Volatility ruled the roost as key benchmark indices trimmed losses in late trade after sliding to fresh intraday low. The barometer index, the S&P BSE Sensex, was provisionally down 206.60 points or 1.1%, up 100.48 points from the day's low and off 146.42 points from the day's high. All 13 sectoral indices on BSE were in red. The market sentiment hit adversely on data showing that foreign institutional investors (FIIs) remained net sellers of Indian stocks on Friday, 21 June 2013. Weakness in global stocks also weighed on sentiment on the domestic bourses.
Index heavyweight Reliance Industries (RIL) edged higher in choppy trade. Another index heavyweight and cigarette maker ITC edged lower. Realty stocks tumbled, with shares of realty major DLF hitting 52-week low. Capital goods pivotals dropped, with shares of Bhel hitting a 52-week low.
Metal stocks fell as a recent spike in Shanghai interbank interest rates fueled worries about the world's second-largest economy. Sterlite Industries (India) hit 52-week low. Jindal Steel & Power (JSPL) reversed direction after hitting a 52-week low in intraday trade. M&M Financial Services dropped in volatile trade after the company said its board of directors has decided not to proceed with the application for a banking licence with Reserve Bank of India.
The market was volatile. Key benchmark indices edged lower in early trade on weak Asian stocks. Key benchmark indices dropped to fresh intraday low in morning trade. The Sensex and Nifty, both, hit their lowest level in almost 10 weeks. Fresh selling derailed a brief recovery in mid-morning trade. A setback in mainland Chinese stocks hit investor sentiment as key benchmark indices hovered in red in afternoon trade. The Sensex continued to hover in negative terrain in afternoon trade. Key benchmark indices dropped to fresh intraday low in mid-afternoon trade. The market trimmed losses in late trade.
The market may remain volatile this week as traders roll over positions in the futures & options (F&O) segment from the near month June 2013 series to July 2013 series. The June 2013 F&O contracts expire on Thursday, 27 June 2013.
The market sentiment was hit adversely after data showed that foreign funds remained net sellers of Indian stocks on Friday, 21 June 2013. Foreign institutional investors (FIIs) sold shares worth a net Rs 1768.60 crore on Friday, 21 June 2013, as per provisional data from the stock exchanges.
As per provisional closing, the S&P BSE Sensex was down 206.60 points or 1.1% to 18,567.64. The index declined 307.08 points at the day's low of 18,467.16 in late trade, its lowest level since 16 April 2013. The index fell 60.18 points at the day's high of 18,714.06 in opening trade.
The CNX Nifty was down 68.35 points or 1.21% to 5,599.30. The index hit a low of 5,566.25 in intraday trade, its lowest level since 16 April 2013. The index hit a high of 5,640 in intraday trade.
The market breadth, indicating the overall health of the market, was weak. On BSE, 1,673 shares declined and 681 shares rose. A total of 119 shares were unchanged.
The total turnover on BSE amounted to Rs 1643 crore, lower than Rs 2268.82 crore on Friday, 21 June 2013.
Among the 30-share Sensex pack, 22 declined and rest of them gained. Bharti Airtel (down 3.09%), Hero MotoCorp (down 2.88%) and ONGC (down 2.69%) edged lower from the Sensex pack. Hindalco Industries (up 0.43%), HDFC (up 0.62%) and ICICI Bank (up 0.69%) edged higher.
Reliance Industries (RIL) rose 0.32% to Rs 796.45. The stock was volatile. The scrip hit high of Rs 797 and low of Rs 779.20. The Cabinet Committee on Economic Affairs (CCEA) on Friday, 21 June 2013, deferred a decision on a proposal to hike natural gas prices by a steep 60% as Oil Minister M Veerappa Moily was away on an official tour. The CCEA is likely to consider the proposal this week. The oil ministry has proposed an increase in gas prices to $6.775 million British thermal unit (mbtu) from current $4.2 mbtu. The Oil Ministry has proposed raising gas price for state-run firms immediately and that for Reliance Industries (RIL) from April 2014 when it is contractually due.
Index heavyweight and cigarette major ITC lost 2.49% to Rs 314.80. The stock was volatile. The stock hit a high of Rs 325.45 and low of Rs 311.50.
Capital goods pivotals dropped. India's largest power equipment maker by capacity Bhel fell 2.96% to Rs 165.60 after hitting a 52-week low of Rs 164.50 in intraday trade today, 24 June 2013.
India's largest engineering and construction firm L&T declined 2.43%.
Sterlite Industries (India) lost 3.85% to Rs 77.50 after sliding to a 52-week low of Rs 76.60 in intraday trade today, 24 June 2013.
Jindal Steel & Power (JSPL) rose 1.64% to Rs 207.60. The stock was volatile. The stock hit a 52-week low of Rs 194 in intraday trade today, 24 June 2013. The stock hit a high of Rs 209.70.
Early this month, the Central Bureau of Investigation filed an FIR in the Coalgate case in which JSPL Chairman Naveen Jindal and JSPL, as well as a former minister of state for coal Dasari Narayan Rao have been named. The CBI has alleged that Rao was paid kickbacks for favouring coal block allocation to the Jindal firm.
