Cement, realty stocks slide

Key benchmark indices hovered in negative terrain, but were off their intraday lows in early afternoon trade. The S&P BSE Sensex was down 254.02 points or 1.41%, up close to 270 points from the day's low and off about 140 points from the day's high. The market breadth, indicating the overall health of the market, was weak. Except the BSE IT index and the BSE Teck index all the other sectoral indices on BSE were in the red.

Realty stocks dropped for the second straight day. Auto stocks also declined. Among bank stocks, shares of State Bank of India (SBI) hit 52-week low. NTPC reversed direction after hitting a 52-week low. Cement stocks tumbled.

The market dropped in early trade as stocks fell across the globe on fears of a possible US military strike in Syria. The market extended initial losses and hit fresh intraday low in morning trade. The market trimmed losses after hitting fresh intraday low in mid-morning trade. The S&P BSE Sensex trimmed losses after hitting its lowest level in almost a year. The 50-unit CNX Nifty also cut losses after hitting its lowest level in nearly 11 months. It hovered in negative terrain in early afternoon trade.

The rupee slumped in choppy deals and hit record low below 68 against the dollar. The partially convertible rupee was hovering at 68.48 against the dollar, sharply lower than its close of 66.24/25 on Tuesday, 27 August 2013. Rupee depreciation fuels inflation, increases import bill and current account deficit. It also increases the government's spending on fuel subsidies, potentially widening the fiscal deficit.

The rupee has fallen sharply this month due to concerns that India will find it tough to close its wide current-account gap when developed countries end their easy-money policies.

Investor sentiment has been hit adversely on concerns about government finances after the Lok Sabha on Monday, 26 August 2013, passed the Food Security Bill. The massive outlay of funds required for rolling out the programme is bound to raise the government's fiscal deficit.

The market sentiment was also affected adversely by data showing that foreign funds remained net sellers of Indian stocks on Tuesday, 27 August 2013. Foreign institutional investors (FIIs) sold shares worth a net Rs 1373.99 crore on Tuesday, 27 August 2013, as per provisional data from the stock exchanges.

The market is expected to remain volatile in the near future as traders roll over positions in the futures & options (F&O) segment from the near month August 2013 series to September 2013 series. The near month August 2013 derivatives contract expire tomorrow, 29 August 2013.

Stocks fell across the globe today, 28 August 2013, on geopolitical worries as the US and its allies reportedly weighed a military strike against Syria, which is accused of launching a chemical attack on civilians near rebel-held areas around Damascus last week.

At 12:20 IST, the S&P BSE Sensex was down 254.02 points or 1.41% to 17,714.06. The index tumbled 519.37 points at the day's low of 17,448.71 in mid-morning trade, its lowest level since 6 September 2012. The index declined 116.64 points at the day's high of 17,851.44 in opening trade.

The CNX Nifty was down 90.40 points or 1.71% to 5,197.05. The index hit a low of 5,118.85 in intraday trade, its lowest level since 5 October 2012. The index hit a high of 5,236.05 in intraday trade.

The market breadth, indicating the overall health of the market, was weak. On BSE, 1,401 shares fell and 488 shares rose. A total of 119 shares were unchanged.

Among the 30-share Sensex pack, 22 stocks fell and rest of them rose. ONGC (down 8.91%), HDFC (down 6.97%) and GAIL (India) (down 5.48%), edged lower.

Cement stocks tumbled. UltraTech Cement (down 5.93%), ACC (down 2.02%) and Ambuja Cement (down 5.3%), dropped.

Asian Paints slumped 6.88%.

Dr Reddy's Laboratories gained 0.7% on defensive buying in a weak market.

State Bank of India (SBI) declined 2.78% to Rs 1,477.65 after hitting a 52-week low of Rs 1,452.90 in intraday trade today, 28 August 2013.

Realty stocks extended Tuesday's losses. HDIL (down 9.52%), D B Realty (down 2.91%), DLF (down 3.42%) and Unitech (down 4.24%), edged lower.

Auto stocks also declined. Maruti Suzuki India (down 1.73%), Ashok Leyland (down 3.84%), Bajaj Auto (down 1.27%), M&M (down 4.89%), and Hero MotoCorp (down 0.66%), edged lower.

Tata Motors rose 0.43%, with the stock reversing intraday losses.

NTPC rose 0.4% to Rs 125. The stock reversed direction after hitting a 52-week low of Rs 122.65 in intraday trade today, 28 August 2013. The company said after market hours on Monday, 26 August 2013, that the 500 megawatts (MW) Unit-II of 1500 MW Vallur Thermal Power Project of NTPC Tamil Nadu Energy (NTECL), a JV of NTPC and TANGEDCO, is declared on commercial operation from 25 August 2013. With this the total commercial capacity of Vallur Thermal Power Project has become 1,000 MW and that of NTPC Group to 40,184 MW.

Asian stocks dropped for a second day in a row on Wednesday, 28 August 2013, on concern the US will take military action against Syria. Key benchmark indices in Singapore, Hong Kong, Indonesia, South Korea and Japan fell by 0.07% to 2.81%. Key benchmark indices in China and Taiwan rose by 0.07% to 0.42%.

Trading in US index futures indicated that the Dow could gain 30 points at the opening bell on Wednesday, 28 August 2013. US stocks fell hard on Tuesday, with the Dow Jones Industrial Average ending at a two-month low, as unease over possible US action against Syria shook global markets.

US Treasury Secretary Jacob Lew said early this week that the US government will hit the debt ceiling by mid-October and will be unable to borrow money to pay its bills.

Investors across the globe are eyeing the next policy meeting of the Federal Open Market Committee (FOMC) scheduled next month, with their focus squarely on the timing of tapering of Federal Reserve's bond purchases. The FOMC holds a two-day policy meeting on 17-18 September 2013 to decide on interest rates in the United States. 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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