Weakness persisted on the bourses in afternoon trade as European and Asian markets dropped after the Federal Reserve signaled that it may reduce the amount of monetary stimulus it provides as early as this year and on weak reading for manufacturing activity in China this month. The barometer index, the S&P BSE Sensex, was down 392.26 points or 2.04%, off 215.76 points from the day's high and up 36.65 points from the day's low. The market breadth, indicating the overall health of the market, was weak. All the 13 sectoral indices on BSE were in the red.
Index heavyweight Reliance Industries (RIL) hovered in negative zone. FMCG stocks declined. Telecom stocks declined on profit booking after recent gains triggered by reports that a government panel has recommended a major liberalisation of the foreign direct investment (FDI) regime, including raising the FDI limit to 100% from 74% in telecom.
Bharti Infratel dropped to a record low as the stock turned ex-dividend today, 20 June 2013. Apollo Tyres recovered from 52-week low on bargain hunting after a recent steep fall triggered by concerns about the impact of a large US acquisition on the company's balance sheet. Neyveli Lignite Corporation hit a 52-week low on reports the Cabinet will today, 20 June 2013, take up the proposal to sell government's 5% stake in the state-run firm through the offer for sale (OFS) route.
The market tumbled in early trade on weak Asian stocks. The Sensex hit one-week low below the psychological 19,000 level. Weakness continued on the bourses in morning trade. The market remained weak in mid-morning trade. The Sensex hit fresh intraday low in early afternoon trade. Weakness persisted on the bourses in afternoon trade.
Data showing that foreign funds remained net sellers of Indian stocks on Wednesday, 19 June 2013, affected market investor sentiment adversely. Foreign institutional investors (FIIs) sold shares worth a net Rs 544.97 crore on Wednesday, 19 June 2013, as per provisional data from the stock exchanges.
A setback was witnessed across the financial markets as the rupee hit record low against the dollar and yields on government bonds surged. The rupee was currently trading at 59.88, sharply weaker that Wednesday's close of 58.71/72. The Reserve Bank of India (RBI) on Monday, 17 June 2013, refrained from cutting its key policy rate further despite sluggish economic growth due to the recent steep slide in rupee against the dollar. The central bank after a monetary policy review said that the weakness in rupee could adversely impact inflation which has been slowing in the past few months. A weak rupee makes the cost of oil and other imported goods higher in rupee terms, adding to inflationary pressure.
The yields on government bonds rose sharply after trading resumed after a halt triggered by a breach in an indicative daily band. The daily cap on yield fluctuations was lifted for today by the Fixed Income Money Market and Derivatives Association of India, which sets the limit. The yield on the most traded paper -- 8.33% GS 2026 -- was up almost 13 basis points at 7.5730 per cent from Wednesday's close of 7.4458 per cent.
At 13:20 IST, the S&P BSE Sensex was down 392.26 points or 2.04% to 18,853.44. The index tumbled 428.91 points at the day's low of 18,816.79 in early afternoon trade, its lowest level since 13 June 2013. The index fell 176.50 points at the day's high of 19,069.20 in opening trade.
The CNX Nifty was down 128.35 points or 2.2% to 5,693.90. The index hit a low of 5,683.95 in intraday trade, its lowest level since 13 June 2013. The index hit a high of 5,755 in intraday trade.
The market breadth, indicating the overall health of the market, was weak. On BSE, 1,553 shares fell and 553 shares rose. A total of 110 shares were unchanged.
The total turnover on BSE amounted to Rs 986 crore by 13:20 IST.
Among the 30-share Sensex pack, 25 stocks fell and only five of them rose. Jindal Steel & Power (down 7.04%), ICICI Bank (down 3.67%) and HDFC (down 2.43%), edged lower.
NTPC (down 3.73%), Bhel (down 2.67%), ONGC (down 2.07%) and Coal India (down 1.57%) fell.
Index heavyweight Reliance Industries (RIL) dropped 2.54% to Rs 810. The stock hit a high of Rs 821 and low of Rs 806.80 so far during the day.
Index heavyweight and cigarette maker ITC lost 1.91% to Rs 323.80.
Hindustan Unilever shed 0.18% to Rs 593.65. The Anglo-Dutch consumer goods major Unilever's open offer to raise its stake in Indian unit will open tomorrow, 21 June 2013. Unilever will buyback shares from minority shareholders at Rs 600 per share to hike its stake in Hindustan Unilever from 52.48% to up to 75%. The open offer closes on 4 July 2013.
Britannia Industries (down 0.31%), Colgate-Palmolive (India) (down 1.14%), Dabur India (down 1.89%), Godrej Consumer Products (down 3.03%), Marico (down 2.95%), Nestle India (down 0.2%) and Tata Global Beverages (down 0.73%) declined.
Telecom stocks declined on profit booking after recent gains triggered by reports that a government panel has recommended a major liberalisation of the foreign direct investment (FDI) regime, including raising the FDI limit to 100% from 74% in telecom.
