Stock prices witnessed a free fall as the Reserve Bank of India's (RBI) curbs on forex outflows to stem rupee's slide rattled investor sentiment. Fears that the Federal Reserve will begin to scale back its monthly bond buys in September 2013 added to the market's setback. The BSE Sensex settled at over 7 week low below the psychological 19,000 mark. The 50-unit CNX Nifty settled at its lowest level in more than 18 weeks. The Sensex tanked 769.41 points or 3.97%, off 712.77 points from the day's high and up 38.53 points from the day's low. The market breadth, indicating the overall health of the market, was weak. All the thirteen sectoral indices on BSE were in the red.
Indian stocks today, 16 August 2013, reversed four-day rising trend. The Sensex had gained 702.71 points or 3.76% in four trading sessions to 19,367.59 on 14 August 2013 from a recent low of 18,664.88 on 7 August 2013. The Sensex has fallen 747.52 points or 3.86% in this month so far (till 16 August 2013). The Sensex has declined 828.53 points or 4.26% in calendar 2013 so far (till 16 August 2013). From a 52-week high of 20,443.62 on 20 May 2013, the Sensex has fallen 1,845.44 points or 9.03%. From a 52-week low of 17,250.80 on 5 September 2012, the Sensex has surged 1,347.38 points or 7.81%.
Data on Thursday, 15 August 2013, showed that the number of Americans claiming jobless benefits slumped to a near six-year low last week. The data cemented expectations that the US central bank will soon cease its bond-buying program that has flooded global markets with liquidity in recent years.
Index heavyweights ITC and Reliance Industries fell. Banking stocks tumbled, with shares of state-run banking giant State Bank of India (SBI) hitting 52-week low. Metal stocks also declined sharply. Shares of capital goods pivotals L&T and Bhel hit 52-week lows on worries the ongoing slowdown in the economy could restrict new orders. IT stocks edged lower. Realty stocks also dropped.
Key benchmark indices declined in early trade as several upbeat economic reports spurred thinking that the Federal Reserve will begin to scale back its monthly bond buys in September 2013. The Sensex fell below the psychological 19,000 mark. Key benchmark indices tumbled in morning trade as the rupee dropped to a record low against the dollar. Key benchmark indices hit fresh intraday low in mid-morning trade. The Sensex extended losses to hit fresh intraday low in afternoon trade. Key benchmark indices slumped to hit fresh intraday low in mid-afternoon trade. Key benchmark indices extended slide in late trade to hit fresh intraday low.
The rupee trimmed losses after hitting record low below 62 against the dollar as exporters stepped in to sell the greenback. The partially convertible rupee was hovering at 61.66, weaker than its close of 61.43/44 on Wednesday, 14 August 2013. The rupee hit record low of 62.03 in intraday trade. Indian financial markets were closed on Thursday, 15 August 2013, for Independence Day holiday.
The Reserve Bank of India on Wednesday, 14 August 2013, announced measures to curb gold imports and capital outflows to stem rupee's slide. The RBI limited the investment Indian companies can make overseas without seeking its approval to 100% of their net worth. They were previously allowed to invest up to four times their net worth. The RBI also reduced the amount that people living in India can send abroad to $75,000 a year from $200,000. Further, it said the remittances cannot be used for buying property abroad. "The present set of measures is aimed at moderating outflows," the RBI said in a news release. The central bank would, however, consider requests for permission to invest beyond the limit it set Wednesday, it said. However, the central bank has exempted large state-run companies from this restriction.
The S&P BSE Sensex tanked 769.41 points or 3.97% to settle at 18,598.18, its lowest closing level since 26 June 2013. The index lost 807.94 points at the day's low of 18,559.65 in late trade. The index fell 56.64 points at the day's high of 19,310.95 in early trade.
The CNX Nifty was down 234.45 points or 4.08% to 5,507.85, its lowest closing level since 9 April 2013. The index hit a low of 5,496.05 in intraday trade. The index hit a high of 5,716.60 in intraday trade.
