Weakness continued on the bourses in early trade afternoon trade. The barometer index, the S&P BSE Sensex, was down 186 points or 0.93%, up 82.07 points from the day's low and off 158.46 points from the day's high. The market breadth, indicating the overall health of the market, was negative. Investor sentiment was hit adversely as Asian stocks fell as lawmakers in Washington remain deadlocked over extending the nation's debt limit to avoid default. In the foreign exchange market, the rupee dropped against the dollar.
Hindalco Industries extended intraday gain. Cipla also extended intraday gain. Shares of non-banking finance companies (NBFCs) gained on renewed buying.
Key benchmark indices edged lower in early trade on weak Asian stocks. Weakness continued on the bourses in morning trade. Key benchmark indices cut losses after hitting fresh intraday low in mid-morning trade. Weakness continued on the bourses in early trade afternoon trade.
In the foreign exchange market, the rupee dropped against the dollar. The partially convertible rupee was hovering at 61.86, weaker than its close of 61.43/44 on Friday, 4 October 2013. The Reserve Bank of India (RBI) will look at easing restrictions on the forex futures market once the rupee stabilises, Deputy Governor H.R. Khan said on Monday, 7 October 2013. The RBI is also in talks with stock market regulator Securities and Exchange Board of India (Sebi) on making the dollar-rupee over-the-counter and futures market trades on a delivery basis, Khan said on the sidelines of an event. The central bank will look at the "whole gamut of futures market" once stability improves in the forex market, Khan added.
Foreign institutional investors (FIIs) bought shares worth a net Rs 541.36 crore on Friday, 4 October 2013, as per provisional data from the stock exchanges.
At 12:15 IST, the S&P BSE Sensex was down 186 points or 0.93% to 19,729.95. The index lost 268.07 points at the day's low of 19,647.88 in mid-morning trade, its lowest level since 3 October 2013. The index fell 27.54 points at the day's high of 19,888.41 in early trade.
The CNX Nifty was down 53.70 points or 0.91% to 5,853.60. The index hit a low of 5,825.85 in intraday trade, its lowest level since 3 October 2013. The index hit a high of 5,895.25 in intraday trade
The market breadth, indicating the overall health of the market, was negative. On BSE, 1,043 shares declined and 960 shares gained. A total of 140 shares were unchanged.
The total turnover on BSE amounted to Rs 869 crore by 12:20 IST compared to Rs 698 crore by 11:20 IST.
Among the 30-share Sensex pack, 19 stocks declined and rest of them gained. ICICI bank (down 3.22%), Coal India (down 3.18%) and HDFC Bank (down 2.73%) edged lower from the Sensex pack.
Index heavyweight and cigarette major ITC lost 1.35% to Rs 335.50. The stock hit high of Rs 341.95 and low of Rs 332.20 so far during the day.
Hindalco Industries advanced 2.38%, with the stock extending intraday gain.
Cipla rose 0.82%, with the stock extending intraday gain.
Shares of non-banking finance companies (NBFCs) gained on renewed buying. Mahindra and Mahindra Financial Services (up 2.5%), Bajaj Finserv (up 3.05%), Bajaj Finance (up 1.43%), IDFC (up 0.54%) and SREI Infrastructure Finance (up 3.21%) gained.
L&T Finance Holdings jumped 10.17% to Rs 73.65. The stock gained on volume of 35.02 lakh shares, sharply higher than an average volume of 6.37 lakh shares in the past one quarter.
Bombay Dyeing & Manufacturing Company surged 13.12% to Rs 60.30. The stock was volatile. The scrip jumped as much as 14.64% at the day's high of Rs 62.50. The stock rose 6.57% at the day's low of Rs 57.10. The stock rallied on volume of 14.84 lakh shares, higher than an average volume of 1.24 lakh shares in the past one quarter.
The stock jumped after a media report said that three global private equity firms are in talks to jointly acquire up to 24% stake in Bombay Dyeing & Manufacturing Company. Bombay Dyeing & Manufacturing Company during market hours today, 7 October 2013, in clarification to media report said that it has no comments to offer on the newspaper report which is totally baseless, speculative and unsubstantiated.
Wockhardt surged 4.65% at Rs 468.55 on bargain hunting after the stock fell 23.99% in the preceding nine trading sessions to Rs 447.95 on 4 October 2013, from a recent low of Rs 589.30 on 20 September 2013.
