Key benchmark indices hit fresh intraday low in afternoon trade as weak global cues and a steep slide in rupee against the dollar rattled investor sentiment. The S&P BSE Sensex and the 50-unit CNX Nifty, both, hit their lowest level in nearly six weeks. The Sensex was down 237.34 points or 1.24%, off close to 187 points from the day's high and up about 48 points from the day's low. The market breadth, indicating the overall health of the market, was weak.
PSU OMCs fell on a weak rupee, with BPCL hitting a 52-week low. Select PSU stocks were in demand with Hindustan Copper surging over 10%. NDTV slumped 20% after weak Q1 results.
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 market weakened further to hit fresh intraday low in mid-morning trade. The Sensex fell below the psychological 19,000 mark. Weakness continued on the bourses in early afternoon trade. Key benchmark indices hit fresh intraday low in afternoon trade as weak global cues and a steep slide in rupee against the dollar rattled investor sentiment.
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 61.64 today, 6 August 2013, sharply lower than Monday's close of 60.88/89.
Bond prices fell. The yield on the benchmark government paper 7.16 GS 2023 was at 8.2928%, higher than Monday's close of 8.2015%. Bond yield and bond prices are inversely related.
Most global 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 13:20 IST, the S&P BSE Sensex was down 237.34 points or 1.24% to 18,944.92. The index lost 285.77 points at the day's low of 18,896.49 in afternoon 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 80.45 points or 1.42% to 5,604.95. The index hit a low of 5,586.65 in intraday trade, its lowest level since 26 June 2013. The index hit a high of 5,664.90 in intraday trade.
The BSE Mid-Cap index was down 2.01% and the BSE Small-Cap index was down 1.46%. Both these indices underperformed the Sensex.
The market breadth, indicating the overall health of the market, was weak. On BSE, 1,500 shares fell and 549 shares rose. A total of 139 shares were unchanged.
Among the 30-share Sensex pack, 24 stocks fell and rest of them rose. Sterlite Industries (India) (down 4.58%), HDFC Bank (down 3.98%), Tata Steel (down 3.9%), Bajaj Auto (down 3.72%), Tata Power (down 3.35%), Bhel (down 2.65%), ICICI Bank (down 2.43%), Coal India (down 2.32%) and ONGC (down 2.26%), edged lower from the Sensex pack.
Hero MotoCorp (up 1.59%), Wipro (up 0.97%), Tata Motors (up 0.81%), NTPC (up 0.74%), Maruti Suzuki India (up 0.62%), TCS (up 0.18%) and Dr Reddy's Laboratories (up 0.04%), edged higher from the Sensex pack.
NDTV hit a lower circuit limit of 20% at Rs 74.80. On a consolidated basis, the company reported a net loss of Rs 24.04 crore in Q1 June 2013, lesser than the net loss of Rs 26.09 crore in Q1 June 2012. Total income from operations slipped 4.15% to Rs 102.40 crore in Q1 June 2013 over Q1 June 2012.
Shares of state-run copper miner Hindustan Copper jumped 10.22% to Rs 48.55.
MMTC (up 3.70%), Power Grid Corporation of India (up 1.83%), Nalco (up 1.01%) and Neyveli Lignite Corporation (up 0.89%), were other PSU stocks which bucked weak market trend.
PSU OMCs fell on weak rupee. HPCL (down 4.66%) and Indian Oil Corporation (down 0.18%), edged lower.
BPCL declined 7.70% to Rs 260 after hitting a 52-week low of Rs 259.50 in intraday trade today, 6 August 2013.
The weakness in rupee has raised concerns about increased costs of importing oil. PSU OMCs import about 70-75% of their crude oil needs and rely heavily on foreign currency borrowings, which largely remain unhedged.
Economic output in emerging economies contracted in July to its slowest pace since April 2009, marking a fresh low since the global financial crisis, according to HSBC Holdings PLC. The HSBC Emerging Markets Index, which tracks purchasing managers' index reports from 16 emerging economies, declined to 49.4 in July from 50.6 the previous month, HSBC said in a report. A reading above 50 indicates an expansion in activity.
European indices were mostly lower in early trade on Tuesday, with comments from Dallas Fed chief Richard Fisher bringing the topic of the US central bank scaling back its $85 billion-a-month bond-buying program back into the spotlight. Key benchmark indices in Germany and UK were down by 0.10% and 0.19%, respectively. France's CAC 40 was up 0.08%.
Most 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, Taiwan, Singapore, and South Korea were off 0.50% to 1.34%. Key benchmark indices in China and Japan rose by 0.49% and 1%, respectively.
Australia's central bank cut its benchmark interest rate to a record low and damped expectations of further reductions. Governor Glenn Stevens and his board reduced the overnight cash-rate target by a quarter percentage point to 2.5%, the Reserve Bank of Australia said in a statement in Sydney today.
Trading in US index futures indicated that the Dow could fall 8 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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