's trade, Bharat Heavy Electricals (Bhel) extended Monday's steep losses triggered by the company's weak Q1 results. L&T hit 52-week low. Tata Power Company tumbled and hit 52-week low after the company reported reverse turnaround in Q1 June 2013. Bank stocks extended intraday losses, with State Bank of India hitting a 52-week low. Metal and mining stocks declined, with Tata Steel hitting 52-week low.
PSU OMCs fell on a weak rupee, with BPCL hitting a 52-week low. Realty stocks dropped, with DLF hitting a record low. IT stocks were mixed.
The market edged lower in early trade on weak Asian stocks. The Sensex extended initial losses to hit fresh intraday low in morning trade as the rupee hit record low against the dollar. The market weakened further to hit fresh intraday low in mid-morning trade. The Sensex fell below the psychological 19,000 mark. Weakness continued on the bourses in early afternoon trade. The Sensex slumped to hit fresh intraday low in mid-afternoon trade.
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Indo-Pak tension weighed on the bourses after a heavily-armed team of terrorists and Pakistani troops ambushed an Indian Army patrol along the Line of Control in the Poonch sector of Jammu and Kashmir in the early hours of Tuesday, killing five Indian soldiers. The incident occurred just hours after the ceasefire violation in Samba sector on Monday evening in which one BSF soldier was injured.
In the foreign exchange market, the rupee witnessed high intraday volatility. The Indian currency reversed direction after a steep intraday slide took it to record low of 61.80 versus the dollar. The rupee was hovering at 60.77, firmer than Monday's close of 60.88/89.
The S&P BSE Sensex lost 449.22 points or 2.34% to 18,733.04, its lowest closing level since 26 June 2013. The index lost 514.96 points at the day's low of 18,667.30 in late trade. The index declined 50.34 points at the day's high of 19,131.92 in early trade.
The CNX Nifty lost 143.15 points or 2.52% to 5,542.25, its lowest closing level since 12 April 2013. The index hit a low of 5,521.80 in intraday trade. The index hit a high of 5,664.90 in intraday trade.
The total turnover on BSE amounted to Rs 1677 crore, lower than Rs 1765.97 crore on Monday, 5 August 2013.
The market breadth, indicating the overall health of the market, was weak. On BSE, 1,612 shares fell and 644 shares rose. A total of 122 shares were unchanged.
The BSE Mid-Cap index fell 2.6%, underperforming the Sensex. The BSE Small-Cap index declined 1.78%, outperforming the Sensex.
Among the sectoral indices on BSE, the S&P BSE IT index (down 0.46%), the S&P BSE Auto index (down 0.69%), the S&P BSE Teck index (down 0.99%), the S&P BSE Healthcare index (down 1.05%) and the S&P BSE FMCG index (down 2.02%) outperformed the Sensex.
The S&P BSE Capital Goods index (down 2.56%), the S&P BSE PSU index (down 2.57%), the S&P BSE Oil & Gas index (down 2.65%), the S&P BSE Power index (down 3.21%), the S&P BSE Metal index (down 3.24%), the S&P BSE Bankex (down 3.9%), the S&P BSE Realty index (down 4.45%) and the S&P BSE Consumer Durables index (down 5.55%) underperformed the Sensex.
Among the 30-share Sensex pack, 27 stocks fell and only three of them rose.
Index heavyweight and cigarette major ITC lost 1.73% to Rs 330.10.
Index heavyweight Reliance Industries (RIL) shed 2.43% to Rs 840.
PSU OMCs fell on weak rupee. HPCL (down 6.11%) and Indian Oil Corporation (down 1.21%), edged lower.
BPCL declined 6.82% to Rs 262.50 after hitting a 52-week low of Rs 256 in intraday trade today, 6 August 2013.
The weakness in rupee has raised concerns about increased costs of importing oil. PSU OMCs import about 70-75% of their crude oil needs and rely heavily on foreign currency borrowings, which largely remain unhedged.
Metal and mining stocks declined. Sterlite Industries (down 5.51%), Sesa Goa (down 4.32%), NMDC (down 3.03%), Jindal Steel & Power (down 2.98%), Sail (down 3.88%), Hindustan Zinc (down 2.39%), Hindalco Industries (down 1.21%), declined.
Steel major Tata Steel dropped 4.69% to Rs 198.15 after hitting a 52-week low of Rs 197.30 in intraday trade today, 6 August 2013.
But, shares of state-run copper miner Hindustan Copper jumped 8.74% to Rs 47.90.
