A bout of volatility was witnessed as key benchmark indices weakened once again in mid-afternoon trade after seeing intraday recovery in afternoon trade. The S&P BSE Sensex was down 196.31 points or 1.03%, up about 80 points from the day's low and off close to 70 points from the day's high. The market breadth, indicating the overall health of the market, was weak. Weakness in European and Asian stocks weighed on sentiment. Shares of power generation and power distribution companies edged lower in weak market. ONGC reversed intraday losses. Bhel extended intraday losses. Bharti Airtel extended intraday gains. IT stocks declined.
The market edged lower in early trade on weak Asian stocks. The market weakened once again after trimming initial losses in morning trade. The market extended losses to hit fresh intraday low in mid-morning trade. The barometer index, the S&P BSE Sensex, hit 8-week low below the psychological 19,000 mark. The 50-unit CNX Nifty also hit 8-week low. The market trimmed intraday losses in early afternoon trade. Key benchmark indices trimmed losses in afternoon trade. The market weakened once again in mid-afternoon trade.
The market sentiment was affected adversely by data showing that foreign funds remained net sellers of Indian stocks on Wednesday, 12 June 2013. Foreign institutional investors (FIIs) sold shares worth a net Rs 1060.17 crore on Wednesday, 12 June 2013, as per provisional data from the stock exchanges.
At 14:20 IST, the S&P BSE Sensex was down 196.31 points or 1.03% to 18,844.82. The index declined 275.60 points at the day's low of 18,765.53 in mid-morning trade, its lowest level since 18 April 2013. The index fell 127 points at the day's high of 18,914.13 in morning trade.
The CNX Nifty was down 54.35 points or 0.94% to 5,705.85. The index hit a low of 5,683.10 in intraday trade, its lowest level since 18 April 2013. The index hit a high of 5,729.85 in intraday trade.
The market breadth, indicating the overall health of the market, was weak. On BSE, 1,477 shares fell and 656 shares rose. A total of 143 shares were unchanged.
Among the 30-share Sensex pack, 24 stocks fell and the rest of them rose. Hindalco Industries (up 4.09%), Jindal Stee l& Power (up 1.13%) and Hero MotoCorp (up 0.87%), edged higher. Tata Motors (down 3.36%), Sun Pharmaceutical Industries (down 3.03%) and Tata Power Company (down 2.94%), edged lower.
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IT stocks declined. Infosys, Wipro and TCS shed by 1.05% to 1.33%.
India's largest power equipment maker by sales Bhel shed 2.48%, with the stock extending intraday losses.
ONGC rose 0.05%, with the stock reversing intraday losses.
Shares of power generation and power distribution companies edged lower in weak market. Power Grid Corporation of India, Reliance Infrastructure, Tata Power Company, NTPC, Adani Power, JSW Energy, and Reliance Power shed by between 0.12% to 3.58%.
Bharti Airtel rose 3.08%, with the stock recovering on bargain hunting after 6-day 8.59% slide. The stock had declined 8.59% in six trading sessions to settle at Rs 277.95 on Wednesday, 12 June 2013, from a recent high of Rs 304.10 on 4 June 2013.
Bharti Telecom, a promoter group entity of Bharti Airtel, purchased 18.17 lakh shares of Bharti Airtel for around Rs 50.90 crore through open market transactions this week. Bharti Telecom's stake in the company has increased to 45.81% post the purchase from 45.77%, the company said in a filing to the BSE. Bharti Telecom bought 6 lakh shares for Rs 17.07 crore on 10 June 2013, 6.75 lakh shares for Rs 18.74 crore on 12 June 2013 and another tranche of 5.42 lakh shares for Rs 15.09 crore on 12 June 2013, the filing added.
The government today, 13 June 2013, said that industrial production growth for April 2013 has been revised upwards to 2.2% from 2% reported on Wednesday, 12 June 2013, as the government corrected production data for electricity. However, the growth rate still remained lower than the upwardly revised 3.4% expansion in March 2013.
Finance Minister P Chidambaram speaking on the state of the economy today, 13 June 2013, said he expects decisions to be announced in June that will accelerate economic reforms and spur investments in critical sectors and that steps government had taken in the last nine months have yielded results. The government plans to announce a review of the foreign direct investment limits as also coal pricing and allocation to power plants and gas pricing by the end of June, he said. Chidambaram said he is confident of attracting enough capital inflows to finance current-account deficit.
In a strong measure aimed at defending the rupee, the Centre on Wednesday announced a hike in the foreign investment limits in government debt by $5 billion. The measure aims at reversing the outflow of FII funds from debt instruments, one of the reasons for the depreciation in the rupee in recent weeks. Currently, the government debt limit stands at $25 billion. The move comes a day after the Chief Economic Advisor to the finance ministry Raghuram Rajan had said the government will be announcing measures to ensure that portfolio investor inflows are enabled and encouraged.
A committee set up by the Securities and Exchange Board of India on Wednesday, 12 June 2013, recommended the market regulator to simplify rules on foreign portfolio investments in the country. Among the major recommendations, the committee has suggested that existing foreign institutional investors (FIIs), Sub Accounts and Qualified Foreign Investors (QFI) categories be merged into a new investor class to be termed as "Foreign Portfolio Investor" (FPI). The committee has also suggested allowing foreign venture-capital funds to invest in more sectors. Foreign venture funds are currently allowed to invest in only nine sectors including biotechnology, nanotechnology and information technology.
According to the panel, foreign institutional investors should be allowed to register with local depositories recommended by Sebi. Currently, FIIs that want to invest in the Indian market must register directly with the regulator. The committee has also asked Sebi to simplify verification processes -- also called know-your-customer documentation
Global credit rating agency, Fitch Ratings on Wednesday raised its outlook on India's sovereign debt to stable from negative. Fitch cited the government's steps to contain its budget deficit despite the economic slowdown as the main reason for raising the outlook. India also made progress in addressing structural issues such as regulatory uncertainties, delays in government approvals for industrial projects and problems in sectors such as power and mining, it said.
Fitch acknowledged challenges, noting a recovery would remain slow until a healthier investment climate is created, and warning the rupee drop would limit the scope for RBI rate cuts.
European markets declined on Thursday, with investors turning risk averse after the Japan's Nikkei index fell into bear-market territory, and the dollar dropped to its weakest level against the Japanese yen since 4 April 2013. Key benchmark indices in UK, France and Germany were down 1.22% to 2.07%.
Asian equities dropped on Thursday after the World Bank cut its global growth forecast amid concern central banks may pare monetary stimulus. Key benchmark indices in China, Hong Kong, Indonesia, Singapore, Taiwan and South Korea were off 0.85% to 2.83%.
Japanese shares tumbled as the yen rose against the dollar. The Nikkei 225 Average lost 6.35%.
Trading in US index futures indicated that the Dow could fall 91 points at the opening bell on Thursday, 13 June 2013. US stocks fell on Wednesday on concerns the Federal Reserve could taper down its bond purchases. The Federal Open Market Committee meets next week after the Bank of Japan this week left its lending program unchanged.
The World Bank cut its global growth forecast for this year after emerging markets from China to Brazil slowed more than projected, while budget cuts and slumping investor confidence deepened Europe's contraction. The world economy will expand 2.2%, less than a January forecast for 2.4% growth and slower than last year's 2.3%, the bank said in a report. It lowered its prediction for developing economies and sees the euro region's gross domestic product shrinking 0.6%. In contrast, forecasts were raised for the US and Japan, which was helped by fiscal and monetary stimulus.
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