Key benchmark indices tumbled as a continued decline in rupee against the dollar and weakness in global stocks hit sentiment. The S&P BSE Sensex and the CNX Nifty, both, reached their lowest closing levels in nearly eight weeks. The Sensex lost 298.07 points or 1.53%, off close to 276 points from the day's high and up about 22 points from the day's low. The market breadth, indicating the overall health of the market, was weak. All the 13 sectoral indices on BSE were in the red.
The Sensex has lost 617.30 points or 3.12% in this month so far (till 11 June 2013). The Sensex has gained 283.71 points or 1.46% in calendar 2013 so far (till 11 June 2013). From a 52-week high of 20,443.62 on 20 May 2013, the Sensex has fallen 1,300.62 points or 6.36%. From a 52-week low of 16,553.47 on 12 June 2012, the Sensex has surged 2,589.53 points or 15.64%.
Coming back to today's trade, Jindal Steel & Power dropped on heavy volumes after media reports that the Central Bureau of Investigation (CBI) has registered an FIR against Congress MP and company's Chairman Naveen Jindal in the coal scam case. Many other metal stocks extended Monday's losses triggered by weak Chinese economic data released over the weekend. Realty stocks declined in weak market. Jewellery retailer Titan Industries dropped over 10% after the company said that the Reserve Bank of India (RBI) has clarified that all imports of gold for domestic consumption, either through banks, nominated agencies or directly can be made only with 100% cash margin.
The partially convertible rupee pared losses and was trading at 58.39 after hitting record low of 58.96 versus Monday's close of 58.15/16 per dollar. Today's weakness in rupee comes after Monday's steep slide. The rupee had lost 1.9% on Monday, 10 June 2013, weighed down by broad gains in the dollar. A weak rupee makes imports costlier, stoking inflation concerns, thereby capping the Reserve Bank of India's scope to extend monetary easing and counter the slowest economic growth in a decade.
The S&P BSE Sensex fell 298.07 points or 1.53% to 19,143, its lowest closing level since 18 April 2013. The index declined 319.89 points at the day's low of 19,121.18 in early afternoon trade. The index fell 22.33 points at the day's high of 19,418.74 in early trade.
The CNX Nifty fell 89.20 points or 1.52% to 5,788.80, its lowest closing level since 18 April 2013. The index hit a low of 5,780.35 in intraday trade. The index hit a high of 5,868.05 in intraday trade.
The S&P BSE Mid-Cap index fell 1.6% and the S&P BSE Small-Cap index fell 1.82%. Both these indices underperformed the Sensex.
The market breadth, indicating the overall health of the market, was weak. On BSE, 1,688 shares fell and 670 shares rose. A total of 124 shares were unchanged.
The total turnover on BSE amounted to Rs 1951 crore, higher than Rs 1526.89 crore on Monday, 10 June 2013.
The S&P BSE Healthcare (down 0.59%), the S&P BSE Capital Goods (down 0.60%), the S&P BSE FMCG (down 0.66%), the S&P BSE IT (down 0.66%), the S&P BSE Teck (down 0.98%), the S&P BSE Auto (down 1.25%) and the S&P BSE Oil & Gas (down 1.47%), outperformed the Sensex.
The S&P BSE Consumer Durables (down 6.36%), the S&P BSE Metal (down 4.13%), the S&P BSE Realty (down 3.68%), the S&P BSE Bankex (down 2.24%), the S&P BSE Power (down 2.07%) and the S&P BSE PSU (down 2.04%), underperformed the Sensex.
Among the 30-share Sensex pack, 24 stocks fell and rest of them rose.
Jindal Steel & Power slumped 15.18% to Rs 226.35, with the stock extending Monday's 4.46% losses after media reports the Central Bureau of Investigation (CBI) has registered an FIR against Congress MP and company's Chairman Naveen Jindal in the coal scam case. The stock recovered after hitting 52-week low of Rs 202 in intraday trade today, 11 June 2013. On BSE, 47.50 lakh shares changed hands on the counter, compared with average daily volume of 2.42 lakh shares in the past one quarter.
