Key benchmark indices further extended losses and hit fresh intraday low in mid-afternoon trade as oil surged amid escalating violence in Iraq. The barometer index, the S&P BSE Sensex, and the 50-unit CNX Nifty, both, hit one week low. The market breadth indicating the overall health of the market was weak, with more than 2 losers for every gainer on BSE. The BSE Mid-Cap index was off more than 2.7%. The BSE Small-Cap index shed over 3.4%. The barometer index, the S&P BSE Sensex, was down 369.87 points or 1.45%, off close to 480 points from the day's high and up about 35 points from the day's low.
Telecom stocks dropped. Bharti Airtel extended Thursday's fall triggered by a foreign brokerage downgrading the stock citing competition. Realty stocks tumbled.
Crude oil prices surged as escalating violence in Iraq threatened supplies from OPEC's second-largest oil producer. Increase in crude oil prices raised concerns about India's current account deficit and fiscal deficit. India imports majority of its crude oil requirements.
A bout of volatility was witnessed in early trade as key benchmark indices regained positive terrain after slipping into the red for a brief period after opening with decent gains. Key benchmark indices moved in a narrow range in positive terrain in morning trade. Key benchmark indices trimmed intraday gains in mid-morning trade after moving in a narrow range. Key benchmark indices slipped into the red and hit fresh intraday low in early afternoon trade. Key benchmark indices extended fall and hit fresh intraday low in afternoon trade on crude surged. The barometer index, the S&P BSE Sensex and the 50-unit CNX Nifty, both, hit one week low. Key benchmark indices extended losses and hit fresh intraday low in mid-afternoon trade.
At 14:20 IST, the S&P BSE Sensex was down 369.87 points or 1.45% to 25,206.34. The index lost 404.60 points at the day's low of 25,171.61 in mid-afternoon trade, its lowest level since 6 June 2014. The index jumped 112.10 points at the day's high of 25,688.31 in early trade, its highest level since 11 June 2014.
The CNX Nifty was down 114.35 points or 1.49% to 7,535.55. The index hit a low of 7,525.35 in intraday trade, its lowest level since 6 June 2014. The index hit a high of 7,678.50 in intraday trade, its highest level since 11 June 2014.
The BSE Mid-Cap index was down 254.37 points or 2.78% to 8,911.94. The BSE Small-Cap index was down 341.63 points or 3.42% to 9,643.85. Both these indices underperformed the Sensex.
The market breadth indicating the overall health of the market was weak with more than 2 losers for every gainer on BSE. On BSE, 2,223 shares fell and 780 shares rose. A total of 68 shares were unchanged.
Hindalco Industries (down 5.42%), NTPC (down 4.33%) and Tata Steel (down 4.16%) edged lower from the Sensex pack.
Realty stocks tumbled. Housing Development & Infrastructure (HDIL) (down 5.09% to Rs 92.25), DLF (down 8.21% to Rs 205.20), Sobha Developers (down 5.52% to Rs 503.60) and Unitech (down 6.87% to Rs 31.85) declined.
Telecom stocks dropped. MTNL (down 8.77% to Rs 29.60), Tata Teleservices (Maharashtra) (down 6.39% to Rs 11.72) and Reliance Communications (down 2.83% to Rs 142.75) declined.
Bharti Airtel lost 3.04% to Rs 331.15, with the stock extending Thursday's fall triggered by a foreign brokerage downgrading the stock citing competition. A foreign brokerage has downgraded the Bharti Airtel stock to 'underperform' from 'neutral' and reduced its target price to Rs 265 from Rs 275 citing competition from rival Reliance Jio Infocomm, a unit of Reliance Industries (RIL). The stock had lost 3.57% to settle at Rs 341.55 on Thursday, 12 June 2014.
Idea Cellular shed 2.87% to Rs 137.15. The stock hit high of Rs 142.90 and low of Rs 136.50 so far during the day. The company announced after market hours on Thursday, 12 June 2014, successful closure of its qualified institutional placement and has issued and allotted 22.39 crore shares to qualified institutional buyers (QIBs) at an issue price of Rs 134 per share aggregating to Rs 3000 crore. The issue witnessed strong interest from both foreign and Indian investors. Shares allotted to QIBs were admitted for trading on the bourses today, 13 June 2014.
The company is proposing to undertake a private placement of 5.18 crore shares at Rs 144.68 per share aggregating Rs 750 crore to a subsidiary of Axiata Group Berhad of Malayasia, an existing key shareholder of the company.
