Key benchmark indices weakened to hit fresh intraday low in afternoon trade as weak opening of European stocks weighed on sentiment. The barometer index, the S&P BSE Sensex, was down 319.57 points or 1.58%, off close to 295 points from the day's high and up about 10 points from the day's low. The market sentiment was hit as hawkish comments by Reserve Bank of India governor D. Subbarao on Thursday, 30 May 2013, on inflation dashed hopes that the central bank will continue to lower interest rates to boost economic growth. The market breadth, indicating the overall health of the market, was weak.
Capital goods stocks edged lower on worries slowing economy could crimp new orders. Auto stocks declined. Mahindra & Mahindra (M&M) reversed direction after Thursday's post result rally.
Key benchmark indices dropped in early trade as hawkish comments by Reserve Bank of India governor D. Subbarao on Thursday, 31 May 2013, on inflation dashed hopes that the central bank will continue to lower interest rates to boost economic growth. The market extended initial fall in morning trade, with Sensex sliding below the psychological 20,000 mark. Weakness persisted on the bourses in mid-morning trade as latest data showed that India's economy grew at its lowest pace in a decade in fiscal year 2012-13. Key benchmark indices hovered in red in early afternoon trade. It weakened to hit fresh intraday low in afternoon trade.
At 13:20 IST, the S&P BSE Sensex was down 319.57 points or 1.58% to 19,895.83. The index lost 329.76 points at the day's low of 19,885.64 in afternoon trade, its lowest level since 27 May 2013. The index slipped 24.11 points at the day's high of 20,191.29 in early trade.
The CNX Nifty was down 103 points or 1.68% to 6,021.05. The index hit a low of 6,020.60 in intraday trade, its lowest level since 27 May 2013. The index hit a high of 6,106.25 in intraday trade.
The market breadth, indicating the overall health of the market, was weak. On BSE, 1,327 shares declined and 758 shares rose. A total of 112 shares were unchanged.
Among the 30-share Sensex pack, 25 stocks declined and the rest of them gained. Hindalco Industries, HDFC Bank and Bharti Airtel shed by 2.01% to 3.52%.
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Capital goods stocks edged lower on worries slowing economy could crimp new orders. Bhel fell 1.12%.
L&T dropped 1.27%. The company, last week, reported 6.9% fall in net profit to Rs 1787.94 crore on 9.9% rise in total income to Rs 20686.93 crore in Q4 March 2013 over Q4 March 2012. The result was announced on 22 May 2013.
Among other capital goods stocks, ABB, BEML and Punj Lloyd shed by 0.25% to 1.11%.
Ranbaxy Laboratories declined 0.18%. The company issued during market hours today, 31 May 2013, an advisory in public interest for patients, doctors and all its stakeholders. All Ranbaxy products currently in the Indian and global market are safe and efficacious, it said. The company stands by the quality of every medicine that the company makes and distributes in In India and every country around the world. The company's India facilities are routinely inspected by Drug Controller General of India and many other global regulatory agencies, it added.
Auto stocks declined. Auto major Tata Motors fell 0.13% after jumping 4.31% on Thursday. The company's consolidated net profit declined 36.71% to Rs 3945 crore on 10% growth in revenue to Rs 56002 crore in Q4 March 2013 over Q4 March 2012. The fall in bottom line was due to base effect. Tata Motors had accounted for a large tax credit in Q4 March 2012. Tata Motors' British luxury car unit Jaguar Land Rover (JLR) had accounted for tax credit of 225 million pounds (Rs 1794 crore) in Q4 March 2012 for past income tax losses. Tata Motors' profit before tax (PBT) rose 6.1% to Rs 4694 crore in Q4 March 2013 over Q4 March 2012. Tata Motors attributed revenue growth to strong demand, growth in volumes and favourable market mix at JLR and favourable operating foreign exchange at the British luxury car unit. The result was announced after market hours on Wednesday, 29 May 2013.
Due to weak operating environment in the commercial vehicles and passenger car business in India, the board of Tata Motors pruned dividend to Rs 2 per share for the year ended 31 March 2013 (FY 2013) from Rs 4 per share for the year ended 31 March 2012 (FY 2012).
