Key benchmark indices snapped three-day winning streak after the Reserve Bank of India (RBI) after trading hours on Monday, 15 July 2013 announced liquidity tightening measures to prevent a sharp depreciation of the rupee against the dollar. Nevertheless, the Sensex recovered from a steep intraday slide as index heavyweight ITC rose to record high and as another index heavyweight Reliance Industries (RIL) edged higher in choppy trade. The market was volatile. The market breadth was weak. Besides RBI's liquidity tightening measures, South Korean steel major Posco's decision to scrap a large steel project in Karnataka and weakness in European stocks hurt investor sentiment as barometer index, the S&P BSE Sensex, fell below the psychological 20,000 mark and as the 50-unit CNX Nifty fell below the psychological 6,000 mark. The Sensex lost 183.25 points or 0.91%, up 201.65 points from the day's low and off 39.40 points from the day's high.
Bond prices declined sharply after the RBI's measures to tighten liquidity in the banking system. The rupee surged against the dollar.
Indian stocks today, 16 July 2013, snapped three-day winning streak. The Sensex had jumped 740.36 points or 3.84% in three trading sessions to 20,034.48 on 15 July 2013 from a recent low of 19,294.12 on 10 July 2013. The Sensex has risen 455.42 points or 2.35% so far in July 2013 (till 16 July 2013). The Sensex has gained 424.52 points or 2.19% in calendar 2013 so far (till 16 July 2013). From a 52-week high of 20,443.62 on 20 May 2013, the Sensex has fallen 592.39 points or 2.9%. From a 52-week low of 16,598.48 on 26 July 2012, the Sensex has surged 3,252.75 points or 19.6%.
Coming back to today's trade, FMCG stocks gained on defensive buying. Nestle India scaled record high. Bank and financial stocks slumped as RBI's latest measures to tighten liquidity in the banking system will make it costlier for banks and financial companies to raise short-term funds. Interest rate sensitive realty stocks also tumbled after the latest RBI measures. Telecom stocks rose on reports that Prime Minister Dr. Manmohan Singh will chair a meeting of senior ministers today, 16 July 2013, to discuss a proposal to increase the limits for foreign direct investment in a number of sectors, including the telecom sector.
Interest rate sensitive auto stocks were mostly lower. Shares of public sector oil marketing companies gained for second day in a row following a petrol price hike announced over the weekend. Steel stocks declined after South Korean steel major Posco scrapped a large steel project in Karnataka. Shares of private sector steel major Tata Steel hit 52-week low. Pharma major Sun Pharmaceutical Industries hit record high.
Key benchmark indices dropped amid initial volatility as the yields on government bonds rose after the Reserve Bank of India (RBI) after market hours on Monday, 15 July 2013, announced a slew of measures to address exchange rate volatility. Weakness continued on the bourses in morning trade. Key benchmark indices trimmed intraday losses to strike intraday high in mid-afternoon trade as index heavyweight and cigarette major ITC extended intraday gains and as another index heavyweight reversed intraday losses.
The Reserve Bank of India (RBI) after market hours on Monday, 15 July 2013, announced a slew of measures to address exchange rate volatility. RBI raised the Marginal Standing Facility (MSF) rate and Bank Rate each by 200 bps to 10.25% while capped the amount up to which banks can borrow or lend under its daily liquidity window at Rs 75000 crore. Furthermore, RBI will additionally sell Rs 12000-crore of government bonds on Thursday, 18 July 2013, to mop up liquidity from the system, it said.
The RBI said it will continue to closely monitor the markets, the liquidity situation and the macroeconomic developments and will take such other measures as may be necessary, consistent with the growth-inflation dynamics and macroeconomic stability.
Finance Minister P. Chidambaram today, 16 July 2013, said RBI's steps to curb rupee liquidity are aimed at quelling excessive speculation and volatility in the forex market and should not be read as a prelude to policy rate changes.
While the rupee surged after the RBI measures, bond prices fell. The rupee was hovering at 59.32 versus dollar, against Monday's close of 59.89/90. In the debt market, the yield on the most traded 8.33 GS 2026 was hovering at 8.1903%, sharply higher than its close at 7.6656% on Monday. Bond yield and bond prices are inversely related.
The S&P BSE Sensex lost 183.25 points or 0.91% to settle at 19,851.23, its lowest closing level since 11 July 2013. The index lost 384.90 points at the day's low of 19,649.58 in early trade. The index fell 143.85 points at the day's high of 19,890.63 in late trade.
The CNX Nifty lost 75.55 points or 1.25% to 5,955.25, its lowest closing level since 11 July 2013. The index hit a low of 5,910.95 in intraday trade. The index hit a high of 5,966.05 in intraday trade.
