Key benchmark indices hit fresh intraday low in early afternoon trade. The barometer index, the S&P BSE Sensex, and the 50-unit CNX Nifty, both, hit their lowest level in more than a one week as a sharp uptick in consumer price inflation in November 2013 raised the likelihood of the Reserve Bank of India (RBI) hiking its main lending rate viz. the repo rate at a monetary policy review next week. The Sensex was down 159.68 points or 0.76%, off close to 100 points from the day's high and up about 20 points from the day's low. The market breadth, indicating the overall health of the market, was weak. The rupee fell and bonds yields rose after retail inflation spiked, raising bets of a rate hike at the RBI's policy meeting next week.
Realty stocks edged lower as a sharp uptick consumer price inflation raised the likelihood of the Reserve Bank of India (RBI) hiking its main lending rate viz. the repo rate at a monetary policy review next week. Metal and mining stocks dropped.
The market edged lower in early trade after weak macroeconomic data announced after trading hours on Thursday, 12 December 2013. The Sensex and the 50-unit CNX Nifty, both, hit their lowest level in more than a week. A bout of volatility was witnessed as key benchmark indices weakened once again after trimming initial losses in morning trade. The Sensex extended losses and hit fresh intraday low in early afternoon trade.
At 12:20 IST, the S&P BSE Sensex was down 159.68 points or 0.76% to 20,765.93. The index fell 180.83 points at the day's low of 20,744.78 in early afternoon trade, its lowest level since 4 December 2013. The index declined 58.44 points at the day's high of 20,867.17 in opening trade.
The CNX Nifty was down 52.50 points or 0.84% to 6,184.55. The index hit a low of 6,177.15 in intraday trade, its lowest level since 4 December 2013. The index hit a high of 6,208.60 in intraday trade.
The market breadth, indicating the overall health of the market, was weak. On BSE, 1,319 shares fell and 774 shares rose. A total of 145 shares were unchanged.
From the 30-share Sensex pack, 24 stocks fell and rest rose. Bhel (down 3.31%), ICICI Bank (down 3.18%) and GAIL (India) (down 2.28%) declined from the Sensex pack.
Metal and mining stocks extended their recent losses. Jindal Steel & Power (down 2.46%), Sail (down 0.36%), Sesa Sterlite (down 1.9%), JSW Steel (down 1.04%), Tata Steel (down 0.17%), Hindalco Industries (down 2.11%), Hindustan Zinc (down 2.18%), NMDC (down 2.08%) National Aluminum Company (down 1.16%) and Hindustan Copper (down 0.94%) declined.
Realty stocks edged lower as a sharp uptick consumer price inflation raised the likelihood of the Reserve Bank of India (RBI) hiking its main lending rate viz. the repo rate at a monetary policy review next week. Purchases of both residential and commercial property are largely driven by finance. DLF (down 2.4%), HDIL (down 2.1%), Sobha Developers (down 045%), Unitech (down 0.64%) and D B Realty (down 1.87%) declined.
Bharti Airtel rose 1.08% to Rs 327 after a foreign brokerage upgraded its rating on the stock to outperform from underperform. The foreign brokerage also raised its target price on the stock to Rs 375 per share. According to the brokerage house, risk reward in case of Bharti Airtel (Airtel) has turned favourable, India pricing pressures have abated, data ramp-up is at inflection point and Africa operations have stabilised.
Bharti Airtel and Reliance Jio Infocomm (Reliance Jio) early this week announced a comprehensive telecom infrastructure sharing arrangement under which they will share infrastructure created by both parties. This will include optic fibre network - inter and intra city, submarine cable networks, towers and internet broadband services and other such opportunities identified in the future. The cooperation is aimed at avoiding duplication of infrastructure, wherever possible, and to preserve capital and the environment. This will also provide redundancy in order to ensure seamless services to customers of the respective parties.
