Trading for the week ended on a weak note as oil rose amid escalating violence in Iraq. The barometer index, the S&P BSE Sensex, and the 50-unit CNX Nifty, both, hit their lowest closing level in over one-week. The Sensex shed 348.04 points or 1.36%, off close to 460 points from the day's high and up about 55 points from the day's low. The market breadth indicating the overall health of the market was weak, with more than 2 losers for every gainer on BSE. The BSE Mid-Cap index shed more than 2.5%. The BSE Small-Cap index shed more than 3%. Realty stocks tumbled. Bank stocks dropped.
Crude oil prices surged as escalating violence in Iraq threatened supplies from OPEC's second-largest oil producer. Increase in crude oil prices raised concerns of increase in India's current account deficit and fiscal deficit. India imports majority of its crude oil requirements.
The Sensex has risen 1,010.83 points or 4.17% in this month so far (till 13 June 2014). The Sensex has gained 4,057.49 points or 19.16% in calendar year 2014 so far (till 13 June 2014). From a 52-week low of 17,448.71 on 28 August 2013, the Sensex has risen 7,779.46 points or 44.58%. The Sensex is off 496.65 points or 1.93% from a record high of 25,725.12 touched on Wednesday, 11 June 2014.
Coming back to today's trade, a bout of volatility was witnessed in early trade as key benchmark indices regained positive terrain after slipping into the red for a brief period after opening with decent gains. Key benchmark indices moved in a narrow range in positive terrain in morning trade. Key benchmark indices trimmed intraday gains in mid-morning trade after moving in a narrow range. Key benchmark indices slipped into the red and hit fresh intraday low in early afternoon trade. Key benchmark indices extended fall and hit fresh intraday low in afternoon trade on crude extended gains. The Sensex and the 50-unit CNX Nifty, both, hit one week low. Key benchmark indices extended losses and hit fresh intraday low in mid-afternoon trade. Weakness continued on the bourses in late trade.
The S&P BSE Sensex lost 348.04 points or 1.36% to settle at 25,228.17, its lowest closing level since 5 June 2014. The index lost 404.60 points at the day's low of 25,171.61 in mid-afternoon trade. The index jumped 112.10 points at the day's high of 25,688.31 in early trade, its highest level since 11 June 2014.
The CNX Nifty shed 107.80 points or 1.41% to settle at 7,542.10, its lowest closing level since 5 June 2014. The index hit a low of 7,525.35 in intraday trade. The index hit a high of 7,678.50 in intraday trade, its highest level since 11 June 2014.
The BSE Mid-Cap index lost 230.38 points or 2.51% to settle at 8,935.93. The BSE Small-Cap index lost 310.90 points or 3.11% to settle at 9,674.58. Both these indices underperformed the Sensex.
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The market breadth indicating the overall health of the market was weak, with more than 2 losers for every gainer on BSE. On BSE, 2,166 shares fell and 935 shares rose. A total of 68 shares were unchanged.
The total turnover on BSE amounted to Rs 5254 crore, higher than Rs 3812.71 crore on Thursday, 12 June 2014.
HMT (down 8.62% to Rs 44.55), HPCL (down 8.17% to Rs 392.25), Shipping Corporation of India (down 8.07% to Rs 62.65), Essar Ports (down 7.72% to Rs 83.70) and Hindustan Copper (down 7.04% to Rs 109.60) were the biggest losers from the BSE Mid-Cap index.
Capri Global Capital (down 11.1% to Rs 175), MTNL (down 10% to Rs 29.25), Future Consumer Enterprise (down 10% to Rs 7.74), Patel Engineering (down 9.96% to Rs 125.70) and ITI (down 9.82% to Rs 25.25) were the biggest losers from the BSE Small-Cap index.
Telecom stocks dropped. MTNL (down 10% to Rs 29.25), Tata Teleservices (Maharashtra) (down 5.99% to Rs 11.77) and Reliance Communications (down 2.46% to Rs 142.85) declined.
