Key benchmark indices trimmed losses after hitting fresh intraday low in morning trade. The barometer index, the S&P BSE Sensex, was down 222.92 points or 1.08%, up 43.14 points from the day's low and off 167.05 points from the day's high. The market breadth, indicating the overall health of the market, was weak. Investor sentiment was hit adversely after minutes from the Federal Reserve's last meeting signaled US stimulus may be reduced in coming months. 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 edged lower against the dollar due to broad dollar gains after minutes from the US Federal Reserve's October policy meeting suggested the central bank could soon move to taper monetary stimulus.
Index heavyweight and cigarette major ITC extended initial losses. Another index heavyweight Reliance Industries (RIL) edged lower in choppy trade. Metal shares edged lower as a preliminary gauge showed that China's manufacturing activity decelerated this month. Jet Airways (India) extended Wednesday's gains triggered by the company's board approving issue and allotment of shares on preferential basis to Abu Dhabi based Etihad Airways, thereby giving Etihad 24% equity in the Indian private carrier. Realty shares declined.
Key benchmark indices edged lower in early trade as Asian stocks fell after minutes from the Federal Reserve's last meeting signaled US stimulus may be reduced in coming months and as a preliminary gauge showed that China's manufacturing activity decelerated this month. The market extended initial losses in morning trade. The Sensex and the 50-unit CNX Nifty, both, hit one-week low.
At 10:19 IST, the S&P BSE Sensex was down 222.92 points or 1.08% to 20,412.21. The index lost 266.06 points at the day's low of 20,369.07 in morning trade, its lowest level since 14 November 2013. The index fell 55.87 points at the day's high of 20,579.26 in opening trade.
The CNX Nifty was down 72.80 points or 1.19% to 6,050.10. The index hit a low of 6,038.30 in intraday trade, its lowest level since 14 November 2013. The index hit a high of 6,097.35 in intraday trade.
The market breadth, indicating the overall health of the market, was weak. On BSE, 959 shares declined and 639 shares gained. A total of 131 shares were unchanged.
The total turnover on BSE amounted to Rs 407.02 crore by 10:20 IST, compared to Rs 122 crore by 09:25 IST.
Among the 30-share Sensex pack, 25 stocks declined and rest of them gained.
Index heavyweight and cigarette major ITC fell 2.04% to Rs 314.40, with the stock extending initial fall. The stock hit high of Rs 320.25 and low of Rs 313.80 so far during the day.
Index heavyweight Reliance Industries (RIL) lost 1.26% to Rs 852.65. The stock hit high of Rs 861 and low of Rs 849 so far during the day.
Metal shares edged lower as a preliminary gauge showed that China's manufacturing activity decelerated this month. China is the world's largest consumer of copper and aluminum. JSW Steel (down 0.97%), Jindal Steel & Power (down 0.22%), Hindalco Industries (down 0.06%), Sesa Sterlite (down 1.82%) and Tata Steel (down 1.57%) declined.
Jet Airways (India) extended Wednesday's 1.54% gain triggered by the company's board approving issue and allotment of shares on preferential basis to Abu Dhabi based Etihad Airways, thereby giving Etihad 24% equity in the Indian private carrier. The stock rose 1.69%. Jet Airways (India)'s board of directors at its meeting held on Wednesday, 20 November 2013, approved the issue and allotment of 2.72 crore shares at Rs 754.7361607 per share to Abu Dhabi based Etihad Airways on a preferential basis in terms of the investment agreement entered between Etihad and the company on 24 April 2013 and amendments thereto and pursuant to the approval of the shareholders on 24 May 2013 by way of special resolution. The announcement was made during trading hours on Wednesday, 20 November 2013. Jet Airways will mop up Rs 2057.66 crore from the preferential allotment of shares to Etihad. Etihad will hold 24% of the post issue paid up share capital of the company, Jet Airways (India) said.
Jet Airways (India) also said that at a board meeting held on Wednesday, 20 November 2013, Mr. James Hogan and Mr. James Rigney, both nominees of Etihad Airways PJSC, have been appointed as additional directors on the board of the Jet Airways (India).
Jet Airways Chairman Mr. Naresh Goyal said that together with Etihad Airways, Jet Airways would enhance connectivity for tourists, business travellers, Indian families and the wider travelling public. Mr. James Hogan, President and Chief Executive Officer, Etihad Airways said that through their association, Etihad Airways and Jet Airways will, both, be strengthened, as will the economies of India and the UAE. Mr. Goyal and Mr. Hogan confirmed that the collaboration between the airlines would commence immediately with a view to delivering network and service benefits to customers as soon as possible.
