Weaness continued on the bourses in morning trade. The barometer index, the S&P BSE Sensex, was down 204.61 points or 1.03%, off 177.07 points from the day's high and up 18.35 points from the day's low. Investor sentiment was hit adversely as Asian stocks fell as lawmakers in Washington remain deadlocked over extending the nation's debt limit to avoid default.
Index heavyweight and cigarette major ITC extended initial fall. Bank stocks declined across the board. Private sector bank Axis Bank fell after two bulk deals. Cement stocks declined after the Railways announced an increase in freight rates by 1.7%. Steel shares shrugged off freight rate hike. The market breadth, indicating the overall health of the market, was positive.
Key benchmark indices edged lower in early trade on weak Asian stocks. Weakness continued on the bourses in morning trade.
In the foreign exchange market, the rupee dropped against the dollar. The partially convertible rupee was hovering at 61.82, weaker than its close of 61.43/44 on Friday, 4 October 2013.
Foreign institutional investors (FIIs) bought shares worth a net Rs 541.36 crore on Friday, 4 October 2013, as per provisional data from the stock exchanges.
At 10:15 IST, the S&P BSE Sensex was down 204.61 points or 1.03% to 19,711.34. The index lost 222.96 points at the day's low of 19,692.99 in morning trade, its lowest level since 3 October 2013. The index fell 27.54 points at the day's high of 19,888.41 in early trade.
The CNX Nifty was down 62.50 points or 1.06% to 5,844.80. The index hit a low of 5,835.10 in intraday trade, its lowest level since 3 October 2013. The index hit a high of 5,895.25 in intraday trade
The market breadth, indicating the overall health of the market, was positive. On BSE, 785 shares gained and 736 shares fell. A total of 78 shares were unchanged.
The total turnover on BSE amounted to Rs 489 crore by 10:20 IST compared to Rs 316 crore by 09:30 IST.
Among the 30-share Sensex pack, 17 stocks declined and rest of them gained.
Index heavyweight and cigarette major ITC lost 2.09% to Rs 333.15. The stock hit high of Rs 341.95 and low of Rs 332.20 so far during the day.
Bank stocks edged lower. Among private bank stocks, HDFC Bank (down 2.51%), Kotak Mahindra Bank (down 1.64%), Yes Bank (down 1.65%), and ICICI Bank (down 3.33%) declined.
Axis Bank lost 2.86% to Rs 1,062.60. A bulk deal of 9.75 lakh shares was executed in the counter at Rs 1,051.60 per share in early trade. Another bulk deal of 4.19 lakh shares was executed in the counter at Rs 1,050.05 per share in early trade.
Among PSU bank stocks, State Bank of India (SBI) (down 1.26%), Punjab National Bank (down 0.91%), Bank of Baroda (down 1.78%), Bank of India (down 0.37%) and Union Bank of India (down 1.92%) dropped.
The Reserve Bank of India (RBI) governor, Raghuram Rajan, on Friday, 4 October 2013, said that the government is in talks with the bank to decide the contours of a package for retail investors for the festive season, which would be announced soon. Rajan was speaking in Raipur after the RBI's board meeting. Indian banks will offer cheaper loans to stimulate demand for two-wheelers and other consumer durables as Finance Minister P. Chidambaram tries to pull the economy out of the worst slowdown in a decade ahead of national elections due by next May.
Cement stocks declined after the Railways announced an increase in freight rates by 1.7%. ACC (down 1.47%), Ambuja Cement (down 0.26%) and UltraTech Cement (down 1.65%) fell.
The Railways on Friday, 4 October 2013 announced an increase in freight rates by 1.7% on all commodities effective from the midnight of 9 October 2013. Railway is the preferred mode of transport for bulk commodities. The revision came in the form of fuel adjustment component (FAC) which was announced in the Railway Budget 2013-14 to adjust the fluctuating prices of fuel.
Steel shares shrugged off freight rate hike. Tata Steel (up 1.3%), Sail (up 0.45%), Jindal Steel & Power (up 1.1%) edged higher.
JSW Steel rose 0.83%, with the stock reversing initial losses. JSW Steel on Saturday, 5 October 2013, said it has executed a business transfer agreement with Heidelberg Cement India for acquisition of its cement grinding facility at Raigad, Maharashtra, as a going concern on slump sale basis.
Reliance Infrastructure (RInfra) fell 2%. The company has announced that a meeting of the board of directors of the company will be held on Wednesday, 9 October 2013, to consider raising long term resources through borrowings in the domestic/international market for the purpose of refinancing of rupee debt, capital expenditure etc. RInfra also announced that Brickwork Ratings India has assigned AA rating for the proposed Non-convertible Debenture issue of Rs 300 crore of the company. Meanwhile, CRISIL has revised credit rating on the company's long term debts to A+.
