Indian stocks dropped on the last trading session of month today, 30 September 2013, as stocks fell across the globe and as US index futures pointed to a weak opening of US stocks later in the global day on a trio of concerns viz. a potential government shutdown in the US, political instability in Italy and disappointing data from China. The barometer index, the S&P BSE Sensex, and the 50-unit CNX Nifty, both, settled at their lowest level in more than three weeks. The Sensex plunged 347.50 points or 1.76%, up 59.04 points from the day's low and off 271.54 points from the day's high. The market breadth, indicating the overall health of the market, was weak.
Index heavyweight Reliance Industries and ITC, both, declined. Capital goods pivotals dropped. Bank stocks extended Friday's losses triggered by Reserve Bank of India (RBI) governor Raghuram Rajan's comments that the RBI is still worried about high inflation, even when taking out volatile food prices. Shares of power generation and power distribution companies edged lower in weak market.
Indian stocks fell for the second day in a row today, 30 September 2013. The Sensex has plunged 514.08 points or 2.58% in two trading sessions from a recent high of 19,893.85 on 26 September 2013. The Sensex garnered 760.05 points or 4.08% in September 2013. The Sensex has declined 46.94 points or 0.24% in calendar 2013 so far (till 30 September 2013). From a 52-week high of 20,739.69 on 19 September 2013, the Sensex has declined 1,359.92 points or 6.56%. From a 52-week low of 17,448.71 on 28 August 2013, the Sensex has risen 1,931.06 points or 11.07%.
The market sentiment was hit adversely by data showing that foreign funds were net sellers of Indian stocks on Friday, 27 September 2013. Foreign institutional investors (FIIs) sold shares worth a net Rs 224.40 crore from the secondary equity markets on Friday, 27 September 2013, as per data from Securities & Exchange Board of India.
In the foreign exchange market, the rupee weakened against the dollar, tailing global risk-off sentiment on a potential shutdown of the US government. The partially convertible rupee was hovering at 62.64, compared with its close of 62.51/52 on Friday, 27 September 2013. 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.
The Reserve Bank of India (RBI) will unveil data on India's current account deficit and data on balance of payments at 17:00 IST today, 30 September 2013.
The S&P BSE Sensex plunged 347.50 points or 1.76% to settle at 19,379.77, its lowest closing level since 6 September 2013. The index slumped 406.54 points at the day's low of 19,320.73 in late trade. The index fell 75.96 points at the day's high of 19,651.31 in opening trade.
The CNX Nifty lost 97.90 points or 1.68% to 5,735.30, its lowest closing level since 6 September 2013. The index hit a low of 5,718.50 in intraday trade. The index hit a high of 5,810.20 in intraday trade.
The market breadth, indicating the overall health of the market, was weak. On BSE, 1,407 shares fell and 877 shares rose. A total of 136 shares were unchanged.
The BSE Mid-Cap index fell 0.28% and the BSE Small-Cap index fell 0.56%. Both these indices outperformed the Sensex.
Among the sectoral indices on BSE, the S&P BSE IT index (up 0.06%), the S&P BSE Healthcare index (down 0.09%), the S&P BSE Teck index (down 0.48%), the S&P BSE Consumer Durables index (down 0.95%), the S&P BSE FMCG index (down 1.27%), the S&P BSE Auto index (down 1.48%), the S&P BSE Power index (down 1.56%), the S&P BSE Oil & Gas index (down 1.74%) outperformed the Sensex.
The S&P BSE Realty index (down 2.09%), the S&P BSE PSU index (down 2.09%), the S&P BSE Metal index (down 2.44%), the S&P BSE Bankex (down 2.84%), the S&P BSE Capital Goods index (down 2.92%) underperformed the Sensex.
Among the 30-share Sensex pack, 27 stocks fell and only three rose. HDFC (down 3.03%), Coal India (down 4.33%), and ONGC (down 2.93%), edged lower from the Sensex pack.
