Key benchmark indices edged lower in choppy trade as better-than-anticipated US economic data raised expectations that the Federal Reserve will slow the pace of monetary stimulus to the US economy. The S&P BSE Sensex and the 50-unit CNX Nifty, both, hit their lowest level in more than five weeks. The Sensex was provisionally down 153.75 points or 0.8%, off close to 290 points from the day's high and up about 85 points from the day's low. The market breadth, indicating the overall health of the market, was weak. Indian stocks fell for the eighth straight session today, 2 August 2013.
Bhel hit 52-week low. Interest rate sensitive realty stocks extended recent losses as the Reserve Bank of India (RBI) kept its key lending rate viz. the repo rate and cash reserve ratio unchanged after a monetary policy review on 30 July 2013, as the central bank focused on managing the currency volatility rather than pushing for growth. DLF hit 52-week low. Power Grid Corporation of India slumped on equity dilution concerns after the company's board of directors on 1 August 2013 approved a Follow on Public Offer (FPO) of 15% of existing paid up share capital. Metal and mining stocks declined. Coal India dropped after announcing monthly production and offtake data for July 2013.
A bout of initial volatility was witnessed as key benchmark indices trimmed gains after a firm start triggered by the government's decision on Thursday, 1 August 2013, to relax foreign direct investment (FDI) rules in a number of sectors. Intraday volatility continued as the barometer index, the S&P BSE Sensex, regained positive zone after slipping into the red in morning trade. The Sensex once again moved into positive terrain after hitting fresh intraday low in mid-morning trade. The market skidded to hit fresh intraday low in early afternoon trade. Key benchmark indices extended losses to hit fresh intraday low in afternoon trade. The market extended intraday losses to hit fresh intraday low in mid-afternoon trade. A bout of volatility was witnessed in late trade as the Sensex trimmed losses after hitting fresh intraday low in late trade.
The rupee which has been highly volatile off late, weakened today, 2 August 2013. The rupee was hovering at 60.98 against the dollar, weaker than its close of 60.43/44 on Thursday, 1 August 2013.
Bond prices fell sharply. The yield on the benchmark government paper 7.16 GS 2023 was hovering at 8.2511%, higher than Thursday's close of 8.0653%. Bond yield and bond prices are inversely related.
As per provisional figures, the S&P BSE Sensex was down 153.75 points or 0.8% to 19,163.44. The index fell 238.47 points at the day's low of 19,078.72 in late trade, its lowest level since 27 June 2013. The index jumped 134.51 points at the day's high of 19,451.70 in early trade.
The CNX Nifty was down 49.40 points or 0.86% to 5,678.45, as per provisional figures. The index hit a low of 5,649 in intraday trade, its lowest level since 27 June 2013. The index hit a high of 5,761.85 in intraday trade.
The total turnover on BSE amounted to Rs 1808 crore, lower than Rs 2244.66 crore on Thursday, 1 August 2013.
The market breadth, indicating the overall health of the market, was weak. On BSE, 1,477 shares fell and 785 shares rose. A total of 145 shares were unchanged.
Among the 30-share Sensex pack, 23 stocks fell and rest of them rose. Tata Power Company (down 4.67%), ICICI Bank (down 2.85%) and Dr Reddy's Laboratories (down 2.69%), edged lower.
Bhel declined 0.93% to Rs 149.25 after hitting a 52-week low of Rs 147.95 in intraday trade today, 2 August 2013.
Coal India dropped 5.73%. The company announced during market hours today, 2 August 2013, that the company and its subsidiaries achieved 98% of targeted production at 32.77 million tonnes in July 2013. The company achieved 106% of targeted offtake at 38.22 million tonnes in July 2013.
Metal and mining stocks declined. Steel giant Tata Steel skidded 3.9% to Rs 201.95. The stock hit a 52-week low of Rs 201.30 in intraday trade today, 2 August 2013.
Hindalco Industries fell 0.06% to Rs 87.40. The stock had hit a 52-week low of Rs 84.50 in intraday trade on 31 July 2013.
Sterlite Industries (India) lost 4.32% to Rs 71. The stock had hit a 52-week low of Rs 70.50 in intraday trade on 31 July 2013.
