Weakness continues on the domestic bourses in mid-morning trade. The barometer index, the S&P BSE Sensex, was down 127.88 points or 0.6%, off close to 60 points from the day's high and up about 40 points from the day's low. The market breadth, indicating the overall health of the market, was negative. Weakness in Asian stocks hit sentiment on the domestic bourses adversely. In the foreign exchange market, the rupee edged lower against the dollar on speculation a US budget agreement will boost prospects for the Federal Reserve to start tapering its monetary stimulus for the US economy.
Shares of Tata Power Company surged. Bank stocks declined ahead of data on consumer price inflation. SKS Microfinance rose after the company announced the second microfinance securitization during the current financial year of Rs 80.81 crore. Realty stocks edged lower.
The market edged lower in early trade on weak Asian stocks. Key benchmark indices extended initial losses and hit fresh intraday low in morning trade. The Sensex, and the 50- unit CNX Nifty, both, hit their lowest level in almost a week. The Sensex hovered in negative terrain in mid-morning trade.
Asian stocks dropped on Thursday, 12 December 2013, on heightened expectations the Federal Reserve may act sooner than later to unwind its stimulus after a provisional budget deal in Washington eased some of the fiscal drag on the US economy.
At 11:20 IST, the S&P BSE Sensex was down 127.88 points or 0.6% to 21,043.45. The index fell 166.52 points at the day's low of 21,004.89 in morning trade, its lowest level since 6 December 2013. The index declined 67.61 points at the day's high of 21,103.80 in early trade.
The CNX Nifty was down 39.45 points or 0.63% to 6,268.65. The index hit a low of 6,254.50 in intraday trade, its lowest level since 6 December 2013. The index hit a high of 6,286.85 in intraday trade.
The market breadth, indicating the overall health of the market, was negative. On BSE, 1,065 shares fell and 878 shares rose. A total of 119 shares were unchanged.
From the 30-share Sensex pack, 24 stocks fell and rest rose. Tata Motors (down 2.14%), Dr Reddy's Laboratories (down 1.38%) and Wipro (down 1.37%) declined.
Realty stocks edged lower. DLF (down 0.73%), HDIL (down 0.1%), Sobha Developers (down 0.37%), and Unitech (down 0.32%) declined.
Tata Power Company surged 6.17%, with the stock extending intraday gains.
Bank stocks declined ahead of data on consumer price inflation. AXIS Bank (down 0.93%), ICICI Bank (down 0.93%), HDFC Bank (down 0.62%), Yes Bank (down 1.31%), dropped.
State Bank of India (SBI) lost 0.1%. The state-run bank early this week said that the Government of India (GoI) has accorded its approval to the bank to raise Rs 9576 crore of equity during the current financial from the market by way of Qualified Institutions Placement (QIP) as per law with the condition that the Gol holding shall not come down below 58%. The GoI has also accorded its approval to SBI to increase its "Issued Capital" by Rs 11576 crore in accordance with Section 5(2) of SBI Act, 1955, subject to requisite approvals.
Central Bank of India lost 0.29% to Rs 51.95. The company before trading hours today, 12 December 2013, said that the Capital Raising Committee of the board of directors of the Bank at its meeting held on Wednesday, 11 December 2013, has allotted 30.58 crore equity shares to President of India (Government of India) at a price of Rs 58.85 per share aggregating Rs 1800 crore. With this allotment, the shareholding of President of India (Government of India) in Central Bank of India has increased to 88.63% from 85.31%.
SKS Microfinance rose 1.63% after the company announced the second microfinance securitization during the current financial year of Rs 80.81 crore. The announcement was made after market hours on Wednesday, 11 December 2013.
According to a press release issued by SKS Microfinance, the securitization deal involved downloading receivables from micro loans extended to 100,850 rural women entrepreneurs through a special purpose vehicle whose pass through certificates (PTCs) have been purchased by a major private sector bank.
The entire pool qualifies for priority sector treatment as per the Reserve Bank of India's (RBI) priority sector lending guidelines, the company said in a statement.
Notably, 30% of the pool is from scheduled caste and scheduled tribe entrepreneurs, 16% from minorities, 37% from backward caste and the remaining 17% from women belonging to the other castes. The entire pool comprises receivables from women entrepreneurs from weaker sections, the company added.
SKS Microfinance said that the pool is rated AA (SO) signifying 'high degree of safety regarding timely servicing of financial obligation' by one of the leading rating agencies. The pool is structured with geographical diversity as it comprises receivables from 12 non-Andhra Pradesh states and subjected to a minimum seasoning of three months, the company said in a statement.
