Key benchmark indices extended losses to hit fresh intraday low in mid-afternoon trade as shares of index heavyweight ITC witnessed a post-results slide. The S&P BSE Sensex and the 50-unit CNX Nifty, both, hit their lowest level in more than a week. The Sensex was down 221.17 points or 1.1%, off close to 240 points from the day's high and up about 10 points from the day's low. The market breadth, indicating the overall health of the market, was weak.
IT major Wipro extended intraday losses ahead of its Q1 result tomorrow, 26 July 2013. FMCG major Hindustan Unilever extended intraday losses ahead of its Q1 result tomorrow, 26 July 2013. Mining and metal stocks edged lower for the second straight day after a survey on Wednesday, 24 July 2013, showed that China's manufacturing-sector activity is slowing further this month. Shares of steel major Tata Steel hit 52-week low. Cement major ACC dropped after Swiss parent Holcim announced a major restructuring of its India operations on Wednesday, 24 July 2013. Weak Q2 results also weighed on the counter.
Key benchmark indices hovered near the flat line in early trade after alternately moving between positive and negative zone. Key benchmark indices edged lower in morning trade. The market was range bound in mid-morning trade. Key benchmark indices hovered in red in early afternoon trade. The market extended losses to hit fresh intraday low in mid-afternoon trade.
The market may remain volatile during the last one hour or so of trade as traders roll over positions in the futures & options (F&) segment from the July 2013 series to August 2013 series. The near month July 2013 derivatives contracts expire today, 25 July 2013.
The market sentiment was hit adversely after provisional data showed that foreign funds were net sellers of Indian stocks on Wednesday, 24 July 2013. Foreign institutional investors (FIIs) sold shares worth a net Rs 404.50 crore on Wednesday, 24 July 2013, as per provisional data from the stock exchanges.
At 14:20 IST, the S&P BSE Sensex was down 221.17 points or 1.1% to 19,869.51. The index fell 232.31 points at the day's low of 19,858.37 in mid-afternoon trade, its lowest level since 17 July 2013. The index rose 20.13 points at the day's high of 20,110.81 in early trade.
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The CNX Nifty was down 62.65 points or 1.05% to 5,927.85. The index hit a low of 5,927.20 in intraday trade, its lowest level since 17 July 2013. The index hit a high of 5,990.65 in intraday trade.
The market breadth, indicating the overall health of the market, was weak. On BSE, 1,353 shares fell and 728 shares rose. A total of 169 shares were unchanged.
Among the 30-share Sensex pack, 20 stocks fell and rest of them rose. Tata Power Company (down 3.63%), Bhel (down 2.18%) and Sun Pharmaceutical Industries (down 1.55%), edged lower.
ACC shed 4.2% on weak Q2 results. The company's consolidated net profit declined 36.85% to Rs 261.76 crore on 3.57% decline in sales turnover to Rs 2795.23 crore in Q2 June 2013 over Q2 June 2012. The result was announced during trading hours today, 25 July 2013. Demand for cement during the second quarter of the year was lower than seasonal expectations which resulted in weak market conditions, leading to a decline in operating EBITDA and net profit, ACC said. The company is implementing a number of initiatives to further improve its operational efficiencies and to optimize distribution and logistics to counter adverse market conditions.
Swiss cement major Holcim on Wednesday, 24 July 2013, announced a major restructuring of its India operations -- currently, Holcim owns a little over 50% stake in its two cement subsidiaries in India viz. ACC and Ambuja Cements. The board of directors of Ambuja Cements on Wednesday, 24 July 2013, approved a proposal, wherein Ambuja will first acquire from Holderind Investments, Mauritius (Holcim), a 24% stake in Holcim India for a cash consideration of Rs 3500 crore, followed by a merger of Holcim India into Ambuja. The intra-group transaction will result in Ambuja holding 50.01% stake in ACC. The merger swap ratio proposed by two independent accounting firms and approved by Ambuja's board, is one Ambuja share for 7.4 Holcim India shares, translating into an implied swap ratio of 6.6 Ambuja shares for every ACC share, Ambuja said in a statement. Based on the approved merger ratio, Ambuja will issue 58.4 crore new equity shares of the company to Holcim, as consideration for the merger. Post the merger, the expanded capital base of Ambuja (post cancellation of the shares held by Holcim India in Ambuja and the issuance of new shares as aforesaid) will increase by 28%. Holcim will then own 61.39% of Ambuja and Ambuja in turn own 50.01% of ACC.
