Key benchmark indices hovered in negative terrain in mid-morning trade. The market breadth, indicating the overall health of the market, was negative. Weakness in Asian stocks hit investor sentiment adversely. The barometer index, the S&P BSE Sensex, was down 53.69 points or 0.25%, off close to 50 points from the day's high and up about 125 points from the day's low. Asian stocks fell on Friday, 8 November 2013, after faster US economic growth fueled concern the Federal Reserve may reduce monetary stimulus for the US economy sooner than expected. 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.
Pharma stocks rose on defensive buying. Most bank stocks edged lower. Shares of state-run UCO Bank jumped after strong Q2 results. Eicher Motors scaled record high after the company reported strong Q2 result. Power Grid Corporation of India reversed intraday losses after the Cabinet Committee on Economic Affairs on Thursday, 7 November 2013, approved the proposal of follow on public offer (FPO) of the company. United Breweries dropped after the company reported reverse turnaround in Q2 September 2013.
A bout of volatility was witnessed as key benchmark indices trimmed initial losses triggered by weakness in Asian stocks. The Sensex and the 50-unit CNX Nifty, both, hit 1-1/2-week low. Weakness continued on the bourses in morning trade. The Sensex hovered in negative terrain in mid-morning trade.
At 11:20 IST, the S&P BSE Sensex was down 53.69 points or 0.25% to 20,769.98. The index lost 177.13 points at the day's low of 20,645.64 in early trade, its lowest level since 29 October 2013. The index fell 1.76 points at the day's high of 20,821.01 in morning trade.
The CNX Nifty was down 18.35 points or 0.3% to 6,168.90. The index hit a low of 6,139.85 in intraday trade, its lowest level since 29 October 2013. The index hit a high of 6,185.15 in intraday trade.
The market breadth, indicating the overall health of the market, was negative. On BSE, 1,005 shares dropped and 917 shares rose. A total of 129 shares were unchanged.
Among the 30-share Sensex pack, 18 stocks fell and rest of them rose. HDFC (down 2.41%), ONGC (down 1.8%) and GAIL (India) (down 1.7%), dropped.
Power Grid Corporation of India rose 0.59% to Rs 95.65, with the stock reversing intraday losses. The stock hit high of Rs 95.90 and low of Rs 93.70 so far during the day. The Cabinet Committee on Economic Affairs on Thursday, 7 November 2013, approved the proposal of follow on public offer (FPO) of Power Grid Corporation of India (PGCIL) of 78.70 crore equity shares of Rs 10 each, constituting 17% of existing paid-up capital which comprises fresh issue of 60.18 crore equity shares (13% of existing paid-up capital) and offer for sale (disinvestment) of 18.51 crore equity shares (4% of existing paid-up capital) of government's stake in the company. Additional resources generated through the issue of the FPO will be utilized by PGCIL in its investment programmes. Once the approval is received, action will be taken for implementation of the decision immediately in consonance with terms and conditions, a government statement said.
At the end of Financial Year 2012-13, PGCIL owned and operated Extra High Voltage Transmission line network of about 1,00,100 circuit kilometers (ckms) and 168 substations with transformation capacity of more than 1,64,700 Mega Volt Amperes (MVA). PGCIL wheels about 50% of the total power generated in the country through its transmission network. The inter-regional power transfer capacity of National Grid is about 31,850 Mega Watt (MW) which is envisaged to be enhanced to 65,500 MW by the end of the XII Plan. The Capital Expenditure (CAPEX) in the XII Plan is expected to be approximately Rs 1.25 lakh crore after considering the investment for new initiatives. PGCIL is a highly leveraged company and the FPO will help in raising funds of the order of Rs 5600 crore to meet its investment programme for the next two financial years and in meeting with the CERC allowed norms of 30 percent equity contributions to investment during FY 2013-14 & FY 2014-15.
Most bank stocks edged lower. ICICI Bank declined 0.1%.
HDFC Bank shed 0.89%.
But, State Bank of India rose 0.16%.
Punjab National Bank dropped 1.47% ahead of its Q2 results today, 8 November 2013.
Shares of state-run UCO Bank jumped after strong Q2 results. The stock was up 6.7% at Rs 75.80. The bank's net profit jumped 285.88% to Rs 400.20 crore on 5.55% increase in total income to Rs 4653.30 crore in Q2 September 2013 over Q2 September 2012. The result hit the market during trading hours.
Pharma stocks rose on defensive buying. Cipla (up 0.89%), Dr Reddy's Laboratories (up 0.82%), Lupin (up 1.88%), Ranbaxy Laboratories (up 1.19%) and Sun Pharmaceutical Industries (up 0.21%), gained.
