Key benchmark indices extended initial losses to hit fresh intraday low in morning trade as a steep slide in rupee which took it to record low against the dollar rattled investor sentiment. Weakness in Asian stocks also dampened sentiment. The S&P BSE Sensex and the 50-unit CNX Nifty, both, hit their lowest level in nearly six weeks. The Sensex fell below the psychological 19,000 mark. The Sensex was down 207.59 points or 1.08%, off close to 160 points from the day's high and up about 5 points from the day's low. The market breadth, indicating the overall health of the market, was weak.
IT stocks were mixed, with TCS hitting a record high and Wipro scaling 52-week high. L&T hit 52-week low. Sterlite Industries extended intraday losses.
The market edged lower in early trade on weak Asian stocks. The Sensex extended initial losses to hit fresh intraday low in morning trade as the rupee hit record low against the dollar.
The rupee weakened to hit record low against the dollar today, 6 August 2013, weighed by weak local and regional shares. The rupee was trading at 61.44 today, 6 August 2013, sharply lower than Monday's close of 60.88/89.
Asian stocks dropped on Tuesday, 6 August 2013, as stronger growth in American service industries fueled speculation the US Federal Reserve will soon be able to reduce economic stimulus.
At 10:20 IST, the S&P BSE Sensex was down 207.59 points or 1.08% to 18,974.67. The index lost 211.34 points at the day's low of 18,970.92 in morning trade, its lowest level since 27 June 2013. The index declined 50.34 points at the day's high of 19,131.92 in early trade.
The CNX Nifty was down 67.05 points or 1.18% to 5,616.35. The index hit a low of 5,613.50 in intraday trade, its lowest level since 26 June 2013. The index hit a high of 5,664.90 in intraday trade.
The market breadth, indicating the overall health of the market, was weak. On BSE, 834 shares fell and 325 shares rose. A total of 60 shares were unchanged.
Among the 30-share Sensex pack, 23 stocks fell and rest of them rose. Bhel (down 3.56%), Tata Steel (down 3.03%) and Tata Power Company (down 3.11%), edged lower.
Sterlite Industries declined 4.25%, with the stock extending intraday losses.
IT stocks were mixed. Infosys fell 0.65% to Rs 2988. The stock had hit a 52-week high of Rs 3,025 in intraday trade on Monday, 5 August 2013.
Wipro gained 1.42% to Rs 456.05 after hitting a 52-week high of Rs 458.80 in intraday trade today, 6 August 2013.
HCL Technologies declined 0.48% to Rs 942.90. The stock had struck a record high of Rs 960.75 in intraday trade on Monday, 5 August 2013.
IT major TCS rose 0.47% to Rs 1,875.50 after hitting a record high of Rs 1,879 in intraday trade today, 6 August 2013. TCS on Monday, 5 August 2013, said that it has been selected by Australian Pharmaceutical Industries (API), a leading beauty and health retail company in Australia to deliver a major IT and business transformation program whereby TCS will deliver SAP technology to unify and enhance mission critical IT systems across API's retail and wholesale operations.
A weak rupee boosts revenue of IT firms in rupee terms as the sector derives a lion's share of revenue from exports.
L&T declined 1.82% to Rs 799 after hitting a 52-week low of Rs 796.50 in intraday trade today, 6 August 2013.
Shares of Financial Technologies tumbled 13.36% to Rs 171.50 on reports that the government is likely to ban trading in e-series contracts on National Spot Exchange (NSEL), a move that could hit NSEL's business further. NSEL offers e-series contracts in gold, silver, copper, zinc, lead, nickel and platinum. Under e-series contracts, retail investors can buy and sell commodities in demat form. NSEL today, 6 August 2013, said that while the exchange has not yet received government order banning trading in e-series contracts, but as abundant precaution the exchange will not commence trading in e-Series as usual at 10:00 IST. "We will check with the authorities to find out the facts. In any case we will fully comply with Government order", NSEL said on its website. Financial Technologies is one of the two promoters of the NSEL.
The stock had surged 30.88% on Monday, 5 August 2013, after the National Spot Exchange (NSEL) on Sunday, 4 August 2013, proposed two options for settlement of trades on the exchange in the aftermath of NSEL's decision on 31 July 2013 to suspend trading in most one-day forward contracts and to defer the settlement of all pending contracts for 15 days. Earlier, the stock had witnessed steep slide after NSEL's decision on 31 July 2013 to suspend trading of all contracts, other than e-Series contracts, till further notice.
In a clarification to the stock exchanges, Mr. Jignesh Shah, Chairman & Managing Director of Financial Technologies (India) (FTIL) had on 1 August 2013 said that NSEL's decision to suspend trading in most one-day forward contracts does not entail any financial liability on FTIL and that the business of FTIL is as usual.
Shares of Multi Commodity Exchange of India (MCX), a commodity futures exchange promoted by Financial Technologies, were locked at 10% lower circuit at Rs 331.85, also its record low, with the stock extending recent steep slide. MCX had on 1 August 2013 said that there will not be any impact of NSEL's decision to suspend trading in most one-day forward contracts on the operations and financials of MCX.
Engineers India lost 6.16% after net profit fell 16.17% to Rs 129.34 crore on 35.55% decline in total income to Rs 511.22 crore in Q1 June 2013 over Q1 June 2012. The Q1 result was announced after market hours on Monday, 5 August 2013.
eClerx Services rose 4.32% after the company said its board will consider share buyback on 8 August 2013.
Asian stocks fell on Tuesday, 6 August 2013, as stronger growth in American service industries fueled speculation the US Federal Reserve will soon be able to reduce economic stimulus. Key benchmark indices in Hong Kong, China, Taiwan, Singapore, and South Korea were off 0.16% to 1.55%. Japan's Nikkei Average rose 0.07%.
Trading in US index futures indicated that the Dow could fall 26 points at the opening bell on Tuesday, 6 August 2013. Most US stocks fell on Monday, 5 August 2013, with benchmark indices pulling away from record highs, as Wall Street considered a report indicating better-than-expected growth in the service sector and a Federal Reserve official's remarks that the central bank is closer to curbing its asset purchases. Dallas Federal Reserve Bank President Richard Fisher on Monday, 5 August 2013, said the fall in the US unemployment rate to 7.4% in July means the Fed is closer to slowing its asset purchases from $85 billion a month.
The Institute for Supply Management's non-manufacturing index for the US rose to 56 in July, beating the median estimate and June's 52.2 reading.
The US central bank currently buys $85 billion a month in US debt and mortgage-backed securities. Federal Reserve Chairman Ben Bernanke has on several occasions stressed that the tapering process is dependent on an improvement in data.
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