Key benchmark indices trimmed intraday losses in early afternoon trade. The S&P BSE Sensex was down 213.72 points or 1.1%, up close to 95 points from the day's low and off about 65 points from the day's high. The market breadth, indicating the overall health of the market, was negative. Investor sentiment was affected adversely as the rupee hit record low below 61 a dollar as stronger than expected US job data fuelled expectations the US Federal Reserve will slow the pace of monetary stimulus later this year. The Fed's bond-buying program which has flooded global markets with liquidity has helped support an array of assets, including equities in recent years. The weakness on the domestic bourses today, 8 July 2013, was a part of a weakness across Asian markets.
Auto stocks edged lower. Wipro extended intraday gain. ONGC extended intraday losses. Bharti Airtel rose after the company said it has repaid Rs 6796 crore of debt from the proceeds of a 5% stake sale to Qatar foundation endowment. UB group shares rose after Diageo last week said it has raised stake in liquor major United Spirits.
The market edged lower in early trade as Asian stocks fell after stronger than expected US job data fuelled expectations the US Federal Reserve will slow the pace of monetary stimulus later this year. Weakness continued in morning trade. The Sensex continued to hover in negative terrain in mid-morning trade. The market trimmed intraday losses in early afternoon trade.
The Indian rupee sank to a record low against the US dollar on Monday, 8 July 2013, mirroring losses in most emerging market currencies after strong US employment data raised fears that the US Federal Reserve would roll back its monetary stimulus. The rupee was trading at 61.0825 versus dollar, compared with Friday's close of 60.225/235.
Indian government bonds also came under selling pressure on fears that foreign investors would continue to pull out of Indian debt to chase higher bond yields in the US. The yield on the most traded 8.2% GS 2025 was hovering at 7.7222%, higher that its close at 7.6731% on Friday, 5 July 2013. Bond prices and yields move in opposite directions. The Fixed Income Money Market and Derivatives Association of India, which along with the RBI oversees bond markets, said on its website that it had removed price filters on bonds for Monday's session.
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At 12:20 IST, the S&P BSE Sensex was down 213.72 points or 1.1% to 19,282.10. The index declined 309.90 points at the day's low of 19,185.92 in early trade, its lowest level since 3 July 2013. The index fell 73.13 points at the day's high of 19,422.69 in early trade.
The CNX Nifty was down 69.10 points or 1.18% to 5,798.60. The index hit a low of 5,775.55 in intraday trade, its lowest level since 3 July 2013. The index hit a high of 5,833.85 in intraday trade.
The market breadth, indicating the overall health of the market, was negative. On BSE, 1,101 shares fell and 796 shares rose. A total of 86 shares were unchanged.
From the 30-share Sensex pack, 23 stocks fell and rest of them rose. HDFC (down 3.35%), Coal India (down 2.81%) and ICICI Bank (down 2.58%), edged lower. Sun Pharmaceutical Industries (up 0.99%), Dr Reddy's Laboratories (up 0.97%) and Cipla (up 0.61%), edged higher.
Wipro rose 1.61%, with the stock extending intraday gain.
ONGC fell 2.81%, with the stock extending intraday losses.
Bharti Airtel rose 2.18% after the company announced during market hours today, 8 July 2013, that it has retired equivalent debt from the proceeds of Rs 6796 crore of the preferential allotment in June 2013 of 5% equity shares in Bharti Airtel at Rs 340 per share to Qatar Foundation Endowment. Bharti Airtel said that this significant debt reduction will result in an improvement in the capital structure and balance sheet leverage for the company. In June 2013, Bharti had issued 19.98 crore new equity shares, representing 5% equity stake in the company, to Qatar Foundation Endowment for a total consideration of Rs 6796 crore.
Auto stocks edged lower. Mahindra & Mahindra (M&M) shed 1.75%. The company on Thursday, 4 July 2013, said it has allotted 5,000, 9.55% senior unsecured redeemable non-convertible debentures of the face value of Rs 10 lakh each for cash at par aggregating Rs 500 crore to Yes Bank.
Tata Motors declined 4.02% on reports that the production line at Jaguar Land Rover (JLR) facilities in the UK may get impacted after delivery workers from DHL voted for a strike demanding a large pay rise and similar terms and conditions on par with the JLR staff. The staff of logistics giant DHL, which has about 1,800 workers at JLR's three main factories -- 1,000 between Castle Bromwich and Solihull in the Midlands and 800 at Halewood, Merseyside, perform a key role in managing warehouse operations and bringing parts to production lines. Reports suggested that production could stop soon without parts reaching the production line. Any shutdown could potentially dent JLR's position as the biggest exporter of manufactured goods in the UK, reports added.