Meanwhile, Jet Airways (India) after market hours on Wednesday, 20 November 2013 said that the board of directors of the company has approved the sale of the Jet Privilege Frequent Flyer Programme business of the company to its subsidiary, Jet Privilege as a going concern on a slump sale basis. The company and Etihad Airways PJSC have also agreed to make equity investment in Jet Privilege following which Jet Privilege will become 50.1% owned by Etihad Airways PJSC (with Jet Airways holding approximately 49.9%). The consummation of the transaction is subject to the approval of the Competition Commission of India and will only be effected after receipt of such approval, Jet Airways said.
Realty shares declined. DLF (down 1.73%), Indiabulls Real Estate (down 0.85%), HDIL (down 1.24%), Unitech (down 1.45%), Oberoi Realty (down 4.76%) declined.
Future Retail lost 4.09% after the National Stock Exchange said it would exclude the company from its derivatives segment. In a circular, the National Stock Exchange (NSE) said trading in futures and options (F&O) contracts of Future Retail would not be available with effect from 31 January 2014. NSE added that the existing unexpired contracts of expiry months November 2013, December 2013 and January 2014 would continue to be available for trading till their respective expiry and new strikes would also be introduced in the existing contract months.
In the foreign exchange market, the rupee edged lower against the dollar due to broad dollar gains after minutes from the US Federal Reserve's October policy meeting suggested the central bank could soon move to taper monetary stimulus. The partially convertible rupee was hovering at 62.9475, compared with its close of 62.57/58 on Wednesday, 20 November 2013.
Fitch Ratings said in a report published on Wednesday, 20 November 2013, that the spillover effects of a weaker rupee have not significantly hurt India's creditworthiness, and hence would not trigger any rating action as this point. The economy has not lost much momentum, with both agriculture and exports remaining resilient and providing a cushion. Fitch therefore expects the economy to recover with real GDP forecast to rise 4.8% in FY 2014 (financial year ending March 2014) and 5.8% in FY 2015, compared with a 5% rise in FY 2013. The modest economic recovery, however, will continue to undermine India's banking sector, which is facing a combination of weakening asset quality, eroding profit and declining capital. Nonetheless, these factors are likely to have only a moderate effect on the banking sector's ability to supply credit to the economy. Inflation has risen only moderately, despite higher import prices stemming from the weaker rupee. The Reserve Bank of India (RBI) has also signalled that it has started to place a greater focus on capping CPI. The current account deficit is narrowing, following measures to curb gold imports, a weaker exchange rate, and softer domestic demand. Fitch forecasts the current account deficit to decline to 3.1% of GDP in FY 2014 (versus 4.8% in FY 2013). This fall, however, will not be enough to shield India from further pressures related to the eventual start of Fed tapering.
India's budget remains under pressure as the central government's (CG) fiscal deficit in the first six months of FY14 stood at 76% of the full-year target, Fitch said. The authorities have indicated that they are still committed to lowering the fiscal deficit to 4.8% of GDP (versus 4.9% in FY 2013). To achieve this, the CG is likely to clamp down heavily on expenditures in 2H FY 2014.
Asian stocks fell on Thursday, 21 November 2013, after minutes from the Federal Reserve's last meeting signaled US stimulus may be reduced in coming months and as a preliminary gauge showed that China's manufacturing activity decelerated this month. Key benchmark indices in Taiwan, Hong Kong, China, Singapore, Indonesia and South Korea fell by 0.45% to 1.32%. Japan's Nikkei 225 index rose 1.35%.
China manufacturing activity growth slipped to a two-month low as export orders swung to a decline, according to preliminary results from HSBC's monthly gauge of the sector, released Thursday. The "flash" version of the HSBC/Markit China manufacturing Purchasing Managers' Index eased to 50.4, compared to last month's 50.9 reading.
The Bank of Japan kept its policy rates and asset-purchasing program unchanged Thursday, as widely expected. The decision, which came just three weeks after the central bank's previous policy statement, was unanimous. It also made no changes to its assessment of the economy, which it said "has been recovering moderately" as "exports have generally been picking up." It also cited gains for businesses' fixed investment and corporate profits.
Trading in US index futures indicated that the Dow could fall 23 points at the opening bell on Thursday, 21 November 2013. US stocks fell on Wednesday, 20 November 2013, after the minutes of the Federal Reserve's October meeting minutes signaled the central bank is on track to slow down its $85 billion a month bond bond-buying program that has boosted the equity market. Central bank policy makers "generally expected that the data would prove consistent with the committee's outlook for ongoing improvement in labor-market conditions and would thus warrant trimming the pace of purchases in coming months," according to minutes of the Federal Open Market Committee's Oct. 29-30 meeting.
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