Intraday volatility continued as key benchmark indices slipped into the red once again after briefly moving into the positive terrain from negative terrain in mid-afternoon trade. The barometer index, the S&P BSE Sensex, was down 30.87 points or 0.15%, off 35.35 points from the day's high and up 95.13 points from the day's low. The market breadth, indicating the overall health of the market, was positive. In the foreign exchange market, the rupee edged lower against the dollar on demand for greenbacks by state-run oil refiners and on weakness in domestic equities.
PSU OMCs were mostly higher after Oil Minister Veerappa Moily said that the Centre will likely free up diesel pricing from government control over the next six months with gradual price increases. Jet Airways (India) edged higher after the company's board approved issue and allotment of shares on preferential basis to Abu Dhabi based Etihad Airways, thereby giving Etihad 24% equity in the Indian private carrier. Sugar shares extended initial gains triggered by reports that the Centre has convened a high-level meeting today, 20 November 2013, which is expected to discuss a relief-package for the crisis-ridden sugar industry in Uttar Pradesh (UP) and Maharashtra, which could include interest-free loans from banks.
Key benchmark indices cut losses after a lower start triggered by weak Asian stocks. Key benchmark indices extended intraday losses in mid-morning trade. Key benchmark indices cut losses in early afternoon trade. A bout of volatility was witnessed as key benchmark indices slipped into the red once again after briefly moving into the positive terrain from negative terrain in afternoon trade. Intraday volatility continued as key benchmark indices slipped into the red once again after briefly moving into the positive terrain from negative terrain in mid-afternoon trade.
Foreign institutional investors (FIIs) bought shares worth a net Rs 1014.61 crore on Tuesday, 19 November 2013, as per provisional data from the stock exchanges.
At 14:15 IST, the S&P BSE Sensex was down 30.87 points or 0.15% to 20,859.95. The index lost 126 points at the day's low of 20,764.82 in mid-morning trade, its lowest level since 18 November 2013. The index rose 4.48 points at the day's high of 20,895.30 in mid-afternoon trade.
The CNX Nifty was down 6.25 points or 0.1% to 6,197.10. The index hit a low of 6,163.50 in intraday trade, its lowest level since 18 November 2013. The index hit a high of 6,204.35 in intraday trade.
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The market breadth, indicating the overall health of the market, was positive. On BSE, 1,351 shares gained and 1,051 shares fell. A total of 142 shares were unchanged.
Among the 30-share Sensex pack, 18 stocks declined and rest of them gained.
PSU OMCs were mostly higher after Oil Minister Veerappa Moily today, 20 November 2013, said that the Centre will likely free up diesel pricing from government control over the next six months with gradual price increases. HPCL (up 0.42%) and Indian Oil Corporation (up 0.36%) rose. BPCL fell 1.56%.
Currently, state-run oil refining-cum-marketing companies (PSU OMCs) sell diesel at state-fixed discounted rates. Earlier this year, the government allowed them to increase the price by about 50 paise per month as part of a plan to gradually remove the subsidies given on the fuel. Still, the companies sell each liter of diesel at a loss of about Rs 9, Mr. Moily told reporters. But that is significantly lower compared with a loss of Rs 14 per litre earlier this year, he added. Mr. Moily's comments indicate the government may take new measures to eliminate subsidies in the coming months, such as allowing the companies to increase the price by a bigger margin every month.
Such a move would help reduce the government's fuel subsidy, thereby improving the government's finances. It would also help PSU OMCs as the government doesn't fully compensate them for their revenue loss, and state-run oil producers who currently need to give deep discounts on the crude oil they supply to PSU OMCs. Increasing the price of diesel at this time will be tricky for the government with general elections just a few months away. Higher diesel prices will fan inflation. Also, the fuel is used by farmers, who form a big chunk of voters in India, to run their water pumps to irrigate crops. Mr. Moily said he wasn't worried about any political repercussions of freeing up diesel pricing.
Jet Airways (India) gained 2.85%. Jet Airways (India)'s board of directors at its meeting held today, 20 November 2013, approved the issue and allotment of 2.72 crore shares at Rs 754.7361607 per share to Abu Dhabi based Etihad Airways on a preferential basis in terms of the investment agreement entered between Etihad and the company on 24 April 2013 and amendments thereto and pursuant to the approval of the shareholders on 24 May 2013 by way of special resolution. The announcement was made during trading hours. Jet Airways get Rs 2057.66 crore from the preferential allotment of shares to Etihad. Etihad will hold 24% of the post issue paid up share capital of the company, Jet Airways (India) said.
Jet Airways (India) also said that in board meeting held today, 20 November 2013, Mr. James Hogan and Mr. James Rigney, nominees of Etihad Airways PJSC, have been appointed as additional directors on the board of the Jet Airways (India).
Sugar shares extended initial gains triggered by reports that the Centre has convened a high-level meeting today, 20 November 2013, which is expected to discuss a relief-package for the crisis-ridden sugar industry in Uttar Pradesh (UP) and Maharashtra, which could include interest-free loans from banks.
Bajaj Hindusthan (up 15.91%), Dhampur Sugar Mills (up 17.75%), Sakthi Sugars (up 17.67%), Balrampur Chini Mills (up 13.23%), Triveni Engineering & Industries (up 14.69%), Shree Renuka Sugars (up 12.12%), Dwarikesh Sugar Industries (up 16.83%) and Oudh Sugar Mills (up 16.98%) surged.
Sugar industry in Uttar Pradesh and Maharashtra, the two largest producing states, have not yet started crushing sugarcane in the new crop year, which started in October, citing mounting cane arrears, huge unsold stocks and the inability to pay high price to farmers.
