Weakness persisted on the domestic bourses in mid-morning trade as stocks fell across Asia 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 BSE Sensex, was down 376.12 points or 1.95%, off close to 200 points from the day's high and up about 50 points from the day's low. The market breadth, indicating the overall health of the market, was extremely weak. All the 13 sectoral indices on BSE were in the red.
Metal stocks extended intraday losses after a survey showed further slowdown in China's manufacturing sector in June 2013. Capital goods stocks edged lower on worries the ongoing slowdown in the economy could restrict new orders. Realty stocks declined, with realty major DLF hitting 52-week low. Sun Pharmaceutical Industries reversed intraday losses. Shares of state-run gas transmission and distribution major GAIL (India) hit 52-week low. TCS reversed intraday losses.
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.
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.
The rupee today, 20 June 2013, hit record low against the dollar. The rupee was currently trading at 59.63, 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.
At 11:20 IST, the S&P BSE Sensex was down 376.12 points or 1.95% to 18,869.58. The index tumbled 423.05 points at the day's low of 18,822.65 in early 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 123.05 points or 2.11% to 5,699.20. The index hit a low of 5,686.60 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 extremely weak. On BSE, 1,362 shares fell and 444 shares rose. A total of 110 shares were unchanged.
Among the 30-share Sensex pack, 27 stocks fell and only three of them rose. ICICI Bank (down 3.89%), Bharti Airtel (down 3.32%) and HDFC Bank (down 2.94%), edged lower.
Sun Pharmaceutical Industries rose 1.36%, with the stock reversing intraday losses.
TCS rose 0.16%, with the stock reversing intraday losses.
Capital goods stocks edged lower on worries the ongoing slowdown in the economy could restrict new orders. L&T (down 2.44%), Bhel (down 1.44%) and Siemens (down 0.54%), edged lower.
Realty stocks declined. Unitech (down 4.04%), HDIL (down 4.03%) and D B Realty (down 2.36%), edged lower.
DLF fell 5.34% to Rs 178.95. The stock hit 52-week low of Rs 177.35 in intraday trade today, 20 June 2013.
Metal stocks extended intraday losses after a survey showed further slowdown in China's manufacturing sector in June 2013. Sterlite Industries (down 3.7%), Hindalco Industries (down 5.09%), Tata Steel (down 5.08%) and Jindal Steel & Power (down 6.39%), edged lower. China is the world's largest consumer of copper and aluminum.
GAIL (India) was off 1.77% at Rs 291.30. The stock hit 52-week low of Rs 290.80 in intraday trade today, 20 June 2013.
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 1.39% to 2.94%.
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 63 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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