Key benchmark indices trimmed intraday losses in early afternoon trade as index heavyweight Reliance Industries (RIL) recovered. The S&P BSE Sensex was down 24.48 points or 0.13%, up about 100 points from the day's low and off close to 35 points from the day's high. The market breadth, indicating the overall health of the market, was positive. Metal stocks extended intraday gain. Jindal Steel & Power surged nearly 8%.
Shares of organised retailers rose after reports that a government panel has recommended a major liberalisation of the foreign direct investment (FDI) regime, including allowing foreign supermarkets to buy up to 74% in Indian retailers with prior government approval. PSU OMCs dropped as crude oil prices gained.
The rupee was volatile against the dollar. The Indian currency trimmed losses and was currently at 58.73 per dollar after hitting a low of 58.91, within striking distance of a record low of 58.98 struck last week. The rupee fell 1.5% to a record closing low of 58.77/78 on Tuesday, 18 June 2013, as traders worried that the country's current account deficit made the currency especially vulnerable to any scaling back of the US Federal Reserve's monetary stimulus.
The Reserve Bank of India (RBI) on Monday, 17 June 2013, refrained from cutting its key policy rate further despite sluggish economic growth due to the recent steep slide in rupee against the dollar. The central bank after a monetary policy review said that the weakness in rupee could adversely impact inflation which has been slowing in the past few months. A weak rupee makes the cost of oil and other imported goods higher in rupee terms, adding to inflationary pressure.
The market edged lower in early trade on weak Asian stocks. The market extended initial losses to hit fresh intraday low in morning trade. The Sensex hovered in negative terrain in mid-morning trade. The Sensex trimmed intraday losses in early afternoon trade.
Foreign institutional investors (FIIs) sold shares worth a net Rs 597.37 crore on Tuesday, 18 June 2013, as per provisional data from the stock exchanges.
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At 12:20 IST, the S&P BSE Sensex was down 24.48 points or 0.13% to 19,198.80. The index fell 123.15 points at the day's low of 19,100.13 in morning trade, its lowest level since 17 June 2013. The index rose 11.20 points at the day's high of 19,234.48 in early trade.
The CNX Nifty was down 4.10 points or 0.07% to 5,809.50. The index hit a low of 5,777.90 in intraday trade, its lowest level since 17 June 2013. The index hit a high of 5,810.40 in intraday trade.
The market breadth, indicating the overall health of the market, was positive. On BSE, 1,026 shares rose and 905 shares fell. A total of 123 shares were unchanged.
Among the 30-share Sensex pack, 17 stocks fell and the rest of them rose. Bharti Airtel (up 1.37%), GAIL (India) (up 1.36% and HDFC Bank (up 0.52%), edged higher.
Shares of index heavyweight Reliance Industries (RIL) rose 0.3%, with the stock reversing intraday losses. Niko Resources on 13 June 2013 said its proved reserves increased by 160%, and that a recent gas discovery in the D6 block off India's east coast could add significantly to future reserves. RIL is the operator of the block with a 60% stake. BP Plc holds 30% and Niko the rest.
Metal stocks extended intraday gain. Jindal Steel & Power (up 7.88%), Sterlite Industries (up 2.35%), Hindalco Industries (up 1.08%) and Tata Steel (up 1.04%) and edged higher.
PSU OMCs dropped as crude oil prices gained. Indian Oil Corporation (down 1.35%), HPCL (down 0.5%) and BPCL (down 0.23%) edged lower. US crude oil futures for August delivery were up 19 cents at $98.63 a barrel in Asian electronic trading today, 19 June 2013 after gaining 67 cents to settle at $98.44 per barrel on Tuesday. Higher crude oil prices could increase under-recoveries of state-run oil marketing companies (PSU OMCs) on domestic sale of diesel, LPG and kerosene at controlled prices.
The Petroleum Planning and Analysis Cell (PPAC) under the Ministry of Petroleum and Natural Gas on 17 June 2013 said that the under-recovery on high speed diesel (HSD) applicable for second fortnight of June effective from 16 June 2013 has increased sharply to Rs 6.31 per litre from Rs 4.87 per litre during the first fortnight of June 2013.
PSU OMCs are currently incurring daily under-recovery of about Rs 286 crore on the sale of diesel, PDS kerosene and domestic LPG. PSU OMCs suffer under recoveries on domestic sale of diesel, LPG and kerosene at controlled prices. In January 2013, the government allowed PSU OMCs to raise diesel prices in small measures at regular intervals while completely deregulating diesel prices sold to institutional or bulk buyers.
Meanwhile, PSU OMCs hiked petrol price by Rs 2 a litre on Saturday, 15 June 2013, the second increase in rates this month as devaluation of rupee against US dollar made imports costlier. The hike is excluding local sales tax or VAT and actual increase for consumers will be higher. Petrol price in Delhi was hiked by Rs 2.40 a litre to Rs 66.39 from Rs 63.99 previously. Petrol has been deregulated by the government.
Shares of organised retailers rose after on reports that a government panel has recommended a major liberalisation of the foreign direct investment (FDI) regime, including allowing foreign supermarkets to buy up to 74% in Indian retailers with prior government approval. Shoppers Stop (up 0.34%), Future Retail (up 1.23%), and Trent (up 1.43%), edged higher.
The multi-brand retail sector was thrown open to foreign investors in September 2012 allowing them to hold 51% in retail companies but has failed to see any investment so far.
Religare Enterprises rose 1.95% to Rs 322. The company after trading hours on Tuesday, 18 June 2013, said that the promoters of the company have agreed to dilute their shareholding to 49% in the company to enable the company to qualify for applying for banking license under guidelines for licensing of new banks in the private sector.
Asian stocks fell on Wednesday, 19 June 2013, with investors cautious ahead of the conclusion of a Federal Reserve policy meeting for clues on Fed's bond purchases. Key benchmark indices in China, Hong Kong, Indonesia, Singapore, Taiwan and South Korea fell by 0.05% to 0.89%. Japan's Nikkei Average rose 1.83%.
Japan's exports surged by the most since 2010 as the yen weakened and shipments to the US jumped, boosting Prime Minister Shinzo Abe's campaign to revive the world's third-largest economy. Exports increased 10.1% in May from a year earlier, the Finance Ministry said in Tokyo today.
Trading in US index futures indicated that the Dow could gain 24 points at the opening bell on Wednesday, 19 June 2013. US stocks rose for the second day in a row on Tuesday as investors bet that the Federal Reserve will stay the course on its economic stimulus policy.
A two-day meeting of the Federal Open Market Committee, the Fed's interest-rating setting body, ends today, 19 June 2013. Fed Chairman Ben Bernanke said last month that the bank could start scaling back its aggressive easing program in coming months if data continue to improve. The Fed's monthly bond purchases of $85 billion a month is aimed at encouraging US economic growth.
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