Index heavyweight and cigarette maker ITC declined 3%.
Another index heavyweight Reliance Industries lost 2.17%.
Shares of biscuits major Britannia Industries jumped 6.23% to Rs 823.55 after hitting a record high of Rs 840 in intraday today, 30 September 2013.
Capital goods pivotals dropped. Bhel (down 4.2%) and L&T (down 3.64%), declined.
Bank stocks extended Friday's losses triggered by Reserve Bank of India (RBI) governor Raghuram Rajan's comments that the RBI is still worried about high inflation, even when taking out volatile food prices. Among private bank stocks, HDFC Bank (down 2.86%), Yes Bank (down 5.89%), Axis Bank (down 2.33%) and ICICI Bank (down 4.6%), declined.
State Bank of India (SBI) declined 1.6%. The bank announced after market hours on Friday, 27 September 2013, that it has repurchased a principal amount of $147 million of $1 billion 3.25% bonds due 2018 (the 2018 Bonds). The 2018 Bonds were issued by SBI on 18 April 2013 and are listed on the Singapore Exchange Securities Trading. The repurchase of the Bond took place between 26 August 2013 and 26 September 2013. The bank is in the process of cancelling the repurchased 2018 Bonds and the aggregate outstanding principal amount of the 2018 Bonds following such cancellation will be $853 million, SBI said in a statement.
Among other PSU bank stocks, Punjab National Bank, Canara Bank, Bank of India, Union Bank of India, and Bank of Baroda declined 1.26% to 4.85%.
ING Vysya Bank jumped 5.11% on reports ING Groep NV is seeking a buyer for its 43% stake in the bank. According to the media report, ING Groep NV, the biggest Dutch financial-services company, is said to be seeking a buyer for its 43% stake in ING Vysya Bank, as the prospects of limited purpose banking in India and tough competition in retail market make it rethink its local strategy.
ING may exit the domestic banking business comprising retail, corporate and treasury, to focus on corporate banking, the report said.
Report suggested that although ING Vysya may be an attractive asset for every private sector bank because of its clean books, 575 branches and loyal customers, Kotak Mahindra Bank seems to be best placed to benefit from the acquisition of ING Vysya. However, the report added that Kotak Mahindra Bank is not negotiating for a takeover.
As on 3 July 2013, ING Groep NV held 43.55% in ING Vysya Bank, through ING Mauritius Holdings and ING Mauritius Investments I. ING Mauritius Holdings held 33.85% stake and ING Mauritius Investments I held 9.69% stake in ING Vysya Bank.
ING Vysya Bank after market hours today, 30 September 2013, said that the bank never comments on market rumours and speculations and it does not have any other specific comments to offer.
Shares of Kotak Mahindra Bank dropped 1.15% to Rs 674.45. The stock was volatile. The scrip hit high of Rs 689 and low of Rs 669.
Shares of metal companies tumbled after a Chinese manufacturing gauge unexpectedly rose less than a preliminary estimate in September 2013. Tata Steel (down 5.51%), NMDC (down 4.97%), Sail (down 2.74%), Hindalco Industries (down 1.84%), JSW Steel (down 0.38%), Jindal Steel & Power (down 1.06%), and Sesa Sterlite (down 1.78%), edged lower. China is the world's largest consumer of copper and aluminum. Hindustan Zinc rose 1.22%.
Tata Steel dropped 5.37%. The stock was the biggest loser from the Sensex pack.
Most auto stocks extended Friday's losses triggered by Reserve Bank of India (RBI) governor Raghuram Rajan's comments that the RBI is still worried about high inflation, even when taking out volatile food prices. Purchases of automobiles, including that of cars, utility vehicles and commercial vehicles are substantially driven by financing. Maruti Suzuki India (down 0.79%) and Tata Motors (down 2.57%) dropped.
