Intraday recovery witnessed earlier in the day gathered steam in mid-morning trade. The S&P BSE Sensex was down 92.83 points or 0.51%, up about 260 points from the day's low and off close to 5 points from the day's high. The market breadth, indicating the overall health of the market, turned positive from negative. Bank stocks trimmed intraday losses. Auto stocks dropped.
The market edged lower in early trade as the rupee slumped to record low below 64 against the dollar. The Sensex regained the psychological 18,000 mark after falling below that level at the onset of the trading session. The market trimmed losses to hit fresh intraday high in morning trade as the rupee trimmed losses after a sharp initial slide. The intraday recovery gathered steam in mid-morning trade.
The rupee trimmed losses after hitting record low below 64 against the dollar. The partially convertible rupee was hovering at 63.7250, weaker than its close of 63.13/14 on Monday, 19 August 2013. The rupee has declined sharply over the past few days on rising expectations that the US Federal Reserve will start withdrawing its monetary stimulus soon.
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.
Foreign institutional investors (FIIs) sold shares worth a net Rs 680.08 crore on Monday, 19 August 2013, as per provisional data from the stock exchanges.
At 11:20 IST, the S&P BSE Sensex was down 92.83 points or 0.51% to 18,214.69. The index lost 336.54 points at the day's low of 17,970.98 in early trade, its lowest level since 12 September 2012. The index fell 87.69 points at the day's high of 18,219.83 in mid-morning trade.
The CNX Nifty was down 39.55 points or 0.73% to 5,375.20. The index hit a low of 5,306.35 in intraday trade, its lowest level since 5 October 2012. The index hit a high of 5,376.80 in intraday trade.
The market breadth, indicating the overall health of the market, turned positive from negative. On BSE, 882 shares rose and 875 shares rose. A total of 100 shares were unchanged.
Among the 30-share Sensex pack, 23 stocks declined and rest of them gained. TCS (down 2.36%), Sun Pharmaceutical Industries (down 3.71%) and GAIL (India) (down 2.82%), edged lower.
Index heavyweight and cigarette maker ITC rose 1.18%, with the stock reversing intraday losses.
Auto stocks dropped. Mahindra & Mahindra (M&M) lost 3.31%. The company on 14 August 2013 said it plans to invest Rs 200 crore to strengthen its current product line-up of trucks and buses. The company plans to invest Rs 300 crore to explore new product lines in the LCV, ICV and MCV range, it said.
Maruti Suzuki India dropped 2.1%.
Tata Motors shed 3.08%. The company's global wholesale vehicle sales fell 14% to 87,566 vehicles in July 2013 over July 2012. Global sales of passenger cars fell 13% to 46,684 vehicles in July 2013 over July 2012. Sales of its Jaguar Land Rover brand rose 30.61% to 35,162 units. Sales of its Jaguar cars rose 76.53% to 7,174 vehicles and Land Rover sales were higher by 22.45% at 27,988 vehicles during the month. The company announced the global vehicle sales figures on 14 August 2013.
Shares of two wheeler makers also dropped. Bajaj Auto slipped 0.71%. Bajaj Auto on 13 August 2013 said that the company has received a notice from the workmen's union viz. Vishwa Kalyan Kamgar Sanghatana stating that the stoppage of work at Chakan plant has been withdrawn and all the workmen at Chakan plant will resume their duty in their respective shifts from 14 August 2013. The company had earlier informed on 25 June 2013, that it had received a notice from the workmen's union of its Chakan plant viz., Vishwa Kalyan Kamgar Sanghatana stating that they propose to call for a stoppage of work by all the workmen employed in Chakan plant from the morning shift of 28 June 2013. The workmen at Chakan Plant had however, stopped coming from 25 June 2013 itself, without assigning any reason.
Hero MotoCorp skidded 1.37%.
Bank stocks trimmed initial losses. HDFC Bank dropped 0.8% to Rs 579.35, with the stock trimming losses after hitting a 52-week low of Rs 566 in intraday trade today, 20 August 2013.
State Bank of India (SBI) declined 0.88% to Rs 1517, with the stock paring losses after hitting a 52-week low of Rs 1488.80 in intraday trade today, 20 August 2013.
ICICI Bank rose 0.67% to Rs 820.55. The stock reversed direction after hitting a 52-week low of Rs 790 in intraday trade today, 20 August 2013.
Videocon Industries rose 0.26%. MIRC Electronics was locked at 5% upper circuit at Rs 5.09. The government on Monday, 19 August 2013, banned duty-free import of flat screen television by air travellers in its latest effort to narrow the country's current-account deficit. The government on Monday, 19 August 2013, decided to disallow the import of flat panel (LCD/LED/Plasma) televisions as part of free baggage allowance with effect from 26 August 2013.
Currently, air travellers can bring a flat screen television for personal use without paying any duty.
In effect, come 26 August 2013, travellers bringing in LCD/LED/Plasma TV as part of baggage will have to pay customs duty at 35% plus an education cess of 3% to take the total import duty to 36.05%.
McNally Bharat Engineering Company jumped 5.4% to Rs 45.80 after the company said it has received an order worth Rs 973 crore for supply of equipment, civil work, structural work, erection and commissioning of balance of plant package for a thermal power project.
Asian stocks retreated on Tuesday, 20 August 2013, following a fourth straight day of losses on the Wall Street on Monday, 19 August 2013. Key benchmark indices in China, Indonesia, Singapore, Hong Kong, Japan, South Korea and Taiwan were down by 0.38% to 4.28%.
Trading in US index futures indicated that the Dow could fall 16 points at the opening bell on Tuesday, 20 August 2013. US stocks edged lower on Monday after the yield on the 10-year Treasury bond hit fresh two-year highs, raising worries about what impact higher rates will have on the US economic recovery.
The Federal Open Market Committee (FOMC) will tomorrow, 21 August 2013, 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.
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