At its board meeting on Saturday, 5 October 2013, market regulator Securities & Exchange Board of India (Sebi) approved the draft Sebi (Foreign Portfolio Investors) Regulations, 2013. The Sebi (Foreign Portfolio Investors) Regulations, 2013 have been framed keeping in view the provisions of Sebi (Foreign Institutional Investors) Regulations, 1995, qualified foreign investors (QFIs) framework and the recommendations of the "Committee on Rationalization of Investment Routes and Monitoring of Foreign Portfolio Investments".
Sebi said that existing FIIs, sub accounts and qualified foreign investors (QFIs) shall be merged into a new investor class termed as Foreign Portfolio Investors (FPIs). Sebi approved designated depository participants (DDPs) shall register FPIs on behalf of Sebi subject to compliance with KYC requirements. The Sebi board also took note of the fact that instructions regarding risk-based KYC for FPIs have already been issued by Sebi on 12 September 2013.
Sebi said that FPIs shall be required to seek registration in any one of the categories viz. Category I Foreign Portfolio Investor -- which shall include Government and Government related foreign investors etc; Category II Foreign Portfolio Investor -0 which shall include appropriately regulated broad based funds, appropriately regulated entities, broad based funds whose investment manager is appropriately regulated, university funds, university related endowments, pension funds etc; and Category III Foreign Portfolio Investor -- which shall include all others not eligible under Category I and II foreign portfolio investors.
Sebi said that all existing FIIs and sub accounts may continue to buy, sell or otherwise deal in securities under the FPI regime. Further, all existing Qualified Foreign Investors (QFIs) may continue to buy, sell or otherwise deal in securities till the period of one year from the date of notification of this regulation. In the meantime, they may obtain FPI registration through DDPs. The registration granted to FPIs by the DDPs on behalf of Sebi shall be permanent unless suspended or cancelled by Sebi. FPIs shall be allowed to invest in all those securities, wherein Foreign Institutional Investors (FIIs) are allowed to invest.
The market regulator said Category I and Category II FPIs shall be allowed to issue, or otherwise deal in offshore derivative instruments (ODIs), directly or indirectly. However, the FPI needs to be satisfied that such ODIs are issued only to persons who are regulated by an appropriate foreign regulatory authority after ensuring compliance with know your client norms.
RBI governor Raghuram Rajan on Friday, 4 October 2013, said that there is no reason to dispute the government's estimate of 5-5.5 percent economic growth for the current fiscal year. A pick-up in exports and strong agriculture growth would help the government meet its growth estimate, said Rajan while speaking at Raipur after the Reserve Bank of India's board meeting. He also said the RBI had so far received $5.6 billion through the two swap windows the bank announced last month to attract foreign flows.
The Election Commission on Friday, 4 October 2013, announced the schedule for assembly elections in five states. While Chhattisgarh will have a two-phase polling on 11 November and 19 November 2013, the remaining states will have a single-phase poll. Delhi and Mizoram will go to polls on 4 December 2013, Madhya Pradesh on 25 November 2013 and Rajasthan on 1 December 2013. Counting of all assembly elections in all five states will be held on 8 December 2013.
Asian markets edged lower on Monday, 7 October 2013, as lawmakers in Washington remain deadlocked over extending the nation's debt limit to avoid default. Key benchmark indices in Taiwan, Hong Kong, Indonesia, Japan and South Korea fell by 0.11% to 1.18%. Singapore's Straits Times index rose 0.02%. Mainland Chinese markets, which have been closed since Oct. 1 for the National Day holidays, resume trading tomorrow, 8 October 2013.
Trading in US index futures indicated that the Dow could fall 78 points at the opening bell on Monday, 7 October 2013. Republican House Speaker John Boehner vowed on Sunday not to raise the US debt ceiling without a "serious conversation" about what is driving the debt, while Democrats said it was irresponsible and reckless to raise the possibility of a US default. Republicans and Democrats also traded blame for a shutdown that has brought much of the government to a standstill for nearly a week. Republicans are seeking concessions in exchange for raising the nation's $16.7 trillion debt limit. If the borrowing cap is not increased, the United States could go into default.
The Federal Open Market Committee (FOMC) holds a two-day policy meeting on 29-30 October 2013. The lack of data may make it harder for the Federal Reserve to assess the economy's strength as policy makers mull the timing of reductions in bond buying. Government data from payrolls to retail sales will be delayed as long as the shutdown continues. 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.
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