Key benchmark indices regained positive terrain in early afternoon trade as index heavyweights ITC and Reliance Industries (RIL), both, reversed intraday losses. The S&P BSE Sensex was up 70.77 points or 0.41%, up about 215 points from the day's low and off close to 30 points from the day's high. The market breadth, indicating the overall health of the market, was negative. IT stocks were mixed. Most auto stocks declined. Pharma stocks edged higher. Tata Steel extended intraday gain.
High volatility was witnessed as key benchmark indices edged lower after swinging wildly between the positive and negative terrain in early trade. Volatility continued as key benchmark indices regained positive terrain in morning trade. Key benchmark indices once again slipped into the red in mid-morning trade as rupee further weakened to hit fresh record low below the 65 mark against the dollar. The Sensex regained positive terrain in early afternoon trade.
The rupee hit record low below 65 against the dollar after minutes of the Federal Reserve's last meeting signaled the US central bank was on course to pare bond purchases this year. The rupee was hovering at 65.32, sharply lower than its close of 64.11/12 on Wednesday, 20 August 2013.
The rupee has slumped in the past few days on worries that India would struggle to fund its current-account deficit when the US central bank pulls back stimulus to the US economy.
Rupee depreciation fuels inflation, increases import bill and current account deficit. It also increases the government's spending on fuel subsidies, potentially widening the fiscal deficit.
At 12:20 IST, the S&P BSE Sensex was up 70.77 points or 0.41% to 17,978.54. The index jumped 101.36 points at the day's high of 18,007.27 in morning trade. The index fell 146.32 points at the day's low of 17,759.59 in early trade, its lowest level since 11 September 2012.
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The CNX Nifty was up 13.40 points or 0.25% to 5,315.95. The index hit a high of 5,333.20 in intraday trade. The index hit a low of 5,254.05 in intraday trade, its lowest level since 5 October 2012.
The market breadth, indicating the overall health of the market, was negative. On BSE, 1,013 shares fell and 752 shares rose. A total of 109 shares were unchanged.
Among the 30-share Sensex pack, 18 stocks rose and rest of them fell. Sterlite Industries (up 4.48%), ONGC (up 4.23%) and Bharti Airtel (up 3.77%), edged higher.
Index heavyweight and cigarette maker ITC rose 0.82% to Rs 302.65. The stock revered direction after dropping as much as 3.33% to Rs 290.20 in intraday trade.
Index heavyweight Reliance Industries (RIL) was up 1.2% at Rs 793.25. The stock revered direction after dropping as much as 1.1% to Rs 775.15 in intraday trade.
Tata Steel rose 6.01%, with the stock extending intraday gain.
Pharma stocks edged higher. Cipla (up 0.75%), Dr Reddy's Laboratories (up 1.24%), Ranbaxy Laboratories (up 6.4%), and Sun Pharmaceutical Industries (up 1.3%), gained.
IT stocks were mixed. Wipro (up 0.63%) and Infosys (up 0.66%) edged higher. TCS (down 0.99%) and HCL Technologies (down 1.07%), declined. A weak rupee boosts revenue of IT firms in rupee terms as the sector derives a lion's share of revenue from exports.
Most auto stocks declined. Mahindra & Mahindra (M&M) dropped 1.9%. The company on 14 August 2013 said it plans to invest Rs 200 crore to strengthen its current product line-up of trucks and buses. The company plans to invest Rs 300 crore to explore new product lines in the LCV, ICV and MCV range, it said.
Tata Motors rose 2.73%. The company's global wholesale vehicle sales fell 14% to 87,566 vehicles in July 2013 over July 2012. Global sales of passenger cars fell 13% to 46,684 vehicles in July 2013 over July 2012. Sales of its Jaguar Land Rover brand rose 30.61% to 35,162 units. Sales of its Jaguar cars rose 76.53% to 7,174 vehicles and Land Rover sales were higher by 22.45% at 27,988 vehicles during the month. The company announced the global vehicle sales figures on 14 August 2013.
Maruti Suzuki India fell 3.12%. The company said during market hours on Wednesday, 21 August 2013, that it has introduced the stylish, aggressive, sporty Stingray car model. With this the company has expanded its portfolio and enriched to meet inspirations of young India, Maruti said. Stingray, which is powered by a 998 cc petrol engine, is available in three variants, with price ranging between Rs 4,09,999 to Rs 4,66,999 ex showroom Delhi.
Shares of two wheeler makers also declined. Bajaj Auto shed 1.12%. Bajaj Auto on 13 August 2013 said that the company has received a notice from the workmen's union viz. Vishwa Kalyan Kamgar Sanghatana stating that the stoppage of work at Chakan plant has been withdrawn and all the workmen at Chakan plant will resume their duty in their respective shifts from 14 August 2013. The company had earlier informed on 25 June 2013, that it had received a notice from the workmen's union of its Chakan plant viz., Vishwa Kalyan Kamgar Sanghatana stating that they propose to call for a stoppage of work by all the workmen employed in Chakan plant from the morning shift of 28 June 2013. The workmen at Chakan Plant had however, stopped coming from 25 June 2013 itself, without assigning any reason.
Hero MotoCorp lost 0.7%.
Asian stocks dropped on Thursday, 22 August 2013, after minutes of the Federal Reserve's last meeting signaled the US central bank was on course to pare bond purchases this year. Key benchmark indices in China, Singapore, Hong Kong, Japan, Taiwan, Indonesia and South Korea were down by 0.22% to 2.04%.
A report showed China's manufacturing unexpectedly expanded this month. A Chinese manufacturing index rose in August from the lowest level in 11 months, adding to signs the world's second-biggest economy is strengthening after a two-quarter slowdown. The preliminary reading of 50.1 for a Purchasing Managers' Index released today by HSBC Holdings Plc and Markit Economics compares with a final figure of 47.7 in July.
Trading in US index futures indicated that the Dow could fall 9 points at the opening bell on Thursday, 22 August 2013. US stocks dropped on Wednesday, 21 August 2013, as investors weighed the Federal Reserve's signaling that it remained on course to curb its monthly bond purchases by the end of the year.
Federal Reserve policy makers were broadly comfortable with Chairman Ben S. Bernanke's plan to start reducing bond buying later this year if the economy improves, with a few saying tapering might be needed soon, minutes of their last meeting showed on Wednesday. Almost all committee members agreed that a change in the purchase program was not yet appropriate, and a few said it might soon be time to slow somewhat the pace of purchases as outlined in that plan, according to the record of the Federal Open Market Committee's July 30-31 gathering released Wednesday in Washington. A few members emphasized the importance of being patient and evaluating additional information on the economy before deciding on any changes to the pace of asset purchases, the minutes show. Almost all participants confirmed that they were broadly comfortable with the committee moderating the pace of its securities purchases later this year.
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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