Key benchmark indices hovered in the negative terrain in mid-morning trade as the rupee's sharp slide which pushed it to record low against the dollar hit investor sentiment adversely. Weakness in Asian stocks also dampened sentiment. The S&P BSE Sensex was down 176.44 points or 0.95%, up about 120 points from the day's low and off close to 165 points from the day's high. The market breadth, indicating the overall health of the market, was weak. IT stocks rose on weak rupee. Metal stocks reversed intraday losses. Among banking stocks, State Bank of India (SBI) hit 52-week low.
A bout of volatility was witnessed as key benchmark indices trimmed losses after a weak opening. The Sensex hit lowest level in almost 18 weeks. The 50-unit CNX Nifty hit its lowest level in more than 10 months. Weakness continued on the bourses in mid-morning trade.
The market sentiment was affected adversely by data showing that foreign funds were net sellers of Indian stocks on Friday, 16 August 2013. Foreign institutional investors (FIIs) sold shares worth a net Rs 563.23 crore on Friday, 16 August 2013, as per provisional data from the stock exchanges.
The rupee hit a record low below 62 against the dollar today, 19 August 2013. The partially convertible rupee was hovering at 62.29, weaker than its close of 61.65/66 on Friday, 16 August 2013.
Rupee depreciation fuels inflation, increases import bill and current account deficit and hurts economic growth.
At 11:20 IST, the S&P BSE Sensex was down 176.44 points or 0.95% to 18,421.74. The index lost 294.98 points at the day's low of 18,303.20 in morning trade, its lowest level since 15 April 2013. The index fell 10.80 points at the day's high of 18,587.38 in opening trade.
The CNX Nifty was down 65.70 points or 1.19% to 5,442.50. The index hit a low of 5,409.95 in intraday trade, its lowest level since 5 October 2012. The index hit a high of 5,499.65 in intraday trade.
More From This Section
The market breadth, indicating the overall health of the market, was weak. On BSE, 1,047 shares declined and 600 shares rose. A total of 86 shares were unchanged.
Among the 30-share Sensex pack, 20 stocks declined and rest of them gained. Sun Pharmaceutical Industries (down 5.04%), Bajaj Auto (down 4.35%) and M&M (down 4.63%), edged lower.
Metal stocks reversed intraday losses. Tata Steel (up 2.19%), Hindalco Industries (up 2.09%), Jindal Steel & Power (up 1.53%), JSW Steel (up 0.21%), Sail (up 0.01%), and Hindustan Zinc (up 1.09%) edged higher.
Shares of Sesa Goa rose 2.3%, with the stock reversing intraday losses. The stock had lost as much 3.52% at the day's low of Rs 126 in early trade. Sterlite Industries (India) gained 3.16%, with the stock reversing intraday losses. The stock had lost as much as 3.75% at the day's low of Rs 73 in early trade. Sesa Goa (Sesa Goa) and Sterlite Industries (India) (Sterlite) in a joint statement issued on Saturday, 17 August 2013, said that the merger of Sterlite and The Madras Aluminium Company (MALCO) with Sesa Goa and transfer of MALCO power plant to Vedanta Aluminium (VAL) pursuant to the Scheme of amalgamation and arrangement amongst Sterlite, MALCO, Sterlite Energy (SEL), VAL and Sesa Goa and their respective Shareholders and Creditors ('Composite Scheme') and the Scheme of Amalgamation of Ekaterina (Ekaterina) with Sesa Goa and their respective Shareholders and Creditors (Ekaterina Scheme) has become effective. The companies have fixed 28 August 2013 as the record date for determining the list of the shareholders of Sterlite, MALCO and Ekaterina to whom the equity shares of the Sesa Goa will be allotted as per terms of the scheme as already announced on 25 February 2012.
As per the swap ratio, every equity shareholder of Sterlite holding 5 equity shares of the company will be entitled to be issued 3 shares of the Sesa Goa. Every equity shareholder of MALCO holding 10 equity shares will be entitled to be issued 7 equity shares of the Sesa Goa.
IT stocks rose as rupee hit record low against the dollar. Infosys (up 0.43%), HCL Technologies (up 0.96%), TCS (up 0.05%) and Wipro (up 0.71%), edged higher. A weak rupee boosts revenue of IT firms in rupee terms as the sector derives a lion's share of revenue from exports.