The market breadth, indicating the overall health of the market, was weak. On BSE, 1,613 shares declined and 750 shares rose. A total of 145 shares were unchanged.
The BSE Mid-Cap index fell 2.71% and the BSE Small-Cap index declined 2.15%. Both these indices outperformed the Sensex.
The total turnover on BSE amounted to Rs 2033 crore, slightly lower than Rs 2041.97 on Wednesday, 14 August 2013.
Hero MotoCorp was the lone gainer from the 30-share Sensex pack. The stock rose 2.25% to Rs 1,980 as the stock's weightage in MSCI index will rise as a result of a quarterly revisions of MSCI indices.
Mahindra & Mahindra Financial Services rose 0.84%. The stock would be added to MSCI Global Standard Index effective from the close of 30 August 2013.
Lupin (down 3.48%), Adani Enterprises (down 4.78%) and Godrej Consumer Products (down 2.01%) declined. MSCI Inc. in quarterly revisions to its equity indices on 14 August 2013 said weightages of these stocks would be reduced in MSCI indices
Index heavyweight and cigarette major ITC fell 4.04% to Rs 321.05.
Reliance Industries dropped 4.29% to Rs 828. The stock hit a high of Rs 866 and low of Rs 818.05.
Bank pivotals fell across the board. Among PSU bank stocks, Union Bank of India (down 6.32%), Punjab National Bank (down 8.12%), Canara Bank (down 9.94%), Bank of India (down 9.55%) and Bank of Baroda (down 8.89%) tumbled.
Moody's Investors Service has downgraded the bank financial strength ratings (BFSRs) and baseline credit assessments (BCAs) of three Indian public sector banks viz. Bank of Baroda, Canara Bank and Punjab National Bank. Moody's has affirmed the ratings of Union Bank of India, but changed the outlook on its BFSR to negative. The BCA downgrades for Bank of Baroda, Canara Bank and Punjab National Bank, and the negative outlook assigned to Union Bank of India primarily reflect the challenges of the current macroeconomic environment, which have been exacerbated by the depreciating rupee and high levels of inflation.
Shares of state-run banking giant SBI lost 2.78% to Rs 1,580 after hitting a 52-week low of Rs 1,553.40.
Among private sector bank stocks, HDFC Bank (down 4.69%), Yes Bank (down 12.2%) and Kotak Mahindra Bank (down 4.14%) declined.
ICICI Bank lost 4.87% after MSCI Inc. in quarterly revisions to its equity indexes on 14 August 2013 said that the stock's weightage would be increased in MSCI index.
Axis Bank lost 8.48% after MSCI said it would exclude the stock from its standard and large cap indices with effect from 2 September 2013. MSCI made the announcement on Thursday, 15 August 2013, when the Indian stock market was shut for Independence Day holiday.
Meanwhile, shares of Axis Bank also came under pressure after the Reserve Bank of India (RBI) on Wednesday, 14 August 2013, said that overseas investors will not be allowed to purchase additional shares in the bank given the foreign shareholding limit of 49% in the stock has been breached.
Metal stocks fell across the board. Tata Steel lost 6.75% on profit booking. The stock had gained 25.78% in five trading sessions to Rs 249.80 on 14 August 2013 from a recent low of Rs 198.60 on 6 August 2013. The company's consolidated net profit jumped 90.46% to Rs 1139 crore on 3% fall in turnover to Rs 32805 crore in Q1 June 2013 over Q1 June 2012. The result was announced on 13 August 2013. This improvement was on the back of robust performance by the Indian operations and improved performance at the European operations, Tata Steel said.
Sterlite Industries (India) dropped 7.26%. The company on 8 August 2013 said that the National Green Tribunal (NGT) has in its judgment upheld its interim order of 31 May 2013, and has allowed the company's Tuticorin Copper Smelter to continue to operate.
