Key benchmark indices declined for the consecutive trading session as weakness in global stocks weighed on sentiment. The barometer index, the S&P BSE Sensex, fell below the psychological 19,000 level. Both, the S&P BSE Sensex, and the CNX Nifty settled at more than 8-weeks low. The Sensex fell 213.97 points or 1.12%, up about 62 points from the day's low and off close to 87 points from the day's high. The market breadth, indicating the overall health of the market, was weak.
Indian stocks fell for the third straight day today, 13 June 2013. The Sensex has lost 613.91 points or 3.16% in three trading sessions from a recent high of 19,441.07 on 10 June 2013. The Sensex has lost 933.14 points or 4.72% in this month so far (till 13 June 2013). The Sensex has fallen 599.55 points or 3.09% in calendar 2013 so far (till 13 June 2013). From a 52-week high of 20,443.62 on 20 May 2013, the Sensex has fallen 1,616.46 points or 7.91%. From a 52-week low of 16,553.47 on 12 June 2012, the Sensex has surged 2,228.68 points or 13.43%.
Coming back to today's trade, MMTC slumped after the government set the floor price for divestment of 9.33% stake in the company at a massive discount to the ruling market price. Shares of power finance companies tumbled. Realty stocks also declined. Two wheeler makers extended Wednesday's losses triggered by reports oil marketing companies may increase petrol prices by Rs 1.5-2/litre with effect from tomorrow, 14 June 2013. Other auto stocks also faltered. Apollo Tyres slumped over 25% after the company said it will acquire Cooper Tire & Rubber Company (Cooper), a company listed on the New York Stock Exchange in an all-cash transaction valued at approximately $2.5 billion. Shares of television broadcaster Sun TV Network witnessed a sell-off in late trade.
The market sentiment was affected adversely by data showing that foreign funds remained net sellers of Indian stocks on Wednesday, 12 June 2013. Foreign institutional investors (FIIs) sold shares worth net Rs 1044 crore from the secondary equity markets on Wednesday, 12 June 2013, as per data from Securities & Exchange Board of India (Sebi).
The S&P BSE Sensex fell 213.97 points or 1.12% to 18,827.16, its lowest closing level since 17 April 2013. The index declined 275.60 points at the day's low of 18,765.53 in mid-morning trade. The index fell 127 points at the day's high of 18,914.13 in morning trade.
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The CNX Nifty fell 61.10 points or 1.06% to 5,699.10, its lowest closing level since 17 April 2013. The index hit a low of 5,683.10 in intraday trade. The index hit a high of 5,729.85 in intraday trade.
The BSE Mid-Cap index underperformed the Sensex, falling 1.37%. The BSE Small-Cap index outperformed the Sensex, falling 1.06%.
The market breadth, indicating the overall health of the market, was weak. On BSE, 1,565 shares fell and 746 shares rose. A total of 137 shares were unchanged.
The total turnover on BSE amounted to Rs 1812 crore, lower than Rs 1935.57 crore on Wednesday, 12 June 2013.
The S&P BSE Auto index (down 2.33%), the S&P BSE Realty index (down 2.30%), the S&P BSE Healthcare index (down 1.81%), the S&P BSE Power index (down 1.81%), the S&P BSE PSU index (down 1.71%), the S&P BSE IT index (down 1.66%), the S&P BSE FMCG index (down 1.29%), the S&P BSE Bankex (down 1.19%) and the S&P BSE Metal index (down 1.15%), underperformed the Sensex.
The S&P BSE Consumer Durables index (up 1.55%), the S&P BSE Oil & Gas index (down 0.69%), the S&P BSE Capital Goods index (down 0.91%) and the S&P BSE Teck index (down 1.05%), outperformed the Sensex.
Among the 30-share Sensex pack, 25 stocks fell and the rest of them rose. Sun Pharmaceutical Industries (down 3.22%), Tata Steel (down 2.92%), GAIL (India) (down 2.7%), Sterlite Industries (down 2.51%), Bhel (down 2.37%), ITC (down 1.57%), Coal India (down 1.4%), Cipla (down 1.38%) and HDFC Bank (down 1.37%), edged lower from the Sensex pack.
Bharti Airtel rose 3.47%, with the stock recovering on bargain hunting after 6-day 8.59% slide. The stock had declined 8.59% in six trading sessions to settle at Rs 277.95 on Wednesday, 12 June 2013, from a recent high of Rs 304.10 on 4 June 2013.
Bharti Telecom, a promoter group entity of Bharti Airtel, purchased 18.17 lakh shares of Bharti Airtel for around Rs 50.90 crore through open market transactions this week. Bharti Telecom's stake in the company has increased to 45.81% post the purchase from 45.77%, the company said in a filing to the BSE. Bharti Telecom bought 6 lakh shares for Rs 17.07 crore on 10 June 2013, 6.75 lakh shares for Rs 18.74 crore on 12 June 2013 and another tranche of 5.42 lakh shares for Rs 15.09 crore on 12 June 2013, the filing added.
Sun TV Network slumped 10.94% in a sell-off in late trade.
