Key benchmark indices trimmed losses in early afternoon trade after hitting their lowest level in over one week in mid-morning trade. The S&P BSE Sensex was down 69.43 points or 0.35%, off close to 170 points from the day's high and up about 60 points from the day's low. The market breadth, indicating the overall health of the market, was negative. The results of a private survey indicating slowdown in India's manufacturing activity in May 2013 and weakness in Asian stocks dampened sentiment.
Index heavyweight and cigarette major ITC extended intraday losses. Shares of power generation and distribution firms declined. Shares of two wheeler makers extended intraday losses as PSU OMCs raised petrol price, with Bajaj Auto also hit by weak sales for the month just gone by. Maruti Suzuki India pared intraday losses triggered by the company reporting fall in sales in May 2013. Index heavyweight Reliance Industries (RIL) extended intraday losses. Infosys trimmed initial gains triggered by the return of founder and former chairman N.R. Narayana Murthy as executive chairman. Other IT stocks were mixed.
Foreign institutional investors (FIIs) sold shares worth a net Rs 504.02 crore on Friday, 31 May 2013, as per provisional data from the stock exchanges.
A bout of initial volatility was witnessed as key benchmark indices recovered after slipping into the red after a firm start. Key benchmark indices alternately moved between positive and negative terrain near the flat line in morning trade. The market lost ground to hit fresh intraday low in mid-morning trade. The market trimmed losses in early afternoon trade.
At 12:20 IST, the S&P BSE Sensex was down 69.43 points or 0.35% to 19,690.87. The index lost 129.30 points at the day's low of 19,631 in mid-morning trade, its lowest level since 24 May 2013. The index rose 99.89 points at the day's high of 19.860.19 in opening trade.
The CNX Nifty was down 23.80 points or 0.4% to 5,962.15. The index hit a low of 5,941.90 in intraday trade, its lowest level since 24 May 2013. The index hit a high of 6,011 in intraday trade.
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The market breadth, indicating the overall health of the market, was negative. On BSE, 1,060 shares fell and 844 shares rose. A total of 94 shares were unchanged.
Among the 30-share Sensex pack, 16 stocks declined and the rest of them gained.
Bharti Airtel, Coal India and Jindal Steel & Power rose by 1.53% to 1.76%.
Dr Reddy's Laboratories gained 1.37%. The company said during market hours today, 3 June 2013, that FUJIFILM Corporation and the company have decided to terminate the memorandum of understanding (MoU) to enter into a exclusive partnership in the generic drugs business for the Japanese market and to establish joint venture in Japan. Based on MoU signed on 28 July 2011, the tow companies had conducted detailed studies on the establishment of a joint venture for developing and manufacturing generic drugs in Japan. However, as Fujifilm realigns its long term growth strategy in pharmaceutical business, both companies have decided to terminate the MoU.
The two companies will continue to explore partnerships/alliance in other pharmaceutical businesses such as active pharmaceutical ingredients (API) development and manufacturing, contract research and development and manufacturing, and the development and marketing of super-generics.
Shares of power generation and distribution firms declined. NTPC, Tata Power Company, Power Grid Corporation of India and Reliance Infrastructure dropped by 0.37% to 1.39%.
Index heavyweight and cigarette major ITC dropped 1.47%, with the stock extending intraday losses.
Maruti Suzuki India was down 2.62% to Rs 1,564 after the company reported fall in sales in May 2013. The stock came off the day's low of Rs 1,548. The company on Saturday, 1 June 2013, reported 14.4% fall in total sales to 84,677 units in May 2013 over May 2012. The company's domestic sales declined 13% to 77,821 units in May 2013 over May 2012. Exports fell 27.1% to 6,856 units in May 2013 over May 2012.
Shares of two wheeler makers extended intraday losses as PSU OMCs raised petrol price. Hero MotoCorp shed 2.43%.
Bajaj Auto slumped 4.07% on fall in sales in May 2013. The company said during market hours today, 3 June 2013, that total sales fell 4% to 3.39 lakh units in May 2013 over May 2012. Motorcycle sales fell 5% to 3.04 lakh units in May 2013 over May 2012. Domestic motorcycle sales rose 3% to 2.12 lakh units in May 2013 over May 2012, owing to the launch of new Discover models. Sales of Commercial vehicles rose 14% to 34,568 units in May 2013 over May 2012. Total exports declined 14% to 1.11 lakh units in May 2013 over May 2012.
Index heavyweight Reliance Industries (RIL) fell 1.77% to Rs 791.35, with the stock extending intraday losses. RIL and its partners BP and NIKO on 24 May 2013 announced a significant gas and condensate discovery in the KG D6 block off the eastern coast of India. RIL is the operator of KG D6 with 60% equity. BP has a 30% share and NIKO the remaining 10%.