Sesa Goa fell 6.22%. The company on 12 August 2013 said that the Division Bench of the High Court of Bombay at Goa vide its order dated 12 August 2013 has dismissed the appeal filed by the shareholder of Sesa Goa and sanctioned the Scheme of amalgamation and arrangement amongst Sterlite Industries (India), Madras Aluminium Company, Sterlite Energy, Vedanta Aluminium and Sesa Goa and their respective shareholders and creditors and the scheme of amalgamation of Ekaterina with the company and their respective shareholders and creditors.
Hindalco Industries slipped 5.56%. The company's net profit rose 11.52% to Rs 474 crore on 3.15% decline in revenue from operations to Rs 5838 crore in Q1 June 2013 over Q1 June 2012. Earnings before interest, taxation, depreciation and amortization (EBITDA) rose 3.45% to Rs 479 crore in Q1 June 2013 over Q1 June 2012. Hindalco said that the performance in Q1 June 2013 was achieved despite adverse macro-economic headwinds. Hindalco announced the standalone results during trading hours on Tuesday, 13 August 2013.
On future business outlook, the company said that its focus is now on ramping up the new projects already on stream. Depressed LME prices in an otherwise inflationary scenario pose a significant challenge, Hindalco said. However, the company is confident of riding through these challenges with its trust on stabilizing the projects, operational efficiencies and cost control, Hindalco Industries said.
JSW Steel (down 9.95%), Hindustan Copper (down 8.51%), NMDC (down 5.03%), and Hindustan Zinc (down 4.18%) edged lower.
National Aluminum Company fell 5.25%. The company's net profit fell 28.41% to Rs 159.70 crore on 7.89% decline in total income to Rs 1739.26 crore in Q1 June 2013 over Q1 June 2012. The company announced Q1 result after market hours on Wednesday, 14 August 2013.
Steel Authority of India fell 5.96%. The company's net profit declined 35.25% to Rs 450.91 crore on 5.08% fall in total income to Rs 10494.08 crore in Q1 June 2013 over Q1 June 2012. The company announced the first quarter results during trading hours on Wednesday, 14 August 2013
Auto stocks edged lower. Maruti Suzuki India lost 5.17%.
Tata Motors shed 1.97%. The company's global wholesale vehicle sales fell 14% to 87,566 vehicles in July 2013 over July 2012. Global sales of passenger cars fell 13% to 46,684 vehicles in July 2013 over July 2012. Sales of its Jaguar Land Rover brand rose 30.61% to 35,162 units. Sales of its Jaguar cars rose 76.53% to 7,174 vehicles and Land Rover sales were higher by 22.45% at 27,988 vehicles during the month. The announcement was made after market hours on Wednesday, 14 August 2013.
Mahindra & Mahindra (M&M) declined 3.37%. The company after market hours on Wednesday, 14 August 2013, said it plans to invest Rs 200 crore to strengthen its current product line-up of trucks and buses. The company plans to invest Rs 300 crore to explore new product lines in the LCV, ICV and MCV range, it said.
Bajaj Auto slipped 3.36%. Bajaj Auto on Tuesday, 13 August 2013, said that the company has received a notice from the workmen's union viz. Vishwa Kalyan Kamgar Sanghatana stating that the stoppage of work at Chakan plant has been withdrawn and all the workmen at Chakan plant will resume their duty in their respective shifts from 14 August 2013. The company had earlier informed on 25 June 2013, that it had received a notice from the workmen's union of its Chakan plant viz., Vishwa Kalyan Kamgar Sanghatana stating that they propose to call for a stoppage of work by all the workmen employed in Chakan plant from the morning shift of 28 June 2013. The workmen at Chakan Plant had however, stopped coming from 25 June 2013 itself, without assigning any reason.
Bharti Airtel fell 3.31%, with the stock reversing intraday gain. Reportedly Singapore Telecommunications (SingTel) will increase its effective stake in Bharti Airtel to 32.34% from 30.76%. South-East Asia's biggest telecom company SingTel will buy 3.62% stake of Bharti Airtel's holding company Bharti Telecom for $302 million (Rs 1851 crore). Bharti Telecom currently holds 43.57% stake in Bharti Airtel. The deal is expected to be completed by 28 August 2013.
