Key benchmark indices extended recovery to strike intraday high in late trade as index heavyweight and cigarette major ITC extended gains and as another index heavyweight Reliance Industries turned positive. The barometer index, the S&P BSE Sensex, was provisionally down 147.30 points or 0.74%, up 237.60 points from the day's low and off 3.45 points from the day's high. The market breadth, indicating the overall health of the market, was weak.
The market sentiment was hit adversely as bond prices fell after the Reserve Bank of India (RBI) after market hours on Monday, 15 July 2013, announced measures to tighten liquidity in the banking system to prevent a sharp depreciation of the rupee against the dollar. While the rupee surged after the RBI measures, bond prices declined sharply. Investor sentiment was also hit adversely after South Korean steel major Posco scrapped a large steel project in Karnataka.
FMCG stocks gained on defensive buying amid broad market decline. ITC struck record high. Nestle India also scaled record high. Engineering and construction major L&T cut intraday fall. Bank stocks slumped as RBI's latest measures to tighten liquidity in the banking system will make it costlier for banks and financial companies to raise short-term funds. Interest rate sensitive realty stocks also tumbled after the latest RBI measures. Telecom stocks rose on reports that Prime Minister Dr. Manmohan Singh will chair a meeting of senior ministers today, 16 July 2013, to discuss a proposal to increase the limits for foreign direct investment in a number of sectors, including the telecom sector.
Key benchmark indices dropped amid initial volatility as the yields on government bonds rose after the Reserve Bank of India (RBI) after market hours on Monday, 15 July 2013, announced a slew of measures to address exchange rate volatility. The BSE Sensex, fell below the psychological 20,000 mark. The 50-unit CNX Nifty fell below the psychological 6,000 mark. Weakness continued on the bourses in morning trade. Key benchmark indices trimmed intraday losses to strike intraday high in mid-afternoon trade as index heavyweight and cigarette major ITC extended intraday gains and as another index heavyweight reversed intraday losses. Market extended recovery in late trade.
The Reserve Bank of India (RBI) after market hours on Monday, 15 July 2013, announced a slew of measures to address exchange rate volatility. RBI raised the Marginal Standing Facility (MSF) rate and Bank Rate each by 200 bps to 10.25% while capped the amount up to which banks can borrow or lend under its daily liquidity window at Rs 75000 crore. Furthermore, RBI will additionally sell Rs 12000-crore of government bonds on Thursday, 18 July 2013, to mop up liquidity from the system, it said.
The RBI said it will continue to closely monitor the markets, the liquidity situation and the macroeconomic developments and will take such other measures as may be necessary, consistent with the growth-inflation dynamics and macroeconomic stability.
Finance Minister P. Chidambaram today, 16 July 2013, said RBI's steps to curb rupee liquidity are aimed at quelling excessive speculation and volatility in the forex market and should not be read as a prelude to policy rate changes.
While the rupee surged after the RBI measures, bond prices fell. The rupee was hovering at 59.29 versus dollar, against Monday's close of 59.89/90. In the debt market, the yield on the most traded 8.33 GS 2026 was hovering at 8.2407%, sharply higher than its close at 7.6656% on Monday. Bond yield and bond prices are inversely related.
Foreign institutional investors (FIIs) sold shares worth a net Rs 227.26 crore on Monday, 15 July 2013, as per provisional data from the stock exchanges.
As per provisional closing, the S&P BSE Sensex was down 147.30 points or 0.74% to 19,887.18. The index lost 384.90 points at the day's low of 19,649.58 in early trade, its lowest level since 11 July 2013. The index fell 143.85 points at the day's high of 19,890.63 in late trade.
The CNX Nifty was down 67.80 points or 1.12% to 5,963. The index hit a low of 5,910.95 in intraday trade, its lowest level since 11 July 2013. The index hit a high of 5,966.05 in intraday trade.
The market breadth, indicating the overall health of the market, was weak. On BSE, 1,456 shares declined and 907 shares gained. A total of 144 shares were unchanged.
The total turnover on BSE amounted to Rs 1877 crore, higher than Rs 1655 crore on Monday, 15 July 2013.
Among the 30-share Sensex pack, 17 stocks declined and rest of them gained.
FMCG stocks gained on defensive buying amid broad market decline.
Index heavyweight and cigarette major ITC rose 2.68% to Rs 361.50 after striking a record high of Rs 361.70 in intraday trade today, 16 July 2013. The company announces Q1 results on 25 July 2013.
Hindustan Unilever (HUL) rose 1.81% to Rs 624.90. HUL's parent Unilever PLC on 11 July 2013 said that pursuant to the voluntary open offer to increase its stake in HUL, the shareholders of HUL tendered a total of 31.99 crore shares, out of which 31.95 crore shares have been accepted by Unilever PLC on completion of the verification of the shares tendered. Based on the shares tendered which represent 14.78% of HUL, the Unilever Group will increase its stake in HUL from 52.48% to 67.26%.
