Key benchmark indices extended intraday losses to hit fresh intraday low in mid-afternoon trade as weakness in European and Asian stocks weighed on sentiment. The results of a private survey which indicated slowdown in India's manufacturing activity in May 2013 also dampened sentiment. The S&P BSE Sensex and the 50-unit CNX Nifty, both, hit their lowest level in over one month. The Sensex was down 211.49 points or 1.07%, off close to 310 points from the day's high and up about 5 points from the day's low. The market breadth, indicating the overall health of the market, was negative.
Index heavyweight Reliance Industries (RIL) extended intraday losses. Shares of private banks declined. Mahindra & Mahindra bounced back after initial weakness on strong tractor sales in May 2013. Shares of some MNC affiliates were in demand. Some side counters tumbled.
The market sentiment was also affected adversely by data showing that foreign funds remained net sellers of Indian stocks on Friday, 31 May 2013. Foreign institutional investors (FIIs) sold shares worth a net Rs 504.02 crore on Friday, 31 May 2013, as per provisional data from the stock exchanges.
A bout of initial volatility was witnessed as key benchmark indices recovered after slipping into the red after a firm start. Key benchmark indices alternately moved between positive and negative terrain near the flat line in morning trade. The market lost ground to hit fresh intraday low in mid-morning trade. The market trimmed losses in early afternoon trade. Key benchmark indices hit fresh intraday low in afternoon trade after European market opened lower. The market extended intraday losses to hit fresh intraday low in mid-afternoon trade.
At 14:20 IST, the S&P BSE Sensex was down 211.49 points or 1.07% to 19,548.81. The index declined 218.33 points at the day's low of 19.541.97 in mid-afternoon trade, its lowest level since 2 May 2013. The index rose 99.89 points at the day's high of 19.860.19 in opening trade.
The CNX Nifty was down 66.90 points or 1.12% to 5,919.05. The index hit a low of 5,916.40 in intraday trade, its lowest level since 2 May 2013. The index hit a high of 6,011 in intraday trade.
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The market breadth, indicating the overall health of the market, was negative. On BSE, 1,263 shares fell and 866 shares rose. A total of 119 shares were unchanged.
Among the 30-share Sensex pack, 20 stocks declined and the rest of them gained.
Some side counters were sharply lower. Shares of realty firm Orbit Corp were locked at 20% lower circuit at Rs 15.50 and education solutions provider Educomp Solutions was locked at 10% lower circuit at Rs 50. Hindustan Oil Exploration down (down 17.4%), PSL (down 10%), and Everonn Systems (down 8.9%) tumbled.
Shares of some MNC affiliates were in demand. Glaxosmithline Pharma, Procter & Gamble Hygiene and Health Care, Gillette India, Sanofi India, Bayer CropScience and Castrol India were up 3% to 6.5%
Glaxosmithline Consumer Healthcare dropped after a recent steep rally. The stock was off 5.5%. The stock had witnessed a solid rally ahead of its inclusion in the MSCI India index with effect from the close of trade on 31 May 2013.
Shares of biscuits maker Britannia Industries fell 5.3% to Rs 685, with the stock reversing direction after a recent strong rally.
Pharmaceutical major Sun Pharmaceutical Industries slumped 4.67%. The company is reportedly in talks to buy Sweden's Meda AB for between $5 billion and $6 billion to boost its generics business in developed markets. Meda makes speciality products, over-the-counter drugs and branded generics -- the same areas of focus as Sun.
Maruti Suzuki India was down 3.02% to Rs 1,557.55 after the company reported fall in sales in May 2013. The stock was volatile. The stock hit high of Rs 1605 and low of Rs 1,548 so far during the day. The company on Saturday, 1 June 2013, reported 14.4% fall in total sales to 84,677 units in May 2013 over May 2012. The company's domestic sales declined 13% to 77,821 units in May 2013 over May 2012. Exports fell 27.1% to 6,856 units in May 2013 over May 2012.
Shares of two wheeler makers extended intraday losses as PSU OMCs raised petrol price. Hero MotoCorp shed 3.33%.
Bajaj Auto slumped 4.1% on fall in sales in May 2013. The company said during market hours today, 3 June 2013, that total sales fell 4% to 3.39 lakh units in May 2013 over May 2012. Motorcycle sales fell 5% to 3.04 lakh units in May 2013 over May 2012. Domestic motorcycle sales rose 3% to 2.12 lakh units in May 2013 over May 2012, owing to the launch of new Discover models. Sales of Commercial vehicles rose 14% to 34,568 units in May 2013 over May 2012. Total exports declined 14% to 1.11 lakh units in May 2013 over May 2012.
Mahindra & Mahindra (M&M) rose 1.58% to Rs 983.50, off the day's low of Rs 945.40. The company during market hours today, 3 June 2013, announced that its tractor sales rose 24% to 23,626 units in May 2013 over May 2012. The company's domestic sales jumped 25% to 22,471 units in May 2013 over May 2012. Exports rose 16% to 1,155 units in May 2013 over May 2012.
