Immense volatility was witnessed as key benchmark indices slipped into the red and hit fresh intraday low in mid-afternoon trade as weakness in European stocks hurt sentiment. The barometer index, the S&P BSE Sensex, was down 90.55 points or 0.49%, off about 320 points from the day's high and up close to 40 points from the day's low. The market breadth, indicating the overall health of the market, turned negative from positive.
Jindal Steel & Power tumbled over 9% after the company's board approved buyback proposal. Shares of two wheeler makers rose. Index heavyweight and cigarette marker ITC edged lower in choppy trade. Another index heavyweight Reliance Industries also dropped. Cairn India fell along with crude oil prices.
A bout of volatility was witnessed in early trade as key benchmark indices trimmed losses after slipping into the red after a positive opening. The market regained positive terrain and hit fresh intraday high in morning trade. The Sensex extended gains and hit fresh intraday high in mid-morning trade. A bout of volatility was witnessed as key benchmark indices trimmed gains after hitting fresh intraday high in early afternoon trade as Asian stocks reversed intraday gains. Volatility ruled the roost as key benchmark indices regained positive zone after slipping into the red for a brief period in afternoon trade. Immense volatility was witnessed as key benchmark indices slipped into the red and hit fresh intraday low in mid-afternoon trade as weakness in European stocks hurt sentiment.
In the foreign currency market, the rupee dropped amid high intraday volatility after Thursday's steep rally. The partially convertible rupee was hovering at 66.64, weaker than its close of 66.55/56 on Thursday, 29 August 2013. The rupee fell as stronger than expected US GDP growth in Q2 June 2013 raised fears that the data may lead the Federal Reserve to reduce the pace of its bond purchases soon.
At 14:20 IST, the S&P BSE Sensex was down 90.55 points or 0.49% to 18,310.49. The index fell 128.28 points at the day's low of 18,272.76 in mid-afternoon trade. The index jumped 231.19 points at the day's high of 18,632.23 in early afternoon trade, its highest level since 26 August 2013.
The CNX Nifty was down 40.90 points or 0.76% to 5,368.15. The index hit a low of 5,360.20 in intraday trade. The index hit a high of 5,469.10 in intraday trade, its highest level since 26 August 2013.
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The market breadth, indicating the overall health of the market, turned negative from positive in mid-afternoon trade. On BSE, 1,093 shares fell and 1,019 shares rose. A total of 163 shares were unchanged.
Among the 30-share Sensex pack, 18 stocks rose and rest of them fell. Hindalco Industries (down 4.26%), Tata Motors (down 3.78%) and Sesa Goa (down 3.58%), edged lower from the Sensex pack.
Cairn India lost 2.42% as US crude oil futures fell for a second straight day after UK lawmakers rejected a motion for military action against Syria, easing concern that unrest will disrupt Middle East oil supplies. US crude oil futures for October 2013 delivery were down 91 cents a barrel at $107.89 a barrel in the electronic trading today, 30 August 2013. The contract had fallen $1.30 a barrel or 1.18% to settle at $108.80 a barrel on the New York Mercantile Exchange on Thursday, 29 August 2013. Lower crude oil prices will result in lower realizations from crude sales for oil exploration firms like Cairn India.
Index heavyweight and cigarette marker ITC fell 0.51% to Rs 303.65. The stock was volatile. The scrip hit high of Rs 308.45 and low of Rs 300.05 so far during the day.
Another index heavyweight Reliance Industries dropped 1.5% to Rs 832.60. The scrip hit high of Rs 846.90 and low of Rs 828.25 so far during the day.
Shares of two wheeler makers rose. Bajaj Auto (up 2.64%) and Hero MotoCorp (up 0.92%), gained.
Jindal Steel & Power (JSPL) tumbled 9.41% to Rs 220.55 after the company's board approved share buyback proposal through open market purchases. The company said it has set aside Rs 1000 crore for share buyback. The ceiling price for the share buyback through the open market purchases has been set Rs 261 per share.
The maximum buyback price of Rs 261 per share is at a premium of 18.34% to the stock's ruling market price.
The Forward Markets Commission (FMC), which regulates the commodity futures market in India, has raised the initial margin on gold futures to 5% from 4% for domestic traders effective Monday, 2 September 2013. The FMC move comes after gold prices rose 18% to reach a record high earlier this week. The FMC also imposed an additional 5% margin on gold, silver and crude oil futures contracts from Monday, 2 September 2013.
