Volatility continued as key benchmark indices hovered in a narrow range in the negative terrain in afternoon trade. The S&P BSE Sensex was down 159.83 points or 0.8%, up close to 20 points from the day's low and off about 220 points from the day's high. The market breadth, indicating the overall health of the market, was positive.
Most IT stocks declined on recent recovery of rupee against the dollar. Financial Technologies (India) (FTIL) spurted on high volume after Securities and Exchange Board of India renewed the license of MCX Stock Exchange for a period of one year beginning 16 September 2013. Capital goods pivotals rose on renewed buying.
Key benchmark indices reversed direction after a firm opening triggered by higher Asian stocks. The barometer index, the S&P BSE Sensex, dropped below the psychological 20,000 mark after regaining that level at the onset of the trading session. Key benchmark indices extended initial losses and hit intraday low in morning trade. Key benchmark hovered in red in mid-morning trade. A bout of volatility was witnessed as key benchmark indices trimmed losses after hitting fresh intraday low in early afternoon trade. It continued to hover in the negative terrain in afternoon trade.
Foreign institutional investors (FIIs) bought shares worth a net Rs 586.50 crore on Wednesday, 11 September 2013, as per provisional data from the stock exchanges.
In the foreign exchange market, the rupee weakened against the dollar. The partially convertible rupee was hovering at 63.52, weaker than its close of 63.38/39 on Wednesday, 11 September 2013. Earlier in the session, the rupee rose to 62.92, its highest since 19 August 2013.
At 13:20 IST, the S&P BSE Sensex was down 159.83 points or 0.8% to 19,837.62. The index lost 180.46 points at the day's low of 19,816.99 in early afternoon trade. The index rose 54.60 points at the day's high of 20,052.05 in early trade.
The CNX Nifty was down 42.75 points or 0.72% to 5,870.40. The index hit a low of 5,859.95 in intraday trade. The index hit a high of 5,932 in intraday trade, its highest level since 26 July 2013.
The market breadth, indicating the overall health of the market, was positive. On BSE, 1,167 shares gained and 882 shares fell. A total of 136 shares were unchanged.
Among the 30-share Sensex pack, 19 stocks declined and rest of them gained. Hero MotoCorp (down 2.99%), Coal India (down 2.66%) and ONGC (down 2.35%), edged lower.
Most IT stocks declined on recent recovery of rupee against the dollar. A firm rupee adversely affects operating profit margins of IT firms as the sector derives a lion's share of revenue from exports.
TCS shed 2.01%. The company after market hours on Tuesday, 10 September 2013, said it has bagged a five-year multi-million euros deal from Scandinavian Airlines (SAS) to help transform and optimise SAS' IT processes, applications and infrastructure. TCS will implement its proprietary cloud-based solutions to simplify and standardize the SAS IT landscape. The initiative is a part of the SAS "4 Excellence Next Generation" strategy, aimed at improving the competitiveness of the SAS Group. Through this partnership, SAS will also tap into TCS' Aviation and Digital Innovation Labs to develop solutions addressing the needs of the new digital consumer.
Infosys dropped 1.04%.
Wipro declined 0.14%.
Tech Mahindra fell 2.16%. The company during market hours today, 12 September 2013 said it has been chosen as a strategic partner for application maintenance and development by Volvo Car Corporation. This partnership will provide Volvo Car Corporation with a service to maintain and develop a wide range of applications across the business and to develop and implement new applications as part of its drive to increase efficiency and reduce costs, Tech Mahindra said in a statement.
But, HCL Technologies rose 0.98% to Rs 1075.65. HCL Technologies and Anglo American, one of the world's largest mining companies, announced after market hours on Tuesday, 10 September 2013, that they have entered into an engagement whereby HCL will deliver IT services for Anglo American businesses across the globe. As a part of this contract, HCL will transform Anglo American's end user computing and data center landscape to improve operational efficiency, business agility and the user experience. The scope of the service covers end to end infrastructure services, including data centre and hosting services, email services, service desk, local area network and security management, end user computing and on-site IT services, utilizing hybrid on-premise and cloud delivery models.
Financial Technologies (India) (FTIL) spurted 21.43%. The stock surged on volume of 31.62 lakh shares, higher than average daily volume of 12.61 lakh shares in the past one quarter. The Securities and Exchange Board of India renewed the license of MCX Stock Exchange for a period of one year beginning 16 September 2013. Shares of MCX were locked at 5% upper circuit filter at Rs 482.70.