Jindal Steel & Power slumped 7.94% to Rs 185.60 after hitting a 52-week low of Rs 181.55 in intraday trade today, 2 August 2013. It was the top loser from the Sensex pack.
JSW Steel (down 4.5%), Sail (down 5.44%), Sesa Goa (down 3.62%) and NMDC (down 2.03%) edged lower.
Power Grid Corporation of India slumped 11.70% to Rs 90.90 on equity dilution concerns. The stock hit 52-week low of Rs 86.70 in intraday trade today, 2 August 2013. The company on Thursday, 1 August 2013, said its board of directors has approved the Follow on Public Offer (FPO) of 15% of existing paid up share capital comprising fresh issue of 69.44 crore shares, for augmenting resources of company to fund its investment programme, subject to necessary approval of Government of India.
The company's net profit rose 19.56% to Rs 1040.34 crore on 21.03% rise in total income to Rs 3634.03 crore in Q1 June 2013 over Q1 June 2012. The company announced Q1 result after market hours on Thursday, 1 August 2013.
Interest rate sensitive realty stocks extended recent losses as the Reserve Bank of India (RBI) kept its key lending rate viz. the repo rate and cash reserve ratio unchanged after a monetary policy review on 30 July 2013, as the central bank focused on managing the currency volatility rather than pushing for growth. Purchases of both residential and commercial property are largely driven by finance. HDIL (down 1.61%), Unitech (down 3.77%) and D B Realty (down 2.14%), edged lower.
Realty major DLF tumbled 7.18% to Rs 127.95 after hitting a 52-week low of Rs 125.60 in intraday trade today, 2 August 2013.
The Reserve Bank of India on Thursday, 1 August 2013, said that foreign institutional investors who have issued a participatory note, can hedge their forex risk in these securities provided they have a mandate from the participatory note holder.
The Union Cabinet on Thursday, 1 August 2013, approved proposals to relax foreign-investment rules in a number of sectors including telecommunications, multibrand retail and defense.
European stock markets moved in a narrow range on Friday, 2 August 2013, as investors remained cautious ahead of the much awaited nonfarm-payrolls report from the US. Key benchmark indices in Germany and France were up 0.15% to 0.27%. UK's FTSE 100 fell 0.08%.
The European Central Bank on Thursday, 1 August 2013, kept its key financing rate at a record low, and ECB President Mario Draghi said interest rates would remain at or below present levels for an extended period of time. The Bank of England also on Thursday also left its benchmark interest rate and bond-buying program unchanged.
Asian stocks rose on Friday, 2 August 2013, as global manufacturing reports beat forecasts and central banks in Europe vowed to maintain stimulus. Key benchmark indices in Hong Kong, China, Japan, Indonesia, Singapore, Taiwan and South Korea rose by 0.02% to 3.29%.
China's non-manufacturing purchasing managers' index is scheduled to be released tomorrow, 3 August 2013 after the manufacturing gauge unexpectedly strengthened in July, data yesterday showed.
Indonesia's economy grew less than 6% last quarter, adding to risks for the Southeast Asian nation as investments ease, inflation accelerates and the currency slumps. Gross domestic product increased 5.81% in the three months ended June 30 from a year earlier, the Central Bureau of Statistics said in Jakarta today.
Trading in US index futures indicated that the Dow could gain 11 points at the opening bell on Friday, 2 August 2013. US stocks kicked off the month by rallying Thursday, 1 August 2013, to all-time highs in the wake of upbeat economic signals from around the globe. Factory output from the US to China and Europe expanded in July, reports on Thursday showed, while American jobless claims fell to a five-year low. The Institute for Supply Management's US factory index increased to 55.4 in July 2013, the strongest since June 2011, from 50.9 in June 2013. Readings above 50 indicate expansion.
The influential US non-farm payroll data for July 2013 is due later in the global day today, 2 August 2013. The job data is a key piece of data which the Federal Reserve monitors in its assessment of its monetary-stimulus program. The Fed currently buys $85 billion a month in government and mortgage bonds in an effort to keep interest rates low and stimulate economic growth.
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