Key benchmark indices edged lower in choppy trade as a decision by State Bank of India (SBI), India's biggest commercial bank in terms of branch network, to raise lending rates by 20 basis points hurt investor sentiment adversely as borrowing costs will rise for the corporate sector. A faster-than-estimated expansion in a US services gauge stoked speculation the world's largest economy is strong enough to allow the US Federal Reserve to reduce stimulus for the US economy earlier than analysts had projected. Fed's bond-buying program has been a source of liquidity for most Asian and emerging markets this year. The barometer index, the BSE Sensex and the 50-unit CNX Nifty, both, hit their lowest level in over one week in late trade. The Sensex was provisionally down 85.73 points or 0.41%, up about 30 points from the day's low and off close to 155 points from the day's high. The market breadth, indicating the overall health of the market, was positive. In the foreign exchange market, the rupee weakened past 62 against the dollar.
Indian stocks fell for the second day in a row today, 6 November 2013.
Metal stocks dropped. Bank stocks dropped across the board. Bharat Heavy Electricals (Bhel) fell in choppy trade after weak Q2 results. Most telecom stocks gained.
A bout of volatility was witnessed in early trade as key benchmark regained positive terrain after slipping into the red after opening higher. The Sensex retained positive zone after striking fresh intraday high in morning trade. A bout of volatility was witnessed as key benchmark indices regained positive terrain after slipping into the red for a brief period in mid-morning trade. Volatility continued as key benchmark indices reversed intraday gains and hit fresh intraday low in early afternoon trade. Key benchmark indices extended losses and hit fresh intraday low in afternoon trade. The Sensex, and the 50-unit CNX Nifty, both hit their lowest levels in more than a week. High intraday volatility was witnessed as key benchmark indices trimmed losses as European stocks rose and as trading in US index futures indicated a higher opening US stocks later in the global day. It weakened and hit fresh intraday low in late trade.
As per provisional figures, the S&P BSE Sensex was down 85.73 points or 0.41% to 20,889.06. The index fell 113.37 points at the day's low of 20,861.42 in late trade, its lowest level since 29 October 2013. The index rose 70.59 points at the day's high of 21,045.38 in morning trade.
The CNX Nifty was down 36.55 points or 0.58% to 6,216.60, as per provisional figures. The index hit a low of 6,208.70 in intraday trade, its lowest level since 29 October 2013. The index hit a high of 6,269.70 in intraday trade.
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The total turnover on BSE amounted to Rs 1874 crore, lower than Rs 2224.16 crore on Tuesday, 5 November 2013.
The market breadth, indicating the overall health of the market, was positive. On BSE, 1,304 shares rose and 1,148 shares fell. A total of 150 shares were unchanged.
Among the 30-share Sensex pack, 19 stocks fell and rest of them rose.
Bharat Heavy Electricals (Bhel) fell in choppy trade after weak Q2 results. The stock was off 1.83% at Rs 139.70. The scrip hit high of Rs 144.90 and low of Rs 138.70. The company's net profit fell 64.22% to Rs 455.95 crore on 11.31% decline in total income to Rs 9482.25 crore in Q2 September 2013 over Q2 September 2012. The Q2 result was announced during trading hours today, 6 November 2013.
Bharat Heavy Electricals (Bhel) said that the results for the quarter and half year ended 30 September 2013 includes financial results of HPVP unit (erstwhile M/s BHPV). Consequent to this, impact of HPVP unit for and upto the quarter ended on 30 September 2013 includes turnover of Rs 16.69 crore and loss of Rs 191.35 crore before tax. The impact on Reserves & Surplus is reduction by Rs 311 crore, Bhel said. In view of this, figures for the current reporting period are not comparable with the previously reported period figures, Bhel added.
Bhel's order book stood at Rs 102300 crore as on 30 September 2013.
Bank stocks dropped across the board. State Bank of India (SBI) dropped 3.28%. SBI today, 6 November 2013, said it has revised upwards the base rate by 20 basis points (bps) from 9.8% to 10% per annum (p.a) and the benchmark prime lending rate by 20 bps from 14.55% to 14.75% p.a with effect from Thursday, 7 November 2013. A bank's base rate is the rate which it charges on floating-rate loans. The prime lending rate is the benchmark for floating-rate loans made before Indian banks shifted to the base rate in July 2010.
Among other PSU bank stocks, Canara Bank, Union Bank of India, Bank of India, and Punjab National Bank shed 2.55% to 3.71%.
Bank of Baroda dropped 2.88%. The bank said during market hours that the bank has privately placed non-convertible redeemable unsecured Basel Ill complaint Tier II bonds (series XVI -- coupon 9.8% p.a) aggregating Rs 1000 crore for which allotment process has been completed.
HDFC Bank was off 1.69%. HDFC Bank has raised its base rate by 0.2 percentage point to 10% from 2 November 2013.
