Key benchmark indices remained weak in early afternoon trade on concern the Federal Reserve may reduce monetary stimulus for the US economy sooner than expected after latest data showed better than expected US October jobs report. The S&P BSE Sensex, was down 84.25 points or 0.41%, off close to 40 points from the day's high and up about 100 points from the day's low. The market breadth, indicating the overall health of the market, was negative.
Bank stocks declined across the board. Shares of two-wheeler makers dropped. Divi's Laboratories jumped on strong Q2 result. PSU OMCs declined as a weak rupee will negate the impact of lower crude oil prices for PSU OMCs as the crude oil that refineries process is either imported or priced on import-parity.
Indian stocks fell for the fifth day in a row today, 11 November 2013.
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. It continued to hover in negative terrain in early afternoon 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 12:18 IST, the S&P BSE Sensex was down 84.25 points or 0.41% to 20,581.90. 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 29.05 points or 0.47% to 6,111.70. 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, 1,058 shares fell and 893 shares rose. A total of 117 shares were unchanged.
Among the 30-share Sensex pack, 20 stocks fell and rest of them rose. Hindalco Industries (down 2.36%), ONGC (down 2.45%) and L&T (down 2.68%), declined.
PSU OMCs decline as a weak rupee will negate the impact of lower crude oil prices for PSU OMCs as the crude oil that refineries process is either imported or priced on import-parity. BPCL (down 2.64%), HPCL (down 3.3%) and Indian Oil Corporation (down 3.52%), edged lower.
Shares of two-wheeler makers dropped. Hero MotoCorp (down 2.27%) and Bajaj Auto (down 1.56%), declined.
Bank stocks declined across the board. ICICI Bank declined 0.88%.
HDFC Bank shed 0.95%.
Among PSU bank stocks, State Bank of India, Canara Bank, Union Bank of India, Bank of India, Bank of Baroda and Punjab National Bank shed 1.18% to 3.63%.
Max India fell 1.37% after Q2 result. The company reported net profit of Rs 1.99 crore in Q2 September 2013 as against net loss of Rs 17.43 crore in Q2 September 2012. The Q2 result was announced after market hours on Friday, 8 November 2013.
Max India's total income rose 15.8% to Rs 214.16 crore in Q2 September 2013 over Q2 September 2012.
Commenting on the company's Q2 performance, Mr. Rahul Khosla, Managing Director, Max India said, Our Businesses of Life are positioned for sustained and profitable growth, and are setting the pace in their respective industries. These results are especially pleasing when evaluated against the backdrop of a generally challenging macroeconomic and regulatory environment. This positive financial performance, a healthy balance sheet and a comfortable liquidity position has led the board of directors to approve an interim dividend of 90%. I am confident that our commitment to core values and strategies will continue to deliver superior results in the future.
Mr. Mohit Talwar, Deputy Managing Director, Max India said, The liquidity position continues to be healthy at Rs 2300 crore across operating companies and the listed entity. This will ensure that the Group is well positioned to tap future growth opportunities.
Divi's Laboratories jumped 9.69% on strong Q2 result. The company's net profit jumped 73.72% to Rs 205 crore on 19.62% growth in total income to Rs 567 crore in Q2 September 2013 over Q2 September 2012. The result was announced after market hours on Friday, 8 November 2013.
Divi's Laboratories reported a foreign exchange (forex) gain of Rs 31 crore in Q2 September 2013 as against a forex loss of Rs 21 crore in Q2 September 2012.
Divi's Laboratories said it has capitalized fixed assets aggregating to Rs 120 crore in the first half of the fiscal year ending March 2014 (FY 2014).
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 63.26, 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 0.23% to 1.3%. Key benchmark indices in Taiwan, South Korea and Indonesia shed 0.38% to 0.79%.
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 2 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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