Key benchmark indices trimmed losses after hitting fresh intraday low in early afternoon trade. Sharp cut in Asian stocks and slide in US index futures weighed on sentiment adversely. The barometer index, the S&P BSE Sensex pared losses after hitting lowest level in over a week below the psychological 20,000 mark. The 50-unit CNX Nifty also pared losses after hitting lowest level in over a week below the psychological 6,000 mark. The Sensex was down 306.91 points or 1.53%, up close to 60 points from the day's low and off about 330 points from the day's high. Index heavyweight and cigarette major ITC edged lower. Another index heavyweight Reliance Industries (RIL) extended intraday losses. The market breadth, indicating the overall health of the market, was very weak. Auto stocks declined across the board. All the 13 sectoral indices on BSE were in the red.
The market edged lower in early trade on weak Asian stocks. It weakened to hit fresh intraday low in morning trade. It extended losses to hit fresh intraday low in mid-morning trade. It trimmed losses after hitting fresh intraday low in early afternoon trade.
Foreign institutional investors (FIIs) bought shares worth a net Rs 540.18 crore on Wednesday, 22 May 2013, as per provisional data from the stock exchanges.
At 12:20 IST, the S&P BSE Sensex was down 306.91 points or 1.53% to 19,755.33. The index declined 364.80 points at the day's low of 19,697.44 in early afternoon trade, its lowest level since 14 May 2013. The index fell 34.68 points at the day's high of 20,027.56 in early trade.
The CNX Nifty was down 97.70 points or 1.8% to 5,996.80. The index hit a low of 5,972.40 in intraday trade, its lowest level since 14 May 2013. The index hit a high of 6,081.45 in intraday trade.
The market breadth, indicating the overall health of the market, was very weak. On BSE, 1,610 shares fell and 408 shares rose. A total of 108 shares were unchanged.
Among the 30-share Sensex pack, 28 stocks fell and the rest of them rose. L&T, SBI and Bhel shed by 3.59% to 3.7%.
Index heavyweight Reliance Industries (RIL) declined 2.57% to Rs 796.70. The stock hit high of Rs 817 and low of Rs 792.15 so far during the day.
Index heavyweight and cigarette major ITC fell 0.98% to Rs 332.50. The stock hit high of Rs 336.10 and low of Rs 330.35 so far during the day. The stock had hit record high of Rs 355 in intraday trade on 11 May 2013. The company's net profit rose 19.43% to Rs 1927.98 crore on 19.12% growth in total income to Rs 8511.38 crore in Q4 March 2013 over Q4 March 2012. The result was announced on 17 May 2013. ITC's net profit rose 20.38% to Rs 7418.39 crore on 18.74% growth in total income to Rs 30839.97 crore in the year ended March 2013 over the year ended March 2012.
On a consolidated basis, ITC's net profit rose 21.57% to Rs 7608.07 crore on 19.02% growth in total income to Rs 32505.14 crore in the year ended March 2013 over the year ended March 2012.
ITC's board of directors at its meeting held on Friday, 17 May 2013, recommended a dividend of Rs 5.25 per share for the financial year ended 31 March 2013.
NHPC dropped 1.75%. The company said during market hours today, 23 May 2013 that consequent upon successful trial run and demonstration of peaking capability corresponding to installed capacity of 33 megawatts (MW) each, Unit 1 of Teesta Low Dam -III HE Project have been declared under commercial operation from 19 May 2013.
It is further stated that commercial operation of the generating station of installed capacity of 4x33MW (132MW) as a whole is also declared from 19 May 2013.
Auto stocks declined across the board. M&M declined 3.02%. Ssangyong Motor part of Mahindra Group, announced today 23 May 2013 that the full payment of 80 billion won for the new shares has been received from its majority shareholder Mahindra & Mahindra Group and that the paid-in capital increase was successfully completed. Ssangyong Motors decided to make a third party allotment (Preferential Offer) to Mahindra on 14 February 2013 to Secure investment funds for new products. The most recent increase in the paid-in capital results from the issuance of some 14.545 million new shares (capital increase ratio of 11.9%). All of the new shares will be locked up for one year and the expected listing date is scheduled on 7 June 2013. After this, Mahindra's shareholding ratio in Ssangyong Motor will increase from 69.63% to 72.85%.