Bank stocks dropped. HDFC Bank declined 3.94%. ICICI Bank dropped 4.28%.
Among PSU bank stocks, Canara Bank, Union Bank of India, Bank of India, Bank of Baroda and Punjab National Bank shed by 2.94% to 5.94%.
State Bank of India declined 2.51% to Rs 1640.10 after hitting a 52-week low of Rs 1634.15 in intraday trade today, 6 August 2013.
Housing finance major HDFC lost 5.09%.
Bharat Heavy Electricals (Bhel) slumped 6.95% to Rs 112.50, with the stock extending Monday's steep losses triggered by weak Q1 results. The stock hit 52-week low of Rs 112.10 in intraday trade today, 6 August 2013. The scrip had lost 19.08% in a single trading session on Monday, 5 August 2013, on weak Q1 results. The company's net profit fell 49.45% to Rs 465.43 crore on 20.54% decline in total income to Rs 6996.60 crore in Q1 June 2013 over Q1 June 2012. The result was announced on Saturday, 3 August 2013.
Tata Power Company tumbled 13.56% to Rs 72.35 after the company reported reverse turnaround in Q1. The stock hit 52-week low of Rs 68.25 in intraday trade today, 6 August 2013. The company reported a consolidated net loss of Rs 114.70 crore in Q1 June 2013, compared with net profit of Rs 145.93 crore in Q1 June 2012. The company's total income rose 24.53% to Rs 9111.57 crore in Q1 June 2013 over Q1 June 2012. The company announced Q1 result during market hours today, 6 August 2013.
L&T declined 2.06% to Rs 797 after hitting a 52-week low of Rs 784.25 in intraday trade today, 6 August 2013.
Siemens declined 2.49%. The company today, 6 August 2013, said that a consortium comprising the company, its parent Siemens AG and Siemens Ltd. China has won an order for a turnkey project worth about 70 million euros from IL&FS Rail. The company's share of the order in the project is Rs 184.10 crore. The project involves extension of the Gurgaon Metro line with a new southern line, which is around seven kilometers long. The new line will add 6 stations in the south-east of Gurgaon.
Crompton Greaves rose 3.6%. The company's consolidated net profit declined 30.05% to Rs 60.08 crore on 12.31% growth in total income from operations to Rs 3157.22 crore in Q1 June 2013 over Q1 June 2012. The Q1 result was announced during trading hours today, 6 August 2013. Crompton Greaves said that Q1 June 2013 results include the results of the subsidiaries acquired during the last year i.e. ZIV Group in Spain. Consequently, figures for the quarter are not comparable with corresponding quarter last year.
IT stocks were mixed. Wipro gained 0.52% to Rs 452 after hitting a 52-week high of Rs 463.20 in intraday trade today, 6 August 2013.
IT major TCS rose 0.29% to Rs 1,872 after hitting a record high of Rs 1,881 in intraday trade today, 6 August 2013. TCS on Monday, 5 August 2013, said that it has been selected by Australian Pharmaceutical Industries (API), a leading beauty and health retail company in Australia to deliver a major IT and business transformation program whereby TCS will deliver SAP technology to unify and enhance mission critical IT systems across API's retail and wholesale operations.
Infosys fell 0.68% to Rs 2,987. The stock had hit a 52-week high of Rs 3,025 in intraday trade on Monday, 5 August 2013.
HCL Technologies declined 0.7% to Rs 942.90. The stock had struck a record high of Rs 960.75 in intraday trade on Monday, 5 August 2013.
A weak rupee boosts revenue of IT firms in rupee terms as the sector derives a lion's share of revenue from exports.
eClerx Services rose 3.7% after the company said its board will consider share buyback on Thursday, 8 August 2013.
Tata Motors rose 1.16% ahead of its Q1 result tomorrow, 7 August 2013.
Shares of motorcycle maker Hero MotoCorp fell 1.1%. The company said on 1 August 2013, its total sales rose 0.68% to 4.87 lakh units in July 2013 over July 2012.
Bosch fell 2.43%. The company after market hours today, 6 August 2013, reported 1.7% rise in net profit to Rs 251.68 crore on 5.69% rise in total income to Rs 2396.75 crore in Q2 June 2013 over Q2 June 2012.
Pharma stocks declined. Dr Reddy's Laboratories (down 1.14%), Wockhardt (down 5%) and Sun Pharmaceutical Industries (down 1.94%), declined.
Lupin was down 1.01% ahead of its Q1 result tomorrow, 7 August 2013.
