Bank stocks decline

Key benchmark indices edged lower in early trade triggered by the rupee plunging to record low against the dollar. Weakness in Asian stocks also dampened sentiment. The S&P BSE Sensex was currently above the psychological 18,000 mark after falling below that mark. The Sensex was down 248.06 points or 1.35%, up about 85 points from the day's low and off almost equal points from the day's high. The market breadth, indicating the overall health of the market, was weak. Bank stocks declined across the board, with ICICI Bank, State Bank of India, HDFC Bank and Bank of Baroda hitting 52-week low.

The rupee slumped to hit fresh record low against the dollar today, 20 August 2013. The partially convertible rupee was hovering at 63.97 after falling below the 64 mark, lower than its close of 63.13/14 on Monday, 19 August 2013.

Rupee depreciation fuels inflation, increases import bill and current account deficit and hurts economic growth.

The market sentiment was affected adversely by data showing that foreign funds remained net sellers of Indian stocks on Monday, 19 August 2013. Foreign institutional investors (FIIs) sold shares worth a net Rs 680.08 crore on Monday, 19 August 2013, as per provisional data from the stock exchanges.

At 9:30 IST, the S&P BSE Sensex was down 248.06 points or 1.35% to 18,059.46. The index lost 336.54 points at the day's low of 17,970.98 in early trade. The index fell 164.40 points at the day's high of 18,143.12 in opening trade.

The CNX Nifty was down 86.55 points or 1.6% to 5,328.20. The index hit a low of 5,306.35 in intraday trade. The index hit a high of 5,353.45 in intraday trade.

The market breadth, indicating the overall health of the market, was weak. On BSE, 656 shares declined and 213 shares rose. A total of 12 shares were unchanged.

Among the 30-share Sensex pack, 23 stocks declined and rest of them gained. M&M (down 3.65%), Sun Pharmaceutical Industries (down 2.99%) and Tata Motors (down 2.62%), edged lower.

Telecom major Bharti Airtel shed 3.66%, with the stock sliding for the fourth straight day.

Index heavyweight and cigarette maker ITC declined 2.56%.

Bank stocks declined. ICICI Bank declined 1.98% to Rs 799 after hitting a 52-week low of Rs 790 in intraday trade today, 20 August 2013.

HDFC Bank dropped 2.14% to Rs 571.50 after hitting a 52-week low of Rs 566 in intraday trade today, 20 August 2013.

State Bank of India (SBI) declined 2.05% to Rs 1499.05 after hitting a 52-week low of Rs 1488.80 in intraday trade today, 20 August 2013.

Bank of Baroda lost 3.88% to Rs 434 after hitting a 52-week low of Rs 429.25 in intraday trade today, 20 August 2013.

Among other PSU bank stocks, Canara Bank, Union Bank of India, Bank of India, and Punjab National Bank shed by 2.62% to 4.73%.

Most Asian stocks retreated Tuesday triggered by a fourth straight day of losses on the Wall Street on Monday. Key benchmark indices in Indonesia, Singapore, Hong Kong, Japan, South Korea and Taiwan were down by 0.15% to 4.69%. China's Shanghai Composite rose 0.08%.

US stocks edged lower on Monday after the yield on the 10-year Treasury bond hit fresh two-year highs, raising worries about what impact higher rates will have on the US economic recovery.

The Federal Open Market Committee (FOMC) tomorrow, 21 August 2013, will issue minutes of its recent policy meeting held on 30 and 31 July 2013. The minutes of FOMC meet may help provide clues about the future of Fed's bond-buying program.

The US central bank currently buys $85 billion a month in US debt and mortgage-backed securities in a bid to hold interest rates low and encourage economic growth. Federal Reserve Chairman Ben Bernanke has on several occasions stressed that the tapering process is dependent on an improvement in data. Fed's bond-buying program has kept global markets flush with liquidity in recent years.

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