Key benchmark indices edged lower to hit fresh intraday low in mid-morning trade after the Reserve Bank of India (RBI) kept its key policy rate viz. the repo rate unchanged at 7.25% after mid-quarter review of the monetary policy. The market breadth, indicating the overall health of the market, turned negative from positive. The S&P BSE Sensex was down 80.68 points or 0.42%, off close to 160 points from the day's high and up about 15 points from the day's low. Capital goods pivotals gained. Metal stocks declined. MMTC was locked at 5% lower circuit at Rs 162.80 on BSE, with the stock extending recent steep slide triggered by government concluding the divestment of 9.33% stake at a huge discount to the stock's ruling market price last week.
Bank stocks edged lower after the Reserve Bank of India (RBI) kept repo rate and cash reserve ratio unchanged after mid-quarter review of the monetary policy. Tata Motors extended intraday losses after weak sales in May 2013.
A bout of volatility was witnessed in early trade as key benchmark indices slipped into the negative terrain after opening higher. Key benchmark indices trimmed intraday losses amid range bound trade as investors awaited the outcome of Reserve Bank of India's mid-quarter monetary policy review. Key benchmark indices edged lower to hit fresh intraday low in mid-morning trade after the Reserve Bank of India (RBI) kept its key policy rate viz. the repo rate unchanged at 7.25% after mid-quarter review of the monetary policy.
The Reserve Bank of India (RBI) kept its key policy rate viz. the repo rate unchanged at 7.25% after mid-quarter review of the monetary policy today, 17 June 2013. The central bank also kept the cash reserve ratio (CRR) of scheduled banks unchanged at 4%. The RBI said in a statement that the inflation outlook going forward will be determined by suppressed inflation being released through revisions in administered prices, including the minimum support prices (MSP) as well as the recent depreciation of the rupee. The rupee declined 6.6% during the period from 22 May 2013 to 11 June 2013 due to sell-off by foreign institutional investors, reflecting risk-off sentiment triggered by apprehensions of possible tapering off of quantitative easing by the US Federal Reserve.
The RBI's monetary policy stance will be determined by how growth and inflation trajectories and the balance of payments situation evolve in the months ahead, the central bank said. It is only a durable receding of inflation that will open up the space for monetary policy to continue to address risks to growth, the RBI said. While several measures have been taken to contain the current account deficit, we need to be vigilant about the global uncertainty, the rapid shift in risk perceptions and its impact on capital flows, the central bank said. The RBI stands ready to use all available instruments and measures to respond rapidly and appropriately to any adverse developments, it said.
At 11:20 IST, the S&P BSE Sensex was down 80.68 points or 0.42% to 19,097.25. The index fell 93.25 points at the day's low of 19,084.68 in mid-morning trade. The index rose 79.48 points at the day's high of 19,257.41 in early trade, its highest level since 11 June 2013.
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The CNX Nifty was down 34.15 points or 0.59% to 5,774.25. The index hit a low of 5,770.25 in intraday trade. The index hit a high of 5,825.55 in intraday trade, its highest level since 11 June 2013.
The market breadth, indicating the overall health of the market, turned negative from positive in mid-morning trade. On BSE, 897 shares fell and 810 shares rose. A total of 104 shares were unchanged.
Among the 30-share Sensex pack, 21 stocks fell and the rest of them rose. M&M (up 2.5%), Sun Pharmaceutical Industries (up 1.82%) and Hero MotoCorp (up 1.6%), edged higher.
MMTC was locked at 5% lower circuit at Rs 162.80 on BSE, with the stock extending recent steep slide triggered by government concluding the divestment of 9.33% stake at a huge discount to the stock's ruling market price last week. The government last week sold 9.33% stake in MMTC via Offer for Sale through stock exchanges mechanism at an indicate price of Rs 60.86 per share.
The divestment was done to make the company compliant to the public shareholding requirements under the Securities Contract Regulations (Rules) (SCRR). Sebi has mandated minimum public shareholding of 10% for state-run firms by August 2013.
Bank stocks edged lower after the Reserve Bank of India (RBI) kept repo rate and cash reserve ratio unchanged after mid-quarter review of the monetary policy. HDFC Bank (down 0.74%), ICICI Bank (down 1.38%), and State Bank of India (down 1.72%), edged lower.
Capital goods pivotals gained. L&T (up 0.39%) and Bhel (up 0.23%), edged higher.
Metal stocks declined. Hindalco Industries fell 0.39% on profit booking after jumping 7.07% on Friday, 14 June 2013.
Tata Steel (down 1.33%), Sail (down 1.76%), Jindal Steel & Power (down 1.77%) and Sterlite Industries (down 2.17%), edged lower.
State Trading Corporation of India (down 5.36%), Gokul Refoils and Solvent (down 5.06%), Riddhi Siddhi Gluco Biols (down 5%) and Setco Automotive (down 5%), were the major losers from the BSE Small-Cap index.
Tata Motors declined 1.74%, with the stock extending intraday losses. Tata Motors' global wholesales declined 14.88% to 81,783 units in May 2013 over May 2012.
The India Meteorological Department (IMD) said on 14 June 2013 that cumulative seasonal rainfall for the country as a whole during the period between 1-13 June 2013 was 28% above the Long Period Average (LPA).
On the political front, the 17-year long relationship between the BJP and Janata Dal (United) ended on Sunday, 16 June 2013, as Bihar Chief Minister Nitish Kumar remained adamant against elevation of Narendra Modi to the BJP's election campaign committee. The BJP on 9 June 2013 appointed Modi as the Chairman of BJP's Election Campaign Committee for 2014 Lok Sabha polls which could make him the party's candidate for Prime Minister.
Janata Dal (United) rules in Bihar state in a coalition with the BJP. The split is unlikely to bring down Bihar's state government. Mr. Kumar said on Sunday he had asked the state's governor to sack the BJP's ministers. He said his party would seek a vote of confidence in Bihar's state assembly on June 19 to show it has a majority even without the BJP.
Asian stocks rose for a second day on Monday as investors await this week's Federal Reserve meeting. Key benchmark indices in China, Hong Kong, Indonesia, Japan, Taiwan and Singapore rose by 0.04% to 1.9%. South Korea's Kospi fell 0.47%.
Singapore's exports fell more than economists estimated in May as manufacturers shipped fewer electronics after an uneven global recovery hurt demand. Non-oil domestic exports slid 4.6% from a year earlier, after falling 1% in April, the trade promotion agency said in a statement today.
Trading in US index futures indicated that the Dow could gain 55 points at the opening bell on Monday, 17 June 2013. US stocks fell on Friday as the International Monetary Fund cut its 2014 outlook for the US and urged the central bank to carefully manage its exit from stimulus plans. The Washington-based IMF lowered its US growth forecast for 2014 to 2.7%, from 3% predicted in April. It left its predication for growth this year unchanged at 1.9%. The IMF sees the Federal Reserve maintaining large monthly bond purchases until at least the end of this year and urged the central bank to carefully manage its exit plan to avoid disrupting financial markets.
The Thomson Reuters/University of Michigan June preliminary index of consumer sentiment fell to 82.7 from a final reading of 84.5 the prior month. Other reports showed US industrial production was unchanged in May and wholesale prices climbed for the first time in three months.
The Federal Open Market Committee, the Fed's interest-rating setting body, is due to begin its two-day meeting on interest rates in the United States tomorrow, 18 June 2013. Uncertainty about whether the Fed will curtail the pace of its bond purchases, set at $85 billion a month, directed at encouraging US economic growth, has weighed on global stocks over the past few weeks. Federal Reserve 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.
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