Reliance Communications (RCom) fell 1.22% to Rs 125.10 on profit booking after a recent upmove. Shares of RCom had gained 20.05% in four trading days to Rs 126.65 on 19 June 2013 from the recent low of Rs 105.50 on 13 June 2013.
Idea Cellular slipped 3.28% to Rs 143.05. MTNL shed 3.41%.
Bharti Airtel lost 3.22%. The company on 17 June 2013 said that it has completed the allotment of 19.98 crore new shares, representing 5% equity stake in the company, to Qatar Foundation Endowment. The shares have been issued at a price of Rs 340 each on a preferential basis for a total consideration of Rs 6796 crore. The allotment marks one of the largest private equity transactions in the history of India, Bharti said. On 3 May 2013, Bharti and Qatar Foundation Endowment had announced a binding agreement for the share sale. As part of the entitlement, QFE is entitled to one seat on the board of Bharti.
Tata Teleservices (Maharashtra) hit maximum permissible upper limit of 10% at Rs 7.30. The stock extended Thursday's 10% surge after the company during market hours on Thursday, 19 June 2013, said that its board of directors has proposed issue of bonus shares with the promoter/promoter group forgoing their entitlement to the bonus shares in order to comply with the minimum public shareholding requirement. Promoters currently hold 77.21% stake in Tata Teleservices (Maharashtra) (as per the shareholding pattern as on 3 June 2013).
Bharti Infratel declined 4.8% to Rs 146.85 as the stock turned ex-dividend today, 20 June 2013, for final dividend of Rs 3 per share for the year ended 31 March 2013. The stock hit a record low of Rs 145.25 in intraday trade today, 20 June 2013.
Apollo Tyres advanced 2.05% to Rs 62.15, with the stock reversing direction after hitting 52-week low of Rs 59.45 in intraday trade today, 20 June 2013. Shares of Apollo Tyres had dropped 33.8% in five trading days to Rs 60.90 on 19 June 2013 from a recent high of Rs 92 on 12 June 2013 on concerns about the impact of a large US acquisition on the company's balance sheet.
Apollo Tyres after trading hours on 12 June 2013 said that it has entered into a definitive merger agreement under which a wholly-owned step subsidiary of the company will acquire Cooper Tire & Rubber Company (Cooper), a company listed on the New York Stock Exchange, in an all-cash transaction valued at approximately $2.5 billion. This strategic combination will bring together two companies with highly complementary brands, geographic presence and technological expertise to create a global leader in tire manufacturing and distribution, Apollo Tyres said in a statement.
Neyveli Lignite Corporation lost 2.59% to Rs 58.20 after hitting a 52-week low of Rs 57.10 in intraday trade today, 20 June 2013. As per reports, the Cabinet will today, 20 June 2013, take up a proposal to sell government's 5% stake through the offer for sale (OFS) in Neyveli Lignite Corporation (NLC). The Government of India (GoI) holds 93.56% stake in NLC (as per the shareholding pattern as on 31 March 2013).
Market regulator Securities & Exchange Board of India (Sebi) has set a deadline of August 2013 for all listed central public sector units to have a minimum 10% public shareholding.
Dena Bank (down 7.87%), DLF (down 7.09%), Bank of India (down 5.98%), Indiabulls Real Estate (down 5.73%) and Jaiprakash Associates (down 5.21%) were among the top losers from the BSE's 'A' group.
European stock markets dropped on Thursday, 20 June 2013, after Federal Reserve Chairman Ben Bernanke said late the prior day the central bank may scale back its bond purchases this year, depending on the economic outlook. Key benchmark indices in UK, France and Germany were down by 1.11% to 1.6%.
Asian stocks slumped on Thursday after Federal Reserve Chairman Ben Bernanke said the central bank may reduce bond purchases later this year should the US economy strengthen. Key benchmark indices in China, Hong Kong, Indonesia, Japan, Singapore, Taiwan and South Korea fell by 1.35% to 3.72%.
Activity in China's vast manufacturing sector weakened further in June to a 9-month low as new orders faltered, a preliminary survey of purchasing managers showed on Thursday, reinforcing signs of tepid economic growth in the second quarter. The flash HSBC Purchasing Managers' Index fell to 48.3 in June from May's final reading of 49.2, drifting further away from the 50-point level demarcating expansion from contraction. It was the weakest level since September 2012.
Trading in US index futures indicated that the Dow could fall 31 points at the opening bell on Thursday, 20 June 2013. US stocks fell sharply on Wednesday after Federal Reserve Chairman Ben Bernanke said the central bank may scale back its bond purchases this year, depending on the economic outlook.
Bernanke said yesterday the central bank may start dialing down its unprecedented bond-buying program this year and end it entirely in mid-2014 if the economy finally achieves the sustainable growth the Fed has sought since the recession ended in 2009. In its announcement, the Federal Reserve after a two day policy meeting on Wednesday said it would continue to purchase $85 billion in bond purchases each month, but noted that the outlook for the economy and the labor market has improved since the fall. The Federal Open Market Committee (FOMC) reiterated that it was ready to hike or cut the pace of its asset buys, depending on the labor market and inflation.
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