Key benchmark indices dropped to fresh intraday low in morning trade on weak Asian stocks. The barometer index, the S&P BSE Sensex, and the CNX Nifty, both, hit their lowest level in almost 10 weeks. Index heavyweight Reliance Industries (RIL) extended initial fall. Another index heavyweight and cigarette maker ITC also extended early fall. The Sensex was down 121.59 points or 0.65%, off 61.41 points from the day's high and up 70.10 points from the day's low. The market breadth, indicating the overall health of the market, was weak.
GAIL (India) hit 52-week low. PSU OMCs dropped as crude oil prices steadied after steep recent fall. MMTC was locked in 5% lower circuit at Rs 126.15 on BSE, also its 52-week low, with the stock extending recent steep slide triggered by government concluding the divestment of 9.33% stake at a huge discount to the stock's ruling market price this month. Jewellery stocks declined sharply on concerns that the Reserve Bank of India's and government initiative to curb gold imports may impact the sectors' growth.
Key benchmark indices edged lower in early trade on weak Asian stocks. Key benchmark indices dropped to fresh intraday low in morning trade. The barometer index, the S&P BSE Sensex, and the CNX Nifty, both, hit their lowest level in almost 10 weeks.
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.
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.
At 10:30 IST, the S&P BSE Sensex was down 121.59 points or 0.65% to 18,652.65. The index declined 191.69 points at the day's low of 18,582.55 in morning 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 40.75 points or 0.72% to 5,626.90. The index hit a low of 5,606.80 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, 979 shares declined and 587 shares rose. A total of 81 shares were unchanged.
Among the 30-share Sensex pack, 25 declined and rest of them gained.
Reliance Industries (RIL) fell 1.62% to Rs 781.05, with the stock extending early fall. 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.
GAIL (India) fell 2.63% to Rs 282.70 after striking a 52-week low of Rs 281 in intraday trade today, 24 June 2013. Oil India slipped 0.61%.
PSU OMCs dropped as crude oil prices steadied after steep recent fall. Indian Oil Corporation (down 3.04%), HPCL (down 1.49%) and BPCL (down 2.79%) edged lower. U.S. crude futures steadied above $93 a barrel on Monday, after falling for the past three sessions and posting their worst week since April amid worries over Chinese demand and U.S. economic stimulus being pared back. Higher crude oil prices could increase under-recoveries of state-run oil marketing companies (PSU OMCs) on domestic sale of diesel, LPG and kerosene at controlled prices.
The Petroleum Planning and Analysis Cell (PPAC) under the Ministry of Petroleum and Natural Gas on 17 June 2013 said that the under-recovery on high speed diesel (HSD) applicable for second fortnight of June effective from 16 June 2013 has increased sharply to Rs 6.31 per litre from Rs 4.87 per litre during the first fortnight of June 2013.
PSU OMCs are currently incurring daily under-recovery of about Rs 286 crore on the sale of diesel, PDS kerosene and domestic LPG. PSU OMCs suffer under recoveries on domestic sale of diesel, LPG and kerosene at controlled prices. In January 2013, the government allowed PSU OMCs to raise diesel prices in small measures at regular intervals while completely deregulating diesel prices sold to institutional or bulk buyers.
Meanwhile, PSU OMCs hiked petrol price by Rs 2 a litre on Saturday, 15 June 2013, the second increase in rates this month as devaluation of rupee against US dollar made imports costlier. The hike is excluding local sales tax or VAT and actual increase for consumers will be higher. Petrol price in Delhi was hiked by Rs 2.40 a litre to Rs 66.39 from Rs 63.99 previously. Petrol has been deregulated by the government.
Index heavyweight and cigarette major ITC shed 1.05% to Rs 319.45, with the stock extending initial decline.
MMTC was locked in 5% lower circuit at Rs 126.15 on BSE, also its 52-week low, with the stock extending recent steep slide triggered by government concluding the divestment of 9.33% stake at a huge discount to the stock's ruling market price this month. The government this month sold 9.33% stake in MMTC via Offer for Sale through stock exchanges mechanism at an indicative price of Rs 60.86 per share. The divestment was done to make the company compliant to the public shareholding requirements under the Securities Contract Regulations (Rules) (SCRR). Sebi has mandated minimum public shareholding of 10% for state-run firms by August 2013.
Jewellery stocks declined sharply on concerns that the Reserve Bank of India's and government initiative to curb gold imports may impact the sectors' growth. TBZ (down 11.98%), Shree Ganesh Jewellery House (down 8.55%), Rajesh Exports (down 4.23%), PC Jeweller (down 8.29%), Tara Jewels (down 6.52%) and Titan Industries (down 0.09%) dropped.
Shares of diamond jewellery maker Gitanjali Gems were locked at 20% lower circuit at Rs 405.35 on BSE.
Jaiprakash Power Ventures tumbled 10.54%. The company before market hours today, 24 June 2013 said that during the onset of monsoon, Uttarakhand including District Chamoli where company's 400 megawatt Vishnuprayag Hydro-power plant is situated, has witnessed very heavy rain causing unprecedented flood of very high intensity with excessive silt, boulders and other materials in the Alakananda river, resulting in disturbances to river protection works and leading to shutdown of the Barrage operations and power generation with effect from 16 June 2013.
Jaiprakash Power Ventures said it is taking effective steps to restore generation and that assessment of damages due to the said flood conditions shall be made on restoration of commutation and connectivity to Barrage site. Unprecedented floods in river Alaknanda has resulted in Force Majeure event for 400 megawatt Vishnuprayag Project, commercial aspects of which shall be addressed in accordance with Power Purchase Agreement between the company and Uttar Pradesh Power Corporation (UPPCL).
As prudent practice, 400 megawatt Vishnuprayag project is also covered under Industrial All Risk Insurance Policy, the company said.
Asian stocks were trading lower 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, Indonesia and South Korea were off 0.31% to 0.76%. Taiwan's Taiwan Weighted index rose 0.19%.
Chinese stocks edged lower as a recent spike in Shanghai interbank interest rates fueled worries about the world's second-largest economy. In mainland China, the Shanghai Composite was off 3.01% and Hong Kong's Hang Seng was down 1.56%. 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 may keep those rates at a high level.
Trading in US index futures indicated that the Dow could fall 53 points at the opening bell on Monday, 24 June 2013. US stocks ended mixed on Friday, 21 June 2013, as investors picked up beaten down stocks. While the Dow Junes Industrial Average and S&P 500 score small gains the tech laden Nasdaq Composite index registered small losses.
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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