Hindalco Industries rose 4.82%, with the stock recovering on bargain hunting after 4-day 9.98% slide triggered by weak Chinese economic data for May 2013. Shares of Hindalco Industries had declined 9.98% in four trading sessions to settle at Rs 92.40 on Wednesday, 12 June 2013, from a recent high of Rs 102.65 on 6 June 2013, hit by weak Chinese economic data. China is the world's largest consumer of copper and aluminum.
Two wheeler makers extended Wednesday's losses triggered by reports oil marketing companies may increase petrol prices by Rs 1.5-2/litre with effect from tomorrow, 14 June 2013. Bajaj Auto (down 2.06%) and Hero MotoCorp (down 0.10%), edged lower.
Other auto stocks also faltered. Tata Motors (down 3.5%), M&M (down 3.25%), Maruti Suzuki India (down 1.60%), Eicher Motors (down 0.25%) and Hero MotoCorp (down 0.10%), edged lower.
Apollo Tyres slumped 25.43% to Rs 68.60 after the company on Wednesday said it has entered into a definitive merger agreement under which a wholly-owned step subsidiary of the company will acquire Cooper Tire & Rubber Company (Cooper), a company listed on the New York Stock Exchange in an all-cash transaction valued at approximately $2.5 billion. The stock hit 52-week low of Rs 67.75 in intraday trade today, 13 June 2013.
This strategic combination will bring together two companies with highly complementary brands, geographic presence, and technological expertise to create a global leader in tire manufacturing and distribution, Apollo Tyres said in a statement. Cooper is the 11th largest tyre company in the world by revenue and it supplies premium and mid-tier tyres worldwide through renowned brands such as Cooper, Mastercraft, Starfire, Chengshan, Roadmaster and Avon. The combined company will be the seventh-largest tyre company in the world and will have a strong presence in high-growth end-markets across four continents, Apollo Tyres said. With a combined $6.6 billion in total sales in 2012, the combined company will have a comprehensive portfolio of signature brands and greater ability to cross-sell products in diverse countries with negligible overlap, Apollo Tyres said.
Realty stocks edged lower. Anant Raj Industries (down 5.83%), Indiabulls Real Estate (down 5.75%), Unitech (down 5.19%), HDIL (down 3.29%), Phoenix Mills (down 2.54%), Prestige Estates (down 2.12%), D B Realty (down 2.06%), Godrej Properties (down 1.77%), DLF (down 1.69%) and Parsvnath Developers (down 1.49%), edged lower.
Shares of select PSU firms declined after the government set the floor price for divestment of 9.33% stake in state-run MMTC at a massive discount to the ruling market price. State Trading Corporation of India (down 19.96%), National Fertilizers (down 5.42%), Hindustan Copper (down 5.07%), NMDC (down 4.36%) and MTNL (down 4.22%), edged lower.
MMTC declined by the maximum permissible level of 10% to Rs 190.35 on BSE after the government set the floor price for divestment of 9.33% stake in the company at a massive discount to the ruling market price. The government had put on block 9.33 crore equity shares, aggregating to 9.33% of the total paid up equity share capital of the company through offer for sale (OFS) route via the stock exchanges mechanism on today, 13 June 2013. The government had fixed the floor price for the OFS at Rs 60 per share, a 71.62% discount to MMTC's Wednesday's closing price of Rs 211.45 on BSE.
The offer for sale (OFS) was subscribed 154.60%. The OFS received total bids for 14.42 crore shares at an indicative price of Rs 60.86 per share.
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.
Shares of power finance companies tumbled. Power Finance Corporation (down 4.85%) and Rural Electrification Corporation (down 5.31%), edged lower.
IT stocks declined. MphasiS (down 5.45%), Hexaware Technologies (down 4.48%), CMC (down 2.04%), TCS (down 1.61%), Wipro (down 1.33%), Oracle Financial Services Software (down 1.02%), Mahindra Satyam (down 0.97%), HCL Technologies (down 0.94%) and Tech Mahindra (down 0.88%), edged lower.
Infosys fell 1.85% to Rs 2,379.10. The company after market hours today, 13 June 2013, announced salary increments for all eligible employees for fiscal year 2014. The company announced an average increase of 8% for employees based in India. Employees based in other geographies, who have not been covered by salary increments in February 2013, can look forward to an average increase of 3%, Infosys said. These increments will be effective 1 July 2013. The global sales force will see an average increase of 8% which will be effective 1 May 2013, Infosys said.
Shares of power generation and power distribution companies edged lower in weak market. JSW Energy (down 6.17%), Adani Power (down 5.54%), Tata Power (down 2.5%), NHPC (down 1.4%), GMR Infrastructure (down 1.27%), Reliance Power (down 1%), NTPC (down 0.93%) and Reliance Infrastructure (down 0.61%), edged lower.
