Intraday recovery witnessed in afternoon trade proved short lived as key benchmark indices weakened once again in mid-afternoon trade. The S&P BSE Sensex was down 275.33 points or 1.36%, up close to 35 points from the day's low and off about 225 points from the day's high. The market breadth, indicating the overall health of the market, was weak. The Reserve Bank of India's (RBI) latest measures to squeeze liquidity from the banking system to stem rupee's decline rattled investor sentiment.
Index heavyweight Reliance Industries (RIL) edged higher in volatile trade. United Phosphorous fell after the company reported muted growth in net profit in Q1 June 2013. IT major TCS extended intraday gain to hit record high after the company completed the acquisition of French IT services firm Alti SA. Bank stocks declined across the board after the Reserve Bank of India (RBI) on Tuesday, 23 July 2013 announced more measures to squeeze liquidity from the banking system to stem rupee's decline.
The market trimmed losses after a weak start. The intraday recovery proved short lived as the market weakened again in morning trade. The market extended losses to hit fresh intraday low in mid-morning trade. The S&P BSE Sensex hit its lowest level in almost one week. The 50-unit CNX Nifty hit one-week low below the psychological 6,000 mark. It remained weak in early afternoon trade. Weakness continued on the bourses in early afternoon trade. Key benchmark indices cut intraday losses in afternoon trade as European markets edged higher in early trade. The barometer index, BSE Sensex, regained the psychological 20,000 after falling below that mark in early afternoon trade. Intraday recovery witnessed in afternoon trade proved short lived as key benchmark indices weakened once again in mid-afternoon trade.
The market may remain volatile in the immediate future as traders roll over positions in the futures & options (F&) segment from the July 2013 series to August 2013 series. The near month July 2013 derivatives contracts expire tomorrow, 25 July 2013.
The Reserve Bank of India (RBI) on Tuesday, 23 July 2013, announced additional measures to squeeze liquidity from the banking system to stem rupee's decline. The central bank imposed restrictions on commercial banks' access to cash, allowing banks to borrow cash only up to 0.5% of their net deposits from the central bank' daily at the benchmark interest rate of 7.25%. The RBI also tightened rules on the cash reserve ratio (CRR) -- the percentage of deposits that banks must hold as cash with the central bank -- which is 4% at present.
At 14:20 IST, the S&P BSE Sensex was down 275.33 points or 1.36% to 20,026.60. The index fell 307.88 points at the day's low of 19,994.25 in early afternoon trade, its lowest level since 18 July 2013. The index declined 49.43 points at the day's high of 20,252.70 in morning trade.
The CNX Nifty was down 107.20 points or 1.76% to 5,970.60. The index hit a low of 5,962.60 in intraday trade, its lowest level since 17 July 2013. The index hit a high of 6,047.25 in intraday trade.
The market breadth, indicating the overall health of the market, was weak. On BSE, 1,494 shares declined and 520 shares rose. A total of 128 shares were unchanged.
Among the 30-share Sensex pack, 22 stocks fell and rest of them rose. Jindal Steel & Power (down 4.35%), L&T (down 4.06%) and M&M (down 3.76%), edged lower.
IT major TCS rose 2.1% to Rs 1786.50, with the stock extending recent gains triggered by the company's strong Q1 results. The stock hit a record high of Rs 1,791 in intraday trade today, 24 July 2013. The company said during market hours today, 24 July 2013, that it has completed the acquisition of French IT services firm Alti SA. The acquisition was initially announced in April 2013.
This strategic investment by TCS will help leverage the strong engineering talent in the country for the benefit of its customers in France and other markets globally, TCS said. A privately-held company with revenue of euro 126 million in 2012, Alti SA is regarded as one of the top system integrators of SAP solutions in France. It includes several top French corporations in the banking, financial services, luxury, manufacturing and utilities sectors as its key customers.
Reliance Industries (RIL) rose 0.2%. The stock was volatile. The scrip hit high of Rs 917 and low of Rs 895.65 so far during the day. The company's net profit rose 18.9% to Rs 5352 crore on 4.6% decline in revenue to Rs 90589 crore in Q1 June 2013 over Q1 June 2012. The result was announced on 19 July 2013.