Bharti Airtel lost 2.5% to Rs 333, with the stock extending Thursday's fall triggered by a foreign brokerage downgrading the stock citing competition. A foreign brokerage has downgraded the Bharti Airtel stock to 'underperform' from 'neutral' and reduced its target price to Rs 265 from Rs 275 citing competition from rival Reliance Jio Infocomm, a unit of Reliance Industries (RIL). The stock had lost 3.57% to settle at Rs 341.55 on Thursday, 12 June 2014.
Idea Cellular shed 4.32% to Rs 135.10. The stock hit high of Rs 142.90 and low of Rs 134.70. The company announced after market hours on Thursday, 12 June 2014, successful closure of its qualified institutional placement and has issued and allotted 22.39 crore shares to qualified institutional buyers (QIBs) at an issue price of Rs 134 per share aggregating to Rs 3000 crore. The issue witnessed strong interest from both foreign and Indian investors. Shares allotted to QIBs were admitted for trading on the bourses today, 13 June 2014.
The company is proposing to undertake a private placement of 5.18 crore shares at Rs 144.68 per share aggregating Rs 750 crore to a subsidiary of Axiata Group Berhad of Malayasia, an existing key shareholder of the company.
IT major Infosys rose 0.48% to Rs 3,181.65 in volatile trade. The stock hit high of Rs 3,205 and low of Rs 3,132.15. On Thursday, 12 June 2014, Infosys had announced the selection of Dr. Vishal Sikka as the Chief Executive Officer and Managing Director (CEO & MD) of the company. Dr. Sikka will be inducted as a whole-time director of the board of Infosys and CEO & MD (Designate) on 14 June 2014. He will take over as CEO & MD from Mr. S. D. Shibulal on 1 August 2014. Infosys also said that Mr. N.R. Narayana Murthy will voluntarily step down as Executive Chairman of the company on 14 June 2014. Meanwhile, Infosys on Thursday, 12 June 2014 also denied rumours of the company planning share buyback.
Metal and mining stocks dropped. NMDC (down 4.42% to Rs 176.35), Steel Authority of India (Sail) (down 6.73% to Rs 97.05), Jindal Steel & Power (down 3.48% to Rs 322.90), JSW Steel (down 3.28% to Rs 1,257.85), Hindalco Industries (down 3.94% to Rs 162.10), Sesa Sterlite (down 0.96% to Rs 289.50), Hindustan Zinc (down 3.9% to Rs 162,75), Tata Steel (down 4.4% to Rs 525.75), Hindustan Copper (down 7.04% to Rs 109.60), National Aluminium Company (down 3.71% to Rs 54.55) declined.
Larsen & Toubro (L&T) fell 1.93% to Rs 1,685.75. L&T during market hours today, 13 June 2014, said that its unit construction division has won orders valued at Rs 1027 crore across various business segments in May and June 2014.
Bharat Heavy Electricals (Bhel) lost 2.66% to Rs 237.70. The stock hit high of Rs 252.75 and low of Rs 233.45. The company said during market hours that it has commissioned one more hydro generating unit of 68 megawatts (MW) at Rampur Hydro Electric Project (HEP) in Himachal Pradesh, thus successfully commissioning total four units of the 412 MW hydro power plant of SJVN.
The first three units at Rampur HEP, which were commissioned earlier by Bhel in March 2014, have been put into commercial operation in May 2014. The remaining 2 sets are also in an advanced stage of execution and are likely to be commissioned by Bhel shortly.
Bhel is presently executing hydro power projects of around 5,000 MW which are under various stages of implementation.
GAIL (India) shed 3.57% to Rs 416.80. The company said during market hours today, 13 June 2014, that its wholly owned subsidiary -- GAIL Gas -- and Uttar Pradesh State Industrial Development Corporation (UPSIDC) have signed a memorandum of understanding (MoU) to expand the natural gas downstream distribution network in Uttar Pradesh. This Mou will lay the foundation for building up natural gas infrastructure for fulfilling the demand of natural gas, setting up CNG stations along the highway corridor and distribution of gas to various industrial clusters and parks in the state. The investment envisaged for developing this city gas distribution project in Uttar Pradesh is about Rs 140 crore.
