Key benchmark trimmed losses after hitting fresh intraday low in early afternoon trade. The Sensex was down 286.59 points or 1.47%, off close to 265 points from the day's high and up about 35 points from the day's low. Today's decline on the bourses was broad based. The market breadth, indicating the overall health of the market, was extremely weak. A run on the rupee and weakness in Asian stocks weighed on sentiment.
Jindal Steel & Power dropped on heavy volumes after media reports the Central Bureau of Investigation (CBI) has registered an FIR against Congress MP and company's Chairman Naveen Jindal in the coal scam case. Shares of other metal stocks extended intraday losses. Shares of Axis Bank, HDFC Bank and ICICI Bank extended intraday losses triggered by the Reserve Bank of India (RBI) imposing a monetary penalty on these three private sector banks for violating RBI instructions. PSU bank stocks also declined. ONGC and Tata Power Company also extended intraday losses. Realty stocks also declined in weak market.
The market edged lower in early trade. The Sensex extended initial losses to hit fresh intraday low in morning trade. The market weakened further to hit fresh intraday low in mid-morning trade. The Sensex trimmed losses after hitting 7-week low in early afternoon trade.The Nifty trimmed losses after hitting its lowest level in almost 8 weeks.
The partially convertible rupee was trading at 58.88 after hitting record low of 58.96 versus Monday's close of 58.15/16 per dollar. The rupee had lost 1.9% on Monday, 10 June 2013, weighed down by broad gains in the dollar. A weak rupee makes imports costlier, stoking inflation concerns, thereby capping the Reserve Bank of India's scope to extend monetary easing and counter the slowest economic growth in a decade.
Foreign institutional investors (FIIs) sold shares worth a net Rs 114 crore on Monday, 10 June 2013, as per provisional data from the stock exchanges.
At 12:20 IST, the S&P BSE Sensex was down 286.59 points or 1.47% to 19,154.48. The index declined 319.89 points at the day's low of 19,121.18 in early afternoon trade, its lowest level since 23 April 2013. The index fell 22.33 points at the day's high of 19,418.74 in early trade.
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The CNX Nifty was down 79.40 points or 1.35% to 5,798.60. The index hit a low of 5,781.80 in intraday trade, its lowest level since 18 April 2013. The index hit a high of 5,868.05 in intraday trade.
The market breadth, indicating the overall health of the market, was extremely weak. On BSE, 1,514 shares fell and 375 shares rose. A total of 111 shares were unchanged.
Among the 30-share Sensex pack, 26 stocks fell and rest of them rose. Cipla, GAIL (India) and Dr Reddy's Laboratories rose by 0.49% to 0.88%.
Jindal Steel & Power slumped 18.72% to Rs 216.90, with the stock extending Monday's 4.46% losses after media reports the Central Bureau of Investigation (CBI) has registered an FIR against Congress MP and company's Chairman Naveen Jindal in the coal scam case. The stock recovered after hitting 52-week low of Rs 202 in intraday trade today, 11 June 2013. On BSE, 28.73 lakh shares changed hands on the counter, compared with average daily volume of 2.42 lakh shares in the past one quarter.
The FIR has accused Navin Jindal and Jindal Power and Steel of misrepresentation of networth and concealing previous coal allotment. They are also charged with cheating and forgery. The Naveen Jindal group was allotted a total of 11 blocks, making it the single largest beneficiary of the controversial coal block allotment.
As per reports, CBI officials are conducting raids at 15 places in Delhi, Hyderabad and Kolkata. The CBI has also filed an FIR against former Minister of State for Coal Dasari Narayan Rao.
Shares of other metal stocks extended intraday losses. Sterlite Industries, Hindalco Industries, Sail and Tata Steel shed by 2.33% to 5.37%. Metal stocks extended Monday's losses triggered by weak Chinese economic data released over the weekend. China is the world's largest consumer of copper and aluminum.
ONGC fell 2.45%, with the stock extending intraday losses.
Tata Power Company declined 4.79%, with the stock extending intraday losses
Axis Bank, HDFC Bank and ICICI Bank shed by 0.6% to 2.98% after the Reserve Bank of India (RBI) on Monday, 10 June 2013, said it has imposed a monetary penalty on these three private sector banks for violating RBI instructions. A penalty of Rs 5 crore has been imposed on Axis Bank, Rs 4.5 crore on HDFC Bank and Rs 1 crore on ICICI Bank. The RBI had carried out a scrutiny of books of accounts, internal control, compliance systems and processes of these three banks at their corporate offices and some branches during March/April 2013 to investigate into the allegations of contravention of KYC/AML guidelines against them. The scrutiny of these three banks revealed violation of certain regulations and instructions issued by RBI such as non-observance of certain safeguards in respect of arrangement of "at par" payment of cheques drawn by cooperative banks, non-adherence to certain aspects of know your customer (KYC) norms and anti money laundering (AML) guidelines like risk categorisation and periodical review of risk profiling of account holders, non-adherence of KYC for walk in customers including for sale of third party products, omission in filing of cash transaction reports (CTRs) in respect of some cash transactions and sale of gold coins for cash beyond Rs 50000, RBI said. Among other violations are not-obtaining of permanent account number (PAN) card details or form 60/61 as required, non-verification of source of funds credited to a few non-resident ordinary (NRO) accounts, failure to re-designate a few accounts as NRO accounts and non-submission of proper information called for by RBI. The investigation did not reveal any prima facie evidence of money laundering, RBI said. However, any conclusive inference in this regard can be drawn only by an end to end investigation of the transactions by tax and enforcement agencies, RBI said. A similar scrutiny was also conducted at the corporate offices of 36 other banks during April and May 2013. The process of follow up action in respect of these banks is at different stages of its completion, RBI said.
Among PSU bank stocks, State Bank of India (SBI), Canara Bank, Union Bank of India, Bank of India, and Punjab National Bank dropped by 0.01% to 1.82%.
Realty stocks declined in weak market. DLF, HDIL, D B Realty and Unitech shed by 2.83% to 4.77%.
Asian stocks edged lower on Tuesday after the Bank of Japan kept its policy unchanged. Key benchmark indices in Taiwan, Hong Kong, Indonesia, Japan, Singapore and South Korea shed by 0.54% to 2.77%. Mainland Chinese markets are closed from Monday, 10 June 2013 till tomorrow, 12 June 2013, for the Dragon Boat Festival.
The Bank of Japan (BOJ) on Tuesday kept monetary policy steady and revised up its assessment of the economy, unfazed by recent market turbulence which has yet to inflict severe damage on a gradually improving economy. As widely expected, the central bank voted unanimously to maintain its pledge of increasing base money, or cash and deposits at the BOJ, at an annual pace of 60 trillion to 70 trillion yen.
Trading in US index futures indicated that the Dow could fall 11 points at the opening bell on Tuesday, 11 June 2013. US stocks ended a choppy session little changed on Monday after Standard & Poor's Ratings Services revised its US credit-rating outlook to stable from negative and consumer shares lost ground.
Global credit rating agency Standard & Poor's revised its credit-rating outlook for the US to stable from negative citing receding fiscal risks, indicating the likelihood of a near-term downgrade is less than one in three. S&P also affirmed its AA+/A-1+ sovereign-credit ratings for the US.
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