Maruti Suzuki India fell 0.48% to Rs 1547 after company reported a fall in production in June 2013. The stock came off low of Rs 1531.25. The company said during market hours today, 8 July 2013, that production fell 25.36% to 61,668 units in June 2013 over June 2012. Earlier, the company had reported 12.6% fall in total sales to 84,455 units in June 2013 over June 2012. The company's domestic sales fell 7.8% to 77,002 units in June 2013 over June 2012. Exports declined 43% to 7,453 units in June 2013 over June 2012. The company announced the monthly sales data on 1 July 2013.
UB group shares rose after Diageo last week said it has raised stake in liquor major United Spirits. United Spirits (USL) rose 0.96% to Rs 2555.95. The stock had struck a record high of Rs 2,625.95 in intraday trade on Friday, 5 July 2013. Kingfisher Airlines was locked at 10% upper circuit filter after hitting maximum permissible upper limit of 10% on Friday. United Breweries (Holdings) was locked at 10% upper limit after hitting maximum permissible upper limit of 10% on Friday. United Breweries fell 1.53%.
USL on Thursday, 4 July 2013, said that Diageo has completed the acquisition of a 14.98% stake in USL at Rs 1,440 per share. The shares were bought from United Breweries (Holdings) and other UB group companies. Following the acquisition, Diageo holds 25.02% stake in USL. Diageo and the UB Group are now co-promoters of USL. In a statement, Diageo said that its 25.02% shareholding in USL, together with the voting and other governance arrangements agreed with the UB group, including Dr. Vijay Mallya's continued role as Chairman of USL, will give Diageo control and enable Diageo to fully reflect the results of USL in its consolidated accounts, which it expects to do from 1 January 2014. Prior to this, Diageo will equity account its shareholding in USL, Diageo said.
On 27 May 2013, Diageo subscribed for a preferential allotment of new shares in USL amounting to 10% of the post-issue enlarged share capital. Separately, Diageo acquired 58,668 additional USL shares via a mandatory open offer to the shareholders of USL.
Century Textiles & Industries lost 2.36% as the stock turned ex-dividend today, 8 July 2013, for dividend of Rs 5.50 per share for the year ended 31 March 2013.
Gillette India fell 2.44% after the market regulator Securities and Exchange Board of India (Sebi) on Friday, 5 July 2013, on Friday, 5 July 2013, barred promoters of Gillette India from dealing in capital markets and directed a freeze on their voting rights and corporate benefits such as dividend, rights, bonus shares and split for non-compliance with public shareholding norms before the deadline that expired 3 June 2013. All private listed firms are required to have a minimum public shareholding of 25%. Sebi's interim order follows a ruling by the Securities Appellate Tribunal, or SAT, upholding the market regulator's earlier decision on Gillette with regard to non-compliance with public holding norms.
Asian stocks dropped on Monday, 8 July 2013, after a better-than-forecast monthly US jobs report fueled speculation that the Federal Reserve may begin reducing stimulus this year. Key benchmark indices in China, Hong Kong, Indonesia, Singapore, Japan, South Korea and Taiwan shed by 0.7% to 2.53%.
Chinese stocks were also hit by concerns that Beijing won't ease policies despite slowing growth. In a statement issued on Friday, 5 July 2013, elaborating on its pursuit of economic restructuring and reforms, the State Council -- China's cabinet -- indicated it would strengthen supervision of wealth-management products and emphasized financial-market stability, but it also hinted it would loosen controls on banks' interest rates only gradually. The State Council also suggested tighter controls over credit to industries with excess production capacity.
Trading in US index futures indicated a flat opening of US stocks on Monday, 8 July 2013. US stocks surged on Friday, 5 July 2013, after government data showed the nation added more jobs than forecast last month. The non-farm payrolls increased by 195,000 in June and the unemployment rate held steady at 7.6% as more people entered the workforce. Job growth in previous months also was revised higher.
Federal Reserve Chairman Ben Bernanke on 19 June 2013 said that the central bank may taper the pace of its bond purchases, currently set at $85 billion a month, as early as this year if the economy continues to improve in line with its forecasts.
The minutes of Federal Open Market Committee's (FOMC) policy meeting held on 19 June 2013, will be released on Wednesday, 10 July 2013. The minutes may provide more insight into the Fed's outlook on monetary stimulus. Bernanke is also due to deliver a speech on that day.
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