Berger Paints India gained 3.52% to Rs 236.70 after foreign promoter bought 0.1% stake in the paint manufacturing company on Thursday, 12 December 2013. UK Paints India bought 3.50 lakh shares or 0.1% stake in Berger Paints India at Rs 228.50 per share in a block deal on NSE on Thursday, 12 December 2013. Vinu Dhingra was the seller in the transaction.
Total promoter holding in Berger Paints India was 74.96% as on 30 September 2013). UK Paints India held 45.64% stake in the company while Vinu Dhingra owned 2.21% stake in Berger Paints India (as per the shareholding pattern as on 30 September 2013).
Shares of Motherson Sumi Systems extended Thursday's gains triggered by the company's announcement that the Register of Members & Share Transfer Books of the company will remain closed on 24 December 2013 for the purpose of 1:2 bonus share issue. The stock was up 1.21%.
In the foreign exchange market, the rupee edged lower against the dollar and fell below 62 level after two sets of economic data released after market hours on Thursday, 12 December 2013, which showed a spike in consumer price inflation in November and a worse-than-expected contraction in industrial production in October. The partially convertible rupee was hovering at 62.20, compared with its close of 61.81/82 on Thursday, 12 December 2013.
Bond prices fell as a sharp uptick in consumer price inflation in November 2013 raised the likelihood of the Reserve Bank of India (RBI) hiking its main lending rate viz. the repo rate at a monetary policy review next week. The yield on 10-year federal paper 8.83% GS 2023 was hovering at 8.8945%, higher than its close of 8.8498% on Thursday, 12 December 2013. Bond yield and bond prices are inversely related.
Provisional annual inflation rate based on all India general consumer price index (CPI) (combined) rose 11.24% in November 2013 as compared to 10.17% (final) in October 2013. The data was announced after market hours on Thursday, 12 December 2013.
Index of industrial production (IIP) declined 1.8% in October 2013, against 2% growth in the previous month September 2013. The decline in the output of manufacturing sector at 2% and mining sector at 3.5% mainly led to decline in IIP for October 2013. Meanwhile, the marginal 1.3% growth in the electricity generation restricted further dip in industrial production during October 2013.
The IIP growth for the month of September 2013 has been retained unchanged at 2%, while the growth for the month of July 2013 has been scaled down to 2.6% from 2.8% reported at first revision. However, the final growth rate for July 2013 is similar to the provisional level of 2.6%. The data was announced after market hours on Thursday, 12 December 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 on 28 January 2014.
Asian markets edged higher in choppy trade on Friday, 13 December 2013, after a report showed US retail sales in November 2013 beat market expectations and after US House of Representatives on Thursday, 12 December 2013, passed a federal budget plan. Key benchmark indices in Hong Kong, Japan, Singapore and Taiwan were up 0.02% to 0.4%. Key benchmark indices in China, Indonesia, and South Korea were off 0.24% to 0.42%.
The Bank of Japan (BoJ), which buys more than 7 trillion yen ($67.6 billion) of Japanese Government Bonds (JGBs) every month in its bid to stoke inflation, holds a two-day monetary policy meeting on 19 and 20 December 2013.
Trading in US index futures indicated that the Dow could advance 37 points at the opening bell on Friday, 13 December 2013. US stocks dropped on Thursday, 12 December 2013, sending the Standard & Poor's 500 Index to a one-month low, as improving economic data spurred speculation the Federal Reserve will cut stimulus as early as next week.
Data showed retail sales rose more than forecast in November as Americans bought cars and took advantage of discounts going into the holiday-shopping season. Sales increased 0.7 percent in November from the previous month, the most since June, the Commerce Department figures showed. A separate report indicated applications for unemployment benefits jumped last week from an almost three-month low.
The US House of Representatives on Thursday passed the first bipartisan federal budget in four years, which would ease $63 billion in automatic spending cuts and avert another government shutdown. The legislation now heads to the Senate. The House voted 332-94 for the $1.01 trillion compromise budget crafted by Senator Patty Murray and Representative Paul Ryan, the chairman of a special bipartisan panel. President Barack Obama said he'll sign the final measure.
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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