Mahindra & Mahindra (M&M) lost 2.86% on profit booking. The M&M stock had surged 4.61% on Thursday, 30 May 2013, after the company reported strong Q4 results. The combined profit before exceptional items and tax of M&M and its 100% subsidiary -- Mahindra Vehicle Manufacturers (MVML) -- jumped 41.8% to Rs 1230.40 crore in Q4 March 2013 over Q4 March 2012. MVML, located at Chakan near Pune in Maharashtra, has been set up as a 100% subsidiary of M&M with a view to source contemporary products for expanding the market offering of M&M.
The combined gross revenue of Mahindra & Mahindra (M&M) and Mahindra Vehicle Manufacturers (MVML) rose 9.8% to Rs 11342.30 crore in Q4 March 2013 over Q4 March 2012
India's largest car maker by sales, Maruti Suzuki India declined 0.81%.
Two wheeler makers also edged lower. Bajaj Auto shed 1.26%. India's largest motorcycle maker by sales, Hero MotoCorp, dropped 1.08%
India's GDP grew 4.8% Q4 March 2013, slightly higher than a revised 4.7% growth in Q3 December 2012, data released by the government today, 31 May 2013, showed. GDP grew at a decade low of 5% in fiscal year 2012-13.
In Q4 March 2013, the 'agriculture, forestry and fishing' segment registered a growth of 1.4%, the manufacturing sector reported 2.6% growth, 'electricity, gas and water supply' segment clocked growth of 2.8%, the construction sector grew 4.4%, 'trade, hotels, transport and communication' segment clocked 6.2% growth, 'financing, insurance, real estate and business services' segment clocked 9.1% growth and 'community, social and personal services' segment registered 4% growth. The mining and quarrying segment reported a decline of 3.1%.
The Reserve Bank of India (RBI) governor D. Subbarao on Thursday, 30 May 2013, said that the central bank is concerned about the country's wide current-account deficit (CAD) and still-high retail inflation. Mr. Subbarao, while speaking at an event in Ahmedabad, said the RBI will factor in the current-account gap while formulating its monetary policy. He said the wide deficit is weakening the local currency and may fan inflation that has slowed in recent months. The bank is concerned about the size of the deficit as well as the way India funds it, Mr. Subbarao said. The result of the high current-account deficit has been the depreciation of the rupee, he said. Rupee depreciation is a problem because it pushes up the cost of our imports, it increases debt-servicing cost, it causes inflation and it erodes our external payment situation, he added. Mr. Subbarao said India's retail inflation is still a concern. Sacrificing growth in the short term is "inevitable" as the RBI strives to rein in inflation, he added.
RBI undertakes mid-quarter review of the monetary policy on 17 June 2013. The RBI on 3 May 2013 cut its key policy rate viz. the repo rate by 25 basis points (bps) to 7.25% and kept the cash reserve ratio (CRR) for banks unchanged at 4% after a monetary policy review. RBI said at that time that the balance of risks stemming from its assessment of the growth-inflation dynamic provides little space for further monetary easing. The RBI said it will endeavour to condition the evolution of inflation to a level of 5% by March 2014, using all instruments at its command.
The finance ministry in October 2012 announced a five-year plan to cut fiscal deficit. The government hopes to reduce the fiscal deficit to 3% by March 2017.
European stock markets moved lower on Friday, pulling back from gains seen the prior day and with investors cautious to make any major moves ahead of U.S. consumer data. Key benchmark indices in France, Germany and UK shed by 0.95% to 1.27%.
Asian markets were trading mostly lower today, 31 May 2013. Key benchmark indices in Indonesia, Hong Kong, China and Singapore were down by 0.36% to 0.74%. Key benchmark indices in South Korea, Taiwan and Japan rose by 0.05% to 1.37%.
Japan's industrial production rose 1.7% during April, the Ministry of Economy, Trade and Industry said today, 31 May 2013.
China will release the government-sponsored manufacturing data for May 2013 tomorrow, 1 June 2013. Investors will be watching to see if the government-sponsored Purchasing Managers' Index matches preliminary results from a privately-compiled version, produced by HSBC and Markit, which showed Chinese manufacturing activity contracting in May.
Trading in US index futures indicated that the Dow could fall 21 points at the opening bell on Friday, 31 May 2013. US stocks edged higher on Thursday, 30 May 2013, as another report cast a positive light on the US housing market and as weaker-than-expected data on first-quarter economic growth and jobless claims raised hopes the Federal Reserve may keep its current level of bond purchases.
Fed Chairman Ben Bernanke said last week that an improvement in data could trigger the central bank to start tapering its asset purchases in coming months, stoking fears that the $85-billion-a-month liquidity injection will soon come to an end.
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