As the paid-in capital increase got completed smoothly, Ssangyong Motor's new product development such as the small CUV which will be launched in 2015, will gain further momentum, Furthermore, the company's debt ratio will decline and cash liquidity will improve, which will further strengthen the company's financial soundness.
Also this paid-in capital increase serves as a message to show the strong commitment of the majority shareholder Mahindra and its confidence in the turnaround of Ssangyong Motor. This will greatly boost Ssangyong Motor's external credit Worthiness. Apart from the 80 billion won paid-in capital Mahindra agreed to roll over the Corporate bond worth 95.4 billion won that was scheduled to mature in 2014, by another year: This is an additional source of funds for Ssangyong Motor. With this, the company expects more tangible results from synergy in various areas of sales sourcing etc.
Mahindra invested 522.5 billion won in 2011 to acquire 70% of Ssangyong Motor Company, and since the acquisition, Ssangyong Motor's board of directors has approved a total investment of approx. 500 billion won till now, which includes 295.8 billion won investment for small size new engine development and CUV development projects
India's largest car maker by sales, Maruti Suzuki India dropped 4.92% to Rs 1604.40. The stock tumbled on the back of a rally in yen against the dollar. The yen rallied, snapping a two-day drop that took it to the weakest in more than four years, as Japanese shares extended declines. Strong yen could adversely impact earnings of Maruti Suzuki as it imports raw materials from its Japanese parent Suzuki Motor Corporation. It also pays annual royalty on sales to the Japanese parent.
Tata Motors skidded 1.83%. The company said on 18 May 2013 that TML Holdings, a wholly owned subsidiary of the company, issued and allotted S$350 million in principal amount of 4.25% senior notes due 2018. The net proceeds from the issue will be used for the redemption of preference shares issued to Tata Motors and for general corporate purposes. Australia and New Zealand Banking Group, Citigroup Global Markets Singapore, Deutsche Bank AG, Singapore Branch and Standard Chartered Bank acted as joint lead managers and joint bookrunners for the issue.
This announcement does not constitute nor form a part of any offer or solicitation to purchase or subscribe for securities in Singapore, the United States, India or elsewhere, company said.
Two wheeler markers also dropped. Bajaj Auto fell 2.07%. The company's net profit fell 1% to Rs 766 crore on 4% rise in turnover to Rs 4990 crore in Q4 March 2013 over Q4 March 2012. Net profit rose 1% to Rs 3044 crore on 3% growth in turnover to Rs 20793 crore in the year ended 31 March 2013 (FY 2013) over the year ended 31 March 2012 (FY 2012). The result was announced on 16 May 2013.
Bajaj Auto said that the company's performance in FY 2013 was good in a very difficult year for the automobile industry. The company's strategy to build strong brands and offer differentiated products in the front-end, and focus on cost and productivity improvements in the back-end, has yielded desired results, Bajaj Auto said.
India's largest motorcycle maker by sales, Hero MotoCorp declined 0.96%. The company said on 1 May 2013 its total sales fell 9.5% to 4.99 lakh in April 2013 over April 2012.
As per the Q4 results calendar, Coal India unveils consolidated FY 2013 results on 27 May 2013. Sun Pharma, Power Grid Corporation of India, GAIL (India) and Hindalco Industries unveil Q4 results on 28 May 2013. Tata Motors, ONGC, Cipla, NMDC and BPCL unveil Q4 results on 29 May 2013. DLF, M&M and Tata Power unveil Q4 results on 30 May 2013.