Jubilant Life Sciences rose 3.08% after the company's board approved a proposal to transfer its active pharmaceutical ingredient and dosage form business to its Singapore-based subsidiary. The announcement was made after market hours on Friday, 4 October 2013.
Jubilant Life Sciences (JLL) said that its board has approved to transfer the active pharmaceutical ingredient (API), dosage form businesses of the company by way of a slump sale on a going concern basis and to transfer the shares held by JLL in Jubilant Pharma Holding Inc, USA and Jubilant Pharnma N. V., Belgium to a wholly-owned subsidiary of Jubilant Pharma, Singapore (which is a wholly-owned subsidiary of the company) for a total consideration of Rs 1145.10 crore, subject to the approval of the shareholders of the company and such other approvals and permissions as may be deemed necessary.
In this regard, Jubilant Pharma, Singapore has received approval from the Foreign Investment Promotion Board (FIPB), JLL said in a statement.
JLL said that this will enable the company to consolidate its API, solid dosage form, radiopharma, allergenic extracts, sterile injectibles and ointment, cream and liquid businesses (pharma business) under Jublilant Pharma, Singapore and to explore, identify and implement the options and opportunities of raising money including by way of listing the pharma business for its growth and reduction of overall consolidated debt of the company, JLL said.
Apollo Tyres rose 3.38% on growing uncertainty about the status of the company's $2.5 billion deal to buy US-based Cooper Tire & Rubber Company. Cooper Tire & Rubber Company (Cooper) on Friday, 4 October 2013, said that it filed a complaint in a US court asking that subsidiaries of Apollo Tyres be required to expeditiously close the pending merger between the two tyre companies in accordance with the terms of the definitive merger agreement.
Media reports suggested that Apollo Tyres is disappointed by the legal action and is working to complete the deal as expeditiously as possible.
Cooper is asking the court to compel Apollo to take actions so that the transaction may close. Among other matters, the complaint says that Apollo is seeking to delay an agreement with the United Steelworkers (USW). The USW represents Cooper employees at facilities in Findlay, Ohio and Texarkana, Arkansas. An arbitrator ruled on 13 September 2013 that as result of the pending merger, Cooper and Apollo must enter into new agreements with the union prior to closing. By delaying resolution with the USW, Apollo is breaching the merger agreement, Cooper said in a statement.
On 30 September 2013, Cooper's stockholders voted to approve its pending merger with a wholly-owned subsidiary of Apollo Tyres. When finalised, the pending merger will result in a strategic business combination that creates the seventh-largest tire company in the world.
Cooper and Apollo announced the proposed merger on 12 June 2013 following unanimous approval by the boards of directors of both companies. The pending merger is expected to close by the end of this year, Cooper said in a statement.
At its board meeting on Saturday, 5 October 2013, market regulator Securities & Exchange Board of India (Sebi) approved the draft Sebi (Foreign Portfolio Investors) Regulations, 2013. The Sebi (Foreign Portfolio Investors) Regulations, 2013 have been framed keeping in view the provisions of Sebi (Foreign Institutional Investors) Regulations, 1995, qualified foreign investors (QFIs) framework and the recommendations of the "Committee on Rationalization of Investment Routes and Monitoring of Foreign Portfolio Investments".
Sebi said that existing FIIs, sub accounts and qualified foreign investors (QFIs) shall be merged into a new investor class termed as Foreign Portfolio Investors (FPIs). Sebi approved designated depository participants (DDPs) shall register FPIs on behalf of Sebi subject to compliance with KYC requirements. The Sebi board also took note of the fact that instructions regarding risk-based KYC for FPIs have already been issued by Sebi on 12 September 2013.
Sebi said that FPIs shall be required to seek registration in any one of the categories viz. Category I Foreign Portfolio Investor -- which shall include Government and Government related foreign investors etc; Category II Foreign Portfolio Investor -0 which shall include appropriately regulated broad based funds, appropriately regulated entities, broad based funds whose investment manager is appropriately regulated, university funds, university related endowments, pension funds etc; and Category III Foreign Portfolio Investor -- which shall include all others not eligible under Category I and II foreign portfolio investors.
