Key benchmark indices extended losses in mid-morning trade. The barometer index, the S&P BSE Sensex, was down 122.42 points or 0.61%, off 180.86 points from the day's high and up 54.43 points from the day's low. The market breadth, indicating the overall health of the market, was positive.
Index heavyweight and cigarette major ITC edged lower in volatile trade. State-run bank stocks edged higher while private sector bank stocks declined. Two wheeler makers rose on expectations of pick up in sales during the upcoming festive season and on hopes good rains this year will boost rural sales. Shares of Hero MotoCorp hit a 52-week high ahead of its 30th Annual General Meeting (AGM) today, 11 September 2013.
Key benchmark indices edged lower in early trade to profit booking after Tuesday's rally. A bout of volatility was witnessed as the key benchmark indices slipped into the red again after reversing initial losses in morning trade. The Sensex alternately moved above and below the psychological 20,000 level in intraday trade. Key benchmark indices extended losses in mid-morning trade.
Foreign institutional investors (FIIs) bought shares worth a massive Rs 2563.60 crore on Tuesday, 10 September 2013, as per provisional data from the stock exchanges. The Sensex had jumped 3.77% on Tuesday after the latest data showed that India's trade deficit, the key driver of the country's large current-account deficit, narrowed to five-month low in August 2013.
In the foreign exchange market, the rupee edged lower against the dollar after Tuesday's strong gains. The partially convertible rupee was hovering at 63.96, weaker than its close of 63.84/85 on Tuesday, 10 September 2013.
At 11:16 IST, the S&P BSE Sensex was down 122.42 points or 0.61% to 19,874.67. The index rose 55.76 points at the day's high of 20,055.53 in morning trade, its highest level since 25 July 2013. The index lost 179.53 points at the day's low of 19,820.24 in early trade.
The CNX Nifty was down 32.55 points or 0.55% to 5,864.20. The index hit a high of 5,913.45 in intraday trade, its highest level since 26 July 2013. The index hit a low of 5,842.10 in intraday trade.
The market breadth, indicating the overall health of the market, was positive. On BSE, 1,015 shares gained and 726 shares fell. A total of 92 shares were unchanged.
The total turnover on BSE amounted to Rs 779 crore by 11:20 IST compared to Rs 521 crore by 10:20 IST.
Among the 30-share Sensex pack, 19 stocks declined and rest of them gained.
Index heavyweight and cigarette major ITC lost 2% to Rs 328.70. The stock hit high of Rs 336.50 and low of Rs 327.15 so far during the day.
State-run bank stocks edged higher while private sector bank stocks declined.
Axis Bank (down 1.13%), Yes Bank (down 2.02%), Kotak Mahindra Bank (down 1.27%), ICICI Bank (down 1.5%) and HDFC Bank (down 0.96%) fell.
SBI (up 0.49%), Punjab National Bank (up 1.66%), Canara Bank (up 2.84%), Bank of India (up 3.68%) and Bank of Baroda (up 1.33%) gained.
The Reserve Bank of India (RBI) on Tuesday said that banks can raise funds overseas above 50% of their Tier I capital with a minimum maturity of three years and swap these borrowings with the central bank at a concessional rate for one to three years. "The swaps shall be available at a concessional rate of a 100 basis points below the market rate for all fresh borrowing with a minimum tenor of one year and a maximum tenor of three years, irrespective of whether such borrowings are in excess of 50% of their unimpaired Tier I capital or not," the RBI said.
RBI said despite the swaps being for the entire tenor of the borrowing, the rate shall be reset after every one year from the date of the swap at 100 basis points lower than the prevailing market rate, at the time of reset. The RBI added that banks are free to borrow in any foreign currency but the swaps will be available only for conversion of the US dollar equivalent into rupees and will be computed at relevant cross rates on that day.
Shares of two wheeler makers rose on expectations of pick up in sales during the upcoming festive season and on hopes good rains this year will boost rural sales.
Hero MotoCorp gained 2.17% to Rs 2,113.20 after striking a 52-week high of Rs 2,127.70 in intraday trade today, 11 September 2013. The company holds its 30th Annual General Meeting (AGM) today, 11 September 2013.
Bajaj Auto rose 0.92%. TVS Motor Company gained 0.82%.
Asian stock markets were mostly lower on Wednesday, 11 September 2013, with investors treading a bit cautiously after the recent strong upmove. Key benchmark indices in Taiwan, Hong Kong, Indonesia and Singapore fell by 0.14% to 0.41%. Key benchmark indices in China, South Korea and Japan rose by 0.23% to 0.81%.
Trading in US index futures indicated a flat opening of US stocks on Wednesday, 11 September 2013. US stocks rallied on Tuesday, 10 September 2013, with the S&P 500 continuing its longest stretch of gains since mid-July, after upbeat data from China and amid heightened diplomacy on Syria.
US President Barack Obama called for diplomacy in dealing with chemical weapons in Syria but kept open the possibility of military action against the Assad regime. Obama late Tuesday said he was sending US Secretary of State John Kerry to Geneva to meet Russian Foreign Minister Sergey Lavrov to work out details of a plan to have Syria, led by President Bashar al-Assad, give its chemical weapons stockpile to the international community. Obama had called for potential strikes against Syria in retaliation for Syria's use of chemical weapons against civilians in late August. But with a diplomatic solution on the table, Obama asked Congress to delay a vote on whether to authorize military strikes.
Investors across the globe are eyeing the next policy meeting of the Federal Open Market Committee (FOMC) scheduled this month, with their focus squarely on the timing of tapering of Federal Reserve's bond purchases. The FOMC holds a two-day policy meeting on 17-18 September 2013 to decide on interest rates in the United States. The US central bank currently buys $85 billion a month in US debt and mortgage-backed securities in a bid to hold interest rates low and encourage economic growth. Federal Reserve Chairman Ben Bernanke has on several occasions stressed that the tapering process is dependent on an improvement in data. Fed's bond-buying program has kept global markets flush with liquidity in recent years.
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