Capital goods pivotals edged lower on worries the ongoing slowdown in the economy could restrict new orders. L&T declined 5.17% to Rs 756.80 after hitting a 52-week low of Rs 753.25 in intraday trade today, 16 August 2013.
Bhel tumbled 11% to Rs 105.60, after hitting a 52-week low of Rs 104.75 in intraday trade today, 16 August 2013.
IT stocks edged lower. Infosys declined 3.02% to Rs 2,977. The stock had hit 52-week high of Rs 3,098.40 in intraday trade on Tuesday, 13 August 2013.
Wipro shed 0.67% to Rs 457. MSCI Inc. in quarterly revisions to its equity indexes on 14 August 2013 said that the stock's weightage would be increased in MSCI index. The stock had hit a 52-week high of Rs 473.20 in intraday trade on Wednesday, 14 August 2013.
HCL Technologies slipped 0.09% to Rs 920. The stock had hit a record high of Rs 960.75 in intraday trade on 5 August 2013.
IT major TCS declined 2.84% to Rs 1,778.50. The stock had hit a record high of Rs 1,890.30 in intraday trade on 7 August 2013.
A weak rupee boosts revenue of IT firms in rupee terms as the sector derives a lion's share of revenue from exports.
Titan Industries slumped 12.04% after the Reserve Bank of India (RBI) issued clarificatory circular on gold import norms after market hours on Wednesday, 14 July 2013. The RBI on Wednesday, 14 July 2013, banned the import of gold coins and medallions, and importers of gold will have to pay upfront before getting any of the yellow metal with the condition that at least 20% of the gold imported will have to be re-exported and the balance for domestic use.
Further, RBI said, nominated banks/nominated agencies and other entities should make available gold for domestic use only to the entities engaged in jewellery business/bullion dealers and to banks authorised to administer the gold deposit scheme against full upfront payment.
Also, RBI said, nominated banks/agencies/refineries and other entities should ensure that there is no front-loading of imports, particularly in the first and second lots of imports. Such imports should be linked to normal quantities of gold supplied to the exporters by the nominated banks/agencies and should not exceed the highest quantity supplied during any one year out of last three years. The quantity thus arrived at, however, will not be imported in one or two lots only.
Shares of other jewellery retailers also declined. Tribhovandas Bhimji Zaveri (TBZ) (down 7.7%), Thangamayil Jewellery (down 5.16%), PC Jeweller (down 7.21%), Gitanjali Gems (down 1.53%), Shree Ganesh Jewellery House (down 5.79%) and Tara Jewels (down 1.01%) declined.
United Breweries (UBL) dropped 4.86%. The company reported 22.63% rise in net profit to Rs 120.96 crore on 11.9% rise in total income to Rs 1362.66 crore in Q1 June 2013 over Q1 June 2012. The company announced Q1 result after market hours on Wednesday, 14 August 2013.
UBL said it has posted volume growth in key markets resulting in revenue growing ahead of volume. The double digit volume growth in Delhi, Rajasthan, Punjab, Orissa and Uttar Pradesh resulted in market share gains, the company said. The quarter also witnessed good growth in Andhra Pradesh & Karnataka markets that constitute a large share of the industry, UBL said in a statement. The major brown-field expansion undertaken at Aurangabad has been completed. Land acquisition for the new Greenfield project in Bihar has also been completed, UBL said in a statement.
Realty stocks dropped. DLF lost 7.48%, with the stock reversing recent gain. The company reported consolidated net profit of Rs 181 crore in Q1 June 2013, as against net loss of Rs 4 crore in Q4 March 2013. Earnings before interest, taxation, depreciation, and amortization (EBITDA) jumped 29% to Rs 1055 crore in Q1 June 2013 over Q4 March 2013. Revenue rose 6% to Rs 2453 crore in Q1 June 2013 over Q4 March 2013. The company announced Q1 result after market hours on Monday, 12 August 2013.