M&M shed 1.67%. The company on Friday, 27 September 2013, said it would be raising the prices of its passenger as well as its commercial vehicles by up to 2% with effect from 1 October 2013. The company said that the increase would be in the range of Rs 6000 to Rs 20000 depending on the vehicle model. The increase is primarily due to higher input costs, devaluation of the rupee and increase in some raw material costs.
Two-wheeler stocks were mixed. Bajaj Auto rose 0.26%. Hero MotoCorp dropped 1.79%.
Auto companies will start unveiling monthly sales volume data for September 2013 from tomorrow, 1 October 2013.
Shares of power generation and power distribution companies edged lower in weak market. Torrent Power, GVK Power & Infrastructure, Tata Power Company, Adani Power, Power Grid Corporation of India, JSW Energy, and Reliance Power shed by 0.76% to 5.71%.
NTPC dropped 0.1%. The company said during market hours today, 30 September 2013, that the two units of Uri-II HE Project have been successfully commissioned. Further, a Memorandum of Understanding has been signed amongst the Chhattisgarh State Power Holding Company (CSPHCL), Indian Farmers Fertiliser Cooperative (IFFCO) and NHPC for development of 2x660 megawatts (MW) super critical thermal power project in Surajpur district at Chhattisgarh.
Shares of NHPC declined 1.76%.
Shares of Reliance Infrastructure (RInfra) dropped after credit rating agency CRISIL downgraded its rating on RInfra's debt programmes and long-term bank facilities to 'CRISIL A+/Negative' from 'CRISIL AA-/Negative'. The stock lost 5.55% at Rs 371.10. CRISIL said that the rating revision reflects lower revenue visibility in RInfra's engineering, procurement, and construction (EPC) business coupled with higher-than-expected exposure to group companies. The impact of these developments is partially offset by the incremental annual cash flow expected from the recovery of regulatory assets in its Mumbai distribution business, CRISIL said.
CRISIL's ratings continue to reflect RInfra's stable cash flows supported by its leading market position in the regulated electricity distribution market in Mumbai, and its relatively healthy financial flexibility. These rating strengths are partially offset by the company's exposure to risks related to the infrastructure project development business, and high financial exposure to group companies, CRISIL said.
Lupin rose 0.45% after the company after market hours on Friday, 27 September 2013, announced that it has received final approval for its Vyfemla Tablets (Norethindrone and Ethinyl Estradiol Tablets USP, 0.4mg/0.035 mg) from the United States Food and Drugs Administration (USFDA) to market a generic version of Warner Chilcott Company, LLC's Ovcon 35 Tablets (Norethindrone and Ethinyl Estradiol Tablets USP, 0.4mg/0.035 mg). Lupin's US subsidiary Lupin Pharmaceuticals Inc. shall commence marketing the product shortly.
Lupin's Vyfemla Tablets (Norethindrone and Ethinyl Estradiol Tablets USP, 0.4 mg/0.035 mg) is the AB rated generic equivalent of Warner Chilcott's Ovcon 35 Tablets and is indicated for the prevention of pregnancy in women who elect to use this product as a method of contraception.
As per IMS MAT March 2013 data, Warner Chilcott Company, LLC.'s Ovcon 35 Tablets had annual sales of approximately $22.3 million in the US.
Glenmark Pharmaceuticals rose 1.37% after the company said its US subsidiary has secured approval from USFDA for a generic version of Locoid Lipocream. The announcement was made during trading hours today, 30 September 2013.
Glenmark Generics Inc., USA, the subsidiary of Glenmark Generics announced the approval for Hydrocortisone Butyrate Cream USP, 0.1%, abbreviated new drug approval (ANDA) from the United States Food and Drug Administration (USFDA), a generic version of Locoid Lipocream.
Hydrocortisone Butyrate Cream is indicated for the relief of the inflammatory and pruritic manifestations of corticosteroid-responsive dermatoses in adults and the treatment of mild to moderate atopic dermatitis in patients 3 months to 18 years of age.
According to IMS Health data, Hydrocortisone Butyrate Cream garnered annual sales of approximately $34 million in the US for the twelve months ended June 2013.
