Key benchmark indices slumped and hit fresh intraday low in early afternoon trade as weakness in rupee against the dollar hurt sentiment. The barometer index, the S&P BSE Sensex was down 237.14 points or 1.26%, off about 360 points from the day's high and up close to 60 points from the day's low. The market breadth, indicating the overall health of the market, was negative. Capital goods pivotals rose for the second straight day. Realty stocks declined. HDFC extended intraday losses. Index heavyweight Reliance Industries also extended intraday losses.
A bout of volatility was witnessed as key benchmark indices slipped into the red after opening higher. It weakened and hit fresh intraday low in morning trade. It hovered in negative terrain in mid-morning trade. It slumped and hit fresh intraday low in early afternoon trade.
The partially convertible rupee was trading 66.86 lower than Monday's close of 66. Rupee depreciation fuels inflation, increases import bill and current account deficit. It also increases the government's spending on fuel subsidies, potentially widening the fiscal deficit.
At 12:20 IST, the S&P BSE Sensex was down 237.14 points or 1.26% to 18,648.99. The index fell 297.53 points at the day's low of 18,588.60 in early afternoon trade, its lowest level since 30 August 2013. The index rose 121.18 points at the day's high of 19,007.31 in opening trade, its highest level since 16 August 2013.
The CNX Nifty was down 92.05 points or 1.66% to 5,458.70. The index hit a low of 5,449.20 in intraday trade, its lowest level since 30 August 2013. The index hit a high of 5,580.95 in intraday trade, its highest level since 16 August 2013.
The market breadth, indicating the overall health of the market, was negative. On BSE, 937 shares fell and 860 shares rose. A total of 125 shares were unchanged.
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Among the 30-share Sensex pack, 25 stocks fell and rest of them rose. ICICI Bank (down 2.17%), Hero MotoCorp (down 4.3%) and HDFC Bank (down 2.49%), edged lower from the Sensex pack.
HDFC fell 4.01%, with the stock extending intraday losses.
Index heavyweight Reliance Industries dropped 2.52%, with the stock extending intraday losses.
Capital goods pivotals rose for the second straight day. L&T gained 0.28% The company said during market hours on Monday, 2 September 2013 that its construction business secured new orders worth Rs 1141 crore in August 2013 in various business segments.
Bharat Heavy Electricals (Bhel) gained 3.48%. The company said during market hours on Monday, 2 September 2013 that the Board for Industrial and Financial Reconstruction (BIFR) vide order dated 29 August 2013 sanctioned the Modified Draft Rehabilitation Scheme envisaging merger of Bharat Heavy Plate and Vessels (BHPV) with Bhel.
Realty stocks declined. DLF (down 1.35%), Sobha Developers (down 2.13%), D B Realty (down 0.36%) and Unitech (down 1.73%), declined.
Religare Enterprises declined 0.29%. The company said it plans to acquire Macquarie's stake in its wealth management joint venture - Religare Macquarie Wealth Management. The announcement was made after market hours on Monday, 2 September 2013.
Religare Macquarie Wealth Management is an equal partnership joint venture (JV) with Macquarie formed in 2007 to serve the fast growing Indian High Net Worth individuals (HNI) client base, leveraging Religare's local knowledge and Macquarie's global expertise. The venture has currently close to Rs 2800 crore of Assets Under Management (as on 31 March 2013) servicing over 4800 clients through its committed team of professional wealth advisors.
Post completion of the transaction and necessary formalities, the legal entity will be rechristened as Religare Wealth Management (RWML) and will form a part of the broader Capital Markets Business of Religare group. There will be no change in the management team and the team will report to Basab Mitra, CEO-Capital Markets and Wealth Management for Religare group, Religare Enterprises said in a statement.
Commenting on the development, Shachindra Nath, Group CEO, Religare Enterprises said, "The partnership with Macquarie has been fruitful. Macquarie has decided to exit the wealth management business from Asia including India and this has created for us the opportunity to further consolidate our financial services platform in India. We see this new structure as a great growth enabler for the business by bringing together the broader Religare ecosystem including distribution, pan-India client base and research capabilities under a common unified umbrella."
Steel Strips Wheels jumped 12.17% after the company said its wheel sales rose 16% to 9.71 lakh units in August 2013 over August 2012. The company announced August sales during trading hours today, 3 September 2013.
Exports spurted 140% to 179,940 units in August 2013 over August 2012. Strong performance is expected to continue with more new export business coming on-stream and ramping up of existing businesses will result in higher volumes going forward in FY 2014. These will hence improving profitability going forward, SSWL said in a statement.
