Key benchmark indices slumped as world stocks tumbled after disappointing data from China and comments from the US Federal Reserve about tapering its stimulus program stoked worries about slower global growth and less liquidity. Weak Q4 results announced by index constituents, SBI and Bhel also dampened sentiment. The barometer index, the S&P BSE Sensex hit lowest level in nearly two weeks below the psychological 20,000 mark. The 50-unit CNX Nifty hit lowest level in over two weeks below the psychological 6,000 mark. The Sensex was provisionally down 371.86 points or 1.85%, off close to 340 points from the day's high and up about 60 points from the day's low. The market breadth, indicating the overall health of the market, was extremely weak. All the 13 sectoral indices on BSE were in the red.
Index heavyweight and cigarette major ITC edged lower. Another index heavyweight Reliance Industries (RIL) slumped nearly 4%. Realty stocks fell for the fourth straight day. L&T extended Wednesday's 5.57% losses triggered by poor Q4 results. Bharat Heavy Electricals (Bhel) also dropped after reporting weak Q4 results during market hours today, 23 May 2013. Other capital goods stocks declined after sector heavyweights, L&T and Bhel reported disappointing Q4 results. SBI tumbled nearly 8% after the state-run banking giant reported weak Q4 results during market hours today, 23 May 2013.
The market edged lower in early trade on weak Asian stocks. It weakened to hit fresh intraday low in morning trade. It extended losses to hit fresh intraday low in mid-morning trade. It trimmed losses after hitting fresh intraday low in early afternoon trade. Market extended fall in afternoon trade as European markets opened weak. It continued downward trend to hit fresh intraday low in mid-afternoon trade. It further weakened to hit fresh intraday low in late trade.
Foreign institutional investors (FIIs) bought shares worth a net Rs 540.18 crore on Wednesday, 22 May 2013, as per provisional data from the stock exchanges.
As per provisional figures, the S&P BSE Sensex was down 371.86 points or 1.85% to 19,690.38. The index declined 427.45 points at the day's low of 19,634.79 in late trade, its lowest level since 10 May 2013. The index fell 34.68 points at the day's high of 20,027.56 in early trade.
The CNX Nifty was down 121.25 points or 1.99% to 5,973.25, as per provisional figures. The index hit a low of 5,955.70 in intraday trade, its lowest level since 6 May 2013. The index hit a high of 6,081.45 in intraday trade.
The total turnover on BSE amounted to Rs 3890 crore, higher than Rs 2064.84 crore on Wednesday, 22 May 2013.
The market breadth, indicating the overall health of the market, was extremely weak. On BSE, 1,737 shares fell and 592 shares rose. A total of 117 shares were unchanged.
Among the 30-share Sensex pack, 28 stocks fell and only two of them rose. Bharti Airtel, Jindal Steel & Power and NTPC shed by 3.59% to 4.05%.
Index heavyweight Reliance Industries (RIL) declined 3.99% to Rs 785.15. The stock hit high of Rs 817 and low of Rs 781.60.
Index heavyweight and cigarette major ITC fell 1.04% to Rs 332.30. The stock hit high of Rs 336.10 and low of Rs 330.35. The stock had hit record high of Rs 355 in intraday trade on 11 May 2013. The company's net profit rose 19.43% to Rs 1927.98 crore on 19.12% growth in total income to Rs 8511.38 crore in Q4 March 2013 over Q4 March 2012. The result was announced on 17 May 2013. ITC's net profit rose 20.38% to Rs 7418.39 crore on 18.74% growth in total income to Rs 30839.97 crore in the year ended March 2013 over the year ended March 2012.
On a consolidated basis, ITC's net profit rose 21.57% to Rs 7608.07 crore on 19.02% growth in total income to Rs 32505.14 crore in the year ended March 2013 over the year ended March 2012.
ITC's board of directors at its meeting held on Friday, 17 May 2013, recommended a dividend of Rs 5.25 per share for the financial year ended 31 March 2013.
Capital goods stocks declined after sector heavyweights, L&T and Bhel reported disappointing Q4 results. L&T lost 6.49%, with the stock extending Wednesday's 5.57% losses triggered by poor Q4 results. The company during market hours on Wednesday, 22 May 2013 reported 6.9% fall in net profit to Rs 1787.94 crore on 10.08% rise in total income to Rs 20668.21 crore in Q4 March 2013 over Q4 March 2012.