FMCG firm Nestle India rose 2.79% to Rs 5,720 also its record high.
Colgate-Palmolive (India) (up 0.42%), Dabur India (up 1.4%), Godrej Consumer Products (up 2.28%), Marico (up 1.65%) gained.
Index heavyweight Reliance Industries (RIL) edged higher in choppy trade. The stock was up 0.83% at Rs 903.20. The stock hit high of Rs 904.30 and low of Rs 882.80.
Cipla shed 1.43%. The company during market hours today, 16 July 2013, said it has completed the acquisition of 100% of the issued shares of Cipla Medpro South Africa and the listing of the shares of Medpro on the JSE has been terminated from the commencement of business on 16 July 2013.
Meanwhile, the company after trading hours on Monday, 15 July 2013, said Mr. Subhanu Saxena has been designated as managing director and global chief executive officer with effect from today, 16 July 2013. Mr. Saxena joined Cipla as its chief executive officer on 1 February 2013. Cipla also said that Mr. M. K. Hamied has been designated as executive vice-chairman. Mr. Hamied has been reappointed as a whole time director for a fresh term with effect from today, 16 July 2013.
Engineering and construction major L&T fell 3.27% to Rs 973, with the stock recovering after sliding as much as 4.83% at intraday low of Rs 959.55.
Bank stocks slumped as RBI's latest measures to tighten liquidity in the banking system will make it costlier for banks and financial companies to raise short-term funds. ICICI Bank (down 5.74%), HDFC Bank (down 2.05%) and State Bank of India (down 4.55%) declined.
Telecom stocks rose on reports that Prime Minister Dr. Manmohan Singh will chair a meeting of senior ministers today, 16 July 2013, to discuss a proposal to increase the limits for foreign direct investment in a number of sectors, including the telecom sector.
Idea Cellular gained 2.4% to Rs 157.60 after hitting a 52-week high of Rs 159.15 in intraday trade today, 16 July 2013.
Bharti Airtel (up 1.84%) and Tata Teleservices (Maharashtra) (up 2.31%) gained.
MTNL (down 2.04%) and Reliance Communications (down 0.2%) fell.
Last month, a government-appointed panel headed by Economic Affairs Secretary Arvind Mayaram proposed higher foreign direct investment (FDI) caps to bring in long-term foreign capital and boost economic growth. In its report, the committee recommended removing the limit in telecom, where the cap is 74% currently. Any changes to the current policy on investment will need to be cleared by the Union Cabinet.
Interest rate sensitive realty also tumbled after the latest RBI measures to tighten liquidity in the banking system. DLF (down 7.93%), Indiabulls Real Estate (down 9.87%), HDIL (down 7.23%), Unitech (down 6.57%), Godrej Properties (down 1.42%), Oberoi Realty (down 7.17%) and Parsvnath Developers (down 0.16%) declined.
European stock markets were mostly lower on Tuesday, 16 July 2013, after German investor confidence data missed expectations. Key benchmark indices in France and Germany were down 0.25% to 0.45%. UK's FTSE 100 rose 0.14%.
The ZEW German economic sentiment indicator -- a gauge of investor confidence -- unexpectedly fell in July to 36.3 points from 38.5 in June, the Mannheim-based Center for European Economic Research, or ZEW, said Tuesday. The index, which measures investors' expectations for the upcoming six months, was forecast to rise to 39.4, according to FactSet. The current conditions index, however, improved slightly by 2 points to stand at 10.6.
Exports from the 17 countries that share the euro slumped in May, as did imports, an indication that the currency area's longest postwar contraction may have continued into a seventh straight quarter.
The European Union's statistics agency Tuesday said that adjusted for seasonal factors, exports from the euro zone to the rest of the world fell 2.3% from April, while imports were down 2.2%. It was the second straight month in which exports fell sharply.
Asian shares edged higher on Tuesday, 16 July 2013, taking their cue from overnight gains in US stocks as weaker-than-forecast US retail sales growth backed the view that the Federal Reserve will hold off reducing its bond-buying stimulus anytime soon. Key benchmark indices in China, Hong Kong, Taiwan, Indonesia and Japan were up 0.04% to 0.64%. Key benchmark indices in South Korea and Singapore were down 0.37% to 0.47%.
Trading in US index futures indicated a flat opening of US stocks on Tuesday, 16 July 2013. US stocks climbed modestly on Monday, with the S&P 500 and the Dow industrials rising to record closing highs again, after Citigroup Inc. reported better-than-expected earnings.
Federal Reserve Chairman Ben Bernanke is due to deliver testimony on monetary policy in Washington on 17 and 18 July 2013. The minutes of the Fed's June meeting released on 10 July 2013 showed that while "several members judged that a reduction in asset purchases would likely soon be warranted," many want to see further improvement in the labor market before reducing the central bank's $85 billion-a-month quantitative easing 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. At a press conference following the June 18-19 meeting, Bernanke said the central bank could start reducing its $85 billion in monthly bond purchases later this year if the economy continues to improve in line with its forecasts.
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