In the foreign exchange market, the rupee edged lower against the dollar as crude oil prices rose as escalating violence in Iraq threatened supplies from OPEC's second-largest oil producer. The partially convertible rupee was hovering at 59.52, compared with its close of 59.25/26 on Thursday, 12 June 2014.
Brent crude oil futures for July settlement, which expires today, 13 June 2014, were up 58 cents at $113.60 a barrel on the London-based ICE Futures Europe exchange. The contract ended up with gains of more than $3 on Thursday, 12 June 2014.
Crude-oil prices surged on concerns that unrest in Iraq could lead to disruptions in the country's oil supplies. Islamist militants have reportedly taken full control of the northern oil city of Kirkuk and vowed to march to Baghdad. Iraq is the second-largest oil producer in the Organization of the Petroleum Exporting Countries. The International Energy Agency today, 13 June 2014, said oil supplies in Iraq aren't at immediate risk.
US President Barack Obama is reportedly weighing possible airstrikes in Iraq to blunt the momentum of Sunni militants who have seized control of several major cities in recent days.
On the macro front, India's industrial production rose 3.4% in April 2014, compared with a contraction of 0.5% in March 2014, data released by the government after trading hours on Thursday, 12 June 2014, showed. Fourteen out of the twenty two industry groups from the manufacturing sector registered positive growth during the month of April 2014 as compared to the corresponding month of the previous year. Industrial production contracted 0.1% during April-May 2014 over the corresponding period of the previous year.
The annual inflation rate based on combined consumer price index (CPI) for urban and rural India eased to 8.28% (provisional) in May 2014, from 8.59% (final) in April 2014, data released by the government after trading hours on Thursday, 12 June 2014, showed. Within the consumer price index, food prices inflation eased to 9.56% in May 2014, from 9.83% in April 2014. The rate of inflation based on the core CPI, which excludes food and energy prices was 7.72% in May 2014, unchanged from the level in April 2014.
European stocks declined on Friday, 13 June 2014, as an escalation of violence in Iraq sent energy prices soaring, while investors assessed comments from Bank of England Governor Mark Carney on the next rate hike. Key benchmark indices in UK, France and Germany were off 0.22% to 0.44%.
Bank of England Governor Mark Carney said in a speech on Thursday, 12 June 2014, an interest-rate increase may come sooner than the markets currently anticipate. "Growth has been much stronger, and unemployment has fallen much faster than either we or anyone else expected a year ago", Carney said.
The rate of annual inflation in Germany weakened substantially in May, the country's statistics office said Friday. German consumer prices rose by only 0.6% in May in annual terms based on common European data standards, its lowest growth rate since February 2010 and well below the 1.1% gain registered in April. In monthly terms, prices declined by 0.3%. In national terms, prices fell 0.1% on the month, but rose 0.9% on the year in May, the statistics office said.
Spain's inflation rate eased slightly in May, largely due to declines in food and beverage prices, official data showed Friday. The country's European Union-harmonized consumer price index rose 0.2% in May, said the country's national statistics institute, or INE, down from a rise of 0.3% in April. Under Spain's own inflation calculations, prices rose 0.2% in May, having increased by 0.4% in April.
Asian stocks were mixed in choppy trade on Friday, 13 June 2014, after data showed China's industrial output and retail sales growth accelerated in May. Key benchmark indices in Japan, China and Hong Kong were up 0.62% to 0.93%. Singapore's Straits Times was flat. Key benchmark indices in Indonesia, Taiwan, and South Korea were off 0.09% to 1.03%.
China's industrial output rose 8.8% in May 2014 while, retail sales rose 12.5% in May, the latest data showed.
The Bank of Japan maintained record stimulus as Governor Haruhiko Kuroda strives to boost inflation that remains short of a 2% target. The central bank will continue to expand the monetary base at a pace of 60 trillion yen to 70 trillion yen ($688 billion) per year, it said in a statement today in Tokyo, in line with estimates.
Trading in US index futures indicated that the Dow could gain 8 points at the opening bell on Friday, 13 June 2014. US stocks fell on Thursday as concerns escalated about Iraq and after disappointing economic data on retail sales and jobless claims.
In macroeconomic news, retail sales rose 0.3% in May, half the growth rate than forecasts. Americans' new claims for unemployment benefits unexpectedly rose last week.
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