Key benchmark indices hovered in negative terrain in mid-morning trade as better than expected October jobs report in US fueled concern the Federal Reserve may reduce monetary stimulus for the US economy sooner than expected. The S&P BSE Sensex, was down 109.78 points or 0.53%, off close to 65 points from the day's high and up about 75 points from the day's low. The market breadth, indicating the overall health of the market, was negative.
Realty stocks dropped. Capital goods pivotals also declined. Lupin rose after its US subsidiary, Lupin Pharmaceuticals, Inc. (LPI) has launched its generic Rabeprazole Sodium delayed?release tablets, 20mg. Apollo Tyres jumped after a US judge ruled that the Indian firm did not breach its obligation to close its $2.5 billion buyout of US-based Cooper Tire & Rubber Company.
The market edged lower in early trade. The S&P BSE Sensex and the 50-unit CNX Nifty, both, hit their lowest level in 3-1/2 weeks. It weakened once again after it pared initial losses and hit fresh intraday high in morning trade. It hovered in negative terrain in mid-morning trade.
The US central bank currently buys bonds worth $85 billion a month in a bid to hold interest rates low and encourage economic growth in the world's biggest economy. Fed's bond-buying program has been a source of liquidity for most Asian and emerging markets this year.
In the foreign exchange market, the rupee fell below 63 level against the dollar. Rupee depreciation fuels inflation, increases import bill and current account deficit. It also increases the government's spending on fuel subsidies, potentially widening the fiscal deficit.
At 11:20 IST, the S&P BSE Sensex was down 109.78 points or 0.53% to 20,556.37. The index shed 183.74 points at the day's low of 20,482.41 in early trade, its lowest level since 17 October 2013. The index fell 42.32 points at the day's high of 20,623.83 in morning trade.
The CNX Nifty was down 45.15 points or 0.74% to 6,095.60. The index hit a low of 6,070.85 in intraday trade, its lowest level since 17 October 2013. The index hit a high of 6,121.35 in intraday trade.
The market breadth, indicating the overall health of the market, was negative. On BSE, 955 shares fell and 788 shares rose. A total of 95 shares were unchanged.
Among the 30-share Sensex pack, 23 stocks fell and rest of them rose. Hindalco Industries (down 2.96%), Tata Motors (down 2.05%) and Hero MotoCorp (down 2.01%), declined.
Realty stocks dropped. DLF (down 2.65%), HDIL (down 2.93%), Sobha Developers (down 0.13%) and Unitech (down 1.47%), declined.
Capital goods pivotals also declined. L&T (down 3.04%) and Bhel (down 1.11%), fell.
Lupin rose 0.61% after the company announced during market hours that its US subsidiary, Lupin Pharmaceuticals, Inc. (LPI) has launched its generic Rabeprazole Sodium delayed?release tablets, 20mg. Lupin had earlier received final approval from the US FDA for the same. Lupin's Rabeprazole Sodium delayed?release tablets, 20mg, are the generic equivalent of Eisai Inc.'s Aciphex delayedrelease tablets, 20mg, and are indicated for the treatment of Gastroesophageal reflux disease (GERD). Aciphex delayedrelease tablets, 20mg, had annual U.S sales of approximately $ 864.3 million (IMS MAT June 2013).
Apollo Tyres jumped 3.84% after a US judge ruled that the Indian firm did not breach its obligation to close its $2.5 billion buyout of US-based Cooper Tire & Rubber Company. The company made the announcement during trading hours today, 11 November 2013.
Apollo Tyres said that a partial ruling on 8 November 2013, by Judge Sam Glasscock, III, Vice Chancellor of the Delaware Court of Chancery found that Apollo is not in breach of its merger agreement with Cooper Tire & Rubber Company. Furthermore, the Court found that Apollo has used reasonable best efforts to negotiate with the United Steel Workers (USW) and that, contrary to Cooper's claims, nothing in Apollo's conduct indicates buyer's remorse. Apollo said it continues to believe in the merits of the combination and is committed to finding a sensible way forward.
On 12 June 2013, Apollo Tyres announced that it would acquire Cooper, a company listed on the New York Stock Exchange, in an all-cash transaction valued at approximately $2.5 billion.
Later, Cooper accused Apollo of intentionally delaying the transaction and had gone to the US court to expedite the transaction. As per the terms of the bid, the deal can be terminated without any financial penalty after 31 December 2013.
Cooper in its filing with the court, on 4 October 2013, had blamed Apollo for delay in settling issues with some of its labour from USW union in the US plants. The USW represents Cooper employees at facilities in Findlay, Ohio and Texarkana, Arkansas. It said Apollo is also looking at reducing the deal price owing to labour issues at the company's US and China plants.
In its answer, Apollo had denied the allegations made by Cooper regarding the course of its negotiations with the USW and confirmed that it has worked diligently to reach a settlement with the USW to enable Cooper to overcome the USW injunction prohibiting Cooper from consummating the merger. Apollo said that conditions precedent to closing had not been satisfied because the marketing period for the financing, central to Cooper's claims in its complaint, had never commenced and that Cooper has failed to meet its contractual obligations.
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 strategic combination of Apollo and Cooper will bring together two companies with highly complementary brands, geographic presence and technological expertise to create a global leader in tire manufacturing and distribution. If finalised, the pending merger will result in a strategic business combination that creates the seventh-largest tire company in the world.
In the foreign exchange market, the rupee fell below 63 level against the dollar as better than expected October US jobs report fueled concern the Federal Reserve may reduce monetary stimulus for the US economy sooner than expected. The partially convertible rupee was hovering at 63.24, compared with its close of 62.475/485 on Friday, 8 November 2013.
On the macro front, the government will unveil industrial production data for September 2013 on tomorrow, 12 November 2013. Index of industrial production (IIP) rose 0.6% in August 2013, showing moderation in growth from 2.8% growth recorded in July 2013.
Data on inflation based on the consumer price index (CPI) for October 2013 will be unveiled on tomorrow, 12 November 2013. The headline CPI inflation (combined) for September 2013 was placed at 9.84% (y-o-y), which came in higher than 9.52% (y-o-y) seen in August 2013.
Most Asian stocks edged higher on Monday. Key benchmark indices in China, Singapore, Japan, and Hong Kong rose 0.08% to 1.16%. Key benchmark indices in Taiwan, South Korea and Indonesia shed 0.37% to 0.78%.
China's industrial output rose a more-than-estimated 10.3% from a year earlier in October, according to data released Nov 9 by the National Bureau of Statistics. October inflation was a less-than-forecast 3.2%, producer prices fell 1.5% from a year earlier and retail sales rose 13.3%.
The meeting of China's leaders in Beijing will end tomorrow, 12 November 2013 to map out economic policies as the country heads for its slowest annual growth in more than two decades.
Trading in US index futures indicated that the Dow could fall 13 points at the opening bell on Monday, 11 November 2013. US stocks applauded a better-than-expected October jobs report and rose on Friday amid hopes a more buoyant economy will improve business for American companies over the long run.
American employers added 204,000 workers last month after a revised 163,000 gain in September that was larger than previously estimated, Labor Department figures showed Nov. 8. The increase in payrolls topped the most optimistic forecast in a survey of economists.
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