Weakness continued on the bourses in morning trade with investors remaining cautious ahead of a two-day meeting of the Federal Open Market Committee amid uncertainty about the Fed possibly slowing the pace of monthly bond purchases from their current $85 billion a month. The S&P BSE Sensex was down 83.67 points or 0.43%, off close to 90 points from the day's high and up about 15 points from the day's low. The market breadth, indicating the overall health of the market, was positive.
Tata Motors extended initial losses. Shares of two wheeler makers rose for the second day in a row, shrugging off a hike in petrol price announced over the weekend. Shares of most Mahindra Group companies extended Monday's gain triggered by the Mahindra Group and CIE Automotive S. A. (Spain) on Saturday, 15 June 2013, announcing the signing of a global alliance agreement between Mahindra's automotive component businesses (held under its Systech Sector) and CIE Automotive (involving also its subsidiary Autometal).
Cinemax India was locked at 5% upper circuit, with the stock extending Monday's rally triggered by favourable swap ratio for the company's merger with PVR. Orchid Chemicals & Pharmaceuticals extended Monday's rally triggered by the company's announcement that its oral formulations facility at Irungattukottai near Chennai was successfully inspected and accepted by the USFDA without any observations.
A bout of volatility was witnessed in early trade as key benchmark indices slipped into the negative terrain after opening slightly higher. The Sensex hovered in red in morning trade.
Foreign institutional investors (FIIs) sold shares worth a net Rs 165.09 crore on Monday, 17 June 2013, as per provisional data from the stock exchanges.
At 10:20 IST, the S&P BSE Sensex was down 83.67 points or 0.43% to 19,242.20. The index fell 98.76 points at the day's low of 19,227.11 in early trade. The index rose 8.20 points at the day's high of 19,334.07 in opening trade.
The CNX Nifty was down 27.85 points or 0.48% to 5,822.20. The index hit a low of 5,815.15 in intraday trade. The index hit a high of 5,843.95 in intraday trade.
The market breadth, indicating the overall health of the market, was positive. On BSE, 666 shares rose and 497 shares fell. A total of 54 shares were unchanged.
Among the 30-share Sensex pack, 23 stocks fell and the rest of them rose. ICICI Bank (down 0.99%), HDFC (down 0.98%), and HDFC Bank (down 0.95%), edged lower.
Shares of Cinemax India were locked at 5% upper circuit at Rs 158.20, with the stock extending Monday's rally triggered by favourable swap ratio for the company's merger with PVR. Shares of PVR fell 0.58%. The board of directors of PVR on Saturday, 15 June 2013, approved the Scheme of Amalgamation for the merger of Cine Hospitality and Cinemax India with PVR. As per the swap ratio, shareholders of Cinemax India will get 4 shares of PVR for every 7 shares held in Cinemax India. PVR holds 93.19% stake in Cinemax India through its wholly owned subsidiary Cine Hospitality (as per the shareholding patter as on 31 March 2013).
Multiplex cinema chain operator PVR in November 2012 acquired promoters' entire stake in rival Cinemax India. PVR later raised its stake in Cinemax India via a mandatory open offer.
Orchid Chemicals & Pharmaceuticals jumped 7.98% to Rs 56.85, with the stock extending Monday's rally triggered by the company's announcement that its oral formulations facility at Irungattukottai near Chennai was successfully inspected and accepted by the USFDA without any observations.
Tata Motors fell 1.55%, with the stock extending initial losses.
Shares of two wheeler makers rose for the second day in a row, shrugging off a hike in petrol price announced over the weekend. Hero MotoCorp (up 0.87%) and Bajaj Auto (up 1.2%), edged higher. PSU OMCs hiked petrol price by Rs 2 a litre on Saturday, 15 June 2013.
India's largest utility vehicle maker by sales, Mahindra & Mahindra (M&M), was down 0.27% after jumping 4.43% on Monday. Mahindra Ugine Steel Company was locked at 10% upper limit, with the stock extending Monday's 10% rally. Mahindra Forgings was up 3.39%. The Mahindra Group and CIE Automotive S. A. (Spain) on Saturday, 15 June 2013, announced the signing of a global alliance agreement between Mahindra's automotive component businesses (held under its Systech Sector) and CIE Automotive (involving also its subsidiary Autometal). The agreement will see the formation of a global automotive component supply network with combined annual sales of approximately Rs 15000 crore or $3 billion with operations in North America, South America, Europe and Asia held through listed businesses in Spain, Brazil and India.
As part of the transaction, CIE Automotive, through one of its subsidiaries, will acquire from Mahindra Group a stake in its listed and unlisted companies belonging to Systech Automotive Component business and CIE Automotive will contribute its forging businesses in Spain and Lithuania and together consolidate all companies under Mahindra Forgings (MFL) which will be rechristened Mahindra CIE. Mahindra CIE will continue to be listed on BSE (Bombay Stock Exchange) and NSE (National Stock Exchange).
The share sale by Mahindra group will trigger open-offer provisions under the Securities Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations 2011. The proposed business transaction will be carried out in a series of steps over the next year that will culminate in Mahindra & Mahindra (M&M) taking a stake of 13.5% in CIE Automotive and CIE Automotive taking a majority stake in a single listed entity in India which will continue to operate the current Systech automotive component businesses globally and include CIE's European forgings operations. Post acquisition of 13.5% stake, M&M will be second largest shareholder in CIE. M&M will nominate 2 directors to the CIE board.
The Mahindra Systech business consists of five companies viz. Mahindra Forgings, Mahindra Ugine Steel Company, Mahindra Composites, Mahindra Hinoday Industries and Mahindra Gears.
Finance Minister P. Chidambaram on Monday, 17 June 2013, said that the government is proactively working towards operationalisation of 215 stalled projects involving investment of about Rs 7 lakh crore with a view to give a push to the production activity in the country. The only way to contain Current Account Deficit (CAD) is to increase the domestic production of oil and coal and restraining the consumption of gold. Chidambaram made the comments while addressing a meeting of the Parliamentary Consultative Committee of the Ministry of Finance on India's high CAD and measures to contain the deficit.
On political front, the ruling Congress government ahead of 2014 Lok Sabha elections appointed eight new ministers on Monday. In all, eight ministers -- four Cabinet and four ministers of state -- were sworn in on Monday evening. Mallikarjun Kharge became new minister for railways, and Oscar Fernandes was sworn in as minister for roads and highways.
Asian stocks were mixed on Tuesday, 18 June 2013. Key benchmark indices in Indonesia, Taiwan, Singapore and South Korea rose by 0.37% to 1.54%. Key benchmark indices in China, Hong Kong and Japan fell by 0.04% to 0.64%.
Foreign direct investment in China rose in May by the least in four months, a sign of concern that growth is slowing in the world's second-biggest economy. Inbound non-financial investment increased 0.3% from a year earlier to $9.26 billion, the Ministry of Commerce said today in a statement in Beijing, after a 0.4% gain in April.
Trading in US index futures indicated a flat opening of US stocks on Tuesday, 18 June 2013. US stocks surged on Monday as investors await Wednesday's monetary-policy decision by the Federal Open Market Committee.
A two-day meeting of the Federal Open Market Committee, the Fed's interest-rating setting body, begins today, 18 June 2013. Fed Chairman Ben Bernanke said last month that the bank could start scaling back its aggressive easing program in coming months if data continue to improve. The Fed's monthly bond purchases of $85 billion a month is aimed at encouraging US economic growth.
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