Key benchmark indices extended intraday losses and hit fresh intraday low as European stocks dropped on prospects of a reduction in central-bank easing in the United States. The barometer index, the S&P BSE Sensex, was down 293.62 points or 1.56%, off 233.44 points from the day's high and up 0.26 points from the day's low. The market breadth, indicating the overall health of the market, was quite weak. All 13 sectoral indices on BSE were in red. The market sentiment hit adversely on data showing that foreign institutional investors (FIIs) remained net sellers of Indian stocks on Friday, 21 June 2013.
Metal stocks fell as a recent spike in Shanghai interbank interest rates fueled worries about the world's second-largest economy. Sterlite Industries (India) hit 52-week low. M&M Financial Services dropped in volatile trade after the company said its board of directors has decided not to proceed with the application for a banking licence with Reserve Bank of India.
Key benchmark indices edged lower in early trade on weak Asian stocks. Key benchmark indices dropped to fresh intraday low in morning trade. The Sensex and Nifty, both, hit their lowest level in almost 10 weeks. Fresh selling derailed a brief recovery in mid-morning trade. A setback in mainland Chinese stocks hit investor sentiment as key benchmark indices hovered in red in afternoon trade. The Sensex continued to hover in negative terrain in afternoon trade. Key benchmark indices dropped to fresh intraday low in mid-afternoon trade.
The market may remain volatile this week as traders roll over positions in the futures & options (F&O) segment from the near month June 2013 series to July 2013 series. The June 2013 F&O contracts expire on Thursday, 27 June 2013.
The market sentiment was hit adversely after data showed that foreign funds remained net sellers of Indian stocks on Friday, 21 June 2013. Foreign institutional investors (FIIs) sold shares worth a net Rs 1768.60 crore on Friday, 21 June 2013, as per provisional data from the stock exchanges.
At 14:20 IST, the S&P BSE Sensex was down 293.62 points or 1.56% to 18,480.62. The index declined 293.88 points at the day's low of 18,480.36 in mid-afternoon trade, its lowest level since 16 April 2013. The index fell 60.18 points at the day's high of 18,714.06 in opening trade.
The CNX Nifty was down 97.35 points or 1.72% to 5,570.30. The index hit a low of 5,566.25 in intraday trade, its lowest level since 16 April 2013. The index hit a high of 5,640 in intraday trade.
The market breadth, indicating the overall health of the market, was quite weak. On BSE, 1,643 shares declined and 502 shares rose. A total of 121 shares were unchanged.
Among the 30-share Sensex pack, 26 declined and rest of them gained. L&T (down 2.81%), SBI (down 2.69%) and Bhel (down 2.67%) edged lower from the Sensex pack. Tata Power Company (up 1.1%), Sun Pharmaceutical Industries (up 0.64%) and NTPC (up 0.13%), edged higher.
Metal stocks fell as a recent spike in Shanghai interbank interest rates fueled worries about the world's second-largest economy. China is the world's largest consumer of copper and aluminum. Hindalco Industries (down 0.64%), Tata Steel (down 1.71%), Sesa Goa (down 3.36%), edged lower.
Sterlite Industries (India) lost 3.97% to Rs 77.40 after sliding to a 52-week low of Rs 77.10 in intraday trade today, 24 June 2013.
Jindal Steel & Power (JSPL) fell 0.95% to Rs 202.30. The stock was volatile. The stock hit a 52-week low of Rs 194 in intraday trade today, 24 June 2013. The stock hit a high of Rs 207.20 so far during the day. The stock has been on a downward spiral recently after a foreign brokerage last week downgraded the stock to sell and reduced its target price to Rs 230 from Rs 290.
Early this month, the Central Bureau of Investigation filed an FIR in the Coalgate case in which JSPL Chairman Naveen Jindal and JSPL, as well as a former minister of state for coal Dasari Narayan Rao have been named. The CBI has alleged that Rao was paid kickbacks for favouring coal block allocation to the Jindal firm.
M&M Financial Services lost 5.31% to Rs 243.50 after the company said its board of directors has decided not to proceed with the application for a banking licence with Reserve Bank of India. The stock was volatile. The stock lost as much as 15.9% at the day's low of Rs 216.25. Mahindra & Mahindra Financial Services said its board took the decision not to apply for a banking license after reviewing the implications of the present guidelines issued by the Reserve Bank of India (RBI) for such an application, alongwith the clarifications issued by RBI on 3 June 1013.
