Volatility continued as key benchmark indices weakened once again and hit fresh intraday low after trimming initial losses. The barometer index, the S&P BSE Sensex, was down 199.70 points or 0.99%, up close to 10 points from the day's low and off about 135 points from the day's high. The market breadth, indicating the overall health of the market, was positive.
IT stocks rose as rupee fell against the dollar, with HCL Technologies scaling record high. Interest rate sensitive realty stocks extended Friday's losses triggered by the Reserve Bank of India, in a surprise decision, raising its key policy rate viz. the repo rate by 25 basis points (bps) to 7.5% from 7.25% after a monetary policy review on Friday, 20 September 2013, and as the central bank retained hawkish tone at the latest monetary policy review.
A bout of initial volatility was witnessed as key benchmark indices trimmed losses after a weak start. The 50-unit CNX Nifty fell below the psychological 6,000 mark. Volatility continued as key benchmark indices weakened once again and hit fresh intraday low after trimming initial losses.
The market may remain volatile this week as traders roll over positions in the futures & options (F&O) segment from the near month September 2013 series to October 2013 series. The September 2013 F&O contracts expire on Thursday, 26 September 2013.
In the foreign exchange market, the rupee dropped against the dollar. The partially convertible rupee was hovering at 62.5225, weaker than its close of 62.23/24 on Friday, 20 September 2013. Rupee depreciation fuels inflation, increases import bill and current account deficit. It also increases the government's spending on fuel subsidies, potentially widening the fiscal deficit.
At 10:20 IST, the S&P BSE Sensex was down 199.70 points or 0.99% to 20,063.94. The index declined 211.40 points at the day's low of 20,052.31 in morning trade. The index fell 63.90 points at the day's high of 20,199.81 in early trade.
The CNX Nifty was down 59.85 points or 1% to 5,952.25. The index hit a low of 5,945.60 in intraday trade. The index hit a high of 5,989.40.
The market breadth, indicating the overall health of the market, was positive. On BSE, 796 shares rose and 772 shares dropped. A total of 94 shares were unchanged.
Among the 30-share Sensex pack, 15 stocks fell and rest of them rose. State Bank of India (down 3.24%), HDFC Bank (down 2.91%) and ICICI Bank (down 2.87%), declined.
IT stocks rose as rupee fell against the dollar. A weak rupee boosts revenue of IT firms in rupee terms as the sector derives a lion's share of revenue from exports.
HCL Technologies advanced 3.03% to Rs 1093.30 after hitting record high of Rs 1095.95 in intraday trade.
Wipro rose 1.05%. Wipro becomes a part of the 50-unit CNX Nifty with effect from Friday, 27 September 2013. The IT major replaces Reliance Infrastructure in Nifty.
TCS gained 0.43%. Infosys added 0.88%.
Mindtree gained 2.59% to Rs 1,119.10 after hitting record high of Rs 1130 in intraday trade after foreign fund FID Fund Mauritius bought 0.71% stake in the software firm on Friday, 20 September 2013. Foreign fund FID Fund Mauritius bought 2.95 lakh shares or 0.71% stake at Rs 1,074.99 per share of Mindtree through a bulk deal on the BSE on Friday, 20 September 2013.
Interest rate sensitive realty stocks extended Friday's losses triggered by the Reserve Bank of India, in a surprise decision, raising its key policy rate viz. the repo rate by 25 basis points (bps) to 7.5% from 7.25% after a monetary policy review on Friday, 20 September 2013, and as the central bank retained hawkish tone at the latest monetary policy review. Purchases of both residential and commercial property are largely driven by finance. HDIL (down 2.5%), Unitech (down 1.45%), D B Realty (down 0.35%) and DLF (down 2.9%), declined.
Indian Overseas Bank fell 0.11% after the bank's board approved raising capital by way of issue of equity shares to the Government of India. The announcement was made after market hours on Friday, 20 September 2013. Indian Overseas Bank's (IOB) board of directors at a meeting held on Friday, 20 September 2013, approved raising capital by way of issue of equity share of Rs 10 each at a price determined under Sebi (ICDR) Regulations of 2009 to the Government of India (GoI) to the extent of capital infusion by GoI under preferential allotment. The board has also accorded its approval to the bank to issue equity shares of Rs 10 each to Qualified Institutional Buyers (QIBs) by way of private placement for the shortfall in Tier I capital requirements of Rs 2100 crore assessed by the bank and the capital infusion by GoI. The exact amount of government support for infusion of capital and the quantum and size of issue for QIP will be known in due course, IOB said.
Most Asian stocks rose on Monday, 23 September 2013, after a private measure of Chinese manufacturing jumped more than forecast in September. Key benchmark indices in China, South Korea and Taiwan rose 0.17% to 0.89%. Key benchmark indices in Indonesia and Singapore were off 0.7% to 0.89%. Trading on Hong Kong markets was delayed due to a storm and Japanese markets were closed for a holiday. A powerful typhoon hit Hong Kong and the southern China coast on Monday, killing at least 20 people on the mainland, crippling power lines and causing flooding and gale force winds.
A Chinese manufacturing index rose to a six-month high in September, signaling that a rebound in the world's second-largest economy is gaining steam. The preliminary reading of 51.2 for a Purchasing Managers' Index released today by HSBC Holdings Plc and Markit Economics. The gauge was at 50.1 in August.
Trading in US index futures indicated that the Dow could gain 25 points at the opening bell on Monday, 23 September 2013. US stocks fell on Friday, 20 September 2013, after Federal Reserve Bank of St. Louis President James Bullard said that the Fed could make a small stimulus reduction at its next meeting in October. The Federal Open Market Committee (FOMC) holds a two-day policy meeting on 29-30 October 2013.
On 18 September 2013, the Fed surprised economists and investors with its decision to delay scaling back its stimulus. Kansas City Fed President Esther George on Friday, 20 September 2013, said markets were ready for reduced stimulus to begin, and the central bank's failure to follow through on expectations hurt its credibility on Wall Street.
In Europe, preliminary results showed that Germany has re-elected Angela Merkel as chancellor after Sunday's elections.
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