Key benchmark indices edged lower in choppy trade, with the market sentiment hit adversely by the government's failure to raise fuel prices. However, the key benchmark indices trimmed intraday losses as the rupee edged higher against the dollar and as European stocks reversed intraday losses. Volatility was high ahead of the expiry of the near month futures & options (F&O) contracts tomorrow, 26 September 2013. The market breadth, indicating the overall health of the market, was negative. The barometer index, the S&P BSE Sensex, was provisionally down 77.67 points or 0.39%, up close to 185 points from the day's low and off about 135 points from the day's high.
The government's decision on Tuesday, 24 September 2013, not to raise fuel prices sparked concerns about the government's fiscal deficit. PSU OMCs, which control more than 90% of the fuel-retail market in India, sell diesel and cooking fuels at government-set discounted prices. The government partially reimburses them for the discounted sales.
IT stocks edged lower. Index heavyweight Reliance Industries declined. Another index heavyweight and cigarette maker ITC dropped in choppy trade. Capital goods pivotal gained. Some pharma stocks rose on defensive buying, with Dr Reddy's Laboratories scaling record high. Most auto stocks declined.
A bout of initial volatility was witnessed as key benchmark indices alternately swung between gains and losses. The market moved in a narrow range in morning trade. Key benchmark indices extended intraday losses and hit fresh intraday low in mid-morning trade as index heavyweights, Reliance Industries and ITC, both, extended intraday losses. Key benchmark indices trimmed losses in early afternoon trade. Weakness continued on the bourses in afternoon trade as European stocks opened lower. Key benchmark indices trimmed losses after hitting their lowest level in more than a week in mid-afternoon trade.
The market may remain volatile tomorrow, 26 September 2013 as traders roll over positions in the futures & options (F&O) segment from the near month September 2013 series to October 2013 series. The September 2013 F&O contracts expire tomorrow, 26 September 2013.
As per provisional figures, the S&P BSE Sensex was down 77.67 points or 0.39% to 19,842.54. The index declined 261.47 points at the day's low of 19,658.74 in mid-afternoon trade, its lowest level since 17 September 2013. The index rose 58.28 points at the day's high of 19,978.49 in early trade.
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The CNX Nifty was down 21.95 points or 0.37% to 5,870.50, as per provisional figures. The index hit a low of 5,811.10 in intraday trade, its lowest level since 17 September 2013. The index hit a high of 5,910.55 in intraday trade.
The total turnover on BSE amounted to Rs 1624 crore, higher than Rs 1614.44 crore on Tuesday, 24 September 2013.
The market breadth, indicating the overall health of the market, was negative. On BSE, 1,256 shares fell and 1,053 shares rose. A total of 149 shares were unchanged.
Among the 30-share Sensex pack, 15 stocks fell and rest of them rose. HDFC Bank (down 2.96%), Hindustan Unilever (down 1.45%) and Jindal Steel & Power (down 1.27%), edged lower from the Sensex pack.
Capital goods pivotal gained. Bhel surged 7.73%. The stock was the biggest gainer from the Sensex pack.
L&T rose 0.7%.
Index heavyweight and cigarette maker ITC dropped 1.37% to Rs 345. The stock hit high of Rs 350 and low of Rs 337.45.
IT stocks were mostly lower. HCL Technologies was off 1.32%. The company announced during trading hours today, 25 September 2013, that its wholly-owned subsidiary, HCL America Inc (HCLA), has won a multi-year, multi-million dollar deal with the WyCAN Consortium, a group of states including Arizona, Colorado, North Dakota and Wyoming. HCLA will enable WyCAN to significantly improve services for its Unemployment Insurance (UI) modernization program, which is one of the largest such programs in the US providing critical income to millions of unemployed Americans.
The deal will give the consortium states a configurable, intuitive Government-to-Citizen (G2C) system aimed at consolidating and replacing existing legacy systems to allow easier adaptation to changing legislation, HCL Technologies said in a statement.
TCS rose 0.66%, with the stock reversing intraday losses. The company announced after market hours on Tuesday, 24 September 2013, that the company, Saudi Aramco and GE launched the first all-female business process services center in Riyadh, Kingdom of Saudi Arabia. The center will be staffed by Saudi females, with TCS and GE owning 76% and 24% equity in the new venture, which will initially serve Saudi Aramco and GE as anchor clients. The new business process services center will serve as a building block to localize the business process outsourcing (BP0) industry in the Kingdom. The three partners will work together with the intention of scaling up the new venture to create up to 3,000 jobs for Saudi professional females. GE will create up to 1,000 employment opportunities for this initiative.
Infosys dropped 0.36%.
Wipro fell 0.64% in choppy trade. Wipro becomes a part of the 50-unit CNX Nifty with effect from Friday, 27 September 2013. The IT major replaces Reliance Infrastructure in Nifty.
Hindalco Industries rose 3.57%. Sesa Goa gained 4.26%.
Index heavyweight Reliance Industries (RIL) fell 3.16% to Rs 846.75. The stock hit high of Rs 874 and low of Rs 842.60.