The RBI guidelines provide for the conversion of non-banking financial companies (NBFCs) into a bank, but do not provide any flexibility for a NBFC and a bank to co-exist for a reasonable period of time, M&M Financial Services said. The regulations provide that CRR and SLR will be applicable from inception, even though building of CASA will take some time for a newly converted bank. This anomaly will impose an undue penalty on large, successful NBFCs with a pan-India network, that wish to convert into a bank, as compared to smaller NBFCs with a limited network.
South Indian Bank (up 5.13%), GlaxoSmithkline Consumer Healthcare (up 2.7%), Jubilant FoodWorks (up 1.86%), Glenmark Pharmaceuticals (up 1.47%) and Bajaj Holdings (up 1.32%) were the top gainers from the BSE's 'A' group.
Future Retail (down 11.41%), Indian Bank (down 8.51%), Dish TV India (down 7.45%), JP Infratech (down 6.88%) and Century Textiles & Industries (down 6.22%) were the top losers from the BSE's 'A' group.
Jubilant Life Sciences (down 17.51%), Manappuram Finance (down 10.15%), Ajanta Pharma (down 8.51%), Amtek India (down 8.38%), Bombay Dyeing & Manufacturing Company (down 8.14%) and Shree Renuka Sugars (down 7.34%) were among the top losers from the BSE Mid-Cap index.
Ganesh Housing (down 10.25%), Opto Circuits (India) (down 10.14%), Orbit Corporation (down 9.8%), Jai Corp (down 9.46%) and Welspun India (down 8.58%) were among the top losers from the BSE Small-Cap index.
Meanwhile, in the foreign currency market, the rupee came under renewed pressure against the dollar. The rupee was hovering at 59.77, lower than Friday's close of 59.27/28. The rupee had hit a record low of 59.9850 in intraday deals on Thursday, 20 June 2013, as global investors pulled out of emerging markets broadly amid concerns over the reduction of a US program that has injected billions of dollars into the global financial system.
European markets declined on Monday after Chinese markets dropped to new 2013 lows, as investors in Asia and Europe remained concerned about China's liquidity condition and the potential cutback in monetary stimulus by the US Federal Reserve later in 2013. Key benchmark indices in France, Germany and UK shed by 0.3% to 0.94%.
Business confidence rose in Germany in June, with the Ifo business-climate index climbing to 105.9 compared with a reading of 105.7 in May, according to media reports.
Asian stocks dropped on Monday, 24 June 2013, on mounting concerns that the US Federal Reserve may start scaling back its huge monthly bond-buying plan which was aimed at keeping bond yields down and provide support to its faltering economy. Key benchmark indices in Japan, Singapore, Taiwan, Indonesia and South Korea were off 0.45% to 1.72%.
Chinese stocks tumbled as a recent spike in Shanghai interbank interest rates fueled worries about the world's second-largest economy. In mainland China, the Shanghai Composite lost 5.3% and Hong Kong's Hang Seng lost 2.22%. Short-term interbank interest rates in Shanghai, which hit record highs on Thursday, 20 June 2013, extended their drop from levels seen on Friday, 21 June 2013, but remained above the 6%-level on Monday, 24 June 2013. This fed worries that the People's Bank of China, China's central bank, may keep those rates at a high level.
The China's central bank warned Monday that the nation's banks need to strengthen their liquidity management and control liquidity risks. The statement was the first by the central bank that appeared to be aimed at banks caught in a recent liquidity crunch which sent short-term rates on the interbank market soaring, with the overnight lending rate hitting an intraday high of 30% late last week. The People's Bank of China said liquidity in the banking system is at a reasonable level. It also said banks need to maintain "stable and appropriate" credit growth and adhere to its prudent monetary policy.
Trading in US index futures indicated that the Dow could fall 83 points at the opening bell on Monday, 24 June 2013. US stocks ended mixed on Friday, 21 June 2013, as investors picked up beaten down stocks. While the Dow Junes Industrial Average and S&P 500 score small gains the tech laden Nasdaq Composite index registered small losses.
Federal Reserve Chairman Ben Bernanke said last week the central bank may start dialing down its stimulus effort if the economy achieves sustainable growth.
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