Infosys jumped 4.7% to Rs 2,520.70 after the company announced on Saturday, 1 June 2013, that the board of directors have approved appointing Mr. N R Narayana Murthy as Executive Chairman of the board and Additional Director for a period of five year with effect from 1 June 2013. The stock came off the day's high of Rs 2,624.90 hit during early trade. The stock had jumped 9.02% at the day's high.
Mr. K V Kamath would step down from his position as Chairman of the board and take up the position of Lead Independent Director effective 1 June 2013.
During his five-year term, Mr. Murthy would draw a token compensation of rupee one per year.
Mr. S Gopalakrishnan would be re-designated as Executive Vice Chairman effective 1 June 2013 and would primarily focus on key client relationships and broader industry issues. Mr. S D Shibulal would continue to be the Managing Director and CEO. Mr. S Gopalakrishnan and Mr. S D Shibulal have requested that they draw a compensation of rupee one per year. The board has accepted their requests, subject to necessary shareholder and government approvals.
In order to function more effectively Mr. Narayana Murthy intends to create the Chairman's office to assist him during his tenure and has requested the board to permit him to put together a team for this function. The team will include his son, Dr. Rohan Murty, as Mr. Narayana Murthy's executive assistant. The board has agreed to Mr. Narayana Murthy's requests, subject to necessary approvals.
Among other IT stocks, Wipro rose 0.35% to Rs 327.70, off the day's high of Rs 333.50.
TCS fell 1.56%, with the stock extending intraday losses.
HCL Technologies shed 1%.
ICRA (up 12.42%), Visa Steel (up 11.2%), Apar Industries (up 9.49%), NDTV (up 6.71%) and KNR Constructions (up 5.54%), were the biggest gainers from the BSE Small-Cap index in that order.
HSBC's India manufacturing PMI, which gauges business activity in Indian factories but not its utilities, eased to 50.1 in May 2013 from 51 in April 2013 led by a fall in output and a slowdown in new orders. Meanwhile, new export orders continued to firm. Quantity of purchases grew at a slower clip, stocks of purchases accelerated and stocks of finished goods grew at broadly the same pace. Backlogs of work rose notably and supplier delivery times continued to lengthen, albeit at a slower pace. Meanwhile, employment rose at a slightly faster pace. Input prices deflated and output prices declined for the first time since the global financial crisis.
With inflation pressures easing, the RBI may cut the policy rate again at the June meeting, but it is not blessed with a lot of room to ease monetary policy settings, said HSBC Economists after the manufacturing data.
Fiscal deficit for or the fiscal year ended 31 March 2013 (FY 2013) came in lower at 4.9% of GDP against 5.1% budgeted (in February 2012) and revised to 5.2% in February 2013, data released by the government after trading hours on Friday, 31 May 2013, showed. Fiscal deficit for FY 2014 is budgeted at 4.8% of GDP.
The crucial monsoon arrived on cue in Kerala on the southern coast on Saturday, 1 June 2013, boosting farming. The rains, which run from June to September, are vital for the 55% of farmland without irrigation in India, one of the world's largest producers and consumers of food. The weather office last month predicted the monsoon would arrive over Kerala on June 3.
Asian stocks fell on Monday after improving US economic data added to concern the Federal Reserve will scale back its stimulus. Key benchmark indices in China, Indonesia, Japan, Singapore, Taiwan and South Korea shed by 0.12% to 3.72%. Hong Kong's Hang Seng rose 0.02%.
The final version of the HSBC China manufacturing Purchasing Managers' Index for May fell to 49.2, down from a preliminary reading of 49.6, and more than a point off from April's 50.4. HSBC said that while the result marked the first contraction in seven months, "albeit at only a marginal pace," manufacturing output actually registered its seventh straight gain, though that too was small in size.
The official purchasing managers' index (PMI), issued by the National Bureau of Statistics and China Federation of Logistics and Purchasing, indicated activity in China's vast manufacturing sector picked up slightly in May. China's official PMI rose to 50.8 in May from 50.6 in April, data showed on Saturday, 1 June 2013. A reading above 50 indicates expanding activity while a reading below that level points to a contraction.
Separately, a government gauge of services industries today, 3 June 2013 showed the slowest expansion since September. The official China non-manufacturing PMI for May declined to 54.3 from 54.5.
South Korea's exports unexpectedly increased in May as surging smartphone shipments and improving demand from the US and China countered a decline in the yen. Overseas shipments increased 3.2% from a year earlier after a 0.4% gain in April, the Ministry of Trade, Industry and Energy said in a statement on Saturday, 1 June 2013.
Trading in US index futures indicated that the Dow could gain 34 points at the opening bell on Monday, 3 June 2013. US stocks tanked on Friday after positive economic indicators rekindled talk that the Federal Reserve will soon scale back stimulus measures. The Thomson Reuters/University of Michigan's final consumer sentiment index rose to 84.5 in May from 83.7 in April. A separate report showed that the Chicago purchasing managers' index climbed to 58.7 this month from 49 in April, beating expectations for a rise to 50.
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