Bank stocks extended initial losses as the RBI's latest measures to squeeze liquidity from the banking system to stem rupee fall have made it costlier for banks to raise short term funds. ICICI Bank (down 4%) and HDFC Bank (down 3.27%) edged lower.
Among PSU bank stocks, State Bank of India, Canara Bank, Union Bank of India, Bank of India, Bank of Baroda and Punjab National Bank dropped by 3.17% to 8.14%.
The Reserve Bank of India took new steps on Tuesday to support the rupee, signalling it will stay the course with its defence of the currency despite the risks to economic growth. The central bank tightened liquidity further and made it even harder for lenders to access funds with measures including lowering the amount banks can borrow or lend under its daily liquidity window. The RBI lowered the overall limit for borrowing under the daily liquidity adjustment facility (LAF) -- which offers funds in exchange for collateral -- for each bank to 0.5% of deposits from 1%. The central bank also said banks now needed to maintain 99 percent of their daily cash reserve ratio requirements -- the deposits they must set aside -- with the RBI, compared with 70% now. The change takes effect from the two-weekly period starting July 27. The RBI also announced the sale of short end cash management bills of Rs 6000 crore to drain out more cash from the banking system.
Yes Bank tumbled 13.28%. The bank's net profit surged 38.15% to Rs 400.84 crore on 30.6% growth in total income to Rs 2839.97 crore in Q1 June 2013 over Q1 June 2012. The Q1 result was announced during trading hours today, 24 July 2013.
IndusInd Bank tumbled 8.53%. The bank today, 24 July 2013, said it has opened a new branch in Greater Noida. The new branch will expand IndusInd bank's reach across NCR and Uttar Pradesh.
United Phosphorous fell 2.57% after Q1 result. The company's consolidated net profit rose 4.8% to Rs 212.65 crore on 10.33% growth in total income to Rs 2482.26 crore in Q1 June 2013 over Q1 June 2012. The Q1 result was announced during market hours today, 24 July 2013.
Redington (India) lost 4.12% as the stock turned ex-dividend today, 24 July 2013, for dividend of 40 paise per share for the year ended 31 March 2013.
European stock markets advanced on Wednesday, 24 July 2013, after better-than-expected purchasing managers' indexes from the region spurred hopes about the economic recovery. Key benchmark indices in UK, Germany and France were up by 0.49% to 0.67%.
The composite euro-zone index climbed to an 18-month high of 50.4 in July from 48.7 in June, moving above the 50-mark that separates expansion from contraction. In Germany, the composite index climbed to a five-month high of 52.8, while France's similar poll moved up to a 17-month high at 48.8.
Most Asian stocks edged lower on Wednesday, 24 July 2013, after a private survey showed manufacturing weakened further in July in China. Key benchmark indices in China, Indonesia, Japan, and Taiwan were down by 0.22% to 1.55%. Key benchmark indices in Hong Kong, Singapore and South Korea rose by 0.24% to 0.53%.
China's manufacturing weakened further in July, signaling the worst of the nation's slowdown has yet to be reached, according to a preliminary survey of purchasing managers. The reading of 47.7 for an index released today by HSBC Holdings Plc and Markit Economics, was less than estimated and if confirmed in the final report Aug. 1, would be the lowest in 11 months. Readings below 50 indicate contraction.
Japan's exports rose for a fourth straight month in June as a weak yen made the nation's products more competitive and shipments to the European Union rebounded. Exports gained 7.4% from a year earlier, the Finance Ministry said in Tokyo today.
Trading in US index futures indicated that the Dow could gain 26 points at the opening bell on Wednesday, 24 July 2013. US stocks ended mostly lower on Tuesday after a decline in a regional manufacturing gauge prompted concern, but the Dow Jones Industrial Average climbed to a record close. The Federal Reserve Bank of Richmond said manufacturing activity in the central Atlantic region weakened.
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