Meanwhile, sugar manufacturers based in Uttar Pradesh (UP) have announced suspension of operations, following an impasse over announcement of state sugarcane price. Sugar mills officially declared that the sugar industry of the state would stand non-operative till the Rangarajan formula is adopted to fix the cane price.
Bombay Dyeing & Manufacturing Company jumped 7.24% after the company denied a media report that the Bombay High Court had directed the company to hand over Wadala land to BMC and Mhada. Bombay Dyeing & Manufacturing Company (Bombay Dyeing) issued the clarification during trading hours today, 20 November 2013.
A media report today, 20 November 2013, suggested that in a bid to end the stalemate over development of Bombay Dyeing's mill properties at Wadala and Lower Parel, the Bombay High Court, in an interim order on Tuesday, 19 November 2013, asked the textile major to hand over around 66,651 square metres of land to the BMC and Mhada. Bombay Dyeing, however, clarified that no such interim order has been passed and the report is false and misleading. The Bombay High Court has posted the matter for orders today, 20 November 2013, at 15:00 IST. Hence, the news item is totally speculative and unsubstantiated, Bombay Dyeing said in a statement. As and when the Bombay High Court passes any order in the matter, the firm will notify the exchanges about the same, the company said.
Amara Raja Batteries jumped 4.02% to Rs 332.30 after a foreign brokerage raised its price target on the stock to Rs 376 from Rs 350 earlier.
Reliance Broadcast Network was locked at 5% upper circuit after the company said that credit rating agency CARE has assigned rating of CARE AAA (SO) to long term bank facilities of Rs 12 crore of the company. The announcement was made after market hours on Tuesday, 19 November 2013.
Credit rating agency CARE has assigned rating of CARE AAA (SO) to long term bank facilities of Rs 12 crore of Reliance Broadcast Network based on the credit enhancement in the form of unconditional and irrevocable corporate guarantee provided by Reliance Capital (RCL) for ensuring the timely servicing of the bank facilities of Reliance Broadcast Network. RCL is a financial services company of the Anil Ambani-led Reliance group.
Wockhardt (up 6.01%), Jaypee Infratech (up 5.85%), JSW Energy (up 5.24%), HDIL (up 3.63%) and Adani Power (up 4.73%) were among the major gainers from the BSE's 'A' group.
In the foreign exchange market, the rupee edged lower against the dollar on demand for greenbacks by state-run oil refiners and on weakness in domestic equities. The partially convertible rupee was hovering at 62.555, compared with its close of 62.36/37 on Tuesday, 19 November 2013.
Bond prices dropped on concerns that higher diesel prices will fan inflation. Oil Minister Veerappa Moily today, 20 November 2013, said that the Centre will likely free up diesel pricing from government control over the next six months with gradual price increases. The yield on most traded federal paper, 8.28% GS 2027, was hovering at 9.053%, higher than its close of 8.9942% on Tuesday, 19 November 2013. The yield on 10-year benchmark federal paper, 7.16% GS 2023, was hovering at 9.0834%, higher than its close of 9.0093% on Tuesday, 19 November 2013.
Increasing the price of diesel at this time will be tricky for the government with general elections just a few months away. Higher diesel prices will fan inflation. Also, the fuel is used by farmers, who form a big chunk of voters in India, to run their water pumps to irrigate crops. Mr. Moily said he wasn't worried about any political repercussions of freeing up diesel pricing.
On the political front, an unprecedented 78.50% of the nearly 1.40 crore electors voted in the second phase of polling for the Assembly elections in Chhattisgarh on Tuesday, 19 November 2013. The first phase of elections in the 90-member assembly on 11 November 2013 had seen polling of 75.53%.
European stocks edged lower on Wednesday, 20 November 2013, ahead of a busy day for US economic data and minutes of the October US Federal Reserve meeting. Key benchmark indices in UK, Germany and France were off 0.04% to 0.23%.
Asian shares declined on Wednesday, 20 November 2013, on caution ahead of the release of the minutes from the US Federal Reserve's last meeting, possibly providing clues to the timing of its plan to slow monetary stimulus to the US economy. Key benchmark indices in Taiwan, Japan, Indonesia, Singapore and South Korea fell by 0.33% to 1.36%. Key benchmark indices in China and Hong Kong rose 0.18% to 0.62%.
Bank of Japan Governor Haruhiko Kuroda and his board gather for a two-day policy meeting starting today, 20 November 2013.
Trading in US index futures indicated that the Dow could advance 13 points at the opening bell on Wednesday, 20 November 2013. US stocks dropped on Tuesday, 19 November 2013, as investors weighed rising valuations and disappointing earnings forecasts.
Later in the day, the Federal Reserve is slated to release the minutes from its last meeting, possibly providing clues to the timing of its plan to slow monetary stimulus to the US economy. The minutes will be from the October 29-30 meeting.
Federal Reserve Chairman Ben S. Bernanke on Tuesday, 19 November 2013, said the central bank's main interest rate will probably remain near zero for a considerable time after asset purchases end. Bernanke said the Fed is committed to highly accommodative policies, echoing recent comments from other Fed officials including Janet Yellen, who has been nominated to succeed him. The labor market has shown meaningful improvement since the Fed's bond-buying program started, Bernanke said in remarks prepared for a speech to economists in Washington. A "preponderance of data" would be needed to begin removing accommodation, he said. Benchmark interest rates may remain low perhaps well after the jobless rate falls below the Fed's 6.5% threshold, he said.
The US central bank buys $85 billion of Treasuries and mortgage-backed securities each month to put downward pressure on borrowing costs.
The Organization for Economic Cooperation and Development cut its global growth forecasts on Tuesday, 19 November 2013, citing a slowdown in developing nations. The world economy will probably expand 2.7% this year and 3.6% in 2014, instead of the 3.1% and 4% predicted in May, the Paris-based OECD said in a semi-annual report.
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