Key benchmark indices weakened once again after trimming intraday losses in mid-morning trade. The market sentiment was hit adversely by hawkish comments from the Reserve Bank of India governor Raghuram Rajan on Thursday, 26 September 2013, that inflation continued to remain high. The barometer index, the S&P BSE Sensex, was down 69.04 points or 0.35%, off about 160 points from the day's high and up close to 30 points from the day's low. The market breadth, indicating the overall health of the market, was strong.
Bank stocks declined after Reserve Bank of India (RBI) governor Raghuram Rajan said on Thursday, 26 September 2013, that the RBI is still worried about high inflation, even when taking out volatile food prices. Kingfisher Airlines extended recent sharp surge triggered by the company's Chairman Vijay Mallya's comment that the company is in talks with a foreign investor for a potential stake sale.
The market edged higher in early trade on firm Asian stocks. The market reversed initial gains and hit fresh intraday low in morning trade. Key benchmark indices weakened once again after trimming intraday losses in mid-morning trade.
Foreign institutional investors (FIIs) bought shares worth a net Rs 172.15 crore on Thursday, 26 September 2013, as per provisional data from the stock exchanges.
In the foreign exchange market, the rupee strengthened past 62 against the dollar on general risk-on sentiment in global markets. The partially convertible rupee was hovering at 61.82, compared with its close of 62.07 on Thursday, 26 September 2013.
At 11:20 IST, the S&P BSE Sensex was down 69.04 points or 0.35% to 19,824.81. The index declined 97.46 points at the day's low of 19,796.39 in morning trade, its lowest level since 25 September 2013. The index rose 87.72 points at the day's high of 19,981.57 in early trade.
The CNX Nifty was down 15.80 points or 0.27% to 5,866.45. The index hit a low of 5,854.95 in intraday trade, its lowest level since 25 September 2013. The index hit a high of 5,909.20 in intraday trade.
The market breadth, indicating the overall health of the market, was strong. On BSE, 1,107 shares rose and 729 shares dropped. A total of 131 shares were unchanged.
Among the 30-share Sensex pack, 17 stocks fell and rest of them rose. Bharti Airtel (down 2.05%), Bhel (down 2.59%) and HDFC (down 1.34%), declined.
Bank stocks declined after Reserve Bank of India (RBI) governor Raghuram Rajan said on Thursday, 26 September 2013, that the RBI is still worried about high inflation, even when taking out volatile food prices. Among private bank stocks, HDFC Bank (down 1.85%), Axis Bank (down 0.94%), Yes Bank (down 0.59%) and ICICI Bank (down 2.18%), declined.
State Bank of India (SBI) fell 1.02%. Ratings agency Moody's early this week downgraded its outlook on the bank's financial strength rating to 'negative' from 'stable'. Moody's also downgraded SBI's unsecured debt rating on par with the sovereign foreign currency bond rating. SBI's standalone credit profile continues to face negative pressures, and it will have to compete with other public sector lenders for capital injection from the government, Moody's said. SBI's impaired loan ratio of 8.6% at end-June is below the 11.5% average for Indian public sector banks rated by Moody's.
SBI on 18 September 2013 said it has raised the base rate by 10 basis points (bps) to 9.8% per annum (pa) from 9.7% and the benchmark prime lending rate by 10 bps to 14.55% from 14.45% with effect from 19 September 2013. The bank also raised interest rates for retail term deposits.
Among other PSU bank stocks, Bank of India, Union Bank of India, and Bank of Baroda declined 0.77% to 1.06%. Punjab National Bank and Canara Bank rose 0.22% to 0.52%.
Kingfisher Airlines was locked at 5% upper circuit at Rs 6.52 on BSE, with the stock extending recent sharp surge. The company's Chairman Vijay Mallya said on Tuesday, 24 September 2013, that the company is in talks with a foreign investor for a potential stake sale. Kingfisher Airlines has been grounded since October 2012 for want of cash. Its flying licence was suspended in December 2012.
Texmaco Infrastructure & Holdings jumped 5.19% to Rs 23.30. A block deal of 50 lakh shares was executed in the counter on BSE at Rs 22.15 per share at 9:16 IST.
