Volatility continued as key benchmark indices weakened once again after trimming losses in mid-afternoon trade. Weakness in Asian and European stocks dampened sentiment. The barometer index, the S&P BSE Sensex, was currently down 127.23 points or 0.49% at 25,780.68. The market breadth indicating the overall health of the market was positive. Infosys rose on reports that three former executives of the company have suggested the company to buyback shares worth Rs 11200 crore. Lupin rose slightly after the company announced a strategic distribution agreement with LG Life Sciences of South Korea to launch insulin Glargine, a novel insulin analogue under the brand name Basugine.
Earlier, key indices had seen intermittent recovery from lower level after remaining in the red since the beginning of the trading session on weak Asian stocks and after drop in US stocks on Tuesday, 5 August 2014.
At 14:20 IST, the S&P BSE Sensex was down 127.23 points or 0.49% to 25,780.68. The index declined 164.68 points at the day's low of 25,743.33 in afternoon trade. The index fell 6.33 points at the day's high of 25,901.68 in morning trade.
The CNX Nifty was down 37.80 points or 0.49% to 7,722.40. The index hit a low of 7,694.25 in intraday trade. The index hit a high of 7,740.95 in intraday trade.
The market breadth indicating the overall health of the market was positive. On BSE, 1,529 shares rose and 1,320 shares fell. A total of 114 shares were unchanged.
The BSE Mid-Cap index was down 23.08 points or 0.25% at 9,249.46. The BSE Small-Cap index was up 40.36 points or 0.4% at 10,151.63. Both these indices outperformed the Sensex.
Among the 30 Sensex shares, 20 declined and the remaining shares rose. Tata Motors (down 2.01%), ICICI Bank (down 2.04%) and ONGC (down 1.83%) edged lower from the Sensex pack.
Apollo Tyres (down 8.05%), Indiabulls Real Estate (down 5.01%), Future retail (down 3.27%), Shriram City Union (down 2.65%) and Indian Hotels (down 2.64%) were among the biggest losers from the BSE A group.
Bhushan Steel was locked in 20% lower circuit at Rs 304.60, with the stock resuming fall after a seeing a small recovery on Tuesday, 5 August 2014. The stock was the biggest loser from the BSE A group.
Shares of Bhushan Steel had dropped 4.23% to Rs 378.15 on Monday, 4 August 2014, after the Central Bureau of Investigation (CBI) on Saturday, 2 August 2014, arrested the now-suspended Chairman-cum-Managing Director of Syndicate Bank SK Jain after he had allegedly demanded a bribe of Rs 50 lakh from Bhushan Steel to not convert the company's outstanding loan into a Non Performing Asset (NPA). As per reports, Bhushan Steel had taken a loan of Rs 100 crore from Syndicate Bank while Prakash Industries had taken a loan of Rs 120 crore. Both companies were desperate to avoid their loans being declared NPAs for default in repayments.
Meanwhile, CBI Director Ranjit Sinha has reportedly ordered an internal inquiry after his team did not arrest Bhushan Steel vice-chairman Neeraj Singhal during searches at his residence in the Syndicate Bank bribery case, despite clear instructions to pick him up. Neeraj Singhal is on the run from the time of the raid and the CBI has been trying to trace him since, so that he can be arrested, reports added. Neeraj Singhal has filed an anticipatory bail application in a local court which will come for hearing today, 6 August 2014.
Lupin rose 0.18%. The company today, 6 August 2014, announced a strategic distribution agreement with LG Life Sciences of South Korea to launch insulin Glargine, a novel insulin analogue under the brand name Basugine. According to the agreement, Lupin would be responsible for marketing and sales of Basugine in India. The total insulin analogue market is valued at Rs 585 crore, with 3 year CAGR of 24%.The total Glargine molecule market is Rs 218.50 crore with 3 yeat CAGR of 23%.
Infosys rose 2.16% to Rs 3,580 on reports that three former executives of the company have suggested the company to buyback shares worth Rs 11200 crore. As per the reports, former officers V. Balakrishnan, T.V. Mohandas Pai and D.N Prahlad have asked the company to buyback shares worth Rs 11200 crore, saying it will help check the "asymmetry of information" between management and investors. Both Pai and Balakrishnan are former chief financial officers (CFOs) at Infosys and served as directors, while Prahlad was a senior vice president.
As per the reports, the trio wants the buyback at Rs 3,850 per share. They also want Infosys announcing an ongoing buyback programme to the extent of 40% of the previous year's net profits on a consistent basis, the reports added.
EIH fell 2.69% after net profit declined 39.2% to Rs 6.41 crore on 5.2% rise in net sales to Rs 280.91 crore in Q1 June 2014 over Q1 June 2013. The result was announced after market hours on Tuesday, 5 August 2014.
In the foreign exchange market, the rupee edged lower against the dollar. The partially convertible rupee was hovering at 61.235, compared with its close of 60.84 on Tuesday, 5 August 2014.
European stocks slid for the fifth time in six days today, 6 August 2014, as a buildup of Russian armed forces along the border with Ukraine escalated tension, and a report showed German factory orders unexpectedly dropped. Key benchmark indices in UK, France and Germany were off 0.59% to 0.96%.
German factory orders dropped by the most in more than 2 1/2 years in a sign that geopolitical tension with Russia is leaving its mark on Europe's largest economy. Orders, adjusted for seasonal swings and inflation, slid 3.2% in June from May, when they fell a revised 1.6%, the Economy Ministry in Berlin said today.
Poland's foreign minister yesterday, 5 August 2014, warned that a renewed buildup of Russian troops on Ukraine's border may signal an invasion as Russian President Vladimir Putin ordered a response to US and European sanctions. Putin is showing no sign of backing down over Ukraine since the US and the European Union tightened sanctions last week, with Russia amassing forces on its neighbor's border in the biggest military buildup since troops were withdrawn from the area in May.
Asian stocks dropped today, 6 August 2014, after US stocks fell yesterday, 5 August 2014, amid escalating tensions in Ukraine. Key benchmark indices in China, Japan, Indonesia, Hong Kong, Singapore, and South Korea were off 0.11% to 1.05%. However, Taiwan's Taiwan Weighted index rose 0.03%.
Trading in US index futures indicated that the Dow could gain 9 points at the opening bell on Wednesday, 6 August 2014. US stocks fell on Tuesday, 5 August 2014, as energy shares tumbled and concern increased over escalating tensions in Ukraine.
Service industries in the US expanded in July at the fastest pace since December 2005, according to data from the Institute for Supply Management, indicating the economy was building more momentum at the start of the second half of 2014. Another release showed factory orders rose 1.1% in June, which was higher than market expectations.
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