Axis Bank slumped 5.02% to Rs 1,002.40, with the stock extending Friday's sharp slide triggered by an announcement from MSCI that it would exclude the banking stock from its standard and large cap indices with effect from 2 September 2013. The stock had lost 8.23% to Rs 1,055.40 on Friday, 16 August 2013.
Shares of Axis Bank have also came under pressure after the Reserve Bank of India (RBI) on Wednesday, 14 August 2013, said that overseas investors will not be allowed to purchase additional shares of the bank given the foreign shareholding limit of 49% in the stock has been breached.
State Bank of India (SBI) declined 1.67% to Rs 1545 after hitting a 52-week low of Rs 1528 in intraday trade today, 19 August 2013.
Indiabulls Real Estate rose 3.77% to Rs 59.20 after the company said it has purchased the entire stake of FlM and its affiliates (managed by Farallon Capital Management LLC and its affiliates, a leading US private equity fund), in its 7 project subsidiaries for a total consideration of Rs 1172.16 crore. FlM held 49% equity stake in these JVs and had invested Rs 847.48 crore in 2006 to 2008. With the purchase of FlM's entire stake, these project subsidiaries will now be 100% owned by Indiabulls Real Estate.
Prime Minister Manmohan Singh on Saturday, 17 August 2013, told a news agency that India wasn't headed for a crisis despite its large current-account deficit and said the country has plenty of foreign-exchange reserves. There is no comparison and no question of going back to the situation India faced in 1991, when the country was on the brink of defaulting on its debts, Mr. Singh was quoted as saying by the agency. This time, he said, India has enough reserves to pay for as many as seven months of imports.
In an attempt to assuage concerns that India was moving toward capital controls, economic-affairs secretary Arvind Mayaram told reporters on Friday, 16 August 2013, that India doesn't plan to impose controls on money being repatriated by companies, such as dividends and royalties. His comments came after the Reserve Bank of India (RBI) on Wednesday, 14 August 2013, reduced the amount of money that Indian residents and companies can send abroad in an attempt to stem rupee's slide.
Asian stock fell for a third straight day on Monday, 19 August 2013, as worries about the Federal Reserve's policy outlook and rising US Treasury yields weighed on sentiment. Key benchmark indices in Indonesia, Singapore, South Korea, and Taiwan were down by 0.16% to 3.94%. Key benchmark indices in Hong Kong, China and Japan rose by 0.07% to 0.49%.
Japan's exports jumped by the most since 2010 in July, aiding Prime Minister Shinzo Abe's efforts to drive an economic recovery even as rising energy costs boosted the trade deficit. Exports increased 12.2% from a year earlier after a 7.4% rise in June, the Ministry of Finance said in Tokyo today. Imports climbed 19.6%, leaving a trade deficit of 1.02 trillion yen ($10.5 billion), the third biggest on record in data back to 1979. The seasonally-adjusted deficit widened from June to 944 billion yen.
Thailand cut its 2013 growth forecast as the country entered recession for the first time since the global financial crisis, with rising household debt limiting central bank scope to support the economy. Gross domestic product unexpectedly shrank 0.3% in the three months through June from the previous quarter, when it contracted a revised 1.7%, the National Economic and Social Development Board said in Bangkok today.
Trading in US index futures indicated a flat opening of US stocks on Monday, 19 August 2013. US stocks declined on Friday, 16 August 2013, handing the Dow Jones Industrial Average its worst week this year, with investors on uncertain footing as longer-term Treasury yields rose to two-year highs. On US economic data front, the Commerce Department reported housing starts climbed at an annual rate of 896,000, less than the 915,000 estimated. The Labor Department reported productivity rose at a slightly better-than-estimated 0.9% annual rate in the second quarter.
The Federal Open Market Committee (FOMC) on Wednesday, 21 August 2013, will issue minutes of its recent policy meeting held on 30 and 31 July 2013. The minutes of FOMC meet may help provide clues about the future of Fed's bond-buying program.
The US central bank currently buys $85 billion a month in US debt and mortgage-backed securities in a bid to hold interest rates low and encourage economic growth. Federal Reserve Chairman Ben Bernanke has on several occasions stressed that the tapering process is dependent on an improvement in data. Fed's bond-buying program has kept global markets flush with liquidity in recent years.
Powered by Capital Market - Live News