The market breadth, indicating the overall health of the market, was weak. On BSE, 1,456 shares declined and 907 shares gained. A total of 144 shares were unchanged.
The total turnover on BSE amounted to Rs 1877 crore, higher than Rs 1655 crore on Monday, 15 July 2013.
The BSE Mid-Cap index fell 1.45%, underperforming the Sensex. The BSE Small-Cap index declined 0.79%, outperforming the Sensex.
The BSE Realty index (down 5.84%), BSE Bankex (down 4.83%), BSE Capital Goods index (down 2.23%), BSE Metal index (down 1.9%), BSE Consumer Durables index (down 1.13%) and BSE PSU index (down 1.02%) underperformed the Sensex
The BSE Power index (down 0.03%), BSE IT index (down 0.21%), BSE Healthcare index (down 0.49%), BSE Auto index (down 0.62%), BSE Teck index (up 0.05%), BSE Oil & Gas index (up 0.74%), BSE FMCG index (up 1.81%), outperformed the Sensex.
Among the 30-share Sensex pack, 17 stocks declined and rest of them gained.
FMCG stocks gained on defensive buying. Colgate-Palmolive (India) (up 0.42%), Dabur India (up 1.4%), Godrej Consumer Products (up 2.28%), Marico (up 1.65%) gained.
Hindustan Unilever (HUL) rose 1.81% to Rs 624.90. HUL's parent Unilever PLC on 11 July 2013 said that pursuant to the voluntary open offer to increase its stake in HUL, the shareholders of HUL tendered a total of 31.99 crore shares, out of which 31.95 crore shares have been accepted by Unilever PLC on completion of the verification of the shares tendered. Based on the shares tendered which represent 14.78% of HUL, the Unilever Group will increase its stake in HUL from 52.48% to 67.26%.
FMCG firm Nestle India rose 2.79% to Rs 5,720, also its record high.
Index heavyweight and cigarette major ITC rose 2.68% to Rs 361.50 after striking a record high of Rs 361.70 in intraday trade today, 16 July 2013. The company announces Q1 results on 25 July 2013.
Index heavyweight Reliance Industries (RIL) edged higher in choppy trade. The stock was up 0.83% at Rs 903.20. The stock hit high of Rs 904.30 and low of Rs 882.80.
Shares of public sector oil marketing companies gained for second day in a row following a petrol price hike announced over the weekend.
BPCL (up 2.25%), HPCL (up 1.14%) and Indian Oil Corporation (up 0.93%), edged higher. On Monday, 15 July 2013, Indian Oil Corporation (up 1.7%) and HPCL (up 0.19%), edged higher. However, BPCL had lost 0.83%.
Public sector oil marketing companies (PSU OMCs) announced hike in price of petrol by Rs 1.55 a litre as the falling rupee made imports costlier. The price of diesel was kept unchanged.
Public sector oil marketing companies (PSU OMCs) suffer under recoveries on domestic sale of diesel, LPG and kerosene at controlled prices. In January 2013, the government allowed PSU OMCs to raise diesel prices in small measures at regular intervals while completely deregulating diesel prices sold to institutional or bulk buyers. The government has already freed pricing of petrol.
Bank and financial stocks slumped as RBI's latest measures to tighten liquidity in the banking system will make it costlier for banks and financial companies to raise short-term funds. ICICI Bank (down 5.74%), HDFC Bank (down 2.05%) and State Bank of India (down 4.55%) declined.
Among housing finance stocks, HDFC (down 3.64%), LIC Housing Finance (down 7.11%), Dewan Housing Finance Corporation (down 2.7%), Gruh Finance (down 1.39%) and Can Fin Homes (down 1.25%) declined.
Among power finance companies, REC (down 4.81%) and Power Finance Corporation (down 7.64%) declined.
Among non-banking finance companies (NBFC's), Mahindra and Mahindra Financial Services (down 4.84%), Bajaj Finserv (down 2.75%), Bajaj Finance (down 3.74%), Reliance Capital (down 3.98%), L&T Finance Holdings (down 2.15%), IDFC (down 7.32%) and Religare Enterprises (down 1.42%) declined.
Interest rate sensitive auto stocks were mostly lower. Maruti Suzuki India (down 2.35%) and Mahindra & Mahindra (M&M) (down 1.15%) declined.
Ashok Leyland slumped 9.17% to Rs 15.85 after the company reported a net loss of Rs 141.75 crore in Q1 June 2013 as against a net profit of Rs 66.93 crore in Q1 June 2012. The company announced result during trading hours today, 16 July 2013. Ashok Leyland's total income fell 21.83% to Rs 2376.06 crore in Q1 June 2013 over Q1 June 2012.