NHPC declined 2.4%. The company after market hours on Wednesday, 14 August 2013 said that a memorandum of understanding has been signed between the company and Uttar Pradesh New & Renewable Energy Development Agency, Department of Additional Sources of Energy, Government of Uttar Pradesh on 8 August 2013 at Lucknow for implementation of solar power project in Uttar Pradesh. Initially, a 50 megawatt solar energy power project is proposed to be implemented at Parason, Tehsil Kalpi, Dist. Jalaun, Uttar Pradesh.
MMTC fell by maximum permissible limit of 5%. The company's net profit fell 58.37% to Rs 5.02 crore on 63.88% rise in total income to Rs 8864.16 crore in Q1 June 2013 over Q1 June 2012. The company announced Q1 result after market hours on Wednesday, 14 August 2013.
DLF said that the benefit of the revised strategy, which was articulated in February 2013, has now started to flow. The company remains focused on creating a business model of highly stable and predictable earnings, cash flows and long term value creation. The company continues to concentrate its efforts on reduction of net debt by increasing its operating cash flows and non-core divestments thereby increasing ROE, DLF said.
Other realty stocks also declined. Unitech (down 10.44%), Oberoi Realty (down 3.27%), Parsvnath Developers (down 2.13%), D B Realty (down 3.64%), and Indiabulls Real Estate (down 10.37%), edged lower.
Shares of Financial Technologies rose 1.91% to Rs 149.40 in intensely volatile trade. After sliding as much as 18.14% to the day's low of Rs 120, the stock surged as much as 21.42% at the day's high of Rs 178. The National Spot Exchange (NSEL), which shut its operations this month following regulatory probes over possible trading violations, on Wednesday, 14 August 2013, said it has finalized the detailed settlement plan. As per the plan, starting 16 August 2013, there will be pay-in every Friday and pay-out every subsequent Tuesday. Financial Technologies is one of the two promoters of NSEL.
Shares of Multi Commodity Exchange of India (MCX), a commodities futures exchange promoted by Financial Technologies, fell 4.46% to Rs 242. The stock was highly volatile. After hitting 5% lower circuit at Rs 240.65, also its record low in intraday trade, the stock gained 4.62% to hit day's high of Rs 265.
MCX during trading hours today, 16 August 2013, said that the management of the company made a detailed presentation to the board of directors of the company on 13 August 2013 covering various aspects relating to the fundamentals and efficient functionality of MCX. The board was informed about the effective risk management system and monitoring of warehouses prevailing in MCX, including the adequacy of insurance coverage. MCX said its market share remains high at above 86% after the imposition of the commodities transaction tax with effect from 1 July 2013.
MCX and NSEL are totally different entities with no financial commitments or exposure to each other whatsoever, MCX said.
MCX said it has sound investment policy in respect of its surplus fund and that it has not given or placed any inter-corporate deposits with any entity. MCX said that it is in full compliance of FMC directive on investments/loans/advances.
Delta Corp rose 0.66% after the company during market hours today, 16 August 2013 said that Victor Hotels & Motels, a wholly owned fellow subsidiary of Delta Corp, has obtained the necessary approvals for commencing its offshore gaming operations on board its vessel, M.V. Horseshoe Casino. Accordingly, the company proposes to commence operations from 16 August 2013.
European stocks declined on Friday, 16 August 2013, ahead of data from the US, including a sentiment survey. Key benchmark indices in Germany and UK fell by 0.03% to 0.17%. France's CAC 40 rose 0.15%.
Asian stocks declined on Friday, 16 August 2013, as several upbeat economic reports spurred thinking that the Federal Reserve will begin to scale back its monthly bond buys in September 2013. Key benchmark indices in Indonesia, China, South Korea, Hong Kong, Singapore and Japan were down by 0.1% to 2.49%. Taiwan's Taiwan Weighted index rose 0.48%.
Trading in US index futures indicated that the Dow could gain 28 points at the opening bell on Friday, 16 August 2013. US stocks slumped on Thursday, 15 August 2013, as better-than-expected data, such as weekly jobless numbers, heightened fears of imminent tapering of the Federal Reserve'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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