The National Stock Exchange of India (NSE) on Friday, 27 September 2013, said it would include Glenmark Pharmaceuticals, GlaxoSmithkline Consumer Healthcare and United Breweries in the futures and options (F&O) segment with effect from Thursday, 3 October 2013. Shares of GlaxoSmithkline Consumer Healthcare were up 2.22% at Rs 4,331.55. United Breweries fell 1.64% at Rs 860.
Ranbaxy Laboratories fell 1.48%. The company after market hours on Friday, 27 September 2013, said that ICRA has assigned the rating of [ICRA]A1+ (pronounced as A One Plus) to the company's commercial paper (CP)/short term debt (STD) programme for an enhanced amount of Rs 800 crore. Earlier CP/STD programme of the company for Rs 1200 crore was also assigned the same rating i.e. [ICRA]A1+.
Instruments with [ICRA]A1+ rating are considered to have very strong degree of safety regarding timely payment of financial obligations. Such instruments carry lowest credit risk, Ranbaxy Lab said.
Dr Reddy's Laboratories lost 1.43%.
Tech Mahindra rose by 1.75% to Rs 1,329 after a foreign brokerage upgraded the stock to 'buy' from 'sell' and raised its target price to Rs 1,650 from Rs 920, citing potential earnings upside, cheap valuations. The brokerage added that the recent rupee weakness will help offset some of the cost associated with trying to increase revenue.
Telecom stocks declined across the board. Bharti Airtel (down 2.18%), Idea Cellular (down 2.55%), MTNL (down 5.39%), Tata Teleservices (Maharashtra) (down 8.59%) and Reliance Communications (down 3.41%) declined.
Realty stocks extended Friday's losses triggered by Reserve Bank of India (RBI) governor Raghuram Rajan's comments that the RBI is still worried about high inflation, even when taking out volatile food prices. Purchases of both residential and commercial property are largely driven by finance. DLF (down 2.92%), Sobha Developers (down 1.57%), HDIL (down 2.95%), and Unitech (down 3.38%), dropped.
Shriram Transport Finance Company (STFC) dropped 0.1%. The company plans to enter the debt capital market on 7 October 2013 with a public issue of Secured Redeemable Non-Convertible Debentures (NCDs) of face value of Rs 1,000 each. The NCD issue is aggregating up to Rs 250 crore, with an option to retain over-subscription up to Rs 250 crore for issuance of additional NCDs, aggregating to a total of up to Rs 500 crore.
The NCDs proposed to be issued under this issue have been rated 'CRISIL AA/Stable' by CRISIL and 'CARE AA+' by CARE, the company said. The rating of the NCDs by CRISIL indicates high degree of safety regarding timely servicing of financial obligations and carrying very low credit risk, while the rating of NCDs by CARE indicates high degree of safety regarding timely servicing of financial obligations and carrying very low credit risk. The NCDs offered are proposed to be listed on the National Stock Exchange of India and BSE.
These NCDs, bearing a fixed rate of interest, are being offered under six different series. The funds raised through the issue will be used for various financing activities including lending and investments, to repay existing loans and for business operations including capital expenditure and working capital requirements.
SKS Microfinance rose 0.86% after the company today, 30 September 2013, announced the conclusion of a securitization transaction for Rs 321 crore, rated A1+ (SO) by a leading rating agency, with a major public sector bank. The announcement was made before market hours today, 30 September 2013. SKS Microfinance said that the transaction is possibly the first substantial securitization deal in FY 2014 in the microfinance sector.
Mr. S. Dilli Raj, Chief Financial Officer, SKS Microfinance said, "This fiscal we could complete the first securitization transaction in Q2 itself as against Q3 in FY 2013. The present transaction generates liquidity of Rs 321 crore for SKS Microfinance, and enables the company to extend micro loans to 4,75,000 rural women entrepreneurs. Notably, 29% of the pool is from loans extended to women entrepreneurs from Scheduled Castes and Scheduled Tribes, 17% from minorities, 37% from Backward Castes and the remaining 17% from women belonging to the other castes. The entire pool thus qualifies for weaker section treatment for the bank."