The M&M stock had dropped in early trade after the company reported weak sales in its automotive division. The company on Saturday, 1 June 2013, said its total sales declined 1% at 43,460 units in May 2013 over May 2012. Auto sales in the domestic market rose 5% to 42,104 units in May 2013 over May 2012. The passenger vehicles segment which includes the UVs and Verito registered a growth of 5% at 22,244 units in May 2013 over May 2012. The four-wheeler commercial segment which includes the passenger and load vehicles registered a 12% growth at 14,848 units while the three-wheeler segment witnessed a 7% decline in sales at 4,028 units in May 2013 over May 2012. Exports declined sharply by 67% at 1,356 units in May 2013 over May 2012.
Speaking on the monthly performance, Pravin Shah, Chief Executive, Automotive Division, M&M said, "We have achieved an overall growth of 5% in our domestic volumes during May 2013 for our automotive sector, in spite of a challenging environment. The growth in capital investment and private spending have also slowed down which is a cause for concern. At Mahindra, we remain cautiously optimistic of the situation and do hope that on the back of the new product launches, the auto industry will rev up sooner than later".
Index heavyweight Reliance Industries (RIL) fell 2.33 % to Rs 787.40, with the stock extending intraday losses. RIL and its partners BP and NIKO on 24 May 2013 announced a significant gas and condensate discovery in the KG D6 block off the eastern coast of India. RIL is the operator of KG D6 with 60% equity. BP has a 30% share and NIKO the remaining 10%.
Jindal Steel & Power, Bharti Airtel and GAIL (India) rose by 1.06% to 2.25%.
Shares of private banks declined. ICICI Bank fell 1.31%, with the stock extending intraday losses. HDFC Bank declined 1.68%, with the stock extending intraday losses. Kotak Mahindra Bank and Axis Bank dropped by 0.86% to 1.74%.
HSBC's India manufacturing PMI, which gauges business activity in Indian factories but not its utilities, eased to 50.1 in May 2013 from 51 in April 2013 led by a fall in output and a slowdown in new orders. Meanwhile, new export orders continued to firm. Quantity of purchases grew at a slower clip, stocks of purchases accelerated and stocks of finished goods grew at broadly the same pace. Backlogs of work rose notably and supplier delivery times continued to lengthen, albeit at a slower pace. Meanwhile, employment rose at a slightly faster pace. Input prices deflated and output prices declined for the first time since the global financial crisis.
With inflation pressures easing, the RBI may cut the policy rate again at the June meeting, but it is not blessed with a lot of room to ease monetary policy settings, said HSBC Economists after the manufacturing data.
Fiscal deficit for or the fiscal year ended 31 March 2013 (FY 2013) came in lower at 4.9% of GDP against 5.1% budgeted (in February 2012) and revised to 5.2% in February 2013, data released by the government after trading hours on Friday, 31 May 2013, showed. Fiscal deficit for FY 2014 is budgeted at 4.8% of GDP.
The crucial monsoon arrived on cue in Kerala on the southern coast on Saturday, 1 June 2013, boosting farming. The rains, which run from June to September, are vital for the 55% of farmland without irrigation in India, one of the world's largest producers and consumers of food. The weather office last month predicted the monsoon would arrive over Kerala on June 3.
European indices edged lower on Monday ahead of a raft of factory activity data coming in from across the eurozone. Key benchmark indices in UK, France and Germany were down by 1.15% to 1.99%.
Investors will be tracking purchasing managers index (PMI) data coming in from the UK, Germany, France, Italy, Spain, Sweden, Hungary, Norway and the Czech Republic during the day.
Asian stocks fell across the board on Monday after improving US economic data added to concern the Federal Reserve will scale back its stimulus. Key benchmark indices in China, Hong Kong, Indonesia, Japan, Singapore, Taiwan and South Korea shed by 0.06% to 3.72%.
The final version of the HSBC China manufacturing Purchasing Managers' Index for May fell to 49.2, down from a preliminary reading of 49.6, and more than a point off from April's 50.4. HSBC said that while the result marked the first contraction in seven months, "albeit at only a marginal pace," manufacturing output actually registered its seventh straight gain, though that too was small in size.
The official purchasing managers' index (PMI), issued by the National Bureau of Statistics and China Federation of Logistics and Purchasing, indicated activity in China's vast manufacturing sector picked up slightly in May. China's official PMI rose to 50.8 in May from 50.6 in April, data showed on Saturday, 1 June 2013. A reading above 50 indicates expanding activity while a reading below that level points to a contraction.
Separately, a government gauge of services industries today, 3 June 2013 showed the slowest expansion since September. The official China non-manufacturing PMI for May declined to 54.3 from 54.5.
South Korea's exports unexpectedly increased in May as surging smartphone shipments and improving demand from the US and China countered a decline in the yen. Overseas shipments increased 3.2% from a year earlier after a 0.4% gain in April, the Ministry of Trade, Industry and Energy said in a statement on Saturday, 1 June 2013.
Trading in US index futures indicated that the Dow could gain 22 points at the opening bell on Monday, 3 June 2013. US stocks tanked on Friday after positive economic indicators rekindled talk that the Federal Reserve will soon scale back stimulus measures. The Thomson Reuters/University of Michigan's final consumer sentiment index rose to 84.5 in May from 83.7 in April. A separate report showed that the Chicago purchasing managers' index climbed to 58.7 this month from 49 in April, beating expectations for a rise to 50.
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