Key benchmark indices dropped as a sharp uptick in consumer price inflation in November 2013 raised the likelihood of the Reserve Bank of India (RBI) hiking its main lending rate viz. the repo rate at a monetary policy review next week. The barometer index, the S&P BSE Sensex, was provisionally down 191.08 points or 0.91%, up close to 40 points from the day's low and off about 130 points from the day's high. The market breadth, indicating the overall health of the market, was weak. The rupee fell and bonds yields rose after retail inflation spiked, raising bets of a rate hike at the RBI's policy meeting next week.
Indian stocks dropped for the fourth-day in a row today, 13 December 2013.
Bank stocks declined as a sharp uptick in consumer price inflation raised the likelihood of the Reserve Bank of India (RBI) hiking its main lending rate viz. the repo rate at a monetary policy review next week. Capital goods pivotals declined as higher interest rates could put spanner in the works for a likely revival of investment cycle. Shares of two wheeler makers declined.
The market edged lower in early trade after weak macroeconomic data announced after trading hours on Thursday, 12 December 2013. The Sensex and the 50-unit CNX Nifty, both, hit their lowest level in more than a week. A bout of volatility was witnessed as key benchmark indices weakened once again after trimming initial losses in morning trade. The Sensex extended losses and hit fresh intraday low in early afternoon trade. Weakness continued on the bourses in afternoon trade. A bout of volatility was witnessed as key benchmark indices weakened once again after trimming losses in mid-afternoon trade.
As per provisional figures, the S&P BSE Sensex was down 191.08 points or 0.91% to 20,734.53. The index fell 232.94 points at the day's low of 20,692.67 in late trade, its lowest level since 4 December 2013. The index declined 58.44 points at the day's high of 20,867.17 in opening trade.
The CNX Nifty was down 64.10 points or 1.03% to 6,172.95, as per provisional figures. The index hit a low of 6,161.40 in intraday trade, its lowest level since 4 December 2013. The index hit a high of 6,208.60 in intraday trade.
The total turnover on BSE amounted to Rs 1741 crore, lower than Rs 1835.49 crore on Thursday, 12 December 2013.
The market breadth, indicating the overall health of the market, was weak. On BSE, 1,575 shares fell and 883 shares rose. A total of 152 shares were unchanged.
From the 30-share Sensex pack, 22 stocks fell and rest rose. Tata Power Company (down 2.69%), HDFC (down 2.36%) and Hindalco Industries (down 2.19%) declined from the Sensex pack.
Shares of two wheeler makers declined. Bajaj Auto (down 1.87%) and Hero MotoCorp (down 2.98%) declined.
Capital goods pivotals declined as higher interest rates could put a spanner in the works for a likely revival of investment cycle. Bhel (down 4.09%) and L&T (down 1.29%) declined.
Bank stocks declined as a sharp uptick in consumer price inflation raised the likelihood of the Reserve Bank of India (RBI) hiking its main lending rate viz. the repo rate at a monetary policy review next week. AXIS Bank (down 0.39%), ICICI Bank (down 3.76%), HDFC Bank (down 1.4%), and Yes Bank (down 3.91%), dropped.
Syndicate Bank fell 2.35% to Rs 87.40. The bank after market hours on Thursday, 12 December 2013, said it has fixed minimum issue price at Rs 88.36 per share for the proposed issue of 2.26 crore equity shares of face value of Rs 10 each aggregating to Rs 200 crore to Government of India (GoI) by way of preferential allotment basis. The bank will hold an Extraordinary General Meeting of the shareholders on 10 January 2014. The Government of India (GoI) currently holds 66.17% stake in Syndicate Bank (as per the shareholding pattern as on 30 September 2013).
State-run Oriental Bank of Commerce declined 2.93% to Rs 209. The bank today, 13 December 2013, said that the bank has allotted 80.87 lakh equity shares at issue price (including premium) of Rs 185.47 per share aggregating about Rs 150 crore to Government of India on preferential basis. As a result, the Government of India's holding in the bank has increased to 59.13% from 58%.
State Bank of India (SBI) shed 1.96% to Rs 1743.60. The bank after market hours on Thursday, 12 December 2013, said that the Executive Committee of Central Board (ECCB) of the bank at its meeting held on Thursday, 12 December 2013, has accorded its approval to fix the issue price at Rs 1,782.74 per share of face value of Rs 10, including a premium of Rs 1772.74 per share, and accordingly, to issue 1.12 crore equity shares on preferential basis to Government of India (Gol) for a consideration of about Rs 2000 crore.
The price for preferential issue has been arrived at in accordance with the Sebi (Issue of Capital and Disclosure Requirements) Regulations, 2009, taking into consideration 29 November 2013 as the relevant date, SBI said.
The GoI currently holds 62.31% stake in SBI (as per the shareholding pattern as on 30 September 2013).
Among other PSU bank stocks, Canara Bank, Union Bank of India, Bank of India, Bank of Baroda and Punjab National Bank dropped 2% to 4.09%.
Aurobindo Pharma rose 3.99% after the company said it has received the final approval from USFDA to manufacture and market Duloxetine Hydrochloride Delayed-Release Capsules in 3 strengths in the United States. The announcement was made during trading hours today, 13 December 2013.
