The CNX Nifty was range bound, while the barometer index, the S&P BSE Sensex further trimmed losses to hit a fresh intraday high in afternoon trade. The Sensex was down 231.52 points or 1.16%, up 153 points from the day's low and off 24 points from the day's high. The market breadth, indicating the overall health of the market, was weak. Allcargo Logistics, IPCA Laboratories, Godrej Consumer Products, Yes Bank and CRISIL saw a surge in volumes on BSE today, 16 July 2013. State-run Nalco jumped over 3%
The market sentiment was hit adversely as bond prices fell after the Reserve Bank of India (RBI) after market hours on Monday, 15 July 2013, announced measures to tighten liquidity in the banking system to prevent a sharp depreciation of the rupee against the dollar. While the rupee surged after the RBI measures, bond prices declined sharply. Investor sentiment was also hit adversely after South Korean steel major Posco scrapped a large steel project in Karnataka.
Key benchmark indices dropped amid initial volatility as the yields on government bonds rose after the Reserve Bank of India (RBI) after market hours on Monday, 15 July 2013, announced a slew of measures to address exchange rate volatility. The BSE Sensex, fell below the psychological 20,000 mark. The 50-unit CNX Nifty fell below the psychological 6,000 mark. Weakness continued on the bourses in morning trade. Key benchmark indices weakened further in mid-morning trade. Key benchmark indices trimmed losses in early afternoon trade as index heavyweight ITC rose. The CNX Nifty was range bound, while the barometer index, the S&P BSE Sensex further trimmed losses to hit a fresh intraday high in afternoon trade.
The Reserve Bank of India (RBI) after market hours on Monday, 15 July 2013, 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.
Finance Minister P. Chidambaram today, 16 July 2013, said RBI's steps to curb rupee liquidity are aimed at quelling excessive speculation and volatility in the forex market and should not be read as a prelude to policy rate changes.
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While the rupee surged after the RBI measures, bond prices fell. The rupee was hovering at 59.37 versus dollar, against Monday's close of 59.89/90. In the debt market, the yield on the most traded 8.33 GS 2026 was hovering at 8.1903%, sharply higher than its close at 7.6656% on Monday. Bond yield and bond prices are inversely related.
Foreign institutional investors (FIIs) sold shares worth a net Rs 227.26 crore on Monday, 15 July 2013, as per provisional data from the stock exchanges.
At 13:17 IST, the S&P BSE Sensex was down 231.52 points or 1.16% to 19802.96. The index fell 207.33 points at the day's high of 19,827.15 in afternoon trade. The index lost 384.90 points at the day's low of 19,649.58 in early trade, its lowest level since 11 July 2013.
The CNX Nifty was down 86.95 points or 1.44% to 5,943.85. The index hit a low of 5,910.95 in intraday trade, its lowest level since 11 July 2013. The index hit a high of 5,954 in intraday trade.
The market breadth, indicating the overall health of the market, was weak. On BSE, 1,345 shares declined and 705 shares gained. A total of 116 shares were unchanged.
Among the 30-share Sensex pack, 21 stocks declined and rest of them gained. ICICI Bank (down 5.57%), State Bank of India (down 4.49%), HDFC (down 4.04%), Sterlite Industries (down 3.73%), L&T (down 3.38%), Dr Reddy's Laboratories (down 2.8%), Jindal Steel & Power (down 2.59%) and Maruti Suzuki India (down 2.52%), edged lower from the Sensex pack.
Bharti Airtel (up 1.83%), ONGC (up 1.66%), ITC (up 1.29%), Sun Pharmaceutical Industries (up 1.07%), Hindustan Unilever (up 1.01%), NTPC (up 0.74%) and TCS (up 0.58%), edged higher from the Sensex pack.
State-run Nalco jumped 3.61% to Rs 31.60.
Allcargo Logistics clocked volume of 6.48 lakh shares, a 487.04-times surge over two-week average daily volume of 1,000 shares. The stock rose 10.37% to Rs 89.90 after a block deal of 6.11 lakh shares was struck on BSE at Rs 88 per share at 10:17 IST. The block deal constitutes 0.47% of the company's equity.
IPCA Laboratories notched up volume of 1.12 lakh shares, a 7.36-fold surge over two-week average daily volume of 15,000 shares. The stock fell 1.76% to Rs 685.
Godrej Consumer Products saw volume of 9.39 lakh shares, a 5.17-fold surge over two-week average daily volume of 1.82 lakh shares. The stock rose 0.58% to Rs 874.
Yes Bank clocked volume of 10.84 lakh shares, a 4.40-fold surge over two-week average daily volume of 2.46 lakh shares. The stock tumbled 8.46% to Rs 458.15.
CRISIL saw volume of 55,000 shares, a 3.78-fold rise over two-week average daily volume of 15,000 shares. The stock rose 0.21% to Rs 1,178.05.
European indices were mixed on Tuesday. Key benchmark indices in France and Germany were down by 0.17% to 0.35%. However, UK's FTSE 100 was up 0.21%.
Asian shares edged higher on Tuesday, 16 July 2013, taking their cue from overnight gains in US stocks as weaker-than-forecast US retail sales growth backed the view that the Federal Reserve will hold off reducing its bond-buying stimulus anytime soon. Key benchmark indices in China, Hong Kong, Taiwan, Indonesia and Japan were up 0.06% to 0.64%. Key benchmark indices in South Korea and Singapore were down 0.37% to 0.47%.
Trading in US index futures indicated a flat opening of US stocks on Tuesday, 16 July 2013. US stocks climbed modestly on Monday, with the S&P 500 and the Dow industrials rising to record closing highs again, after Citigroup Inc. reported better-than-expected earnings.
Federal Reserve Chairman Ben Bernanke is due to deliver testimony on monetary policy in Washington on 17 and 18 July 2013. 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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