The FIR has accused Navin Jindal and Jindal Power and Steel of misrepresentation of networth and concealing previous coal allotment. They are also charged with cheating and forgery. The Naveen Jindal group was allotted a total of 11 blocks, making it the single largest beneficiary of the controversial coal block allotment.
As per reports, CBI officials are conducting raids at 15 places in Delhi, Hyderabad and Kolkata. The CBI has also filed an FIR against former Minister of State for Coal Dasari Narayan Rao.
Many other metal stocks extended Monday's losses triggered by weak Chinese economic data released over the weekend. China is the world's largest consumer of copper and aluminum. Hindalco Industries (down 5.97%), Nalco (down 3.76%), Tata Steel (down 3.06%), Sesa Goa (down 2.90%), JSW Steel (down 2.70%), Sterlite Industries (India) (down 2.57%), NMDC (down 2.15%), Hindustan Zinc (down 1.82%), Sail (down 1.16%) and Bhushan Steel (down 0.25%), edged lower.
Among IT stocks, Mahindra Satyam (up 4.17%) and Tech Mahindra (up 2.91%), edged higher. The Andhra Pradesh High Court has cleared the merger of Mahindra Satyam with Tech Mahindra. The two companies made the announcement after trading hours. Earlier, the High Court of Bombay had vide its order dated 28 September 2012 approved the merger subject to approval of the Andhra Pradesh High Court.
Realty stocks declined in weak market. Anant Raj Industries (down 5.2%), DLF (down 4.72%), Peninsula Land (down 4.58%), Oberoi Realty (down 4.47%), Indiabulls Real Estate (down 4.11%), D B Realty (down 3.96%), Unitech (down 3.91%), HDIL (down 3.8%), Prestige Estates (down 3.52%), Sobha Developers (down 2.77%), Parsvnath Developers (down 1.79%) and Phoenix Mills (down 1.13%), edged lower.
State-run oil exploration major ONGC slumped 3.91%. Videocon Industries rose 0.21%. ONGC withdrew a statement issued on Monday, 10 June 2013, saying its overseas oil exploration unit ONGC Videsh (OVL) and Oil India (OIL) had signed an agreement to buy a 10% stake in a Mozambique gas field viz. Rovuma Area 1 Offshore Block from Videocon Group for $2.48 billion. The company did not give the reason for the withdrawal. The field has the potential to become one of the world's largest liquefied natural gas (LNG) producing hubs by 2018, and is strategically located to supply gas to India at competitive prices, the withdrawn statement said.
Titan Industries dropped 10.86% after the company said that the Reserve Bank of India (RBI) has clarified that all imports of gold for domestic consumption, either through banks, nominated agencies or directly can be made only with 100% cash margin. RBI has also clarified that credit of any kind from suppliers or bullion banks for import of gold for domestic use is prohibited, Titan said. This will affect import of gold through all non consignment routes like gold on lease/loan, Titan Industries said. Titan imports gold for its retail gold jewellery business.
Titan said it had sought some clarifications on gold imports after the Reserve Bank of India issued a notification on 4 June 2013 on changes to the current terms governing import of gold in India.
Lanco Infratech tumbled 8.15%. The company today, 11 June 2013, said in reply to queries made by a news channel that the company is not considering corporate debt restructuring proposal. The company also said that that the management is not considering any other debt restructuring proposal including bond issue. The debt of Lanco group excluding working capital of power companies and Griffin acquisition debt is Rs 34249 crore as at March 31, 2013. This debt is the total of 21 companies of the group. There are 15 operating companies which constitute around 50% of the debt which is serviced by them from their operations. The balance 50% debt is to projects under construction where the interest is part of project funding and part of the approved project cost, Lanco Infratech said.
Reliance Anil Dhirubhai Ambani (ADA) Group shares declined. Reliance Communications (down 6.35%), Reliance Broadcast Network (down 4.84%), Reliance Infrastructure (down 3.38%), Reliance Power (down 3.10%), Reliance Mediaworks (down 2.94%) and Reliance Capital (down 2.07%), edged lower.