Aurobindo Pharma said it has received the final approval from the US Food & Drug Administration (USFDA) to manufacture and market Duloxetine Hydrochloride Delayed-Release Capsules 20mg (base), 30mg (base) and 60mg (base) which was earlier tentatively approved.
Duloxetine Hydrochloride Delayed-Release Capsules 20mg (base), 30mg (base) and 60mg (base) are the generic equivalent of Eli Lilly & Company's Cymbalta Delayed-Release Capsules 20mg (base), 30mg (base) and 60mg (base). Duloxetine Hydrochloride Delayed-Release Capsules are indicated for the treatment of for the treatment of major depressive disorder (MDD) and falls under the Neurological (CNS) therapeutic category. According to IMS data, the market size of the product is estimated to be $5.4 billion for the twelve months ended September 2013.
Aurobindo now has a total of 188 abbreviated new drug application (ANDA) approvals (163 final approvals including 7 from Aurolife Pharma LLC and 25 tentative approvals) from USFDA.
In the foreign exchange market, the rupee edged lower against the dollar and fell below 62 level after two sets of economic data released after market hours on Thursday, 12 December 2013, which showed a spike in consumer price inflation in November and a worse-than-expected contraction in industrial production in October. The partially convertible rupee was hovering at 62.20, compared with its close of 61.81/82 on Thursday, 12 December 2013.
Bond prices fell as a sharp uptick in consumer price inflation in November 2013 raised the likelihood of the Reserve Bank of India (RBI) hiking its main lending rate viz. the repo rate at a monetary policy review next week. The yield on 10-year federal paper 8.83% GS 2023 was hovering at 8.9111%, higher than its close of 8.8498% on Thursday, 12 December 2013. Bond yield and bond prices are inversely related.
Provisional annual inflation rate based on all India general consumer price index (CPI) (combined) rose 11.24% in November 2013 as compared to 10.17% (final) in October 2013. The data was announced after market hours on Thursday, 12 December 2013.
Index of industrial production (IIP) declined 1.8% in October 2013, against 2% growth in the previous month September 2013. The decline in the output of manufacturing sector at 2% and mining sector at 3.5% mainly led to decline in IIP for October 2013. Meanwhile, the marginal 1.3% growth in the electricity generation restricted further dip in industrial production during October 2013.
The IIP growth for the month of September 2013 has been retained unchanged at 2%, while the growth for the month of July 2013 has been scaled down to 2.6% from 2.8% reported at first revision. However, the final growth rate for July 2013 is similar to the provisional level of 2.6%. The data was announced after market hours on Thursday, 12 December 2013.
The government will unveil data on inflation based on the wholesale price index (WPI) for November 2013 on 16 December 2013. WPI is seen easing a bit at 6.9% in November 2013, from 7% in October 2013, as per the median estimate of a poll of economists carried out by Capital Market.
The Reserve Bank of India (RBI) announces next Mid-Quarter Review of Monetary Policy for 2013-14 on 18 December 2013. The Third Quarter Review of Monetary Policy for 2013-14 is scheduled on 28 January 2014.
European stocks rose on Friday, 13 December 2013, after a report showed US retail sales in November 2013 beat market expectations and after US House of Representatives on Thursday, 12 December 2013, passed a federal budget plan. Key benchmark indices in UK and Germany were up 0.07% to 0.16%. France's CAC 40 was flat.
Asian markets edged higher in choppy trade on Friday, 13 December 2013, after a report showed US retail sales in November 2013 beat market expectations and after US House of Representatives on Thursday, 12 December 2013, passed a federal budget plan. Key benchmark indices in Hong Kong, Japan, Singapore and Taiwan were up 0.12% to 0.4%. Key benchmark indices in China, Indonesia and South Korea were off 0.26% to 0.89%.
The Bank of Japan (BoJ), which buys more than 7 trillion yen ($67.6 billion) of Japanese Government Bonds (JGBs) every month in its bid to stoke inflation, holds a two-day monetary policy meeting on 19 and 20 December 2013.
Trading in US index futures indicated that the Dow could advance 35 points at the opening bell on Friday, 13 December 2013. US stocks dropped on Thursday, 12 December 2013, sending the Standard & Poor's 500 Index to a one-month low, as improving economic data spurred speculation the Federal Reserve will cut stimulus as early as next week.
Data showed retail sales rose more than forecast in November as Americans bought cars and took advantage of discounts going into the holiday-shopping season. Sales increased 0.7 percent in November from the previous month, the most since June, the Commerce Department figures showed. A separate report indicated applications for unemployment benefits jumped last week from an almost three-month low.
The US House of Representatives on Thursday passed the first bipartisan federal budget in four years, which would ease $63 billion in automatic spending cuts and avert another government shutdown. The legislation now heads to the Senate. The House voted 332-94 for the $1.01 trillion compromise budget crafted by Senator Patty Murray and Representative Paul Ryan, the chairman of a special bipartisan panel. President Barack Obama said he'll sign the final measure.
The Federal Open Market Committee (FOMC) holds a two-day policy meeting on interest rates in the United States on 17-18 December 2013. The US central bank currently buys bonds worth $85 billion a month in a bid to hold interest rates low and encourage economic growth in the world's biggest economy. Minutes of the Fed's October meeting released on 20 November 2013 showed officials may reduce their $85 billion a month of bond buying if the economy improves as anticipated.
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