Another significant aspect to be noted is that the transaction further corroborates the fact that securitization is emerging as a meaningful financial inclusion tool, SKS said in a statement.
The government said on Friday, 27 September 2013, that it will allow unlisted Indian companies to list directly and raise capital overseas to retire debt or for acquisitions or operational needs abroad. The move comes at a time when the government is battling to trim the current account deficit and attract dollar inflows.
A finance ministry statement said unlisted Indian companies would be allowed for two years, on a pilot basis, to list and raise capital abroad without the requirement of prior or subsequent listing in the country. "At present, unlisted companies that are incorporated in India are not allowed to directly list in overseas markets without prior or simultaneous listing in Indian markets," the statement said. After the initial two year period, the impact of this arrangement will be reviewed. While raising resources abroad, the listing company shall be fully compliant with the FDI policy in force, the finance ministry said. In case funds raised are not utilized abroad such companies would be asked to remit the money back to India within 15 days and these funds would be parked only in AD category banks recognized by RBI.
European stocks dropped on Monday, 30 September 2013, on a trio of concerns, with worries over a potential government shutdown in the US, political instability in Italy and disappointing data from China. Key benchmark indices in UK, France and Germany were off 0.86% to 1.23%.
Italian Prime Minister Letta said he will ask for a vote of confidence on 2 October 2013, speaking on Rai 3 television. The Italian government has been torn apart by legal troubles facing former leader Silvio Berlusconi, whose criminal tax-fraud conviction subjects him to expulsion proceedings in parliament. Berlusconi allies have said they planned to quit the cabinet.
Asian stocks fell on Monday, 30 September 2013, on concern the US government is headed for a shutdown amid a budget stalemate. Key benchmark indices in Japan, Hong Kong, Taiwan, Indonesia, Singapore and South Korea fell 0.69% to 2.43%. China's Shanghai Composite rose 0.68%
A Chinese manufacturing gauge unexpectedly rose less than a preliminary estimate in September, highlighting challenges for Premier Li Keqiang in sustaining a rebound from a two-quarter economic slowdown. The Purchasing Managers' Index from HSBC Holdings Plc and Markit Economics rose to 50.2 in September from 50.1 in August. The final number was less than last week's 51.2 preliminary reading. A similar gauge from the government is due tomorrow, 1 October 2013.
China opened a new free trade zone in Shanghai on Sunday in what has been hailed as potentially the boldest reform in decades, and gave fresh details on plans to liberalise regulations governing finance, investment and trade in the area. The Shanghai FTZ, which covers an area of nearly 29 sq km on the eastern outskirts of the commercial hub, was approved by China's State Council, or cabinet, in July. Some Chinese and foreign firms are already setting up subsidiaries in the zone. A total of 25 companies so far have been approved to start operations in a variety of sectors, alongside 11 financial institutions, most of which are domestic banks but including the mainland subsidiaries of Citibank and DBS.
Trading in US index futures indicated that the Dow could fall 124 points at the opening bell on Monday, 30 September 2013. US stocks Friday closed a downcast week on a sour note, declining amid relentless partisan squabbling over a budget bill to avert a partial US government shutdown.
Republican-led House voted Sunday to delay President Barack Obama's health-care law by one year. If the two sides can't agree by the Tuesday-morning deadline, thousands of government employees will be unable to work. There's one more vote before the shutdown would take place.
Even if Congress resolves the budget fight by the Oct. 1 deadline, US lawmakers would move to the next fiscal dispute over raising the $16.7 trillion debt ceiling.
The Federal Open Market Committee (FOMC) holds a two-day policy meeting on 29-30 October 2013. On 18 September 2013, the Fed surprised economists and investors with its decision to delay scaling back its stimulus amid concerns about the strength of the economic recovery.
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