Weakness continued on the bourses in morning trade. The market breadth, indicating the overall health of the market, turned negative from positive. Weakness in Asian stocks hit investor sentiment adversely. The barometer index, the S&P BSE Sensex, was down 85.48 points or 0.41%, off close to 85 points from the day's high and up about 95 points from the day's low. Asian stocks fell on Friday, 8 November 2013, after faster US economic growth fueled concern the Federal Reserve may reduce monetary stimulus for the US economy sooner than expected. The US central bank currently buys bonds worth $85 billion a month in a bid to hold interest rates low and encourage economic growth in the world's biggest economy. Fed's bond-buying program has been a source of liquidity for most Asian and emerging markets this year.
Index heavyweight and cigarette maker ITC edged lower in choppy trade. Another index heavyweight Reliance Industries (RIL) also fell. Metal and mining stocks gained after the latest data showed China's exports rose more than estimated last month and import gains accelerated. JSW Steel gained after the company reported growth in crude steel production in October 2013. Tata Motors rose reversed initial losses ahead of its Q2 results today, 8 November 2013.
A bout of volatility was witnessed as key benchmark indices trimmed initial losses triggered by weakness in Asian stocks. The Sensex and the 50-unit CNX Nifty, both, hit 1-1/2-week low. Weakness continued on the bourses in morning trade.
At 10:20 IST, the S&P BSE Sensex was down 85.48 points or 0.41% to 20,737.29. The index lost 177.13 points at the day's low of 20,645.64 in early trade, its lowest level since 29 October 2013. The index fell 1.76 points at the day's high of 20,821.01 in morning trade.
The CNX Nifty was down 28.45 points or 0.46% to 6,158.80. The index hit a low of 6,139.85 in intraday trade, its lowest level since 29 October 2013. The index hit a high of 6,185.15 in intraday trade.
The market breadth, indicating the overall health of the market, turned negative from positive in morning trade. On BSE, 858 shares dropped and 774 shares rose. A total of 95 shares were unchanged.
Among the 30-share Sensex pack, 19 stocks fell and rest of them rose. HDFC (down 2.04%), ONGC (down 1.32%) and GAIL (India) (down 1.42%), dropped.
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Tata Motors rose 2.13%, with the stock reversing initial losses ahead of its Q2 results today, 8 November 2013.
Index heavyweight and cigarette maker ITC was off 0.08% at Rs 320.25. The stock hit high of Rs 323 and low of Rs 318 so far during the day.
Another index heavyweight Reliance Industries (RIL) was off 0.6% at Rs 880.25. The scrip hit high of Rs 885.95 and low of Rs 877.25 so far during the day.
Mining and metal stocks rose after the latest data showed China's exports rose more than estimated last month and import gains accelerated. China is the world's largest consumer of copper and aluminum. Bhushan Steel (up 0.11%), Tata Steel (up 1.66%), Sail (up 1.23%), Sesa Sterlite (up 1.13%), Hindalco Industries (up 0.86%), Hindustan Zinc (up 0.56%), and Jindal Steel & Power (up 0.58%), edged higher.
JSW Steel gained 0.58% after the company reported growth in crude steel production in October 2013. The company said during market hours that crude steel production rose 9% to 10.62 lakh tonnes in October 2013 over October 2012. Production of flat rolled products jumped 36% to 8.67 lakh tonnes in October 2013 over October 2012. Production of long rolled products fell 10% to 1.49 lakh tonnes in October 2013 over October 2012.
In the foreign exchange market, the rupee edged lower against the dollar as faster US economic growth fueled concern the Federal Reserve may reduce monetary stimulus for the US economy sooner than expected. The partially convertible rupee was hovering at 62.62, compared with its close of 62.41/42 on Thursday, 7 November 2013.
Indian government bond prices dropped as faster US economic growth fueled concern the Federal Reserve may reduce monetary stimulus for the US economy sooner than expected. The yield on 10-year benchmark government paper -- 7.16% GS 2023 was hovering at 8.8908%, higher than its close of 8.8492% on Thursday, 7 November 2013. Bond yield and bond prices are inversely related.
Asian stocks fell on Friday, 8 November 2013, after faster US economic growth fueled concern the Federal Reserve may reduce monetary stimulus for the US economy sooner than expected. Key benchmark indices in Singapore, China, Japan, Hong Kong, Taiwan, Indonesia and South Korea shed 0.51% to 1.18%.
China's trade surplus expanded more than forecast to $31.1 billion last month from $15.21 billion in September. Exports grew 5.6% after contracting last month. Among the other October data, imports rose 7.6% in October 2013.
China is due to issue a heavy slate of other October data, including industrial production, consumer inflation and retail sales tomorrow, 9 November 2013.
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.
Trading in US index futures indicated that the Dow could gain 8 points at the opening bell on Friday, 8 November 2013. US stocks tumbled on Thursday, 7 November 2013, as speculation the Federal Reserve may scale back stimulus amid faster-than-estimated economic growth overshadowed a move by the European Central Bank to cut a key interest rate.
Data yesterday showed growth in the world's biggest economy accelerated to a 2.8% annualized rate last quarter, faster than the 2% median market estimates. Fewer Americans filed applications for unemployment benefits last week, indicating firings haven't picked up following the partial government shutdown. Jobless claims decreased by 9,000 to 336,000 in the week ended Nov. 2 from 345,000 the prior period, the Labor Department reported in Washington.
The US government will today, 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.
In Europe, the European Central Bank (ECB) cut its benchmark interest rate to a record low after a drop in inflation to the slowest pace in four years threatened its mission to keep prices stable. Policy makers meeting in Frankfurt on Thursday reduced the main refinancing rate by a quarter point to 0.25%.
The Bank of England kept its benchmark rate at a record-low 0.5% in London on Thursday, while its bond-purchase plan stayed at 375 billion pounds ($603 billion).
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