The Securities and Exchange Board of India (SEBI) unveiled new proposals on Wednesday, 11 December 2013, broadening the scope of who can be held liable for insider trading violations, as it steps up its fight against securities fraud. India's financial market regulator plans to include company employees, directors and their immediate relatives and other stakeholders such as founders, handling market sensitive information under its purview. Under current rules only senior executives are liable for trading violations.
Officials with access to sensitive information will also be required to submit planned trades in company shares ahead of time to resolve any potential conflict of interest. The new proposals also mandate that every listed company and market intermediary formulate a code of conduct to regulate, monitor and report trading in securities by its employees or connected persons. Trades by stakeholders, employees, directors and their immediate relatives would need to be disclosed internally to the company.
In the foreign exchange market, the rupee edged lower against the dollar on speculation a US budget agreement will boost prospects for the Federal Reserve to start tapering its monetary stimulus for the US economy. The partially convertible rupee was hovering at 61.61, compared with its close of 61.245/255 on Wednesday, 11 December 2013.
Indian government bond prices dropped on speculation a US budget agreement will boost prospects for the Federal Reserve to start tapering its monetary stimulus for the US economy. The yield on the new 10-year benchmark federal paper, 8.83% GS 2023, was hovering at 8.8314%, higher than its close of 8.8265% on Wednesday, 11 December 2013. Bond yield and bond prices are inversely related.
The Reserve Bank of India on Wednesday, 11 December 2013, said it has decided to provide additional liquidity of Rs 10000 crore through the 14-day term repo scheduled to be conducted on Friday, 13 December 2013. Accordingly, the notified amount for the 14-day term repo auction to be conducted on that day will be adjusted upwards by Rs 10000 crore. The RBI said it has announced this additional liquidity support for the banking sector so as to ensure that adequate liquidity is available to support the flow of credit to the productive sectors of the economy. The RBI said that the liquidity conditions are expected to tighten in the immediate future on account of advance tax payments commencing from mid-December 2013.
The government will unveil industrial production data for October 2013 after trading hours today, 12 December 2013. Industrial output is estimated to fall 1.5% in October 2013, as per the median estimate of a poll of economists carried out by Capital Market. Industrial production rose 2% in September 2013, showing increase in growth from 0.4% growth recorded in August 2013.
Data on inflation based on the general consumer price index (CPI) for November 2013 will also be unveiled after trading hours today, 12 December 2013. CPI (combined) for November 2013 is estimated at 10%, as per the median estimate of a poll of economists carried out by Capital Market. The CPI inflation (combined) for October 2013 stood at 10.09% (y-o-y), higher than 9.84% (y-o-y) seen in September 2013.
The government will unveil data on inflation based on the wholesale price index (WPI) for November 2013 on 16 December 2013. WPI is seen easing a bit at 6.9% in November 2013, from 7% in October 2013, as per the median estimate of a poll of economists carried out by Capital Market.
The Reserve Bank of India (RBI) announces next Mid-Quarter Review of Monetary Policy for 2013-14 on 18 December 2013. The Third Quarter Review of Monetary Policy for 2013-14 is scheduled 28 January 2014.
President Pranab Mukherjee has given the Andhra Pradesh Assembly six weeks to decide on Telangana. The President had on Wednesday sent the Telangana Bill to the Andhra Pradesh Assembly for consideration. Earlier, Pranab Mukherjee held consultations with legal experts on various provisions of the draft Telangana Bill proposing splitting of Andhra Pradesh.
Asian shares slipped to a four-week low on Thursday, 12 December 2013, on heightened expectations the Federal Reserve may act sooner than later to unwind its stimulus after a provisional budget deal in Washington eased some of the fiscal drag on the US economy. Key benchmark indices in Taiwan, South Korea, Indonesia, Singapore, Japan and Hong Kong were off 0.05% to 1.19%. China's Shanghai Composite rose 0.23%.
Chinese policy makers are meeting this week to set economic growth targets for 2014. China's central economic work conference, which is expected to end today or tomorrow, will set the tone for macroeconomic policy and decide major targets for 2014.
Trading in US index futures indicated that the Dow could fall 20 points at the opening bell on Thursday, 12 December 2013. US stocks posted their biggest drop in a month on Wednesday as traders locked in recent gains after Congress announced the provisional budget deal. The bipartisan budget agreement reached late on Tuesday, though modest in spending cuts, would end three years of political squabbling in Washington that climaxed in October with a two-week partial government shutdown. The US House of Representatives could vote on the deal tomorrow, 13 December 2013.
The Federal Open Market Committee (FOMC) holds a two-day policy meeting on interest rates in the United States on 17-18 December 2013. 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. Minutes of the Fed's October meeting released on 20 November 2013 showed officials may reduce their $85 billion a month of bond buying if the economy improves as anticipated.
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