Global credit rating agency Standard & Poor's (S&P) on 17 May 2013, affirmed India's sovereign rating at BBB-minus with a negative outlook, reiterating there was a one-in-three chances of a ratings downgrade over the next 12 months. S&P said the government's ability to prop up investment growth remains uncertain. The ratings agency, however, said there was scope to upgrade the sovereign ratings if the government unleashes public and private investments to spur economic growth.
The monsoon rains may arrive on the southern coast around 3 June 2013, the weather office forecast on 15 May 2013. The rains, which run from June to September, are vital for the 55% of farmland without irrigation in India, one of the world's largest producers and consumers of food. The India Meteorological Department (IMD) has predicted normal rains this year.
The Reserve Bank of India (RBI) undertakes mid-quarter review of the monetary policy on 17 June 2013. RBI Governor D Subbarao on 14 May 2013 said that the central bank will take note of falling inflation when discussing potential interest rate cuts. The RBI on 3 May 2013 cut its key policy rate viz. the repo rate by 25 basis points (bps) to 7.25% and kept the cash reserve ratio (CRR) for banks unchanged at 4% after a monetary policy review. RBI said at that time that the balance of risks stemming from its assessment of the growth-inflation dynamic provides little space for further monetary easing. The RBI said it will endeavour to condition the evolution of inflation to a level of 5% by March 2014, using all instruments at its command.
The finance ministry in October 2012 announced a five-year plan to cut fiscal deficit. The government hopes to reduce the fiscal deficit to 3% by March 2017.
Asian stocks slid on Thursday after China's manufacturing output unexpectedly contracted and amid speculation the Federal Reserve may soon wind back stimulus. Key benchmark indices in China, Hong Kong, Indonesia, Singapore, Taiwan and South Korea shed by 1.24% to 2.44%. Japan's Nikkei Average tumbled 7.32%, the most since the aftermath of the March 2011 tsunami and nuclear disaster, as financial companies plunged amid rising bond yields. The rout triggered a halt in Nikkei 225 Stock Average futures trading in Osaka.
China's manufacturing is contracting in May for the first time in seven months, adding to signs that economic growth is losing steam for a second quarter. The preliminary reading of 49.6 for a Purchasing Managers' Index released today by HSBC Holdings Plc and Markit Economics compares with a final 50.4 for April. A reading above 50 indicates expansion.
Singapore's economy unexpectedly expanded last quarter as services and construction strengthened, reducing pressure on the central bank to ease monetary policy to boost growth. Gross domestic product rose an annualized 1.8% in the three months through March from the previous quarter, when it grew 3.3%, the Trade Ministry said in a statement today, revising an earlier estimate for a 1.4% contraction last quarter.
Trading in US index futures indicated that the Dow could fall 169 points at the opening bell on Thursday, 23 May 2013. US stocks slid Wednesday, reversing gains after minutes from the Federal Reserve's latest meeting and comments from the Fed chief Ben Bernanke suggested the central bank may begin tapering its bond-buying program in coming months. The minutes of the last Fed meeting said a number of officials expressed a willingness to taper bond purchases as early as the upcoming meeting on June 18-19 if there were signs of sufficiently strong and sustained growth. But views differed both on how to gauge progress and on how likely it was that that threshold would be met.
The Federal Reserve's monetary stimulus is helping the U.S. economy recover but the central bank needs to see further signs of traction before taking its foot off the gas pedal, Fed Chairman Ben Bernanke said on Wednesday. A decision to scale back the $85 billion in bonds the Fed is buying each month could come at one of the central bank's "next few meetings" if the economy looked set to maintain momentum, Bernanke told Congress. In testimony that showed little immediate desire to retreat from the Fed's third and latest round of bond buying, Bernanke emphasized the high costs of both unemployment and inflation, which respectively continue to run above and below the Fed's targets.
The central bank is currently buying $45 billion in Treasury bonds and $40 billion in mortgage-backed debt each month to keep borrowing costs low and encourage investment, hiring and economic growth. It is the third round of asset purchases, or quantitative easing, since the Fed drove interest rates to near zero in late 2008.
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