Prime Minister Dr. Manmohan Singh today, 30 August 2013, said in parliament that said that the rupee's tumble is a "matter of concern", but is part of a needed adjustment due to India's large current account deficit and will have a positive impact on export competitiveness in coming months. He said India's current account deficit was "unsustainably large" and to remedy this there needed to be a reduction in demand for gold and oil imports. He added that although the rupee fall was a matter of concern the government will not meet the rupee decline with capital control measures.
The Prime Minister urged people to control the consumption of gold and oil. "We need to reduce our appetite for gold and economise the use of petroleum products and take steps to increase our exports," Singh said.
The Prime Minister said that the government won't go back on reforms in the current economic situation. "There is no question of reversing economic reforms. The cabinet decisions to give go-ahead to projects will show results in the second quarter," he said. Dr. Singh urged the Opposition to help in passing of certain bills for economic growth. "Many bills are stalled due to lack of political consensus. I urge political parties to come together and get them through for the economic growth," Singh said.
The Prime Minister said that India is not facing a repeat of the 1991 balance of payments crisis and fears that economic growth will slip to as low as 3% are unfounded. Noting that the rupee's sharp decline over the last three months was partly due to an expected tapering of the US Federal Reserve's liquidity measures, he said rich countries should pay more attention to the impact of their policy steps on developing countries' economies.
The Central Statistics Office (CSO) will unveil data on gross domestic product (GDP) for Q1 June 2013 at 17:30 IST today, 30 August 2013. The GDP growth is seen moderating further to 4.7% in Q1 June 2013, from 4.78% in Q4 March 2013, as per the median estimate of a poll of economists carried out by Capital Market. The GDP grew 5% in the year ended 31 March 2013, the weakest in a decade, as falling domestic and overseas demand, crumbling domestic infrastructure facilities, bureaucratic delays in approvals for industrial projects and high borrowing costs choked investments in the economy.
European stocks declined on Friday, 30 August 2013, as investors awaited data on unemployment and consumer confidence from the euro zone and digested the latest developments in the Syria conflict. Key benchmark indices in UK, France and Germany were off 0.68% to 0.83%.
Most Asian stocks rose on Friday, 30 August 2013, following overnight gains in US stocks triggered by data showing that the US economy expanded more rapidly than previously thought in the second quarter. Key benchmark indices in China, Hong Kong, South Korea, Indonesia, and Taiwan rose by 0.03% to 1.78%. Key benchmark indices in Singapore and Japan fell by 0.11% to 0.53%.
Japan's consumer prices increased at the fastest pace since 2008 in July, adding to signs that Prime Minister Shinzo Abe is making progress in pulling the economy out of 15 years of deflation. Consumer prices excluding fresh food climbed 0.7% from a year earlier, the statistics bureau said today in Tokyo.
Trading in US index futures indicated a flat opening of US stocks on Friday, 30 August 2013. US stocks rose on Thursday, 29 August 2013, as data showed the economy expanded at a faster pace in the second quarter and concerns over Syria eased. Gross domestic product rose at a 2.5% annualized rate, up from an initial estimate of 1.7%, Commerce Department figures showed Thursday in Washington. Jobless claims in the week ended August 24 dropped 6,000 to 331,000 from a revised 337,000 the week before that was higher than initially reported, the Labor Department said
US markets remain closed on Monday, 2 September 2013, for the Labor Day holiday.
The prospect of imminent military strikes on Syria receded as the UK and France said they favor waiting for the results of a United Nations investigation into alleged use of chemical weapons. The UK Parliament has voted against the use of force in Syria. A further vote was set for early next week, specifically on whether the UK should get directly involved.
The US which says it has evidence that Syria's government was responsible, won't act without allies, Defense Secretary Chuck Hagel said. Meanwhile, the White House told US congressional leaders that a potential strike on Syria would focus on removing the regime's chemical-weapons capability.
Investors across the globe are eyeing the next policy meeting of the Federal Open Market Committee (FOMC) scheduled next month, with their focus squarely on the timing of tapering of Federal Reserve's bond purchases. The FOMC holds a two-day policy meeting on 17-18 September 2013 to decide on interest rates in the United States. The US central bank currently buys $85 billion a month in US debt and mortgage-backed securities in a bid to hold interest rates low and encourage economic growth. Federal Reserve Chairman Ben Bernanke has on several occasions stressed that the tapering process is dependent on an improvement in data. Fed's bond-buying program has kept global markets flush with liquidity in recent years.
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