In addition, Ambuja's board also provided its approval for Ambuja to make commercially reasonable efforts to invest up to Rs 3000 crore to acquire an economic ownership in ACC of up to 10% without triggering a mandatory open offer.
Ambuja said that this restructuring exercise is expected to be EPS accretive from year one post completion of the transaction. There is synergy potential of about Rs 900 crore through supply chain and fixed cost optimization expected to be realised in a phased manner over two years post completion of the transaction.
Mining and metal stocks edged lower for the second straight day after a survey on Wednesday, 24 July 2013, showed that China's manufacturing-sector activity is slowing further this month. China is the world's largest consumer of copper and aluminum. Jindal Steel & Power (down 0.32%), Sesa Goa (down 1.61%), Hindustan Zinc (down 1.5%), Hindalco Industries (down 0.73%), and NMDC (down 2.82%), edged lower.
Sterlite Industries dropped 2.44% ahead of its Q1 results today, 25 July 2013.
Steel major Tata Steel declined 0.89% to Rs 227.80. The stock hit 52-week low of Rs 227 in intraday trade today, 25 July 2013.
Index heavyweight and cigarette maker ITC fell 4.86% to Rs 358.85, with the stock extending intraday losses on profit booking after the company announced first quarter result. Shares of ITC had witnessed a pre-result rally. The stock had jumped 15.71% to settle at Rs 376 on Wednesday, 24 July 2013, from a low of Rs 324.95 on 2 July 2013.
ITC's net profit rose 18.05% to Rs 1891.33 crore on 10.72% increase in total income to Rs 7,613.88 crore in Q1 June 2013 over Q1 June 2012. The result was announced during trading hours today, 25 July 2013.
IT major Wipro declined 5.38%, with the stock extending intraday losses ahead of its Q1 result tomorrow, 26 July 2013.
FMCG major Hindustan Unilever shed 3.81%, with the stock extending intraday losses ahead of its Q1 result tomorrow, 26 July 2013.
European indices edged lower on Thursday, 25 July 2013. Key benchmark indices in UK, France and Germany were down by 0.14% to 0.47%.
German business confidence rose for a third month in July, indicating that Europe's largest economy is recovering as the 17-nation euro region tries to shake off its longest-ever recession. The Ifo institute's business climate index, based on a survey of 7,000 executives, rose to 106.2 from 105.9 in June.
Asian stocks fell on Thursday, 25 July 2013, as investors weighed US economic data to gauge the fate of Federal Reserve stimulus. Key benchmark indices in Indonesia, China, South Korea, Hong Kong, Singapore, Japan, and Taiwan were down by 0.13% to 1.14%.
China on Wednesday, 24 July 2013, announced some new, minor stimulus measures. China's cabinet on Wednesday, 24 July 2013, said it would cut taxes for small businesses and seek to aid some exporters, while also increasing state investment in railways.
Trading in US index futures indicated that the Dow could fall 36 points at the opening bell on Thursday, 25 July 2013. US stocks closed largely lower on Wednesday after improving home sales in the US renewed expectations that the Federal Reserve remains on course to winding down stimulus measures this year.
A report yesterday showed that new home sales rose more than forecast in June to a five-year high, and a manufacturing gauge rose. Fed Chairman Ben S. Bernanke has said asset purchases that have stoked bond and equity gains may be trimmed this year should economic risks subside. US new-home sales climbed 8.3% to an annualized pace of 497,000, the highest level since May 2008, according to Commerce Department data. The Markit Economics preliminary index of US manufacturing increased to 53.2 in July from a final reading of 51.9 a month earlier, the London-based group said.
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