In an order issued late on Wednesday, 11 September 2013, the capital markets regulator the Securities and Exchange Board of India (Sebi) granted a one-year renewal of recognition from 16 September 2013 to MCX Stock Exchange (MCX-SX), promoted by Financial Technologies (India) (FTIL). The recognition was due to expire on 15 September 2013.
Sebi asked the MCX-SX shareholders to reconstitute its board and rejig its top management if necessary to improve governance standards within the stock exchange.
FTIL and MCX are the promoters of the MCX-SX stock exchange.
Meanwhile, the regulator has asked MCX-SX's shareholders to report to Sebi its findings as well as remedial actions within 30 days from the approval.
Capital goods pivotals rose on renewed buying. L&T (up 0.92%) and Bhel (up 1.1%), edged higher.
On the macro front, the government will unveil data on industrial production for July 2013 after trading hours today, 12 September 2013. Industrial production is seen contracting 0.8% in July 2013, as per the median estimate of a poll of economists carried out by Capital Market. Industrial production registered a contraction of 2.2% in June 2013.
Consumer price inflation is expected to remain high at 9.6% in August 2013, as per the median estimate of a poll of economists carried out by Capital Market. Inflation based on the combined consumer price index (CPI) for urban and rural India had decelerated to 9.64% in July 2013 from 9.87% in June 2013. The government will unveil data on combined consumer price index (CPI) for urban and rural India for August 2013 after trading hours today, 12 September 2013.
Reserve Bank of India Governor Raghuram Rajan on Wednesday, 11 September 2013, said that India's slowing economy and its massive current account and fiscal deficits are not structural problems and can be fixed with modest reforms. This is not to say that ambitious reform is not good, or is not warranted to sustain growth for the next decade. But India does not need to become a manufacturing giant overnight to fix its current problems, Rajan wrote in commentary published on the Project Syndicate website. He said the slowdown in the economy was paradoxically the effect of substantial fiscal and monetary stimulus that the policymakers had injected into its economy in the aftermath of the 2008 financial crisis. The resulting growth spurt led to inflation, especially because the world did not slide into a second Great Depression, as was originally feared, he said. So monetary policy has since remained tight, with high interest rates contributing to slowing investment and consumption, he wrote. Economic growth would slow to a 5% to 5.5% pace, he said, adding that was "not great, but certainly not bad for what is likely to be a low point in economic performance".
Most European stocks edged higher on Thursday before euro-area industrial production data. Key benchmark indices in UK and Germany rose by 0.06% to 0.09%. France's CAC 40 fell 0.02%.
Asian stock markets were mostly higher Thursday, 12 September 2013, with energy stocks offering a bright spot after an increase for oil futures. Key benchmark indices in Indonesia, Taiwan, Hong Kong, South Korea, China, and Singapore rose by 0.01% to 0.64%. Japan's Nikkei Average fell 0.26%.
Japanese core machinery orders stayed flat in July from the previous month, the government said Thursday, following a 2.7% decrease in June, suggesting businesses are still cautious about increasing investment despite a weaker yen and economic stimulus programs in place to support Japan's economic recovery. Unadjusted core orders also rose 6.5% from the year-earlier month.
Trading in US index futures indicated a flat opening of US stocks on Thursday, 12 September 2013. US stocks ended mostly higher on Wednesday, 11 September 2013, with the Dow industrials tallying a third day of triple-digit gains, as reduced worry about Syria countered Apple Inc.'s sharp drop.
The Russian initiative to avert US military strikes on Syria by eliminating the regime's chemical weapons faces a first test when US Secretary of State John Kerry meets in Geneva with his Russian counterpart, Sergei Lavrov. The US says President Bashar al-Assad's regime used sarin gas outside of Damascus on Aug. 21, killing more than 1,400 people.
Investors across the globe are eyeing the next policy meeting of the Federal Open Market Committee (FOMC) scheduled this month, with their focus squarely on the timing of tapering of Federal Reserve's bond purchases. The FOMC holds a two-day policy meeting on 17-18 September 2013 to decide on interest rates in the United States. The US central bank currently buys $85 billion a month in US debt and mortgage-backed securities in a bid to hold interest rates low and encourage economic growth. Federal Reserve Chairman Ben Bernanke has on several occasions stressed that the tapering process is dependent on an improvement in data. Fed's bond-buying program has kept global markets flush with liquidity in recent years.
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