Weakness continued on the bourses in mid-morning trade. The S&P BSE Sensex was down 117.73 points or 0.59%, up 45.55 points from the day's low and off 172.33 points from the day's high. The market breadth, indicating the overall health of the market, was positive.
Bank pivotals fell. IDFC jumped after the central bank withdrew restrictions placed on the purchase of the company's shares by foreign investors.
Key benchmark indices reversed direction after a firm opening triggered by higher Asian stocks. The barometer index, the S&P BSE Sensex, dropped below the psychological 20,000 mark after regaining that level at the onset of the trading session. Key benchmark indices extended initial losses and hit intraday low in morning trade. Key benchmark hovered in red in mid-morning trade.
Foreign institutional investors (FIIs) bought shares worth a net Rs 586.50 crore on Wednesday, 11 September 2013, as per provisional data from the stock exchanges.
In the foreign exchange market, the rupee weakened against the dollar. The partially convertible rupee was hovering at 63.72, weaker than its close of 63.38/39 on Wednesday, 11 September 2013.
At 11:18 IST, the S&P BSE Sensex was down 117.73 points or 0.59% to 19,879.72. The index lost 163.28 points at the day's low of 19,834.17 in morning trade. The index rose 54.60 points at the day's high of 20,052.05 in early trade.
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The CNX Nifty was down 34.35 points or 0.58% to 5,878.80. The index hit a low of 5,866.30 in intraday trade. The index hit a high of 5,932 in intraday trade, its highest level since 26 July 2013.
The market breadth, indicating the overall health of the market, was positive. On BSE, 1,108 shares gained and 793 shares fell. A total of 137 shares were unchanged.
Among the 30-share Sensex pack, 17 stocks declined and rest of them gained. Sesa Goa (down 2.07%), Hindustan Unilever (down 1.7%) and Tata Motors (down 1.62%) edged lower from the Sensex pack. Tata Power Company (up 4.3%), GAIL (India) (up 2.73%) and Cipla (up 1.79%) edged higher from the Sensex pack.
Hero MotoCorp lost 1.96% to Rs 2,047.55. The stock had hit a 52-week high of Rs 2,127.70 on Wednesday, 11 September 2013.
Bank pivotals fell. SBI (down 0.71%), ICICI Bank (down 1.76%), and HDFC Bank (down 1.57%) edged lower.
IDFC jumped 6.99% after the central bank withdrew restrictions placed on the purchase of the company's shares by foreign investors. The Reserve Bank of India (RBI) on Wednesday, 11 September 2013, lifted restrictions placed on foreign institutional investors (FIIs) buying shares in IDFC as the overall foreign shareholding fell below the prescribed limit of 54%. The Reserve Bank of India (RBI) made the announcement after market hours on Wednesday, 11 September 2013.
Total foreign holding in IDFC was 53.18% as at 30 June 2013, of which 52.89% was held by FIIs.
Financial Technologies (India) (up 19.88%), Engineers India (up 8.4%), MCX (up 5%), Dish TV India (up 4.49%) and Eicher Motors (up 3.47%) were among the top gainers from the BSE's A group.
Siemens (down 4.23%), Yes Bank (down 3.66%), Future Retail (down 3.3%), United Breweries (down 3.12%) and Piramal Enterprises (down 2.8%) were among the top losers from the BSE's A group.
KEC International rose 4.02%, with the stock extending Wednesday's 2.75% gains triggered by the company securing new orders worth Rs 1004 crore in its transmission, cables, telecom and power systems cables businesses.
On the macro front, the government will unveil data on industrial production for July 2013 after trading hours today, 12 September 2013. Industrial production is seen contracting 0.8% in July 2013, as per the median estimate of a poll of economists carried out by Capital Market. Industrial production registered a contraction of 2.2% in June 2013.
Consumer price inflation is expected to remain high at 9.6% in August 2013, as per the median estimate of a poll of economists carried out by Capital Market. Inflation based on the combined consumer price index (CPI) for urban and rural India had decelerated to 9.64% in July 2013 from 9.87% in June 2013. The government will unveil data on combined consumer price index (CPI) for urban and rural India for August 2013 after trading hours today, 12 September 2013.
Reserve Bank of India Governor Raghuram Rajan on Wednesday, 11 September 2013, said that India's slowing economy and its massive current account and fiscal deficits are not structural problems and can be fixed with modest reforms. This is not to say that ambitious reform is not good, or is not warranted to sustain growth for the next decade. But India does not need to become a manufacturing giant overnight to fix its current problems, Rajan wrote in commentary published on the Project Syndicate website. He said the slowdown in the economy was paradoxically the effect of substantial fiscal and monetary stimulus that the policymakers had injected into its economy in the aftermath of the 2008 financial crisis. The resulting growth spurt led to inflation, especially because the world did not slide into a second Great Depression, as was originally feared, he said. So monetary policy has since remained tight, with high interest rates contributing to slowing investment and consumption, he wrote. Economic growth would slow to a 5% to 5.5% pace, he said, adding that was "not great, but certainly not bad for what is likely to be a low point in economic performance".
Asian stock markets were mostly higher Thursday, 12 September 2013, with energy stocks offering a bright spot after an increase for oil futures. Key benchmark indices in Indonesia, Hong Kong, China, and Singapore rose by 0.02% to 0.69%. Key benchmark indices in South Korea and Japan fell by 0.14% to 0.47%. Taiwan's Taiwan Weighted index was unchanged.
Japanese core machinery orders stayed flat in July from the previous month, the government said Thursday, following a 2.7% decrease in June, suggesting businesses are still cautious about increasing investment despite a weaker yen and economic stimulus programs in place to support Japan's economic recovery. Unadjusted core orders also rose 6.5% from the year-earlier month.
Trading in US index futures indicated a flat opening of US stocks on Thursday, 12 September 2013. US stocks ended mostly higher on Wednesday, 11 September 2013, with the Dow industrials tallying a third day of triple-digit gains, as reduced worry about Syria countered Apple Inc.'s sharp drop.
The Russian initiative to avert US military strikes on Syria by eliminating the regime's chemical weapons faces a first test when US Secretary of State John Kerry meets in Geneva with his Russian counterpart, Sergei Lavrov. The US says President Bashar al-Assad's regime used sarin gas outside of Damascus on Aug. 21, killing more than 1,400 people.
Investors across the globe are eyeing the next policy meeting of the Federal Open Market Committee (FOMC) scheduled this month, with their focus squarely on the timing of tapering of Federal Reserve's bond purchases. The FOMC holds a two-day policy meeting on 17-18 September 2013 to decide on interest rates in the United States. The US central bank currently buys $85 billion a month in US debt and mortgage-backed securities in a bid to hold interest rates low and encourage economic growth. 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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