Intraday volatility continued as key benchmark indices trimmed losses after hitting fresh intraday low in mid-morning trade. The market breadth, indicating the overall health of the market, turned negative from positive in mid-morning trade. The barometer index, the S&P BSE Sensex, was down 88.17 points or 0.43%, up close to 20 points from the day's low and off about 90 points from the day's high.
Index heavyweight and cigarette major ITC dropped. Most realty stocks edged higher. IDBI Bank fell in choppy trade after global credit rating agency Standard and Poor's downgraded the lender's rating to below investment grade citing expectations for weaker asset quality. Shares of hospitality firms rose after the Reserve Bank of India on Monday, 25 November 2013, widened the definition of infrastructure sector lending to include hotels with project costing more than Rs 200 crore in any place in India and of any star rating as well as convention centres with project worth Rs 300 crore.
The market edged lower in early trade on weak Asian stocks. A bout of volatility was witnessed as key benchmark indices trimmed initial losses in morning trade. Volatility continued as key benchmark indices trimmed losses after hitting fresh intraday low in mid-morning trade.
The market may remain volatile this week as traders roll over positions in the futures & options (F&O) segment from the near month November 2013 series to December 2013 series. The near month November 2013 derivatives contract expire on Thursday, 28 November 2013.
At 11:20 IST, the S&P BSE Sensex was down 88.17 points or 0.43% to 20,516.91. The index dropped 110.75 points at the day's low of 20,494.33 in mid-morning trade. The index fell 0.81 points at the day's high of 20,604.27 in opening trade.
The CNX Nifty was down 24.15 points or 0.39% to 6,091.20. The index hit a low of 6,084.10 in intraday trade. The index hit a high of 6,112.70 in intraday trade.
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The market breadth, indicating the overall health of the market, turned negative from positive in mid-morning trade. On BSE, 1,013 shares fell and 896 shares rose. A total of 140 shares were unchanged.
Among the 30-share Sensex pack, 16 stocks fell and rest rose. Dr Reddy's Laboratories (down 1.32%), Tata Steel (down 1.3%) and Tata Motors (down 1.14%) edged lower from the Sensex pack.
Index heavyweight and cigarette major ITC was off 1.4% at Rs 311.75. The scrip hit high of Rs 316.90 and low of Rs 310.15 so far during the day.
Sun Pharmaceutical Industries rose 1.13%. Taro Pharmaceutical Industries, the US based subsidiary of Sun Pharma announced on Monday, 25 November 2013, that it has commenced a modified "Dutch auction" tender offer to repurchase up to $200 million of its ordinary shares at a price not greater than $97.50 per share nor less than $84.50 per share (the "Offer"). If the Offer is fully subscribed, the number of shares to be purchased in the Offer represents approximately 4.6% to 5.3% of Taro's currently issued and outstanding shares depending on the purchase price payable for those shares pursuant to the Offer, Taro said in a statement. The NYSE closing price of Taro ordinary shares on 22 November 2013, the last full trading day before announcement and commencement of this tender offer, was $89.57 per share.
The Offer will expire at 12:00 midnight, New York City time, on Monday, 23 December 2013, unless extended by Taro. Tendering stockholders may specify a price not greater than $97.50 per share nor less than $84.50 per share (in increments of $0.25) at which they are willing to sell their shares pursuant to the Offer. On the terms and subject to the conditions of the Offer, the company will designate a single per share price that the company will pay for shares properly tendered and not properly withdrawn from the Offer, taking into account the total number of shares tendered and the prices specified by tendering stockholders. The company will select the lowest purchase price, not greater than $97.50 per share nor less than $84.50 per share, that will allow it to purchase ordinary shares having an aggregate purchase price of $200 million, or a lower amount depending on the number of ordinary shares properly tendered and not properly withdrawn. Only shares validly tendered at prices at or below the Final Purchase Price, and not properly withdrawn, will be eligible for purchase in the Offer.
As of 31 October 2013, Taro had approximately $741 million in cash and cash equivalents and short-term bank deposits. Taro will use a portion of its cash and cash equivalents and short-term bank deposits to fund the tender offer.
Most realty stocks edged higher. DLF (up 0.77%), HDIL (up 1.26%), and Sobha Developers (up 1.94%) gained. Unitech fell 0.29%.
IDBI Bank fell in choppy trade after global credit rating agency Standard and Poor's downgraded the lender's rating to below investment grade citing expectations for weaker asset quality. The stock was off 1.2% at Rs 64. The scrip hit high of Rs 64.65 and low of Rs 63.65 so far during the day. S&P lowered IDBI's foreign currency issuer credit rating to "BB-plus/B" from "BBB-minus/A-3." The outlook is "negative." "We downgraded IDBI because we expect the bank's asset quality to remain weak over the next 12-18 months," said Standard and Poor's in a report released on Monday, 25 November 2013.
Shares of hospitality firms rose after the Reserve Bank of India on Monday, 25 November 2013, widened the definition of infrastructure sector lending to include hotels with project costing more than Rs 200 crore in any place in India and of any star rating as well as convention centres with project worth Rs 300 crore. Indian Hotels (up 7.84%), EIH (up 2.8%) and Hotel Leela Venture (up 3.1%) rose. The Finance Ministry has favoured relaxation of lending rules for infrastructure projects in order to expedite them. Also, it has written to the RBI suggesting changes in the rules for infrastructure financing, including the treatment of non-performing loans to the sector.
In the foreign exchange market, the rupee edged higher against the dollar on board weakness of the dollar. The partially convertible rupee was hovering at 62.46, compared with its close of 62.50/51 on Monday, 25 November 2013.
The Reserve Bank of India (RBI) announces next Mid-Quarter Review of Monetary Policy for 2013-14 on 18 December 2013. The Third Quarter Review of Monetary Policy for 2013-14 is scheduled 28 January 2014.
Most Asian stocks edged higher in choppy trade on Tuesday, 26 November 2013. Key benchmark indices in China, South Korea, Taiwan and Hong Kong rose 0.11% to 1.04%. Key benchmark indices in Indonesia, Singapore, and Japan fell by 0.01% to 1.03%.
Most Bank of Japan board members agreed that inflation was likely to reach around 2% toward the latter half of the projection period of between the 2013 and 2015 fiscal years, according to minutes of the Oct. 31 meeting released today in Tokyo.
Trading in US index futures indicated that the Dow could advance 19 points at the opening bell on Tuesday, 26 November 2013. US stocks ended mixed on Monday, 25 November 2013, after disappointing report on the housing market. The number of contracts Americans signed to buy previously-owned homes unexpectedly fell in October for a fifth consecutive month amid higher borrowing costs that are denting the real-estate recovery. The gauge of pending home sales decreased 0.6% after a 4.6% drop in September, the National Association of Realtors said in Washington.
The Federal Open Market Committee (FOMC) holds a two-day policy meeting on interest rates in the United States on 17-18 December 2013. The US central bank currently buys bonds worth $85 billion a month in a bid to hold interest rates low and encourage economic growth in the world's biggest economy. Minutes of the Fed's October meeting released on 20 November 2013 showed officials may reduce their $85 billion a month of bond buying if the economy improves as anticipated.
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