United Breweries lost 2.98% after the company reported reverse turnaround in Q2 September 2013. The company reported a net loss of Rs 18.57 crore in Q2 September 2013, compared with net profit of Rs 34.20 crore in Q2 September 2012. United Breweries (UBL)'s total income fell 1.22% to Rs 848.78 crore in Q2 September 2013 over Q2 September 2012. The Q2 result was announced after market hours on Thursday, 7 November 2013.
UBL said that the volumes in Q2 September 2013 have been under pressure, as a result of the extended and heavy rains experienced during this year's monsoon period.
UBL said it took price increases in select markets that helped in off-setting a major portion of input price increases in an inflationary economy. However the effect of the company being forced to use new bottles for 100% of its production in Maharashtra on account of local excise laws lead to an unprecedented increase in input costs of over Rs 46 crore during the first half year, UBL said in a statement. The Maharashtra government has since reversed this policy and passed a notification in October 2013 permitting once again the use of second hand bottles which will reduce input costs to normal levels, the company added.
During the first half of the year the industry remained flat with Tamil Nadu losing 20% of its volumes on account of higher end-consumer prices and the unfavorable ordering pattern of TASMAC, which also affected the company's volumes in this state, UBL said.
The company posted double digit volume growth in Rajasthan, West Bengal, Orissa and Uttar Pradesh in first half of FY 2014.
UBL said it has maintained its all India market share of 50% despite the adverse developments in Tamil Nadu. It has increased its market share in key markets at a time when pressure from competition has been at its peak, considering the difficult times the industry has been going through, UBL said in a statement.
Eicher Motors gained 3.94% to Rs 4,169.90 after the company reported strong Q2 result. The stock hit a record high of Rs 4,249 in intraday trade today, 8 November 2013. The company's consolidated net profit rose 62.75% to Rs 107.43 crore on 16.16% rise in total income to Rs 1751.33 crore in Q2 September 2013 over Q2 September 2012. The result was announced after market hours on Thursday, 7 November 2013.
In the foreign exchange market, the rupee edged lower against the dollar as faster US economic growth fueled concern the Federal Reserve may reduce monetary stimulus for the US economy sooner than expected. The partially convertible rupee was hovering at 62.6925, compared with its close of 62.41/42 on Thursday, 7 November 2013.
Indian government bond prices dropped as faster US economic growth fueled concern the Federal Reserve may reduce monetary stimulus for the US economy sooner than expected. The yield on 10-year benchmark government paper -- 7.16% GS 2023 -- was hovering at 8.9044%, higher than its close of 8.8492% on Thursday, 7 November 2013. Bond yield and bond prices are inversely related.
Asian stocks fell on Friday, 8 November 2013, after faster US economic growth fueled concern the Federal Reserve may reduce monetary stimulus for the US economy sooner than expected. Key benchmark indices in Singapore, China, Japan, Hong Kong, Taiwan, Indonesia and South Korea shed 0.46% to 1.11%.
China's trade surplus expanded more than forecast to $31.1 billion last month from $15.21 billion in September. Exports grew 5.6% after contracting last month. Among the other October data, imports rose 7.6% in October 2013.
China is due to issue a heavy slate of other October data, including industrial production, consumer inflation and retail sales tomorrow, 9 November 2013.
China's leaders will meet in Beijing on November 9-12 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 gain 7 points at the opening bell on Friday, 8 November 2013. US stocks tumbled on Thursday, 7 November 2013, as speculation the Federal Reserve may scale back stimulus amid faster-than-estimated economic growth overshadowed a move by the European Central Bank to cut a key interest rate.
Data yesterday showed growth in the world's biggest economy accelerated to a 2.8% annualized rate last quarter, faster than the 2% median market estimates. Fewer Americans filed applications for unemployment benefits last week, indicating firings haven't picked up following the partial government shutdown. Jobless claims decreased by 9,000 to 336,000 in the week ended Nov. 2 from 345,000 the prior period, the Labor Department reported in Washington.
The US government will today, 8 November 2013, release nonfarm payrolls figures for October 2013. The job data is a key economic indicator that has been watched closely in recent months to see whether the US Federal Reserve will roll back its bond-buying program.
In Europe, the European Central Bank (ECB) cut its benchmark interest rate to a record low after a drop in inflation to the slowest pace in four years threatened its mission to keep prices stable. Policy makers meeting in Frankfurt on Thursday reduced the main refinancing rate by a quarter point to 0.25%.
The Bank of England kept its benchmark rate at a record-low 0.5% in London on Thursday, while its bond-purchase plan stayed at 375 billion pounds ($603 billion).
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