L&T reported 10.19% rise in net profit to Rs 4910.65 crore on 15.07% increase in total income to Rs 62724.16 crore in the year ended March 2013 over the year ended March 2012.
L&T said that to commemorate the occasion of the platinum jubilee of the company, its board of directors in its meeting held on Wednesday, 22 May 2013, recommended issue of bonus shares in the ratio of 1:2 (i.e. one bonus equity share each for every two held).
The company garnered fresh orders worth Rs 88035 crore during the year ended 31 March 2013 (FY 2013), recording a healthy growth of 25% over FY 2012. The order Inflow rose 32% to Rs 27929 crore in Q4 March 2013 over Q4 March 2012, despite challenging economic environment. International order inflow constituted 17% of the total order inflow for the year 2012-13. The major orders during the year came from Building & Factories, Power Transmission & Distribution, Infrastructure Transportation and Power sectors. The order book stood at Rs 153604 crore as at 31 March 2013. International order book constituted 13% of the total order book.
Bharat Heavy Electricals (Bhel) declined 3.74% after the company during market hours today, 23 May 2013 reported 4.2% fall in net profit to Rs 3237.54 crore on 2.15% decline in net sales to Rs 18850.16 crore in Q4 March 2013 over Q4 March 2012.
Among other capital goods stocks, ABB, Siemens, Crompton Greaves and Punj Lloyd dropped by 2.41% to 10.2%.
Realty stocks fell for the fourth straight day. Godrej Properties, D B Realty, Unitech, and HDIL dropped by 0.27% to 10.95%.
DLF tumbled 7.07% to Rs 211.05. The company said on 20 May 2013 that the Equity Issuance Committee of the board of directors of the company has, by a resolution dated 20 May 2013, allotted 8.1 crore shares to successful applicants at an issue price of Rs 230 per share, aggregating to Rs 1863.42 crore, under the institutional placement programme.
State Bank of India (SBI) tumbled 7.96% after reporting 18.54% fall in net profit to Rs 3299.22 crore on 6.98% rise in total income to Rs 36330.87 crore in Q4 March 2013 over Q4 March 2012. The result was announced during market hours today, 23 May 2013.
SBI's ratio of net non-performing assets to net advances stood at 2.10% as on 31 March 2013, compared with 2.59% as on 31 December 2012 and 1.82% as on 31 March 2012.
The bank's ratio of gross non-performing assets (NPA) to gross advances stood at 4.75% as on 31 March 2013, compared with 5.30% as on 31 December 2012 and 4.44% as on 31 March 2012.
Provisions and contingencies rose 33.14% to Rs 4180.99 crore in Q4 March 2013 over Q4 March 2012. The provisioning coverage ratio as on 31 March 2013 stood at 66.58% compared with 68.10% as on 31 March 2012.
The bank's Capital Adequacy Ratio (CAR) as per Basel II norms stood at 12.92% as on 31 March 2013, compared with 12.21% as on 31 December 2012 and 13.86% as on 31 March 2012.
The board of SBI has declared a dividend of Rs 41.50 per share for the accounting year ended 31 March 2013.
India's largest steel maker by sales, Tata Steel dropped 1.21% ahead of its Q4 results today, 23 May 2013.
JSW Steel rose 0.77%. The company's consolidated net profit fell 61.55% to Rs 295.91 crore on 4.66% decline in total income to Rs 9900.98 crore in Q4 March 2013 over Q4 March 2012. The company announced its Q4 results during market hours today, 23 May 2013.
As per the Q4 results calendar, Coal India unveils consolidated FY 2013 results on 27 May 2013. Sun Pharma, Power Grid Corporation of India, GAIL (India) and Hindalco Industries unveil Q4 results on 28 May 2013. Tata Motors, ONGC, Cipla, NMDC and BPCL unveil Q4 results on 29 May 2013. DLF, M&M and Tata Power unveil Q4 results on 30 May 2013.
Global credit rating agency Standard & Poor's (S&P) on 17 May 2013, affirmed India's sovereign rating at BBB-minus with a negative outlook, reiterating there was a one-in-three chances of a ratings downgrade over the next 12 months. S&P said the government's ability to prop up investment growth remains uncertain. The ratings agency, however, said there was scope to upgrade the sovereign ratings if the government unleashes public and private investments to spur economic growth.
The monsoon rains may arrive on the southern coast around 3 June 2013, the weather office forecast on 15 May 2013. The rains, which run from June to September, are vital for the 55% of farmland without irrigation in India, one of the world's largest producers and consumers of food. The India Meteorological Department (IMD) has predicted normal rains this year.
