Key benchmark indices reversed direction and slipped into the red in mid-afternoon trade as European stocks reversed initial gains as investors turned cautious ahead of two-day congressional testimony from Federal Reserve Chairman Ben Bernanke which begins today, 17 July 2013. The barometer index, the S&P BSE Sensex, was down 23.91 points or 0.12%, off 155.90 points from the day's high and up 43.44 points from the day's low. The market breadth, indicating the overall health of the market, turned negative from positive in mid-afternoon trade.
Bank stocks fell for second day in a row as RBI's recent measures to tighten liquidity in the banking system will make it costlier for banks and financial companies to raise short-term funds. Private sector HDFC Bank fell after announcing Q1 results.
FMCG stocks gained across the board as a bountiful rainfall this year has prepared the ground for bumper harvest. Shares of Hindustan Unilever, ITC, Dabur India and Nestle India hit record high. Shares of liquor major United Spirits scaled record high. Opto Circuits plunged on high volume in highly volatile trade.
Key benchmark indices edged higher in early trade boosted by the government's decision on Tuesday, 16 July 2013, to relax overseas-investment rules for a number of sectors. The market retained positive zone in morning trade. A bout of volatility was witnessed as key benchmark indices pared gains after hitting fresh intraday high in mid-morning trade. Key benchmark indices pared gains in early afternoon trade. Key benchmark indices hit fresh intraday high in afternoon trade, tracking strength in European market. Key benchmark indices reversed direction and slipped into the red in mid-afternoon trade as European stocks reversed initial gains.
Foreign institutional investors (FIIs) sold shares worth a net Rs 357.40 crore on Tuesday, 16 July 2013, as per provisional data from the stock exchanges.
At 14:18 IST, the S&P BSE Sensex was down 23.91 points or 0.12% to 19,827.32. The index jumped 131.99 points at the day's high of 19,983.22 in mid-afternoon trade, its highest level since 15 July 2013. The index fell 67.35 points at the day's low of 19,783.88 in mid-afternoon trade.
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The CNX Nifty was down 23.50 points or 0.39% to 5,931.75. The index hit a high of 5,989.80 in intraday trade, its highest level since 15 July 2013. The index hit a low of 5,926.75 in intraday trade.
The market breadth, indicating the overall health of the market, turned negative from positive in mid-afternoon trade. On BSE, 1,243 shares declined and 933 shares gained. A total of 150 shares were unchanged.
The total turnover on BSE amounted to Rs 1439 crore by 14:20 IST
Among the 30-share Sensex pack, 16 stocks declined and rest of them gained.
FMCG stocks gained across the board as a bountiful rainfall this year has prepared the ground for bumper harvest. India's monsoon is so far progressing well across the country and if the rains continue as expected, this could boost rural incomes. FMCG companies derive substantial revenue from rural India.
Hindustan Unilever (HUL) jumped 5.04% to Rs 654.70 after scaling a record high of Rs 670.30 in intraday trade today, 17 July 2013. HUL's parent Unilever PLC on 11 July 2013 said that pursuant to the voluntary open offer to increase its stake in HUL, the shareholders of HUL tendered a total of 31.99 crore shares, out of which 31.95 crore shares have been accepted by Unilever PLC on completion of the verification of the shares tendered. Based on the shares tendered which represent 14.78% of HUL, the Unilever Group will increase its stake in HUL from 52.48% to 67.26%.
Dabur India gained 3.55% to Rs 164.60 after hitting a record high of Rs 167.55 in intraday trade today, 17 July 2013.
Nestle India rose 1.37% to Rs 5,769.55, after striking a record high of Rs 5,795 in intraday trade today, 17 July 2013.
Colgate-Palmolive (India) (up 2.58%), Godrej Consumer Products (up 0.73%), Marico (up 1.55%) gained.
Index heavyweight and cigarette major ITC rose 2.18% to Rs 368 after striking a record high of Rs 370.20 in intraday trade today, 17 July 2013. The company announces Q1 results on 25 July 2013.
