Fresh selling in mid-afternoon trade derailed an intraday pullback triggered from lower levels in early afternoon trade. At 14:20 IST, the barometer index, the S&P BSE Sensex was down 262.22 points or 0.98% at 26,377.82. The Nifty 50 index was currently down 72.45 points or 0.89% at 8,097.60. The market dropped today, 13 June 2016, as weakness in global stocks hit investors' sentiment adversely. Back home, weak industrial production data for April 2016 released by the government after market hours on Friday, 10 June 2016 also weighed on the sentiment.
Earlier, after opening lower, key indices had extended losses with the Sensex and the Nifty 50 index, both, hitting 2-1/2 week low in early afternoon trade. The Sensex lost 373.48 points or 1.4% at the day's low of 26,262.27 in early afternoon trade, its lowest level since 26 May 2016. The index dropped 167.48 points or 0.62% at the day's high of 26,468.27 in early trade. The Nifty lost 106.15 points or 1.29% at the day's low of 8,063.90 in early afternoon trade, its lowest level since 26 May 2016. The index fell 44.80 points or 0.54% at the day's high of 8,125.25 in mid-afternoon trade.
In overseas markets, European stocks edged lower after Asian stocks settled sharply lower ahead of central bank meetings in the US and Japan this week. The worries about a potential exit by the UK from the European Union also left investors scrambling for safe haven assets. The UK government holds a referendum on 23 June 2016 on whether the country should remain a member of the European Union (EU). In mainland China, the Shanghai Composite settled 3.21% lower. In Hong Kong, the Hang Seng index ended 2.8% down. In Japan, the Nikkei 225 index closed 3.51% lower. Data released today, 13 June 2016 showed that growth in China's fixed-asset investment and retail sales cooled unexpectedly in May, but factory output growth was steady, doing little to clear up uncertainty over prospects for the world's second-largest economy. US stocks declined on Friday, 10 June 2016 as nervousness over an impending vote that could see the UK leave the European Union, as well as a drop in oil prices, spurred a global selloff.
Closer home, the market breadth indicating the overall health of the market was weak. On BSE, 1,546 shares declined and 899 shares rose. A total of 161 shares were unchanged. The BSE Mid-Cap index was currently down 0.74%. The BSE Small-Cap index was currently down 0.65%. The fall in both these indices was lower than the Sensex's decline in percentage terms.
Index heavyweight and housing finance major HDFC declined 2.1%. The company announced after market hours on Friday, 10 June 2016 that it will issue secured redeemable non convertible debentures amounting to Rs 1000 crore on private placement basis. Debentures carry a coupon rate of 8.46% per annum and tenor of 10 years and will mature on 15 June 2026. The issue will open on 15 June 2016 and will close on the same day. The object of the issue is to augment the long term resources of the company. The proceeds will be utilized for financing/refinancing the housing finance requirements of the company.
Stocks of companies involved in oil exploration and production activities fell as global crude oil prices dropped. Oil India (down 1.72%), ONGC (down 2.2%), Cairn India (down 4.21%) and Reliance Industries (down 0.12%) fell. Lower crude oil prices will result in lower realization from crude oil sales for oil exploration & production (E&P) firms if the prices are sustained at lower level.
Also Read
Global crude oil prices fell after a weekly report on Friday, 10 June 2016, showed increase in active oil rigs in the United States. Brent for August 2016 settlement was currently off 45 cents or 0.89% at $50.08 a barrel. The contract had lost $1.14 a barrel or 2.71% to settle at $50.54 a barrel during the previous trading session on 10 June 2016. Oil market participants use the weekly report on active oil rigs in the US to gauge whether US producers are revving up oil-production activity. US energy firms added three oil rigs in the week to 10 June 2016, bringing the total rig count up to 328, compared with 635 a year ago, Baker Hughes said in its closely followed report.
PSU OMCs rose as global crude oil prices dropped. BPCL (up 1.42%), HPCL (up 0.12%) and Indian Oil Corporation (up 0.93%) rose. Lower crude oil prices could reduce under-recoveries of PSU OMCs on domestic sale of LPG and kerosene at controlled prices. A weak rupee raises the cost of imports. The government has already freed pricing of petrol and diesel.
Pharma stocks saw mixed trend. Cadila Healthcare (down 0.08%), Cipla (down 1.41%), Glenmark Pharmaceuticals (down 0.21%), Alkem Laboratories (down 0.2%) and Wockhardt (down 2.18%) declined. Sun Pharmaceutical Industries (up 0.42%), Lupin (up 0.98%), GlaxoSmithKline Pharmaceuticals (up 0.18%) and Aurobindo Pharma (up 0.48%) rose.
Dr Reddy's Laboratories (DRL) rose 0.68% after the company inked a definitive agreement with Teva Pharmaceutical Industries and an affiliate of Allergan plc to acquire a portfolio of eight Abbreviated New Drug Applications (ANDAs) in the US for $350 million in cash. The acquired portfolio consists of products that are being divested by Teva as a precondition to its completion of the acquisition of Allergan's generics business. The portfolio being acquired is a mix of filed ANDAs pending approval and one approved ANDA. The portfolio comprises of complex generic products across diverse dosage forms. The branded versions of these drugs had aggregate sales of about $3.5 billion in the United States for 12-month period ended April 2016, according to IMS Health data. DRL is acquiring this portfolio of drugs on a cash-free, debt-free basis and expects to finance the transaction using a combination of cash on hand and available borrowings under existing credit facilities. The acquisition of these ANDAs is contingent on the successful completion of the Teva/Allergan generics transaction and approval by the US Federal Trade Commission of DRL as a buyer.
FMCG stocks declined. Godrej Consumer Products (down 2.45%), Britannia Industries (down 0.34%), GlaxoSmithkline Consumer Healthcare (down 0.45%), Colgate-Palmolive (India) (down 0.96%), Marico (down 0.28%), Nestle India (down 0.42%), Procter & Gamble Hygiene and Health Care (down 1.01%), Jyothy Laboratories (down 0.76%), and Bajaj Corp (down 0.34%) fell. Hindustan Unilever (up 0.11%), Dabur India (up 0.66%) and Tata Global Beverages (up 1.13%) rose.
On the macro front, data released after market hours on Friday, 10 June 2016 showed that India's industrial production (IIP) contracted by 0.8% in April 2016. Factory output measured in terms of the IIP had expanded by 3% in April 2015. The electricity generation surged at two-year high pace of 14.6%, while the mining output also moved up 1.4% in April 2016. However, the manufacturing sector production dipped 3.1% contributing to the decline in industrial output in April 2016. The IIP growth in March 2016 has been revised upwards to 0.3% in the first revision compared with 0.05% reported provisionally. Meanwhile, the growth in January 2016 has been revised downwards to -1.6% at the final revision from -1.5% at first revision and reported provisionally.
Meanwhile, the government is scheduled to unveil the consumer price index (CPI) data (rural, urban and combined) for the month of May 2016 at 17:30 IST today, 13 June 2016. The all-India General CPI inflation surged to 5.39% in April 2016 (new base 2012=100) from six months low of 4.8% recorded in March 2016.
Powered by Capital Market - Live News