Key benchmark indices slumped to hit fresh intraday low in mid-afternoon trade as several upbeat economic reports spurred thinking that the Federal Reserve will begin to scale back its monthly bond buys in September 2013. The S&P BSE Sensex and the CNX Nifty, both, hit their lowest level in over one week. The S&P BSE Sensex was down 647.87 points or 3.35%, off 591.23 points from the day's high and up 98.33 points from the day's low. The market breadth, indicating the overall health of the market, was weak. All the thirteen sectoral indices on BSE were in the red.
Index heavyweight and cigarette major ITC reversed direction after hitting an intraday high in early trade. Reliance Industries extended intraday slide. Bank pivotals fell after the Reserve Bank of India on Wednesday, 14 August 2013 announced fresh set of measures to moderating outflows. Shares of state-run banking giant SBI hit 52-week low. Realty stocks dropped.
Key benchmark indices declined in early trade as several upbeat economic reports spurred thinking that the Federal Reserve will begin to scale back its monthly bond buys in September 2013. The Sensex dropped below the psychological 19,000 mark. Key benchmark indices tumbled in morning trade as the rupee dropped to a record low against the dollar. Key benchmark indices hit fresh intraday low in mid-morning trade. The Sensex extended losses to hit fresh intraday low in afternoon trade. Key benchmark indices slumped to hit fresh intraday low in mid-afternoon trade.
The rupee trimmed losses after hitting record low below 62 against the dollar as exporters step in to sell the greenback. The partially convertible rupee was hovering at 61.83, weaker than its close of 61.43/ 61.44 on Wednesday, 14 August 2013. The rupee hit record low of 62.02 in intraday trade. Indian financial markets were closed on Thursday, 15 August 2013, for Independence Day holiday.
At 14:20 IST, the S&P BSE Sensex was down 647.87 points or 3.35% to 18,719.72. The index lost 746.20 points at the day's low of 18,621.39 in mid-afternoon trade, its lowest level since 7 August 2013. The index fell 56.64 points at the day's high of 19,310.95 in early trade.
The CNX Nifty was down 202.95 points or 3.53% to 5,539.35. The index hit a low of 5,509.25 in intraday trade, its lowest level since 7 August 2013. The index hit a high of 5,716.60 in intraday trade.
The market breadth, indicating the overall health of the market, was weak. On BSE, 1,585 shares declined and 657 shares rose. A total of 127 shares were unchanged.
The total turnover on BSE amounted to Rs 1486 crore by 14:20 IST.
Hero MotoCorp was the lone gainer from the 30-share Sensex pack. Hero MotoCorp rose 2.7% to Rs 1988.70.
Bhel (down 7.29%), HDFC (down 5.55%) and Maruti Suzuki India (down 4.67%), edged lower from the Sensex pack.
Index heavyweight and cigarette major ITC fell 2.85% to Rs 325. The stock reversed direction after hitting an intraday high of Rs 337.95 in early trade.
Reliance Industries dropped 4.39% to Rs 827.20, with the stock extending intraday fall. The stock hit a high of Rs 866 and low of Rs 818.05 so far during the day.
Bank pivotals fell after the Reserve Bank of India on Wednesday, 14 August 2013 announced fresh set of measures to moderating outflows.
Shares of state-run banking giant SBI lost 2.84% to Rs 1,579 after hitting a 52-week low of Rs 1,553.40.
ICICI Bank (down 4.52%) and HDFC Bank (down 4.89%) declined.
Axis Bank lost 7.97% after MSCI said it would exclude the stock from its standard and large cap indices with effect from 2 September 2013. MSCI made the announcement on Thursday, 15 August 2013, when the Indian stock market was shut for Independence Day holiday.
MSCI Barra is a leading provider of benchmark indices and risk management analytics products. Many global mutual funds are linked with MSCI indices. Hence, deletion of a stock from the MSCI index leads to outflow of passive funds that use the MSCI index to benchmark their portfolios.