United Spirits rose 0.76% to Rs 2,707 after striking a record high of Rs 2,735 in intraday trade today, 17 July 2013.
Bank stocks fell for second day in a row as RBI's recent measures to tighten liquidity in the banking system will make it costlier for banks and financial companies to raise short-term funds. Among private sector bank stocks ICICI Bank (down 2.81%), Axis Bank (down 3.91%), Kotak Mahindra Bank (down 1.46%) and Yes Bank (down 6.48%) declined.
Private sector banking major HDFC Bank fell 2.9%. The bank during market hours today, 17 July 2013 reported 30.08% rise in net profit to Rs 1843.86 crore on 17.94% growth in total income to Rs 11588.56 crore in Q1 June 2013 over Q1 June 2012. The growth in HDFC Bank's bottom line was in line with market expectations. The private sector maintained its run rate of about 30% growth in bottom line which it has consistently reported for many quarters now.
Among PSU bank stocks, State Bank of India (down 1.82%), Canara Bank (down 4.03%), Union Bank of India (down 9.59%), Bank of India (down 3.71%), Bank of Baroda (down 2.62%) and Punjab National Bank (down 1.26%) declined.
The Reserve Bank of India (RBI) early this week announced a slew of measures to address exchange rate volatility. RBI raised the Marginal Standing Facility (MSF) rate and Bank Rate each by 200 bps to 10.25% while capped the amount up to which banks can borrow or lend under its daily liquidity window at Rs 75000 crore. Furthermore, RBI will additionally sell Rs 12000-crore of government bonds on Thursday, 18 July 2013, to mop up liquidity from the system, it said. The RBI said it will continue to closely monitor the markets, the liquidity situation and the macroeconomic developments and will take such other measures as may be necessary, consistent with the growth-inflation dynamics and macroeconomic stability.
Opto Circuits dropped 14.06% to Rs 24.45 on high volume of 93.53 lakh shares. The stock was volatile. The stock rose as much as 14.76% at the day's high of Rs 32.65 and lost as much as 22.14% at the day's low of Rs 22.15.
European stocks reversed initial gains on Wednesday, 17 July 2013, as investors turned cautious ahead of two-day congressional testimony from Federal Reserve Chairman Ben Bernanke which begins today, 17 July 2013. Key benchmark indices in France and Germany were down by 0.05% to 0.15%. UK's FTSE 100 rose 0.04%.
Asian shares were mostly higher on Wednesday, 17 July 2013. Key benchmark indices in China, Taiwan and Singapore were down 0.01% to 1.01%. Key benchmark indices in Japan, Hong Kong, South Korea and Indonesia were up 0.11% to 1.13%.
The latest data showed that foreign-direct-investment flows into China jumped more than 20% in June 2013.
Meanwhile, the Xinhua news service, the official press agency of the People's Republic of China, reported that profit at Chinese state-owned companies outside the financial sector rose 7% in the first half of the year, accelerating from a 6.5% increase in the first five months of 2013.
Trading in US index futures indicated that the Dow could fall 28 points at the opening bell on Wednesday, 17 July 2013. US stocks fell on Tuesday, 16 July 29013, with Coca-Cola Co. and Goldman Sachs Group Inc. losing ground after their quarterly results, and as investors considered Kansas City Fed President Esther George's comment that the Federal Reserve should pare its bond purchases sooner rather than later.
Federal Reserve Chairman Ben Bernanke kicks off his two-day testimony on monetary policy in Washington today, 17 July 2013. In comments last week, Bernanke had eased concerns that the Fed would quickly unwind its monetary stimulus.
The minutes of the Fed's June meeting released on 10 July 2013 showed that while several members judged that a reduction in asset purchases would likely soon be warranted, many want to see further improvement in the labor market before reducing the central bank's $85 billion-a-month quantitative easing program. The Fed currently buys $85 billion a month in government and mortgage bonds in an effort to keep interest rates low and stimulate economic growth. At a press conference following the June 18-19 meeting, Bernanke said the central bank could start reducing its $85 billion in monthly bond purchases later this year if the economy continues to improve in line with its forecasts.
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