Tata Motors rose 1.2%. Tata Motors Group's global wholesales in June 2013, including Jaguar Land Rover, were 84,458 units. Global wholesales of all commercial vehicles -- Tata, Tata Daewoo and the Tata Hispano Carrocera range -- were 41,577 units in June 2013. Global wholesales of all passenger vehicles in June 2013 were 42,881 units. Global wholesales of Tata passenger vehicles in June 2013 were 12,345 units. Global wholesales for Jaguar Land Rover were 30,536 vehicles. Jaguar wholesales for the month were 6,182 vehicles while Land Rover wholesales for the month were 24,354 vehicles. Tata Motors announced the data on global wholesales after market hours on Monday, 15 July 2013.
Two wheeler stocks were mixed. Bajaj Auto rose 0.67%. Hero MotoCorp declined 1.67%.
Exide Industries rose 1.35%. The company's net profit rose 4.44% to Rs 158.80 crore on 4.09% growth in total income to Rs rise in net sales to Rs 1633.68 crore in Q1 June 2013 over Q1 June 2012. The result was announced after trading hours on Monday, 15 July 2013.
Pharma major Sun Pharmaceutical Industries rose 1.15% to Rs 1,120.50 after striking a record high of Rs 1,128.45 in intraday trade today, 16 July 2013.
Cipla shed 1.43%. The company during market hours today, 16 July 2013, said it has completed the acquisition of 100% of the issued shares of Cipla Medpro South Africa and the listing of the shares of Medpro on the JSE has been terminated from the commencement of business on 16 July 2013.
Cipla after trading hours on Monday, 15 July 2013, said Mr. Subhanu Saxena has been designated as managing director and global chief executive officer with effect from today, 16 July 2013. Mr. Saxena joined Cipla as its chief executive officer on 1 February 2013. Cipla also said that Mr. M. K. Hamied has been designated as executive vice-chairman. Mr. Hamied has been reappointed as a whole time director for a fresh term with effect from today, 16 July 2013.
Steel stocks declined after South Korean steel major Posco on Tuesday said it is no longer pursuing plans to build a steel plant in Karnataka after failing to secure land and infrastructure due to local opposition. "Since signing the memorandum of understanding in June 2010, we have been in talks with Karnataka state to secure mining rights, land, and infrastructure. But we have agreed to drop the project given a delay in (acquiring mining rights) and opposition by local people," Posco, the world's fourth-largest steelmaker by output, said in a filing to the Korea Exchange.
Private sector steel major Tata Steel fell 2.29% to Rs 251.45 after hitting a 52-week low of Rs 250.50 in intraday trade today, 16 July 2013.
JSW Steel (down 3.99%), Sail (down 3.41%) and Jindal Steel & Power (down 3.62%) edged lower.
Other metal stocks also declined. Sterlite Industries (India) (down 3.07%), Hindustan Zinc (down 1.17%), Sesa Goa (down 2.08%), NMDC (down 1.66%), Hindalco Industries (down 1.76%), and Hindustan Copper (down 4.22%) edged lower.
Sandur Manganese & Iron Ores settled 9.46% higher at Rs 549.70 on BSE, off the day's high, after the company denied media reports that its promoters may sell a significant stake to JSW Steel. Sandur Manganese & Iron Ores made the clarification at the fag end of the trading session today, 16 July 2013. The stock had surged as much as 18.88% at the day's high of Rs 597 in afternoon trade. However, it sharply pared gains after the company's clarification.
Engineering and construction major L&T fell 3.27% to Rs 973, with the stock recovering after sliding as much as 4.83% at intraday low of Rs 959.55.
Telecom stocks rose on reports that Prime Minister Dr. Manmohan Singh will chair a meeting of senior ministers today, 16 July 2013, to discuss a proposal to increase the limits for foreign direct investment in a number of sectors, including the telecom sector.
Idea Cellular gained 2.4% to Rs 157.60 after hitting a 52-week high of Rs 159.15 in intraday trade today, 16 July 2013.
Bharti Airtel (up 1.84%) and Tata Teleservices (Maharashtra) (up 2.31%) gained.
MTNL (down 2.04%) and Reliance Communications (down 0.2%) fell.
Last month, a government-appointed panel headed by Economic Affairs Secretary Arvind Mayaram proposed higher foreign direct investment (FDI) caps to bring in long-term foreign capital and boost economic growth. In its report, the committee recommended removing the limit in telecom, where the cap is 74% currently. Any changes to the current policy on investment will need to be cleared by the Union Cabinet.