ICICI Bank (down 3.75%), Axis Bank (down 2.65%) and HDFC Bank (down 1.73%), edged lower after the Reserve Bank of India (RBI) on Monday, 10 June 2013, said it has imposed a monetary penalty on these three private sector banks for violating RBI instructions. A penalty of Rs 5 crore has been imposed on Axis Bank, Rs 4.5 crore on HDFC Bank and Rs 1 crore on ICICI Bank.
The RBI had carried out a scrutiny of books of accounts, internal control, compliance systems and processes of these three banks at their corporate offices and some branches during March/April 2013 to investigate into the allegations of contravention of KYC/AML guidelines against them. The scrutiny of these three banks revealed violation of certain regulations and instructions issued by RBI such as non-observance of certain safeguards in respect of arrangement of "at par" payment of cheques drawn by cooperative banks, non-adherence to certain aspects of know your customer (KYC) norms and anti money laundering (AML) guidelines like risk categorisation and periodical review of risk profiling of account holders, non-adherence of KYC for walk in customers including for sale of third party products, omission in filing of cash transaction reports (CTRs) in respect of some cash transactions and sale of gold coins for cash beyond Rs 50000, RBI said.
Among other violations of the regulations by the three banks were not-obtaining of permanent account number (PAN) card details or form 60/61 as required, non-verification of source of funds credited to a few non-resident ordinary (NRO) accounts, failure to re-designate a few accounts as NRO accounts and non-submission of proper information called for by RBI. The investigation did not reveal any prima facie evidence of money laundering, RBI said. However, any conclusive inference in this regard can be drawn only by an end to end investigation of the transactions by tax and enforcement agencies, RBI said. A similar scrutiny was also conducted at the corporate offices of 36 other banks during April and May 2013. The process of follow up action in respect of these banks is at different stages of its completion, RBI said.
Jindal Steel & Power clocked a highest turnover of Rs 106.24 crore on BSE. State Bank of India (Rs 94.24 crore), Reliance Communications (Rs 83.54 crore), Just Dial (Rs 45.71 crore) and Procter & Gamble Hygiene and Health Care (Rs 45.65 crore), were the other turnover toppers on BSE in that order.
Opto Circuits (India) reported highest volumes of 93.08 lakh shares on BSE. Reliance Communications (80.05 lakh shares), Jaiprakash Power Ventures (55.08 lakh shares), Cals Refineries (53.54 lakh shares) and Jindal Steel & Power (47.50 lakh shares), were the other volume toppers on BSE in that order.
European markets dropped ahead of a two-day public hearing in Germany's constitutional court examining the legality of the ECB's bond-buying scheme. Key benchmark indices in UK, France and Germany were down by 1.68% to 2.08%.
Asian stocks edged lower on Tuesday after the Bank of Japan kept its policy unchanged. Key benchmark indices in Taiwan, Hong Kong, Indonesia, Japan, Singapore and South Korea shed by 0.54% to 3.5%. Mainland Chinese markets are closed from Monday, 10 June 2013 till tomorrow, 12 June 2013, for the Dragon Boat Festival.
The Bank of Japan (BOJ) on Tuesday kept monetary policy steady and revised up its assessment of the economy, unfazed by recent market turbulence which has yet to inflict severe damage on a gradually improving economy. As widely expected, the central bank voted unanimously to maintain its pledge of increasing base money, or cash and deposits at the BOJ, at an annual pace of 60 trillion to 70 trillion yen.
Trading in US index futures indicated that the Dow could fall 113 points at the opening bell on Tuesday, 11 June 2013. US stocks ended a choppy session little changed on Monday after Standard & Poor's Ratings Services revised its US credit-rating outlook to stable from negative and consumer shares lost ground.
Global credit rating agency Standard & Poor's revised its credit-rating outlook for the US to stable from negative citing receding fiscal risks, indicating the likelihood of a near-term downgrade is less than one in three. S&P also affirmed its AA+/A-1+ sovereign-credit ratings for the US.
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