Titan Industries rose 4.29% to Rs 213.70 on bargain hunting after a recent steep slide triggered by the company's announcement that the Reserve Bank of India (RBI) has clarified that all imports of gold for domestic consumption, either through banks, nominated agencies or directly can be made only with 100% cash margin. The stock reversed direction after hitting 52-week low of Rs 200 at the onset of the trading session today, 13 June 2013. The RBI has also clarified that credit of any kind from suppliers or bullion banks for import of gold for domestic use is prohibited, Titan said during trading hours on Tuesday, 11 June 2013. This will affect import of gold through all non consignment routes like gold on lease/loan, Titan Industries said. Titan imports gold for its retail gold jewellery business.
Titan said it had sought some clarifications on gold imports after the Reserve Bank of India issued a notification on 4 June 2013 on changes to the current terms governing import of gold in India.
Tata Coffee clocked a highest turnover of Rs 126.72 crore on BSE. State Bank of India (Rs 104.52 crore), United Spirits (Rs 61.64 crore), Apollo Tyres (Rs 58.70 crore) and Jet Airways (India) (Rs 43.29 crore), were the other turnover toppers on BSE in that order.
Media Matrix Worldwide reported highest volumes of 2.34 crore shares on BSE. Tata Teleservices (Maharashtra) (1.16 crore shares), Yantra Natural Resources (1.09 crore shares), Apollo Tyres (80.89 lakh shares) and SpiceJet (44.38 lakh shares), were the other volume toppers on BSE in that order.
The government today, 13 June 2013, said that industrial production growth for April 2013 has been revised upwards to 2.3% from 2% reported on Wednesday, 12 June 2013, as the government corrected production data for electricity. However, the growth rate still remained lower than the upwardly revised 3.4% expansion in March 2013.
Finance Minister P Chidambaram speaking on the state of the economy today, 13 June 2013, said he expects decisions to be announced in June that will accelerate economic reforms and spur investments in critical sectors and that steps government had taken in the last nine months have yielded results. The government plans to announce a review of the foreign direct investment limits as also coal pricing and allocation to power plants and gas pricing by the end of June, he said. Chidambaram said he is confident of attracting enough capital inflows to finance current-account deficit.
In a strong measure aimed at defending the rupee, the Centre on Wednesday announced a hike in the foreign investment limits in government debt by $5 billion. The measure aims at reversing the outflow of FII funds from debt instruments, one of the reasons for the depreciation in the rupee in recent weeks. Currently, the government debt limit stands at $25 billion. The move comes a day after the Chief Economic Advisor to the finance ministry Raghuram Rajan had said the government will be announcing measures to ensure that portfolio investor inflows are enabled and encouraged.
A committee set up by the Securities and Exchange Board of India on Wednesday, 12 June 2013, recommended the market regulator to simplify rules on foreign portfolio investments in the country. Among the major recommendations, the committee has suggested that existing foreign institutional investors (FIIs), Sub Accounts and Qualified Foreign Investors (QFI) categories be merged into a new investor class to be termed as "Foreign Portfolio Investor" (FPI). The committee has also suggested allowing foreign venture-capital funds to invest in more sectors. Foreign venture funds are currently allowed to invest in only nine sectors including biotechnology, nanotechnology and information technology.
According to the panel, foreign institutional investors should be allowed to register with local depositories recommended by Sebi. Currently, FIIs that want to invest in the Indian market must register directly with the regulator. The committee has also asked Sebi to simplify verification processes -- also called know-your-customer documentation
Global credit rating agency, Fitch Ratings on Wednesday raised its outlook on India's sovereign debt to stable from negative. Fitch cited the government's steps to contain its budget deficit despite the economic slowdown as the main reason for raising the outlook. India also made progress in addressing structural issues such as regulatory uncertainties, delays in government approvals for industrial projects and problems in sectors such as power and mining, it said.
Fitch acknowledged challenges, noting a recovery would remain slow until a healthier investment climate is created, and warning the rupee drop would limit the scope for RBI rate cuts.
European markets declined on Thursday, with investors turning risk averse after the Japan's Nikkei index fell into bear-market territory, and the dollar dropped to its weakest level against the Japanese yen since 4 April 2013. Key benchmark indices in UK, France and Germany were down 0.65% to 1.41%.
Asian equities dropped on Thursday after the World Bank cut its global growth forecast amid concern central banks may pare monetary stimulus. Key benchmark indices in China, Hong Kong, Indonesia, Singapore, Taiwan and South Korea were off 0.72% to 2.83%.
Japanese shares tumbled as the yen rose against the dollar. The Nikkei 225 Average lost 6.35%.
Trading in US index futures indicated that the Dow could fall 30 points at the opening bell on Thursday, 13 June 2013. US stocks fell on Wednesday on concerns the Federal Reserve could taper down its bond purchases. The Federal Open Market Committee meets next week after the Bank of Japan this week left its lending program unchanged.
The World Bank cut its global growth forecast for this year after emerging markets from China to Brazil slowed more than projected, while budget cuts and slumping investor confidence deepened Europe's contraction. The world economy will expand 2.2%, less than a January forecast for 2.4% growth and slower than last year's 2.3%, the bank said in a report. It lowered its prediction for developing economies and sees the euro region's gross domestic product shrinking 0.6%. In contrast, forecasts were raised for the US and Japan, which was helped by fiscal and monetary stimulus.
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