PSU OMCs tumbled as Brent crude oil futures for July delivery hit a nine-month high, as supply disruption fears took centre stage with the United States threatening military action in Iraq as Sunni Islamist militants moved towards Baghdad. Indian Oil Corporation (IOCL) was down 5.07% to Rs 333.20. BPCL was down 5.14% to Rs 568.25. HPCL was down 8.17% to Rs 392.25.
Higher crude oil prices will increase under-recoveries of state-run oil marketing companies (PSU OMCs) on domestic sale of diesel, LPG and kerosene at controlled prices. The government has already freed pricing of petrol.
Tata Motors declined 2.64% to Rs 437.80 after the company said after market hours on Thursday, 12 June 2014, that its global wholesales declined 5.14% to 77,575 units in May 2014 over May 2013.
Lupin fell 0.49% to Rs 983.95. The company announced at the fag end of the trading session that the company's US subsidiary, Lupin Pharmaceuticals Inc. (LPI) has launched its Ciprofloxacin for Oral Suspension, 5 g/100 mL (250mg/5 mL) and 10 g/100 mL (500 mg/5 mL) in the US having received final approval from the FDA earlier. It is a generic equivalent of Bayer HealthCare Pharmaceuticals, Inc.'s (Bayer) Cipro Oral Suspension in the same strength and indicated for the treatment of infections caused by susceptible isolates of the designated microorganisms in various conditions and patient populations.
Lupin is the first applicant to file an ANDA for Cipro Oral Suspension 250 mg/ml & 500 mg/ml and as such is entitled to 180 days of marketing exclusivity. Cipro Oral Suspension had annual US sales of $8.6 million, as per IMS MAT March 2014 data.
Bank stocks dropped. Among private sector banks, ICICI Bank (down 2.08% to Rs 1,429.55), IndusInd Bank (down 2.94% to Rs 536), Yes Bank (down 3.29% to Rs 527.40), Kotak Mahindra Bank (down 2.04% to Rs 915.10) and Axis Bank (down 4.48% to Rs 1,819.10) declined.
HDFC Bank lost 0.52% to Rs 835.55, with the stock reversing gains after hitting record high of Rs 856 in intraday trade.
Among PSU bank stocks, State Bank of India (SBI) (down 3.25%), Canara Bank (down 4.15%), Union Bank of India (down 4.15%), Bank of India (down 6.16%), Bank of Baroda (down 4%) and Punjab National Bank (down 3.03%) declined.
Realty stocks tumbled. Housing Development & Infrastructure (HDIL) (down 6.43% to Rs 90.95), DLF (down 8.23% to Rs 205.15), Sobha Developers (down 5.29% to Rs 504.90) and Unitech (down 5.85% to Rs 32.20) declined.
In the foreign exchange market, the rupee edged lower against the dollar as crude oil prices rose as escalating violence in Iraq threatened supplies from OPEC's second-largest oil producer. The partially convertible rupee was hovering at 59.775, compared with its close of 59.25/26 on Thursday, 12 June 2014.
Brent crude oil futures for July settlement, which expires today, 13 June 2014, were up 18 cents at $113.20 a barrel on the London-based ICE Futures Europe exchange. The contract ended up with gains of more than $3 on Thursday, 12 June 2014.
Crude-oil prices surged on concerns that unrest in Iraq could lead to disruptions in the country's oil supplies. Islamist militants have reportedly taken full control of the northern oil city of Kirkuk and vowed to march to Baghdad. Iraq is the second-largest oil producer in the Organization of the Petroleum Exporting Countries. The International Energy Agency today, 13 June 2014, said oil supplies in Iraq aren't at immediate risk.
US President Barack Obama is reportedly weighing possible airstrikes in Iraq to blunt the momentum of Sunni militants who have seized control of several major cities in recent days.