Tractor segment sales grew 49% on the back of very good demand from all across the customers and various new developments coming on-stream for supply, SSWL said. Good monsoon will keep the demand high and the company expects to reach greater benchmarks with every passing month, SSWL said in a statement.
Two & three wheeler segment sales rose 41% and is expected to show similar momentum going forward, the company said. SSWL said it expects these numbers will see upward momentum going forward as few more new businesses will add volumes. Commercial vehicle segment is still soft and is recovering slowly and the company said it is very hopeful that all the new developed wheels will push volume higher along with improvement in the industry.
SSWL said that the company's focus will remain on improving market share and product mix portfolio to maximize profitability.
SSWL said it expects to achieve 10 lakh wheel sale mark in October 2013 which again would be a record monthly sale number. The performance is very satisfactory given the conditions prevailing in the Automotive Industry and the company said it expects to maintain the growth momentum on the back of good overall growth and new business starts.
Readymade Steel India lost 1.2% after the firm said its Singapore subsidiary has entered into a conditional sale & purchase agreement with PSL Holdings for the acquisition of entire share capital of two of its units. The announcement was made after market hours on Monday, 2 September 2013.
Readymade Steel India (RMS) said that its subsidiary, KH Foges Pte in Singapore has entered into a conditional sale & purchase agreement (SPA) with PSL Holdings, for the acquisition of the entire share capital of PSL's wholly owned subsidiaries, PSL Engineering Pte (PSLE) and Rotary Piling Pte (RPL).
The aggregate consideration for the acquisition shall be about Rs 80 crore to Rs 100 crore as per the terms of the conditional SPA. The acquisition is likely to be completed before the end of the year, RMS said in a statement.
Mr. Anil Agrawal, MD, RMS said, "PSLE and RPL have been engaged in their respective businesses for over 25 years and posses infrastructure and experienced manpower for conduct and growth of the business activities which we plan to achieve under new leadership. The proposed acquisition reflects KH Foges' efforts towards continuous upgradation of its capabilities through acquisition of new technologies and investment in the development of human resource competencies which are key strategies employed by KHF to advance towards the leadership position in this field and compliments the vision of being the foundation engineering specialist in South East Asia."
On macro front, the combined index of eight core industries rose 3.1% in July 2013 over July 2012. The eight core industries have a combined weight of 37.90% in the Index of Industrial Production (IIP).
The Rajya Sabha on Monday approved a $20 billion scheme to distribute subsidised wheat and rice to 80 crore people, backing an anti-malnutrition drive that investors fear will mean missing the fiscal deficit target. The Food Security Bill is seen as a vote winner by the ruling Congress party as it prepares for elections due by May next year. But investors reacted negatively to the plan when the lower house approved it last weak, on worries the government will struggle to contain the cost of subsidies. The scheme has now been passed by both houses. Before becoming law it must be signed by the president, a formality.
Asian stocks climbed on Tuesday on evidence of a pickup in global manufacturing. Key benchmark indices in China, Hong Kong, Singapore, South Korea, Japan, Indonesia, and Taiwan rose by 0.04% to 2.99%.
China's official purchasing managers' index (PMI) for the non-manufacturing sector dipped slightly to 53.9 in August from July's 54.1, the National Bureau of Statistics (NBS) said on Tuesday. A reading above 50 indicates activity in the sector is accelerating, while one below 50 indicates it is slowing. The services sector index followed the bureau's manufacturing PMI on Sunday, which showed China's factory activity expanded at the fastest pace in more than a year in August with a jump in new orders.
Australia's central bank left its key interest rate unchanged on signs of a pickup in housing and as a slide in the currency eases pressure on the economy before an election that polls suggest will change the government. Governor Glenn Stevens and his board kept the overnight cash-rate target at a record-low 2.5%, the Reserve Bank of Australia said in a statement today in Sydney.
Trading in US index futures indicated that the Dow could gain 129 points at the opening bell on Tuesday, 3 September 2013. US stock markets remained closed on Monday, 2 September 2013, for the Labor Day holiday.
Investors across the globe are eyeing the next policy meeting of the Federal Open Market Committee (FOMC) scheduled this 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.
President Barack Obama on Saturday, 31 August 2013 said he has decided military action is appropriate, but he would still seek congressional authorization on the use of US military force against Syria. Congressional leaders have agreed to debate and vote on the possible action when lawmakers return from recess on September 9. And, while lawmakers aren't due back in Washington until next week, the Senate Foreign Relations Committee said it would hold hearings on Syria today and tomorrow.
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