Realty stocks edged lower. HDIL (down 4.65%), Sobha Developers (down 7.58%), Unitech (down 3.16%), Godrej Properties (down 3.71%) and Parsvnath Developers (down 4.96%), tumbled.
DLF lost 6.23% to Rs 164.10 after sliding to a 52-week low of Rs 168 in intraday trade today, 24 June 2013.
Fresenius Kabi Oncology jumped 10.78% to Rs 121.75 after the Securities Appellate Tribunal (SAT) today, 24 June 2013, directed the market regulator Securities and Exchange Board of India (Sebi) to give a personal hearing to Fresenius Kabi Oncology with regard its delisting offer and pass a 'rational and reasonable' order within four weeks. SAT has asked Fresenius to file a reply with Sebi detailing all the facts and circumstances of the delisting offer. On June 4, Sebi had passed an order against more than 100 companies, including Fresenius, for not meeting minimum public shareholding norms (MPS). As the order barred promoters of these companies from dealing in the company's shares, it had potentially rendered the MNC pharma company's delisting bid untenable.
Fresenius Kabi Oncology filed an appeal against the Sebi order related to non-compliance of minimum 25% public shareholding norms and had sought approval for its delisting plans. Sebi had earlier refused permission to the company for its delisting plans, saying that it had benefited from a specially designed offer-for-sale (OFS) route for expanding the public float of shares.
The company's foreign promoter Fresenius Kabi (Singapore) Pte currently holds 81% stake in the company. While the foreign promoter had earlier sold 9% promoter stake through an OFS, it later proposed to delist its shares from the stock exchanges rather than selling a further 6% to meet the minimum public shareholding requirement. Fresenius Kabi (Singapore) Pte had said in April 2013 that it intends to pay an indicative price of up to Rs 130 per share to acquire the shares offered to it in the delisting offer.
M&M Financial Services lost 8.5% to Rs 235.30 after the company said its board of directors has decided not to proceed with the application for a banking licence with Reserve Bank of India. The stock was volatile. The stock lost as much as 15.9% at the day's low of Rs 216.25. Mahindra & Mahindra Financial Services said its board took the decision not to apply for a banking license after reviewing the implications of the present guidelines issued by the Reserve Bank of India (RBI) for such an application, alongwith the clarifications issued by RBI on 3 June 1013.
The RBI guidelines provide for the conversion of non-banking financial companies (NBFCs) into a bank, but do not provide any flexibility for a NBFC and a bank to co-exist for a reasonable period of time, M&M Financial Services said. The regulations provide that CRR and SLR will be applicable from inception, even though building of CASA will take some time for a newly converted bank. This anomaly will impose an undue penalty on large, successful NBFCs with a pan-India network, that wish to convert into a bank, as compared to smaller NBFCs with a limited network.
Meanwhile, in the currency market, the rupee came under renewed pressure against the dollar. The rupee was hovering at 59.80, lower than Friday's close of 59.27/28. The rupee had hit a record low of 59.9850 in intraday deals on Thursday, 20 June 2013, as global investors pulled out of emerging markets broadly amid concerns over the reduction of a US program that has injected billions of dollars into the global financial system.
European markets declined as investors remained concerned about China's liquidity condition and the potential cutback in monetary stimulus by the US Federal Reserve later in 2013. Key benchmark indices in France, Germany and UK shed by 0.6% to 1.25%.
Business confidence rose in Germany in June, with the Ifo business-climate index climbing to 105.9 compared with a reading of 105.7 in May, according to media reports.
Asian stocks dropped on Monday, 24 June 2013, on mounting concerns that the US Federal Reserve may start scaling back its huge monthly bond-buying plan which was aimed at keeping bond yields down and provide support to its faltering economy. Key benchmark indices in Japan, Singapore, Taiwan, Indonesia and South Korea were off 0.45% to 1.9%.
Chinese stocks tumbled as a recent spike in Shanghai interbank interest rates fueled worries about the world's second-largest economy. In mainland China, the Shanghai Composite lost 5.3% and Hong Kong's Hang Seng lost 2.22%. Short-term interbank interest rates in Shanghai, which hit record highs on Thursday, 20 June 2013, extended their drop from levels seen on Friday, 21 June 2013, but remained above the 6%-level on Monday, 24 June 2013. This fed worries that the People's Bank of China, China's central bank, may keep those rates at a high level.
The China's central bank warned Monday that the nation's banks need to strengthen their liquidity management and control liquidity risks. The statement was the first by the central bank that appeared to be aimed at banks caught in a recent liquidity crunch which sent short-term rates on the interbank market soaring, with the overnight lending rate hitting an intraday high of 30% late last week. The People's Bank of China said liquidity in the banking system is at a reasonable level. It also said banks need to maintain "stable and appropriate" credit growth and adhere to its prudent monetary policy.
Trading in US index futures indicated that the Dow could fall 91 points at the opening bell on Monday, 24 June 2013.
Federal Reserve Chairman Ben Bernanke said last week the central bank may start dialing down its stimulus effort if the economy achieves sustainable growth.
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