On the macro front, India's industrial production rose 3.4% in April 2014, compared with a contraction of 0.5% in March 2014, data released by the government after trading hours on Thursday, 12 June 2014, showed. Fourteen out of the twenty two industry groups from the manufacturing sector registered positive growth during the month of April 2014 as compared to the corresponding month of the previous year. Industrial production contracted 0.1% during April-May 2014 over the corresponding period of the previous year.
The annual inflation rate based on combined consumer price index (CPI) for urban and rural India eased to 8.28% (provisional) in May 2014, from 8.59% (final) in April 2014, data released by the government after trading hours on Thursday, 12 June 2014, showed. Within the consumer price index, food prices inflation eased to 9.56% in May 2014, from 9.83% in April 2014. The rate of inflation based on the core CPI, which excludes food and energy prices was 7.72% in May 2014, unchanged from the level in April 2014.
European stocks declined on Friday, 13 June 2014, as an escalation of violence in Iraq sent energy prices higher, while investors assessed comments from Bank of England Governor Mark Carney on the next rate hike. Key benchmark indices in UK, France and Germany were off 0.9% to 1.06%.
The euro zone's trade surplus widened in April compared with the same month a year earlier as imports fell more rapidly than exports. Figures released by the European Union's statistics agency Friday also showed that as tensions between the 28-nation bloc and Russia rose in the wake of the latter's March takeover of Ukraine's Crimea peninsula, trade flows continued to fall rapidly. Eurostat said the 18 nations that make up the euro zone had a combined surplus in their trade with the rest of the world of EUR15.7 billion ($21.2 billion), up from EUR14.0 billion in April 2013. Eurostat lowered its estimate for the March surplus to EUR16.7 billion from EUR17.1 billion. On a seasonally adjusted basis, exports fell 0.2% from March, while imports were down 0.5% to give a surplus of EUR15.8 billion, an increase on the month.
Bank of England Governor Mark Carney said in a speech on Thursday, 12 June 2014, that an interest-rate increase may come sooner than the markets currently anticipate. "Growth has been much stronger, and unemployment has fallen much faster than either we or anyone else expected a year ago", Carney said.
The rate of annual inflation in Germany weakened substantially in May, the country's statistics office said Friday. German consumer prices rose by only 0.6% in May in annual terms based on common European data standards, its lowest growth rate since February 2010 and well below the 1.1% gain registered in April. In monthly terms, prices declined by 0.3%. In national terms, prices fell 0.1% on the month, but rose 0.9% on the year in May, the statistics office said.
Spain's inflation rate eased slightly in May, largely due to declines in food and beverage prices, official data showed Friday. The country's European Union-harmonized consumer price index rose 0.2% in May, said the country's national statistics institute, or INE, down from a rise of 0.3% in April. Under Spain's own inflation calculations, prices rose 0.2% in May, having increased by 0.4% in April.
Asian stocks were mixed in choppy trade on Friday, 13 June 2014, after data showed China's industrial output and retail sales growth accelerated in May. Key benchmark indices in Singapore, Japan, China and Hong Kong were up 0.01% to 0.93%. Key benchmark indices in Indonesia, Taiwan, and South Korea were off 0.09% to 1.03%.
China's industrial output rose 8.8% in May 2014 while, retail sales rose 12.5% in May, the latest data showed.
The Bank of Japan maintained record stimulus as Governor Haruhiko Kuroda strives to boost inflation that remains short of a 2% target. The central bank will continue to expand the monetary base at a pace of 60 trillion yen to 70 trillion yen ($688 billion) per year, it said in a statement today in Tokyo, in line with estimates.
Trading in US index futures indicated that the Dow could fall 22 points at the opening bell on Friday, 13 June 2014. US stocks fell on Thursday as concerns escalated about Iraq and after disappointing economic data on retail sales and jobless claims.
In macroeconomic news, retail sales rose 0.3% in May, half the growth rate than forecasts. Americans' new claims for unemployment benefits unexpectedly rose last week.
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