Key benchmark indices hit fresh intraday low in mid-morning trade after the latest data showed that the growth of industrial output in April 2013 was lower than market expectations. The S&P BSE Sensex was down 105.87 points or 0.55%, off close to 100 points from the day's high and up about 25 points from the day's low. The market breadth, indicating the overall health of the market, was negative. Weakness in Asian stocks also weighed on sentiment.
Metal stocks extended losses for third day in a row on weak Chinese economic data released over the weekend. Jindal Steel & Power extended Tuesday's 15.18% losses triggered by media reports the Central Bureau of Investigation (CBI) has registered an FIR against Congress MP and company's Chairman Naveen Jindal in the coal scam case. L&T reversed intraday gains. Shares of two wheeler makers further extended intraday losses on reports oil marketing companies, which are under tremendous pressure on account of weakening rupee, are looking to increase petrol prices by Rs 1.5-2/litre from Friday, 14 June 2013. Coal India extended intraday losses.
The market edged lower in early trade. The S&P BSE Sensex hit over 7-week low. The 50-unit CNX Nifty hit its lowest level in nearly 8 weeks. A bout of volatility was witnessed as the Sensex trimmed intraday losses in morning trade. The market hit fresh intraday low in mid-morning trade.
The market sentiment was affected adversely by data showing that foreign funds remained net sellers of Indian stocks on Tuesday, 11 June 2013. Foreign institutional investors (FIIs) sold shares worth a net Rs 885.85 crore on Tuesday, 11 June 2013, as per provisional data from the stock exchanges.
At 11:20 IST, the S&P BSE Sensex was down 105.87 points or 0.55% to 19,037.13. The index declined 129.59 points at the day's low of 19,013.41 in mid-morning trade, its lowest level since 22 April 2013. The index fell 7.80 points at the day's high of 19,135.20 in morning trade.
The CNX Nifty was down 34.60 points or 0.6% to 5,754.20. The index hit a low of 5,751.65 in intraday trade, its lowest level since 18 April 2013. The index hit a high of 5,789.95 in intraday trade.
The market breadth, indicating the overall health of the market, was negative. On BSE, 943 shares fell and 814 shares rose. A total of 104 shares were unchanged.
Among the 30-share Sensex pack, 20 stocks fell and rest of them rose. ITC, Maruti Suzuki India and TCS shed by 1.82% to 2.01%.
Metal stocks extended losses for third day in a row on weak Chinese economic data released over the weekend. China is the world's largest consumer of copper and aluminum. Hindalco Industries, Tata Steel and Sterlite Industries dropped by 0.63% to 1.14%.
Jindal Steel & Power fell 2.72% to Rs 219.85, with the stock extending Tuesday's 15.18% losses triggered by media reports the Central Bureau of Investigation (CBI) has registered an FIR against Congress MP and company's Chairman Naveen Jindal in the coal scam case. The stock was volatile. The stock was volatile. The stock hit high of Rs 232.50 and low of Rs 219 so far during the day. The stock had hit 52-week low of Rs 202 in intraday trade on Tuesday, 11 June 2013.
The FIR has accused Navin Jindal and Jindal Power and Steel of misrepresentation of networth and concealing previous coal allotment. They are also charged with cheating and forgery. The Naveen Jindal group was allotted a total of 11 blocks, making it the single largest beneficiary of the controversial coal block allotment.
The CBI has also filed an FIR against former Minister of State for Coal Dasari Narayan Rao.
L&T declined 0.33%, with the stock reversing intraday gains.
MMTC lost 4.21% to Rs 196.50 on reports the panel of ministers on disinvestment is likely to meet today, 12 June 2013, to decide the base price for divestment of government's 9.33% stake in MMTC. The stock hit 52-week low of Rs 191 in intraday trade today, 12 June 2013. The divestment through the offer for sale (OFS) is likely to take place tomorrow, 13 June 2013, reports added.
The stake sale would help the company to meet minimum public shareholding norms given by Sebi. The Government of India currently owns 99.33% stake in MMTC (as per the shareholding pattern as on 31 March 2013). Market regulator Securities & Exchange Board of India (Sebi) has mandated minimum public shareholding of 10% for state-run firms by August 2013.
The stake sale, which was originally slated to take place in March 2013, was then deferred on valuation concerns.
Two wheeler makers further extended intraday losses on reports oil marketing companies, which are under tremendous pressure on account of weakening rupee, are looking to increase petrol prices by Rs 1.5-2/litre with effect from Friday, 14 June 2013. Hero MotoCorp and Bajaj Auto shed by 3.19% to 3.55%.
Coal India dropped 2.69%, with the stock extending intraday losses.
Industrial production rose 2% in April 2013, lower than a revised growth of 3.4% in March 2013, data released by the government today, 12 June 2013, showed. The manufacturing sector registered a growth of 2.8% and electricity generation rose 0.7%. The mining sector registered a decline of 3%. As per use-based classification, production of basic goods rose 1.3%, capital goods production rose 1%, production of intermediate goods rose 2.4% and production of consumer non-durables jumped 12.3%. Production of consumer durables declined 8.3%.
Meanwhile, industrial production growth for March 2013 was revised upwards to 3.4% from 2.5% growth reported earlier.
Inflation based on the combined consumer price index (CPI) for urban and rural India eased to 9.31% in May 2013 from 9.39% in April 2013, another data released by the government today, 12 June 2013, showed. With the CPI, inflation based on the category food and beverages stood at 10.65% in May 2013.
The Reserve Bank of India (RBI) on Tuesday took measures to increase the supply of dollars in the market including asking exporters to realise their dollar earnings and get them back into the country within one year to support a plunging rupee. The RBI also hastened the process of dollar inflows through online payment channels by increasing the amount that exporters can bring back to $10,000 from $3000. The new norms will be applicable with immediate effect, the Reserve Bank of India said. The rupee hit record low of 58.98 per dollar in intraday trade on Tuesday.
Dr. Raghuram G. Rajan, Chief Economic Adviser, Ministry of Finance, on Tuesday, 11 June 2013, said that the government continues to undertake measures to ensure the Current Account Deficit (CAD) is safely financed. Dr. Rajan issued the statement after a recent steep slide in rupee against the dollar. "In the coming weeks, we will be recommending the policies to enhance foreign direct investment (FDI) limits in a number of areas", he said. All this will help not just in the short term objective of financing the CAD but also in the longer term objective of ensuring sustainable growth, Dr. Rajan said.
Asian stocks fell on Wednesday as Japanese machinery orders declined more than expected and concern grew that central banks from Tokyo to Washington are increasingly reluctant to add stimulus. Key benchmark indices in Indonesia, Japan, Singapore and South Korea shed by 0.12% to 1.29%. Stock markets in Hong Kong, Taiwan and the Philippines were closed for holidays. Mainland Chinese markets are closed from Monday, 10 June 2013 till today, 12 June 2013, for the Dragon Boat Festival.
Japan's machinery orders, an indicator of future capital spending dropped 8.8% in April, more than estimated.
Trading in US index futures indicated that the Dow could gain 27 points at the opening bell on Wednesday, 12 June 2013. US stocks dropped on Tuesday after the Bank of Japan's status-quo policy decision revived concerns about the winding down of central bank stimulus measures. The restraint in Japan also raised questions about the US Federal Reserve's future direction of policy measures ahead of next week's Federal Open Market Committee meeting.
On Tuesday, Germany's constitutional court began hearing debate on whether the European Central Bank's Outright Monetary Transactions -- a yet-to-be-used program to buy bonds from struggling euro-bloc nations -- is allowable under German law. A ruling isn't expected until later this year, however.
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