Some pharma stocks rose on defensive buying. Dr Reddy's Laboratories rose 1.88% to Rs 2,442 after hitting record high of Rs 2,444.85 in intraday trade. Sun Pharmaceutical Industries gained 1.7%.
Cipla gained 1.41%. The company said during market hours today, 25 September 2013, that India Ratings & Research, a Fitch Group Company has assigned a Long-Term Issuer Rating of 'IND AAA' to the company.
But, Ranbaxy Laboratories declined 0.66%.
Most auto stocks declined. Mahindra & Mahindra (M&M) (down 3%), Ashok Leyland (down 1.2%), and Maruti Suzuki India (down 1.4%), dropped.
Tata Motors gained 1.9%. The company's British luxury car unit Jaguar Land Rover (JLR) on Tuesday, 24 September 2013, unveiled details of its future plans for advanced research and development in the UK which will now be focused on a new cutting-edge technology, innovation and education centre in Warwick. The National Automotive Innovation Campus (NAIC) is designed to create a large-scale collaborative research environment, JLR said in a statement. JLR is the lead partner in the project investing 50 million pounds, along with Tata Motors European Technical Centre (TMETC), WMG (Warwick Manufacturing Group) and the UK Government's Higher Education Funding Council England (HEFCE).
Two wheeler stocks were mostly lower. TVS Motor Company was down 1%. Bajaj Auto dropped 1.41%. Hero MotoCorp gained 1.66%.
Kingfisher Airlines hit maximum permissible 10% upper circuit at Rs 5.65 on BSE, with the stock extending Tuesday's sharp surge triggered by the company's Chairman Vijay Mallya's comment on Tuesday, 24 September 2013, that the company is in talks with a foreign investor for a potential stake sale. Kingfisher Airlines has been grounded for almost a year for want of cash.
Minister of Petroleum & Natural Gas Dr. M. Veerappa Moily on Tuesday, 24 September 2013, ruled out any steep increase in diesel and cooking-fuel prices. The government's decision on Tuesday, 24 September 2013, not to raise fuel prices has sparked concerns about the government's fiscal deficit. PSU OMCs, which control more than 90% of the fuel-retail market in India, sell diesel and cooking fuels at government-set discounted prices. The government partially reimburses them for the discounted sales. Dr. Moily on Tuesday, 24 September 2013, asked the people of India to conserve petroleum products to help the government's finances and reduce the country's oil-import bill.
In an effort to woo Central government employees before the next Lok Sabha elections, Prime Minister Dr. Manmohan Singh constituted the 7th Pay Commission on Wednesday, 25 September 2013. The new pay scale recommended by the Pay Commission will be implemented from 1 January 2016 as the government has given about two years to the 7th Pay Commission to submit its report. The Pay Commission will give its recommendation on the salaries, allowances and pensions of about 80 lakh central employees and pensioners.
The setting up of the Commission, whose recommendations will benefit about 50 lakh central government employees, including those in defence and railways, and about 30 lakh pensioners, comes ahead of the Assembly elections in 5 states in November and the general elections in 2014.
In the foreign exchange market, the rupee surged against the dollar. The partially convertible rupee was hovering at 62.36, compared with its close of 62.7525/7625 on Tuesday, 24 September 2013.
European shares reversed initial losses on Wednesday, 25 September 2013. Key benchmark indices in UK, France and Germany were up 0.07% to 0.23%.
Asian stocks dropped on Wednesday, 25 September 2013, as concern that US lawmakers will fail to arrange a budget deal preventing a government shutdown next week weighed on sentiment. Key benchmark indices in China, Indonesia, Japan, Singapore, Taiwan and South Korea were off 0.01% to 1.2%. Hong Kong's Hang Seng rose 0.13%.
Trading in US index futures indicated that Dow could gain 9 points at opening bell on Wednesday, 25 September 2013. US stocks ended mostly lower on Tuesday, 24 September 2013, as a drop in consumer confidence and worries over a Washington debt-ceiling fight outweighed a rise in home prices and easing concerns over the Middle East.
Investors are worried about the latest squabbling in Washington over a new budget for the fiscal year that starts on 1 October 2013 and, more importantly, over whether to lift the debt ceiling. The US Treasury is set to reach its $16.7 trillion borrowing limit around mid-October, unless legislators move to raise the debt ceiling. Ratings firm Moody's Investors Service on Tuesday said a failure by the US government to raise the country's debt limit would result in a worse outcome for financial markets than a government shutdown.
The Conference Board's index of US consumer confidence slumped in September to a four-month low and a separate report showed a gauge of manufacturing in the region covered by the Federal Reserve Bank of Richmond shrank in September. The Case-Shiller report on US home prices showed prices rose in July, but at a slower pace.
The Federal Open Market Committee (FOMC) holds a two-day policy meeting on 29-30 October 2013. On 18 September 2013, the Fed surprised economists and investors with its decision to delay scaling back its stimulus.
Meanwhile, Iranian President Hasan Rouhani's decision against meeting President Obama or even exchanging a handshake at the UN General Assembly in New York on Tuesday underscored difficulties between the two countries.
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