Wanbury was locked at 20% upper circuit at Rs 22.65 on BSE, after the company's two manufacturing facilities were classified as acceptable by the Department of Health & Human Services, Public Health Service, Food and Drug Administration. Wanbury after market hours on Thursday, 26 September 2013, said the company's manufacturing facilities at Patalganga and Tanaku have been classified as acceptable by the Department of Health & Human Services, Public Health Service, Food and Drug Administration, USA (USFDA).
Bond prices dropped after Reserve Bank of India (RBI) governor Raghuram Rajan's hawkish comments on inflation on Thursday, 26 September 2013. The yield on the benchmark federal paper 7.16% GS 2023 was hovering at 8.7722%, higher than its close of 8.7178% on Thursday, 26 September 2013. Bond prices and bond yields are inversely related. The RBI has a neutral stance on interest rates for now, but it is still worried about high inflation, even when taking out volatile food prices, Rajan said on Thursday, 26 September 2013. He said that inflation is not due just to higher food prices. "Unfortunately there is still some inflation when you strip out the effects of food and energy. Therefore it is not just food, it's other factors also which are driving inflation," Rajan told reporters on the sidelines of a conference. "CPI core (inflation) is about 8.2 percent, that is certainly high, but I think we are looking at all aspects of inflation at this point," Rajan said.
Turning to cross-border capital flows, Rajan said that especially emerging markets were often the losers as flows turned around very quickly. "We need to solve this problem (of capital flows) and we need to take a more practical view of this," Rajan said, without going into details.
Asian stocks rose on Friday, 27 September 2013, after US jobless claims unexpectedly fell and Japan's inflation accelerated to the fastest pace since 2008. Key benchmark indices in China, Hong Kong, Taiwan, Indonesia, Singapore and South Korea rose 0.14% to 0.7%. Japan's Nikkei Average fell 0.49%.
Japan's inflation accelerated to the fastest pace since 2008 in August on higher energy costs, underscoring pressure on Prime Minister Shinzo Abe to drive wage increases as he seeks to end 15 years of deflation. Consumer prices excluding fresh food increased 0.8% from a year earlier, the statistics bureau said today in Tokyo.
Trading in US index futures indicated that the Dow could gain 13 points at the opening bell on Friday, 27 September 2013. US stocks rose on Thursday, halting the longest slump this year for the Standard & Poor's 500 Index, as an unexpected drop in jobless claims overshadowed concern that a budget impasse could hurt economic growth.
A Labor Department report showed the number of Americans filing applications for unemployment benefits unexpectedly fell last week, indicating further progress in the labor market. First-time claims for unemployment benefits in the US dropped by 5,000 to 305,000 last week. The economy expanded at faster pace in the second quarter from the previous three months, with gross domestic product rising at a 2.5% annualized rate, the Commerce Department said. A separate report added to signs that rising mortgage rates may have slowed housing market momentum. Fewer Americans signed contracts in August to buy previously owned homes, figures from the National Association of Realtors showed.
Investors are closely watching debt-ceiling negotiations in Washington. House Speaker John Boehner said on Thursday that his party will push for a bill that will tie increasing the debt ceiling and continue funding the government past Oct. 1 to more cuts in federal spending. Senate Majority Leader Harry Reid, D-Nev., said his chamber plans to have a stopgap budget bill finished by Sunday.
The Senate on Wednesday moved toward advancing a bill that would keep the government open after Monday without wiping out funding from the health-care law. Also Wednesday, Treasury Secretary Jacob Lew told Congress the Treasury will only have $30 billion in cash by Oct. 17, putting the nation on the brink of default.
The Federal Open Market Committee (FOMC) holds a two-day policy meeting on 29-30 October 2013. On 18 September 2013, the Fed surprised economists and investors with its decision to delay scaling back its stimulus amid concerns about the strength of the economic recovery.
Jeffrey Lacker, president of the Federal Reserve Bank of Richmond, said on Thursday that the US central bank will face risks as it pursues its exit strategy from recent unconventional policies. Lacker is a nonvoting member of the Fed's policy-making committee. Participating on a panel in Germany, Fed Gov. Jeremy Stein, a voting member, said the US central bank should develop a methodical approach to tapering by linking reduced asset purchases to the unemployment rate. In Houghton, Mich., Minneapolis Fed President Narayana Kocherlakota, who votes next year, said the central bank should do "whatever it takes" to bolster the labor market.
Powered by Capital Market - Live News
