Key benchmark indices extended losses and hit fresh intraday low in afternoon trade as the rupee's sharp slide which pushed it to record low against the dollar hit investor sentiment adversely. Weakness in European and Asian stocks also dampened sentiment. The S&P BSE Sensex was down 414.77 points or 2.23%, off 403.97 points from the day's high and up 2.60 points from the day's low. The market breadth, indicating the overall health of the market, was weak.
Index heavyweight and cigarette major ITC extended intraday fall. Another index heavyweight Reliance Industries also extended intraday fall. Realty stocks declined in volatile trade.
A bout of volatility was witnessed as key benchmark indices trimmed losses after a weak opening. The Sensex hit its lowest level in almost 18 weeks. The 50-unit CNX Nifty hit its lowest level in more than 10 months. Weakness continued on the bourses in early afternoon trade. Key benchmark extended losses in afternoon trade.
The market sentiment was affected adversely by data showing that foreign funds were net sellers of Indian stocks on Friday, 16 August 2013. Foreign institutional investors (FIIs) sold shares worth a net Rs 563.23 crore on Friday, 16 August 2013, as per provisional data from the stock exchanges.
The rupee hit a record low below 62 against the dollar today, 19 August 2013. The partially convertible rupee was hovering at 62.63, sharply lower than its close of 61.65/66 on Friday, 16 August 2013.
Rupee depreciation fuels inflation, increases import bill and current account deficit and hurts economic growth.
Bond prices declined. The yield on the benchmark federal paper 7.16 GS 2023 was hovering at 9.0342%, higher that its close of 8.8836% on Friday, 16 August 2013. Bond yield and bond prices are inversely related.
At 13:16 IST, the S&P BSE Sensex was down 414.77 points or 2.23% to 18,183.41. The index lost 417.37 points at the day's low of 18,180.81 in afternoon trade, its lowest level since 15 April 2013. The index fell 10.80 points at the day's high of 18,587.38 in opening trade.
The CNX Nifty was down 127.60 points or 2.32% to 5,380.25. The index hit a low of 5,377.65 in intraday trade, its lowest level since 5 October 2012. The index hit a high of 5,499.65 in intraday trade.
The market breadth, indicating the overall health of the market, was weak. On BSE, 1,371 shares declined and 658 shares rose. A total of 127 shares were unchanged.
The total turnover on BSE amounted to Rs 1098 crore by 13:20 IST.
Among the 30-share Sensex pack, 22 stocks declined and rest of them gained.
Index heavyweight and cigarette major ITC fell 1.67% to Rs 314.70, with the stock extending intraday fall. The stock hit a high of Rs 322.05 and low of Rs 314 so far during the day.
Reliance Industries dropped 1.69% to Rs 811.20, with the stock extending intraday fall. The stock hit a high of Rs 834.05 and low of Rs 809 so far during the day.
Telecom stocks dropped. Bharti Airtel (down 7.47%), Idea Cellular (down 4.92%), MTNL (down 7.84%), Tata Teleservices (Maharashtra) (down 1.44%) and Reliance Communications (down 3.16%) declined.
Realty stocks declined in volatile trade. DLF (down 1.24%), Unitech (down 2.74%), Oberoi Realty (down 3.49%), Godrej Properties (down 7.41%), HDIL (down 2.23%), Parsvnath Developers (down 0.93%), D B Realty (down 2.73%), edged lower.
Indiabulls Real Estate rose 2.1% after the company said it has purchased the entire stake of FlM and its affiliates (managed by Farallon Capital Management LLC and its affiliates, a leading US private equity fund), in its 7 project subsidiaries for a total consideration of Rs 1172.16 crore. FlM held 49% equity stake in these JVs and had invested Rs 847.48 crore in 2006 to 2008. With the purchase of FlM's entire stake, these project subsidiaries will now be 100% owned by Indiabulls Real Estate.
