Weakness continued on the bourses in mid-morning trade. The barometer index, the S&P BSE Sensex, was down 149.42 points or 0.8%, off 89.24 points from the day's high and up 42.27 points from the day's low. The market breadth, indicating the overall health of the market, was weak. The market sentiment was weak after data showed that foreign institutional investors (FIIs) remained net sellers of Indian stocks on Friday, 21 June 2013. Weakness in Asian stocks also weighed on sentiment.
Index heavyweight Reliance Industries (RIL) recovered from intraday low. Another index heavyweight and cigarette maker ITC reversed intraday losses. Jindal Steel & Power (JSPL) recovered in volatile trade after sliding to a 52-week low. Ranbaxy Laboratories hit 52-week low on reports the US Food and Drugs Administration (USFDA) has raised concerns about the company's Mohali unit. Realty stocks edged lower, with shares of realty major DLF sliding to a 52-week low.
Key benchmark indices edged lower in early trade on weak Asian stocks. Key benchmark indices dropped to fresh intraday low in morning trade. The Sensex and Nifty, both, hit their lowest level in almost 10 weeks. Fresh selling derailed a brief recovery in mid-morning trade.
The market may remain volatile this week as traders roll over positions in the futures & options (F&O) segment from the near month June 2013 series to July 2013 series. The June 2013 F&O contracts expire on Thursday, 27 June 2013.
The market sentiment was hit adversely after data showed that foreign funds remained net sellers of Indian stocks on Friday, 21 June 2013. Foreign institutional investors (FIIs) sold shares worth a net Rs 1768.60 crore on Friday, 21 June 2013, as per provisional data from the stock exchanges.
At 11:18 IST, the S&P BSE Sensex was down 149.42 points or 0.8% to 18,624.82. The index declined 191.69 points at the day's low of 18,582.55 in morning trade, its lowest level since 16 April 2013. The index fell 60.18 points at the day's high of 18,714.06 in opening trade.
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The CNX Nifty was down 55 points or 0.97% to 5,612.65. The index hit a low of 5,606.80 in intraday trade, its lowest level since 16 April 2013. The index hit a high of 5,640 in intraday trade.
The market breadth, indicating the overall health of the market, was weak. On BSE, 1,102 shares declined and 562 shares rose. A total of 103 shares were unchanged.
Among the 30-share Sensex pack, 21 declined and rest of them gained. Hindalco Industries (up 1.07%), Tata Steel (up 0.57%) and TCS (up 0.47%) edged higher from the Sensex pack.
Reliance Industries (RIL) fell 0.24% to Rs 792, with the stock recovering from intraday low of Rs 779.20. The Cabinet Committee on Economic Affairs (CCEA) on Friday, 21 June 2013, deferred a decision on a proposal to hike natural gas prices by a steep 60% as Oil Minister M Veerappa Moily was away on an official tour. The CCEA is likely to consider the proposal this week. The oil ministry has proposed an increase in gas prices to $6.775 million British thermal unit (mbtu) from current $4.2 mbtu. The Oil Ministry has proposed raising gas price for state-run firms immediately and that for Reliance Industries (RIL) from April 2014 when it is contractually due.
Index heavyweight and cigarette major ITC rose 0.65% to Rs 324.95, with the stock moving into positive zone from negative zone. The stock came off the day's low of Rs 319.10.
Jindal Steel & Power (JSPL) gained 0.47% to Rs 205.20 in volatile trade, with the stock recovering from a 52-week low of Rs 194 hit in intraday trade today, 24 June 2013. The stock has been on a downward spiral recently after a foreign brokerage last week downgraded the stock to sell and reduced its target price to Rs 230 from Rs 290.
Early this month, the Central Bureau of Investigation filed an FIR in the Coalgate case in which JSPL Chairman Naveen Jindal and JSPL, as well as a former minister of state for coal Dasari Narayan Rao have been named. The CBI has alleged that Rao was paid kickbacks for favouring coal block allocation to the Jindal firm.
Ranbaxy Laboratories lost 4.42% to Rs 334 after sliding to a 52-week low of Rs 331.40 in intraday trade today, 24 June 2013 on reports the US Food and Drugs Administration (USFDA) has raised concerns about the company's Mohali unit. The USFDA had reportedly issued a Form 483 to the Mohali facility a few months ago. A Form 483 is issued by the FDA at the conclusion of an inspection to notify the company of objectionable conditions that might be in violation of the US Food, Drug and Cosmetic Act and related laws. However, it does not prevent a company from making regulatory filings from that unit.
Realty stocks edged lower. HDIL (down 3.05%), Sobha Developers (down 5.25%), Unitech (down 3.64%), Godrej Properties (down 0.22%) and Parsvnath Developers (down 2.15%), edged lower.
DLF lost 3.71% to Rs 168.50 after sliding to a 52-week low of Rs 168 in intraday trade today, 24 June 2013.
Asian stocks were trading lower on Monday, 24 June 2013, on mounting concerns that the US Federal Reserve may start scaling back its huge monthly bond-buying plan which was aimed at keeping bond yields down and provide support to its faltering economy. Key benchmark indices in Japan, Singapore, Indonesia and South Korea were off 0.28% to 0.76%. Taiwan's Taiwan Weighted index rose 0.09%.
Chinese stocks edged lower as a recent spike in Shanghai interbank interest rates fueled worries about the world's second-largest economy. In mainland China, the Shanghai Composite was off 3.78% and Hong Kong's Hang Seng was down 2.06%. Short-term interbank interest rates in Shanghai, which hit record highs on Thursday, 20 June 2013, extended their drop from levels seen on Friday, 21 June 2013, but remained above the 6%-level on Monday, 24 June 2013. This fed worries that the People's Bank of China, China's central bank, may keep those rates at a high level.
The China's central bank warned Monday that the nation's banks need to strengthen their liquidity management and control liquidity risks. The statement was the first by the central bank that appeared to be aimed at banks caught in a recent liquidity crunch which sent short-term rates on the interbank market soaring, with the overnight lending rate hitting an intraday high of 30% late last week. The People's Bank of China said liquidity in the banking system is at a reasonable level. It also said banks need to maintain "stable and appropriate" credit growth and adhere to its prudent monetary policy.
Trading in US index futures indicated that the Dow could fall 48 points at the opening bell on Monday, 24 June 2013. US stocks ended mixed on Friday, 21 June 2013, as investors picked up beaten down stocks. While the Dow Junes Industrial Average and S&P 500 score small gains the tech laden Nasdaq Composite index registered small losses.
Federal Reserve Chairman Ben Bernanke said last week the central bank may start dialing down its stimulus effort if the economy achieves sustainable growth.
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