Interest rate sensitive realty tumbled after the latest RBI measures to tighten liquidity in the banking system. DLF (down 7.93%), Indiabulls Real Estate (down 9.87%), HDIL (down 7.23%), Unitech (down 6.57%), Godrej Properties (down 1.42%), Oberoi Realty (down 7.17%) and Parsvnath Developers (down 0.16%) declined.
Oberoi Realty tumbled 7.17% after consolidated net profit rose 1.01% to Rs 101.82 crore on 3.69% growth in revenue to Rs 239.40 crore in Q1 June 2013 over Q1 June 2012. The Q1 result was announced after market hours on Monday, 15 July 2013.
Commenting on the first quarter results, Mr. Vivek Oberoi, CMD, Oberoi Realty said, "We continue to maintain traction on the sale of the residential properties and the rental incomes from our investment properties continue to give us stability. While the global and domestic headwinds have intensified, our order books remain healthy reflecting the confidence of our customers. We believe that reputed developers with sound financial standing will continue to attract healthy demand for their projects. We also welcome the Real Estate Regulatory Bill as it is expected to bring in transparency and accountability in the sector. We will continue to focus on being financially prudent while continuously exploring opportunities to acquire land".
Titan Industries fell 1.68% on turning ex-dividend today, 16 July 2013, for dividend of Rs 2.10 per share for the year ended 31 March 2013 (FY 2013).
Novartis India declined 3.88% on turning ex-dividend today, 16 July 2013, for dividend of Rs 10 per share for the year ended 31 March 2013 (FY 2013).
CMC lost 4.53% after consolidated net profit fell 13.38% to Rs 53.12 crore on 7.12% decline in total income from operations to Rs 486.61 crore in Q1 June 2013 over Q4 March 2013. The Q1 result was announced after market hours on Monday, 15 July 2013. CMC added 16 new clients in Q1 June 2013.
CMC's CEO and MD R Ramanan said that the company continues to see good traction for its offerings across all business segments and geographies despite challenging global business environment. He added that the company has maintained quality of revenue as its revenue from value added services and solution grew 5% QoQ and 7% YoY, helping company maintain its EBITDA margins.
CMC said it is making investments in business development and R&D for future growth.
Allcargo Logistics rose 0.68% to Rs 82 after a bulk deal of 6.11 lakh shares was executed on the counter at Rs 88 per share at 10:17 IST on BSE today, 16 July 2013.
European stock markets edged lower on Tuesday, 16 July 2013, after the ZEW German economic sentiment indicator unexpectedly declined in July. Key benchmark indices in UK, France and Germany were down 0.12% to 0.4%.
The ZEW German economic sentiment indicator -- a gauge of investor confidence -- unexpectedly fell in July to 36.3 points from 38.5 in June, the Mannheim-based Center for European Economic Research, or ZEW, said Tuesday. The current conditions index, however, improved slightly by 2 points to stand at 10.6. Germany is Europe's biggest economy.
Exports from the 17 countries that share the euro slumped in May, as did imports, an indication that the currency area's longest postwar contraction may have continued into a seventh straight quarter. The European Union's statistics agency Tuesday said that adjusted for seasonal factors, exports from the euro zone to the rest of the world fell 2.3% from April, while imports were down 2.2%. It was the second straight month in which exports fell sharply.
Asian shares edged higher on Tuesday, 16 July 2013, taking their cue from overnight gains in US stocks as weaker-than-forecast US retail sales growth backed the view that the Federal Reserve will hold off reducing its bond-buying stimulus anytime soon. Key benchmark indices in China, Hong Kong, Taiwan, Indonesia and Japan were up 0.04% to 0.64%. Key benchmark indices in South Korea and Singapore were down 0.37% to 0.47%.
Trading in US index futures indicated that the Dow could gain 11 points at the opening bell on Tuesday, 16 July 2013. US stocks climbed modestly on Monday, with the S&P 500 and the Dow industrials rising to record closing highs again, after Citigroup Inc. reported better-than-expected earnings.
Federal Reserve Chairman Ben Bernanke is due to deliver testimony on monetary policy in Washington on 17 and 18 July 2013. The minutes of the Fed's June meeting released on 10 July 2013 showed that while "several members judged that a reduction in asset purchases would likely soon be warranted," many want to see further improvement in the labor market before reducing the central bank's $85 billion-a-month quantitative easing program. The Fed currently buys $85 billion a month in government and mortgage bonds in an effort to keep interest rates low and stimulate economic growth. At a press conference following the June 18-19 meeting, Bernanke said the central bank could start reducing its $85 billion in monthly bond purchases later this year if the economy continues to improve in line with its forecasts.
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