Ranbaxy Laboratories was down 3.16% ahead of its Q2 result tomorrow, 7 August 2013.
Cipla declined 0.93% as the stock turned ex-dividend today, 6 August 2013, for dividend of Rs 2 per share for the year ended 31 March 2013 (FY 2013).
Realty stocks dropped. HDIL (down 12.4%), Indiabulls Real Estate (down 2.11%) and D B Realty (down 3.29%), edged lower.
DLF declined 5.22% to Rs 122.60 after hitting a record low of Rs 121.60 in intraday trade today, 6 August 2013.
Unitech lost 5.4%. The company during market hours today, 6 August 2013, reported 37.08% rise in consolidated net profit to Rs 62.89 crore on 35.13% rise in total income to Rs 597.67 crore in Q1 June 2013 over Q1 June 2012.
Shares of realty developer Orbit Corporation were off 6.57% to Rs 11.10 and that of LIC Housing Finance were off 7.29% to Rs 159 after Orbit Corporation admitted of delay in payment of certain interest and principal over last few months to LIC Housing Finance and said that currently an amount of around Rs 96 crore is outstanding to the lender. The company issued a clarification to the stock exchanges today, 6 August 2013, after LIC Housing Finance published a caution notice in newspapers. Orbit Corporation said that the management is in continuous discussion with the LIC Housing Finance officers for re-schedulement of the credit facilities availed by the company. The realty developer said that there was delay in the receipt of regulatory permission for its projects in the last 18-24 months due to which there was not much of construction activities at the site, which in effect led to deferment of the receivables from the project. The company said it has received permissions for the projects in the last couple of months and slowly construction activity has begun to remobilize the sites. The company said it expects the cash flows from the project will restart in the next 1-2 months which will be utilised to service the credit facilities of LIC Housing Finance.
Shares of Financial Technologies tumbled 22.46% to Rs 153.50 on reports that the government is likely to ban trading in e-series contracts on National Spot Exchange (NSEL), a move that could hit NSEL's business further. NSEL offers e-series contracts in gold, silver, copper, zinc, lead, nickel and platinum. Under e-series contracts, retail investors can buy and sell commodities in demat form. NSEL today, 6 August 2013, said that while the exchange has not yet received government order banning trading in e-series contracts, but as abundant precaution the exchange will not commence trading in e-Series as usual at 10:00 IST. "We will check with the authorities to find out the facts. In any case we will fully comply with Government order", NSEL said on its website. Financial Technologies is one of the two promoters of the NSEL.
The stock had surged 30.88% on Monday, 5 August 2013, after the National Spot Exchange (NSEL) on Sunday, 4 August 2013, proposed two options for settlement of trades on the exchange in the aftermath of NSEL's decision on 31 July 2013 to suspend trading in most one-day forward contracts and to defer the settlement of all pending contracts for 15 days. Earlier, the stock had witnessed steep slide after NSEL's decision on 31 July 2013 to suspend trading of all contracts, other than e-Series contracts, till further notice.
In a clarification to the stock exchanges, Mr. Jignesh Shah, Chairman & Managing Director of Financial Technologies (India) (FTIL) had on 1 August 2013 said that NSEL's decision to suspend trading in most one-day forward contracts does not entail any financial liability on FTIL and that the business of FTIL is as usual.
Shares of Multi Commodity Exchange of India (MCX), a commodity futures exchange promoted by Financial Technologies, were locked at 10% lower circuit at Rs 331.85, also its record low, with the stock extending recent steep slide.
In response to the media queries, Mr. Shreekant Javalgekar, Managing Director & CEO of MCX has clarified that MCX and National Spot Exchange (NSEL) are totally different entities with no financial commitments or exposure to each other whatsoever. MCX is an extremely sound regulated entity. He said MCX has a strong debt-free Balance Sheet with a networth in excess of Rs 1200 crore as on 30 June 2013. MCX had on 1 August 2013 said that there will not be any impact of NSEL's decision to suspend trading in most one-day forward contracts on the operations and financials of MCX.
Engineers India lost 6.91% after net profit fell 16.17% to Rs 129.34 crore on 35.55% decline in total income to Rs 511.22 crore in Q1 June 2013 over Q1 June 2012. The Q1 result was announced after market hours on Monday, 5 August 2013.