Adani Ports & Special Economic Zone (down 8.87%), Bank of Baroda (down 7.9%), United Breweries (down 7.77%), Yes Bank (down 7.29%) and Aditya Birla Nuvo (down 6.9%) were among the top losers from the BSE's 'A' group.
Prime Minister Manmohan Singh on Saturday, 17 August 2013, told a news agency that India wasn't headed for a crisis despite its large current-account deficit and said the country has plenty of foreign-exchange reserves. There is no comparison and no question of going back to the situation India faced in 1991, when the country was on the brink of defaulting on its debts, Mr. Singh was quoted as saying by the agency. This time, he said, India has enough reserves to pay for as many as seven months of imports.
India's economic problems, including a wide current account deficit that has pushed the rupee to record lows, cannot be compared to the country's 1991 balance-of-payments crisis, the World Bank's chief economist Kaushik Basu said on Monday, 19 August 2013. Basu cited a raft of economic data to show that the current situation was healthier than that of 1991, describing such comparisons as a "non question."
In an attempt to assuage concerns that India was moving toward capital controls, economic-affairs secretary Arvind Mayaram told reporters on Friday, 16 August 2013, that India doesn't plan to impose controls on money being repatriated by companies, such as dividends and royalties. His comments came after the Reserve Bank of India (RBI) on Wednesday, 14 August 2013, reduced the amount of money that Indian residents and companies can send abroad in an attempt to stem rupee's slide.
European stock markets traded lower in early action on Monday, 19 August 2013, tracking losses seen overnight in Asia and last week in the US where worries over rising Treasury yields spooked investors. Key benchmark indices in UK, France and Germany were down by 0.09% to 0.62%.
Asian stock fell for a third straight day on Monday, 19 August 2013, as worries about the Federal Reserve's policy outlook and rising US Treasury yields weighed on sentiment. Key benchmark indices in Indonesia, Singapore, Hong Kong, South Korea, and Taiwan were down by 0.13% to 4.54%. Key benchmark indices in China and Japan rose by 0.79% to 0.83%.
Japan's exports jumped by the most since 2010 in July, aiding Prime Minister Shinzo Abe's efforts to drive an economic recovery even as rising energy costs boosted the trade deficit. Exports increased 12.2% from a year earlier after a 7.4% rise in June, the Ministry of Finance said in Tokyo today. Imports climbed 19.6%, leaving a trade deficit of 1.02 trillion yen ($10.5 billion), the third biggest on record in data back to 1979. The seasonally-adjusted deficit widened from June to 944 billion yen.
Thailand cut its 2013 growth forecast as the country entered recession for the first time since the global financial crisis, with rising household debt limiting central bank scope to support the economy. Gross domestic product unexpectedly shrank 0.3% in the three months through June from the previous quarter, when it contracted a revised 1.7%, the National Economic and Social Development Board said in Bangkok today.
Trading in US index futures indicated that the Dow could gain 11 points at the opening bell on Monday, 19 August 2013. US stocks declined on Friday, 16 August 2013, handing the Dow Jones Industrial Average its worst week this year, with investors on uncertain footing as longer-term Treasury yields rose to two-year highs. On US economic data front, the Commerce Department reported housing starts climbed at an annual rate of 896,000, less than the 915,000 estimated. The Labor Department reported productivity rose at a slightly better-than-estimated 0.9% annual rate in the second quarter.
The Federal Open Market Committee (FOMC) on Wednesday, 21 August 2013, will issue minutes of its recent policy meeting held on 30 and 31 July 2013. The minutes of FOMC meet may help provide clues about the future of Fed's bond-buying program.
The US central bank currently buys $85 billion a month in US debt and mortgage-backed securities in a bid to hold interest rates low and encourage economic growth. Federal Reserve Chairman Ben Bernanke has on several occasions stressed that the tapering process is dependent on an improvement in data. Fed's bond-buying program has kept global markets flush with liquidity in recent years.
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