Key benchmark indices hovered in the negative terrain in mid-morning trade. Weakness in the rupee and losses in Asian stocks weighed on sentiment. The S&P BSE Sensex was down 32.01 points or 0.16%, up close to 80 points from the day's low and off about 70 points from the day's high. The market breadth, indicating the overall health of the market, was negative.
Bank stocks declined. Mahindra & Mahindra (M&M) rose for the third straight day on expectations of increase in tractor sales due to good rains this year.
The market edged lower after oscillating between positive and negative zone in early trade. Volatility continued as key benchmark indices trimmed losses after hitting fresh intraday low in morning trade. The market hovered in the negative terrain in mid-morning trade.
In the foreign exchange market, the rupee weakened against the dollar ahead of the Federal Reserve's policy meeting, where it is widely expected to announce tapering of bond purchases. The partially convertible rupee was hovering at 63.595, weaker than its close of 62.83/84 on Monday, 16 September 2013.
The domestic currency has declined against the dollar this year due to fears that India will struggle to fund its current account gap if the US starts to wind down its easy-money policies that have fueled global liquidity in recent years. The rupee has, however, made a strong rebound after hitting record low of 68.85 in intraday deals on 28 August 2013. The recovery in the rupee materialized after new Reserve Bank of India Governor Raghuram Rajan on 4 September 2013 announced plans to bolster the financial industry and stabilize the rupee.
Rupee depreciation fuels inflation, increases import bill and current account deficit. It also increases the government's spending on fuel subsidies, potentially widening the fiscal deficit.
At 11:20 IST, the S&P BSE Sensex was down 32.01 points or 0.16% to 19,710.46. The index declined 107.03 points at the day's low of 19,635.44 in morning trade. The index rose 36.79 points at the day's high of 19,779.26 in early trade.
The CNX Nifty was down 17.05 points or 0.29% to 5,823.50. The index hit a low of 5,804.90 in intraday trade. The index hit a high of 5,846.40 in intraday trade.
The market breadth, indicating the overall health of the market, was negative. On BSE, 1,055 shares fell and 726 shares rose. A total of 107 shares were unchanged.
Among the 30-share Sensex pack, 18 stocks declined and rest of them rose. NTPC (down 2.41%), Sun Pharmaceutical Industries (down 2.18%) and HDFC (down 1.57%), declined.
Mahindra & Mahindra (M&M) rose for the third straight day on expectations of increase in tractor sales due to good rains this year. The stock was up 1.28%.
Bank stocks declined. ICICI Bank (down 0.8%), Kotak Mahindra Bank (down 0.53%), Axis Bank (down 2.92%), and HDFC Bank (down 0.33%), edged lower.
Among PSU bank stocks, State Bank of India, Canara Bank, Union Bank of India, Bank of India, Bank of Baroda and Punjab National Bank shed 0.54% to 3.11%.
Ranbaxy Laboratories rose 4.03% to Rs 331.70. The company said during market hours today, 17 September 2013, that during late hours on Monday, 16 September 2013, the company received communication from the US Food and Drug Administration (USFDA) that the regulator had imposed an import alert on the company's Mohali facility. The USFDA also advised that the Mohali facility will be subject to certain terms of the Consent Decree signed in January 2012. Ranbaxy said it will review the details and will continue to fully cooperate with the USFDA and take all necessary steps to resolve the concerns at the earliest.
The USFDA had conducted inspections at Ranbaxy's Mohali facility in 2012, resulting in certain observations. The company believes that it has made further improvements at its Mohali facility since the last inspection in 2012, and remains committed to adressing all concerns of the USFDA. Ranbaxy is hopeful of an early resolution these concerns, the company said in a statement.
Ranbaxy remains fully committed to upholding the highest standards that patients, prescribers, regulators and all other stakeholders expect from the company. Ranbaxy stays firmly committed to its philosophy of 'Quality and Patients First,' it said in a statement.
Shares of Ranbaxy had tumbled 30.27% in a single trading session to settle at Rs 318.85 on Monday, 16 September 2013, after the USFDA issued an import alert against company's Mohali plant.
Mangalore Chemicals & Fertilizers fell 2.46% after the stock turned ex-dividend today, 17 September 2013, for dividend of Rs 1.20 per share for the year ended 31 March 2013.
IL&FS Transportation Networks fell 0.53% on equity dilution concerns after the company said its board of directors has approved a proposal to raise upto Rs 550 crore from rights issue of equity shares. The terms and conditions of the rights issue, including the rights entitlement ratio, the issue price, issue size, record date, timing of the issue and other matters shall be decided in consultation with the lead managers to the rights issue, the company said.
Shares of Motilal Oswal Financial Services dropped 0.68% to Rs 73 after the company said it has an exposure of Rs 253.92 crore on the beleaguered National Spot Exchange (NSEL). The company said that the Motilal Oswal group had consolidated networth of Rs 1236.70 crore as on 30 June 2013, with no borrowings on its balance sheet.
At its upcoming mid-quarter monetary policy review on Friday, 20 September 2013, the Reserve Bank of India will have to decide whether to give in to industry demands and lower interest rates in order to boost slowing economic growth, or leave interest rates unchanged for the third straight policy review as it guards against risks of a fresh rise in inflationary pressures.
Asian stocks fell on Tuesday, 17 September 2013, as the Federal Reserve begins a two-day policy meeting at which it is forecast to reduce the pace of its US bond buying. Key benchmark indices in China, Japan, Taiwan, Hong Kong, Indonesia and South Korea fell by 0.26% to 1.19%. Singapore's Straits Times rose 0.12%.
Trading in US index futures indicated that the Dow could fall 10 points at the opening bell on Tuesday, 17 September 2013. Most US stocks rose on Monday, 16 September 2013, after former US Treasury secretary Larry Summers removed himself from consideration to run the Federal Reserve. Summers was seen as relatively hawkish.
Investors across the globe are eyeing the two-day policy meeting of the Federal Open Market Committee (FOMC), considered by many to provide an indication on the timing and size of the Fed's cutbacks in its bond-purchase program. The FOMC's two-day policy meeting on interest rates in the United States begins today, 17 September 2013. 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. Investors are also eyeing Fed's forward guidance on policy.
UN chemical investigators on Monday confirmed the use of sarin nerve agent in an August 21 poison gas attack outside the Syrian capital in a long-awaited report that the United States, Britain and France said proved government forces were responsible. Syria and Russia have blamed the August 21 attack on the rebels. The rebels, the United States and other Western powers blame forces loyal to Assad for the Ghouta attack. The UN confirmation of sarin gas use on August 21 comes as France, Britain and the United States agreed in Paris to seek a strong and robust UN resolution that sets binding deadlines on removal of chemical weapons. Those talks followed a weekend deal on Syria's chemical weapons reached by the United States and Russia that could avert US military action.
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