Symphony surged 15.73% after net profit jumped 31.67% to Rs 25.90 crore on 27.07% growth in total income from operations to Rs 114.42 crore in Q4 June 2013 over Q4 June 2012. The Q4 result was announced after market hours on Monday, 5 August 2013. Symphony's net profit rose 24.51% to Rs 62.68 crore on 24.88% growth in total income from operations to Rs 321.86 crore in the year ended 30 June 2013 over the year ended 30 June 2012.
On consolidated basis, Symphony's net profit rose 13.2% to Rs 60.11 crore on 22.18% growth in total income from operations to Rs 390.69 crore in the year ended 30 June 2013 over the year ended 30 June 2012.
Symphony's board of directors at a meeting held on Monday, 5 August 2013, decided to open a branch in United Arab Emirates (UAE). UAE is an important hub for trading activities for MENA region viz. Middle East North Africa. This region includes GCC countries (Gulf Cooperation Council), other Middle-eastern countries and North African countries. The whole of this region has vast and promising markets for air coolers, Symphony said. On opening of this branch, the company foresees to expand its presence in this area, it added.
NDTV hit a lower circuit limit of 20% at Rs 74.80. On a consolidated basis, the company reported a net loss of Rs 24.04 crore in Q1 June 2013, lesser than the net loss of Rs 26.09 crore in Q1 June 2012. Total income from operations slipped 4.15% to Rs 102.40 crore in Q1 June 2013 over Q1 June 2012.
Great Eastern Shipping Company rose 2.63% after the company said its board will meet on 8 August 2013, to consider buyback of equity shares. The announcement was made after market hours on Monday, 5 August 2013.
The finance ministry today, 6 August 2013, said that Prime Minister Dr. Manmohan Singh has approved the appointment of Dr. Raghuram Rajan as the next Governor of Reserve Bank of India (RBI) for a term of three years after D Subbarao's tenure ends on 4 September 2013. Rajan, who is currently Chief Economic Adviser in the finance ministry, joined the government last August, having previously been chief economist at the International Monetary Fund and a professor at the University of Chicago.
Economic output in emerging economies contracted in July to its slowest pace since April 2009, marking a fresh low since the global financial crisis, according to HSBC Holdings PLC. The HSBC Emerging Markets Index, which tracks purchasing managers' index reports from 16 emerging economies, declined to 49.4 in July from 50.6 the previous month, HSBC said in a report. A reading above 50 indicates an expansion in activity.
European indices were mostly lower on Tuesday, 6 August 2013. Key benchmark indices in Germany and UK were down by 0.03% to 0.19%. France's CAC 40 rose 0.05%.
Italy's economy contracted less than expected in the second quarter of 2013, shrinking 0.2% compared with the previous three months as activity fell slightly in all sectors, said national statistics institute Istat Tuesday, citing its preliminary estimate. Italian gross domestic product contracted 2.0% in the second quarter compared with the same period of 2012, Istat said.
UK industrial production rose more than economists forecast in June as manufacturing surged the most in a year, rebounding from a slump the previous month. Industrial output increased 1.1% from May after stagnating for three months, the Office for National Statistics said today in London.
Most Asian stocks fell on Tuesday, 6 August 2013, as stronger growth in American service industries fueled speculation the US Federal Reserve will soon be able to reduce economic stimulus. Key benchmark indices in Hong Kong, Taiwan, Singapore, and South Korea were off 0.5% to 1.34%. Key benchmark indices in China and Japan rose by 0.49% and 1%, respectively.
Australia's central bank cut its benchmark interest rate to a record low and damped expectations of further reductions. Governor Glenn Stevens and his board reduced the overnight cash-rate target by a quarter percentage point to 2.5%, the Reserve Bank of Australia said in a statement in Sydney today.
Trading in US index futures indicated that the Dow could fall 27 points at the opening bell on Tuesday, 6 August 2013. Most US stocks fell on Monday, 5 August 2013, with benchmark indices pulling away from record highs, as Wall Street considered a report indicating better-than-expected growth in the service sector and a Federal Reserve official's remarks that the central bank is closer to curbing its asset purchases. Dallas Federal Reserve Bank President Richard Fisher on Monday, 5 August 2013, said the fall in the US unemployment rate to 7.4% in July means the Fed is closer to slowing its asset purchases from $85 billion a month.
The Institute for Supply Management's non-manufacturing index for the US rose to 56 in July, beating the median estimate and June's 52.2 reading.
The US central bank currently buys $85 billion a month in US debt and mortgage-backed securities. Federal Reserve Chairman Ben Bernanke has on several occasions stressed that the tapering process is dependent on an improvement in data. Fed's bond-buying program has kept global markets flush with liquidity in recent years.
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