The Reserve Bank of India (RBI) undertakes mid-quarter review of the monetary policy on 17 June 2013. RBI Governor D Subbarao on 14 May 2013 said that the central bank will take note of falling inflation when discussing potential interest rate cuts. The RBI on 3 May 2013 cut its key policy rate viz. the repo rate by 25 basis points (bps) to 7.25% and kept the cash reserve ratio (CRR) for banks unchanged at 4% after a monetary policy review. RBI said at that time that the balance of risks stemming from its assessment of the growth-inflation dynamic provides little space for further monetary easing. The RBI said it will endeavour to condition the evolution of inflation to a level of 5% by March 2014, using all instruments at its command.
The finance ministry in October 2012 announced a five-year plan to cut fiscal deficit. The government hopes to reduce the fiscal deficit to 3% by March 2017.
European stock markets declined on Thursday, after disappointing data from China and comments from the U.S. Federal Reserve about tapering its stimulus program stoked worries about slower global growth and less liquidity. Key benchmark indices in UK, France and Germany were down by 1.94% to 2.44%.
Britain's economy resumed growth in the first quarter as companies built up stocks and consumer spending increased, offsetting a drop in exports. Gross domestic product rose 0.3% in the period, matching an estimate published on April 25, the Office for National Statistics said today in London. Inventories increased by 2.5 billion pounds ($3.8 billion) in the quarter, adding 0.4 percentage point to GDP. Consumer spending rose 0.1%.
A euro-area services and factory output gauge increased more than economists forecast in May, adding to signs the currency bloc is starting to emerge from its record-long recession. A composite index based on a survey of purchasing managers in both industries rose to 47.7 from 46.9 in April, London-based Markit Economics said today.
Asian stocks slid on Thursday after China's manufacturing output unexpectedly contracted in May and amid speculation the Federal Reserve may soon wind back stimulus. Key benchmark indices in China, Hong Kong, Indonesia, Singapore, Taiwan and South Korea shed by 1.16% to 2.54%. Japan's Nikkei Average tumbled 7.32%, the most since the aftermath of the March 2011 tsunami and nuclear disaster, as financial companies plunged amid rising bond yields. The rout triggered a halt in Nikkei 225 Stock Average futures trading in Osaka.
China's manufacturing is contracting in May for the first time in seven months, adding to signs that economic growth is losing steam for a second quarter. The preliminary reading of 49.6 for a Purchasing Managers' Index released today by HSBC Holdings Plc and Markit Economics compares with a final 50.4 for April. A reading above 50 indicates expansion.
Singapore's economy unexpectedly expanded last quarter as services and construction strengthened, reducing pressure on the central bank to ease monetary policy to boost growth. Gross domestic product rose an annualized 1.8% in the three months through March from the previous quarter, when it grew 3.3%, the Trade Ministry said in a statement today, revising an earlier estimate for a 1.4% contraction last quarter.
Trading in US index futures indicated that the Dow could fall 143 points at the opening bell on Thursday, 23 May 2013. US stocks slid Wednesday, reversing gains after minutes from the Federal Reserve's latest meeting and comments from the Fed chief Ben Bernanke suggested the central bank may begin tapering its bond-buying program in coming months. The minutes of the last Fed meeting said a number of officials expressed a willingness to taper bond purchases as early as the upcoming meeting on June 18-19 if there were signs of sufficiently strong and sustained growth. But views differed both on how to gauge progress and on how likely it was that that threshold would be met.
The Federal Reserve's monetary stimulus is helping the U.S. economy recover but the central bank needs to see further signs of traction before taking its foot off the gas pedal, Fed Chairman Ben Bernanke said on Wednesday. A decision to scale back the $85 billion in bonds the Fed is buying each month could come at one of the central bank's "next few meetings" if the economy looked set to maintain momentum, Bernanke told Congress. In testimony that showed little immediate desire to retreat from the Fed's third and latest round of bond buying, Bernanke emphasized the high costs of both unemployment and inflation, which respectively continue to run above and below the Fed's targets.
The central bank is currently buying $45 billion in Treasury bonds and $40 billion in mortgage-backed debt each month to keep borrowing costs low and encourage investment, hiring and economic growth. It is the third round of asset purchases, or quantitative easing, since the Fed drove interest rates to near zero in late 2008.
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