Key benchmark indices extended losses in mid-afternoon trade as better-than-anticipated US economic data supported the view the Federal Reserve will slow the pace of monetary stimulus. The 50-unit CNX Nifty hit its lowest level in more than five weeks. The S&P BSE Sensex was down 149.13 points or 0.77%, off close to 285 points from the day's high and up about 20 points from the day's low. The market breadth, indicating the overall health of the market, was weak. Shares of three Adani group companies tumbled.
Interest rate sensitive realty stocks extended recent losses as the Reserve Bank of India (RBI) kept its key lending rate viz. the repo rate and cash reserve ratio unchanged after a monetary policy review on 30 July 2013, as the central bank focused on managing the currency volatility rather than pushing for growth. DLF hit 52-week low. Bank stocks declined, with Bank of Baroda hitting 52-week low.
A bout of initial volatility was witnessed as key benchmark indices trimmed gains after a firm start triggered by the government's decision on Thursday, 1 August 2013, to relax foreign direct investment (FDI) rules in a number of sectors. Intraday volatility continued as the barometer index, the S&P BSE Sensex, regained positive zone after slipping into the red in morning trade. The Sensex once again moved into positive terrain after hitting fresh intraday low in mid-morning trade. The market skidded to hit fresh intraday low in early afternoon trade. Key benchmark indices extended losses to hit fresh intraday low in afternoon trade. The market extended intraday losses to hit fresh intraday low in mid-afternoon trade.
The rupee which has been highly volatile off late, weakened today, 2 August 2013. The rupee was hovering at 60.87 against the dollar, weaker than its close of 60.43/44 on Thursday, 1 August 2013.
Bond prices fell sharply. The yield on the benchmark government paper 7.16 GS 2023 was hovering at 8.2321%, higher than Thursday's close of 8.0653%. Bond yield and bond prices are inversely related.
At 14:20 IST, the S&P BSE Sensex was down 149.13 points or 0.77% to 19,168.06. The index fell 170.38 points at the day's low of 19,146.81 in mid-afternoon trade, its lowest level since 31 July 2013. The index jumped 134.51 points at the day's high of 19,451.70 in early trade.
The CNX Nifty was down 49.15 points or 0.86% to 5,678.78. The index hit a low of 5,673.55 in intraday trade, its lowest level since 27 June 2013. The index hit a high of 5,761.85 in intraday trade.
The market breadth, indicating the overall health of the market, was weak. On BSE, 1,390 shares fell and 655 shares rose. A total of 136 shares were unchanged.
Among the 30-share Sensex pack, 21 stocks fell and rest of them rose. Jindal Steel & Power (down 6.05%), Coal India (down 5.57%) and Sterlite Industries (down 4.32%), edged lower.
Bank stocks declined. HDFC Bank (down 0.02%), ICICI Bank (down 2.25%), edged lower. But, State Bank of India rose 0.29%.
Bank of Baroda fell 5.3% to Rs 488.80, with the stock extending Thursday's 7.92% losses triggered by rise in sticky loans in Q1. The stock hit 52-week low of Rs 483.85 in intraday trade today, 2 August 2013. The bank's ratio of gross non-performing assets (NPA) to gross advances increased to 2.99% as on 30 June 2013, from 2.4% as on 31 March 2013 and 1.84% as on 30 June 2012. The ratio of net NPA to net advances increased to 1.69% as on 30 June 2013, from 1.28% as on 31 March 2013 and 0.65% as on 30 June 2012.
The bank's net profit rose 2.54% to Rs 1167.87 crore on 14.89% rise in total income to Rs 10717.49 crore in Q1 June 2013 over Q1 June 2012. The bank announced Q1 result during market hours on Thursday, 1 August 2013.
Adani group stocks tumbled. Adani Enterprises (down 15%), Adani Power (down 7.46%), and Adani Ports and Special Economic Zone (down 8%), slumped.
Interest rate sensitive realty stocks extended recent losses as the Reserve Bank of India (RBI) kept its key lending rate viz. the repo rate and cash reserve ratio unchanged after a monetary policy review on 30 July 2013, as the central bank focused on managing the currency volatility rather than pushing for growth. Purchases of both residential and commercial property are largely driven by finance. HDIL (down 0.64%), Unitech (down 1.57%) and D B Realty (down 1.12%), edged lower.
Realty major DLF fell 6.71% to Rs 128.60 after hitting a 52-week low of Rs 127.40 in intraday trade today, 2 August 2013.
The Reserve Bank of India Governor D. Subbarao today, 2 August 2013, said that the central bank would roll back recent cash tightening measures only after it determines stability has been restored in the foreign exchange market. Last month, the RBI raised short-term rates and also placed restrictions on banks to borrow from the central bank to make funds costlier for stemming the rupee's decline.
RBI on Thursday, 1 August 2013, said that foreign institutional investors who have issued a participatory note, can hedge their forex risk in these securities provided they have a mandate from the participatory note holder.
The Union Cabinet on Thursday, 1 August 2013, approved proposals to relax foreign-investment rules in a number of sectors including telecommunications, multibrand retail and defense.
European stock markets moved in a narrow range on Friday, 2 August 2013, as investors remained cautious ahead of the much awaited nonfarm-payrolls report from the US. Key benchmark indices in UK, Germany and France were up 0.04% to 0.14%.
The European Central Bank on Thursday, 1 August 2013, kept its key financing rate at a record low, and ECB President Mario Draghi said interest rates would remain at or below present levels for an extended period of time. The Bank of England also on Thursday also left its benchmark interest rate and bond-buying program unchanged.
Asian stocks rose on Friday, 2 August 2013, as global manufacturing reports beat forecasts and central banks in Europe vowed to maintain stimulus. Key benchmark indices in Hong Kong, China, Japan, Indonesia, Singapore, Taiwan and South Korea rose by 0.02% to 3.29%.
China's non-manufacturing purchasing managers' index is scheduled to be released tomorrow, 3 August 2013 after the manufacturing gauge unexpectedly strengthened in July, data yesterday showed.
Indonesia's economy grew less than 6% last quarter, adding to risks for the Southeast Asian nation as investments ease, inflation accelerates and the currency slumps. Gross domestic product increased 5.81% in the three months ended June 30 from a year earlier, the Central Bureau of Statistics said in Jakarta today.
Trading in US index futures indicated that the Dow could gain 18 points at the opening bell on Friday, 2 August 2013. US stocks kicked off the month by rallying Thursday, 1 August 2013, to all-time highs in the wake of upbeat economic signals from around the globe. Factory output from the US to China and Europe expanded in July, reports on Thursday showed, while American jobless claims fell to a five-year low. The Institute for Supply Management's US factory index increased to 55.4 in July 2013, the strongest since June 2011, from 50.9 in June 2013. Readings above 50 indicate expansion.
The influential US non-farm payroll data for July 2013 is due later in the global day today, 2 August 2013. The job data is a key piece of data which the Federal Reserve monitors in its assessment of its monetary-stimulus program. The Fed currently buys $85 billion a month in government and mortgage bonds in an effort to keep interest rates low and stimulate economic growth.
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