Meanwhile, shares of Axis Bank also came under pressure after the Reserve Bank of India (RBI) on Wednesday, 14 August 2013, said that overseas investors will not be allowed to purchase additional shares in the bank given the foreign shareholding limit of 49% in the stock has been breached.
Realty stocks dropped. DLF lost 6.03%, with the stock reversing recent gain. The company reported consolidated net profit of Rs 181 crore in Q1 June 2013, as against net loss of Rs 4 crore in Q4 March 2013. Earnings before interest, taxation, depreciation, and amortization (EBITDA) jumped 29% to Rs 1055 crore in Q1 June 2013 over Q4 March 2013. Revenue rose 6% to Rs 2453 crore in Q1 June 2013 over Q4 March 2013. The company announced Q1 result after market hours on Monday, 12 August 2013.
DLF said that the benefit of the revised strategy, which was articulated in February 2013, has now started to flow. The company remains focused on creating a business model of highly stable and predictable earnings, cash flows and long term value creation. The company continues to concentrate its efforts on reduction of net debt by increasing its operating cash flows and non-core divestments thereby increasing ROE, DLF said.
Other realty stocks also declined. Unitech (down 6.59%), Oberoi Realty (down 3.75%), Parsvnath Developers (down 2.46%), D B Realty (down 3.73%), and Indiabulls Real Estate (down 5.15%), edged lower.
Shares of Financial Technologies rose 5.87% to Rs 155.20, after sliding as much as 18.14% to the day's low of Rs 120 in volatile trade. The National Spot Exchange (NSEL), which shut its operations this month following regulatory probes over possible trading violations, on Wednesday, 14 August 2013, said it has finalized the detailed settlement plan. As per the plan, starting 16 August 2013, there will be pay-in every Friday and pay-out every subsequent Tuesday. Financial Technologies is one of the two promoters of NSEL.
Shares of Multi Commodity Exchange of India (MCX), a commodities futures exchange promoted by Financial Technologies, fell 4.68% to Rs 241.45. The stock was highly volatile. After hitting 5% lower circuit at Rs 240.65, also its record low in intraday trade, the stock gained 4.62% to hit day's high of Rs 265.
Delta Corp jumped 7.53% after the company during market hours today, 16 August 2013 said that Victor Hotels & Motels, a wholly owned fellow subsidiary of Delta Corp, has obtained the necessary approvals for commencing its offshore gaming operations on board its vessel, M.V. Horseshoe Casino. Accordingly, the company proposes to commence operations from 16 August 2013.
The Reserve Bank of India on Wednesday, 14 August 2013, announced measures to curb gold imports and capital outflows. The RBI limited the investment Indian companies can make overseas without seeking its approval to 100% of their net worth. They were previously allowed to invest up to four times their net worth. The RBI also reduced the amount that people living in India can send abroad to $75,000 a year from $200,000. Further, it said the remittances cannot be used for buying property abroad. "The present set of measures is aimed at moderating outflows," the RBI said in a news release. The central bank would, however, consider requests for permission to invest beyond the limit it set Wednesday, it said. However, the central bank has exempted large state-run companies from this restriction.
European stocks declined on Friday, 16 August 2013, ahead of more data from the US, including a sentiment survey. Key benchmark indices in France, Germany and UK fell by 0.06% to 0.31%.
Asian stocks declined on Friday, 16 August 2013, as several upbeat economic reports spurred thinking that the Federal Reserve will begin to scale back its monthly bond buys in September 2013. Key benchmark indices in Indonesia, China, South Korea, Hong Kong, Singapore and Japan were down by 0.1% to 2.29%. Taiwan's Taiwan Weighted index rose 0.48%.
Trading in US index futures indicated that the Dow could gain 12 points at the opening bell on Friday, 16 August 2013. US stocks slumped on Thursday, 15 August 2013, as better-than-expected data, such as weekly jobless numbers, heightened fears of imminent tapering of the Federal Reserve's bond-buying program.
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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