ICICI Bank declined 1.45%.
Shares of housing finance major HDFC were off 1.8%.
Metal stocks dropped. Jindal Steel & Power (down 2.12%), Sesa Sterlite (down 2.57%), Bhushan Steel (down 0.46%), Tata Steel (down 1.23%), JSW Steel (down 0.47%), Hindalco Industries (down 1.95%) and Hindustan Zinc (down 1.39%), declined.
Most telecom stocks gained. MTNL (up 2.06%), Tata Teleservices (Maharashtra) (up 6.97%), Reliance Communications (up 0.72%) and Idea Cellular (up 0.94%), gained. But, Bharti Airtel fell 1.17%.
A government panel on Wednesday recommended raising the reserve price for mobile phone spectrum auctions by 15% more than the price suggested by a telecom regulator in the 1800 megahertz band, and by 25% in the 900 megahertz band.
The panel, made up of civil servants, has recommended allowing mergers with a combined market share of up to 50%. The government plans to conduct its next mobile phone airwave auction in January and has estimated revenue of Rs 11000 crore from the sale of airwaves.
The telecoms regulator has recommended a sharp cut in the auction reserve prices after most carriers stayed away from bidding in the last two auctions saying the reserve price was too high. A ministerial panel and the cabinet will finalise the new reserve prices. The government is in the process of finalising rules for mergers and acquisitions in the telecommunications market of around a dozen players, and the government has said previously it will ease rules to help consolidate the crowded market, report added.
GlaxoSmithkline Consumer Healthcare rose 2.46% on good Q2 result. The company's net profit rose 14.29% to Rs 146.93 crore on 19.44% rise in total income to Rs 1057.47 crore in Q2 September 2013 over Q2 September 2012. The company announced result during market hours.
In the foreign exchange market, the rupee weakened past 62 against the dollar. The partially convertible rupee was hovering at 62.21, compared with its close of 61.625/635 on Tuesday, 5 November 2013. The rupee dropped, tracking global gains in the dollar after a gauge of US service industries climbed more than forecast in October, adding to the case for the US Federal Reserve to taper monthly bond purchases.
Indian government bond prices dropped after State Bank of India, the country's largest lender by assets, said interest rates it charges on floating-rate loans will increase by 20 basis points from Thursday, 7 November 2013. The yield on the benchmark government paper -- 7.16% GS 2023 -- was hovering 8.7947%, higher than its close of 8.7368% on Tuesday, 5 November 2013. Bond yield and bond prices are inversely related.
European stocks edged higher on Wednesday, 6 November 2013, as companies from Alstom SA to ING Groep NV posted earnings that beat estimates. Key benchmark indices in France, Germany and UK were up 0.08% to 0.81%.
UK industrial production rose more than economists forecast in September, helped by a rebound in manufacturing after a slump the previous month. Output increased 0.9% from August, when it fell 1.1 percent, the Office for National Statistics said today in London.
The European Union yesterday cut its forecast for euro-area growth next year and raised its unemployment estimate as the economy struggles to regain momentum after a record-long recession.
The European Central Bank (ECB) holds a monetary policy meeting tomorrow, 7 November 2013. The ECB is seen retaining its key policy rate at a record-low 0.5%.
Most Asian stocks were trading lower on Wednesday, 6 November 2013. Key benchmark indices in China, Singapore, Hong Kong and South Korea shed 0.01% to 0.82%. Key benchmark indices in Taiwan, Indonesia and Japan rose 0.24% to 0.79%.
China's leaders will meet in Beijing on November 9-12 to map out economic policies as the country heads for its slowest annual growth in more than two decades.
Indonesia's economy expanded less than 6% last quarter as higher interest rates weighed on consumption and exports fell. Gross domestic product increased 5.62% in the three months ended Sept. 30 from a year earlier, the Central Bureau of Statistics said in Jakarta today. That compares with 5.81% growth for the second quarter.
Trading in US index futures indicated that the Dow could advance 65 points at the opening bell on Wednesday, 6 November 2013. US stocks closed mostly lower on Tuesday, 5 November 2013, after a gauge of service industries climbed more than forecast in October, adding to the case for the Federal Reserve to taper monthly bond purchases.
The US Institute for Supply Management's gauge of service industries climbed more than strategists predicted, data showed yesterday, stoking concern that the world's biggest economy is faring well enough for the Fed to consider reducing asset purchases. Fed policy makers last week signaled diminishing concern over higher borrowing costs as they maintained their $85 billion in monthly bond-buying and sought more evidence of sustained growth before paring stimulus.
The US government will on Friday, 8 November 2013, release nonfarm payrolls figures for October 2013. The job data is a key economic indicator that has been watched closely in recent months to see whether the US Federal Reserve will roll back its bond-buying program.
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