Sebi said that all existing FIIs and sub accounts may continue to buy, sell or otherwise deal in securities under the FPI regime. Further, all existing Qualified Foreign Investors (QFIs) may continue to buy, sell or otherwise deal in securities till the period of one year from the date of notification of this regulation. In the meantime, they may obtain FPI registration through DDPs. The registration granted to FPIs by the DDPs on behalf of Sebi shall be permanent unless suspended or cancelled by Sebi. FPIs shall be allowed to invest in all those securities, wherein Foreign Institutional Investors (FIIs) are allowed to invest.
The market regulator said Category I and Category II FPIs shall be allowed to issue, or otherwise deal in offshore derivative instruments (ODIs), directly or indirectly. However, the FPI needs to be satisfied that such ODIs are issued only to persons who are regulated by an appropriate foreign regulatory authority after ensuring compliance with know your client norms.
The CII ASCON survey for July-September 2013 quarter indicates a scenario of subdued growth with green shoots of recovery continuing to be elusive in the near future. The Survey reveals that the number of sectors reporting negative growth in July-September 2013 quarter of the current year has increased significantly over the corresponding period of last year. This is despite the fact that the government has introduced various economic reform measures to seize the declining growth. "This continuous deterioration in the economy since the last fiscal is reflective of downbeat sentiment within industry. With economic slowdown showing no signs of bottoming out in the near future, industry is cautious in moving ahead. This calls for a concerted effort from policy makers to stay the course on reforms. No doubt, the government has reiterated its support to industry in form of steps taken to accelerate rupee valuation, increase exports, rev up foreign investment, etc. However, the focus has to be on clearing projects and ensuring that once cleared the investments do take place." said Mr Chandrajit Banerjee, Director General, CII.
The sluggish performance of both producer as well as consumer goods indicate subdued demand conditions in the economy which going forward does not sound optimistic for revival of growth in the coming quarters as well. The Survey respondents have raised concerns over the deteriorating macroeconomic conditions owing to multiple factors, both domestic and global. On the external front, global economic uncertainties, depreciation value of rupee, rising oil prices has contributed to the weak economic environment. These concerns have further contributed to the weakening of domestic economy leading to lowering investments, decline in exports, soaring inflation, stalled investments, and subdued consumption, among others. Respondents have stressed on the need for reviving the investments in the economy to boost demand.
RBI governor Raghuram Rajan on Friday, 4 October 2013, said that there is no reason to dispute the government's estimate of 5-5.5 percent economic growth for the current fiscal year. A pick-up in exports and strong agriculture growth would help the government meet its growth estimate, said Rajan while speaking at Raipur after the Reserve Bank of India's board meeting. He also said the RBI had so far received $5.6 billion through the two swap windows the bank announced last month to attract foreign flows.
On the political front, the Election Commission on Friday, 4 October 2013, announced the schedule for assembly elections in five states. While Chhattisgarh will have a two-phase polling on 11 November and 19 November 2013, the remaining states will have a single-phase poll. Delhi and Mizoram will go to polls on 4 December 2013, Madhya Pradesh on 25 November 2013 and Rajasthan on 1 December 2013. Counting of all assembly elections in all five states will be held on 8 December 2013.
Asian markets edged lower on Monday, 7 October 2013, as lawmakers in Washington remain deadlocked over extending the nation's debt limit to avoid default. Key benchmark indices in Singapore, Taiwan, Hong Kong, Indonesia, Japan and South Korea fell by 0.02% to 1.22%. Mainland Chinese markets, which have been closed since Oct. 1 for the National Day holidays, resume trading tomorrow, 8 October 2013.
Trading in US index futures indicated that the Dow could fall 82 points at the opening bell on Monday, 7 October 2013. Republican House Speaker John Boehner vowed on Sunday not to raise the US debt ceiling without a "serious conversation" about what is driving the debt, while Democrats said it was irresponsible and reckless to raise the possibility of a US default. Republicans and Democrats also traded blame for a shutdown that has brought much of the government to a standstill for nearly a week. Republicans are seeking concessions in exchange for raising the nation's $16.7 trillion debt limit. If the borrowing cap is not increased, the United States could go into default.
The Federal Open Market Committee (FOMC) holds a two-day policy meeting on 29-30 October 2013. The lack of data may make it harder for the Federal Reserve to assess the economy's strength as policy makers mull the timing of reductions in bond buying. Government data from payrolls to retail sales will be delayed as long as the shutdown continues. 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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