Market hits nearly four week low

Key benchmark indices weakened and hit fresh intraday low in mid-morning trade. The S&P BSE Sensex and the 50-unit CNX Nifty, both, hit their lowest level in nearly four weeks. The Sensex was down 54.85 points or 0.27%, off close to 150 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 positive. IT stocks rose on weak rupee. National Aluminium Company gained on strong Q2 result. Shalimar Paints jumped on strong Q2 result.

The market edged higher in early trade. It regained positive terrain after slipping into the red and hitting fresh intraday low in morning trade. It weakened and hit fresh intraday low in mid-morning trade.

The rupee further weakened against the dollar. 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.

At 11:41 IST, the S&P BSE Sensex was down 54.85 points or 0.27% to 20,436.11. The index dropped 73.64 points at the day's low of 20,417.32 in mid-morning trade, its lowest level since 17 October 2013. The index rose 93.26 points at the day's high of 20,584.22 in early trade.

The CNX Nifty was down 13.20 points or 0.22% to 6,065.60. The index hit a low of 6,059 in intraday trade, its lowest level since 17 October 2013. The index hit a high of 6,108.70 in intraday trade.

The market breadth, indicating the overall health of the market, was positive. On BSE, 955 shares rose and 783 shares fell. A total of 118 shares were unchanged.

Among the 30-share Sensex pack, 15 stocks rose and rest of them fell. Sesa Sterlite (down 2.64%), Tata Motors (down 2.4%) and Tata Steel (down 1.75%), declined.

IT stocks rose on weak rupee. A weak rupee boosts revenue of IT firms in rupee terms as the sector derives a lion's share of revenue from exports. Infosys (up 0.11%), TCS (up 0.72%), Wipro (up 1.23%) and HCL Technologies (up 1.24%), gained.

National Aluminium Company rose 2.5% on strong Q2 result. The company's net profit surged 3648.33% to Rs 179.17 crore on 6.50% increase in total income to Rs 1861.07 crore in Q2 September 2013 over Q2 September 2012. The company announced the result after market hours on Monday, 11 November 2013.

Shalimar Paints jumped 7.47% on strong Q2 result. The company's net profit rose 48% to Rs 4.1 crore on 6% increase in revenue to Rs 122.20 crore in Q2 September 2013 over Q2 September 2012. The company announced the result after market hours on Monday, 11 November 2013.

Shalimar Paints said that the improvement in profit after tax (PAT) margins was driven by lower material costs as a percentage of sales and lower trade discounts, partially offset by higher employee costs and other operating expenses.

Mr Sameer Nagpal, MD & CEO, commented, "Our growth this quarter has been in line with expectations and reverses the de-growth trend of the last quarter. Our efforts to improve product mix are paying off and helping us build a platform for profitable scaling up of the business."

Mr Girish Jhunjhnuwala, Chairman, commented, "We are focussing on building a strong foundation for the company to ensure sustainable growth in future. We expect to see continuous improvement in sales growth and margin profile from here on."

In the foreign exchange market, the rupee edged lower against the dollar. The partially convertible rupee was hovering at 63.5525, compared with its close of 63.24 on Monday, 11 November 2013.

On macro front, the government will unveil industrial production data for September 2013 today, 12 November 2013. Industrial output is projected to jump 3.7% in September 2013, as per the median estimate of the poll carried out by Capital Market. Index of industrial production (IIP) rose 0.6% in August 2013, showing moderation in growth from 2.8% growth recorded in July 2013.

Data on inflation based on the consumer price index (CPI) for October 2013 will also be unveiled today, 12 November 2013. The headline CPI inflation (combined) is projected to increase to 10% in October 2013, as per the median estimate of the poll carried out by Capital Market. The headline CPI inflation (combined) for September 2013 was placed at 9.84% (y-o-y), which came in higher than 9.52% (y-o-y) seen in August 2013.

Most Asian stocks edged higher on Tuesday. Key benchmark indices in China, Taiwan, Japan and South Korea rose 0.23% to 2.06%. Key benchmark indices in Singapore, Hong Kong and Indonesia shed 0.07% to 0.45%.

President Xi Jinping and Chinese Communist Party leaders today, 12 November 2013 conclude a four-day gathering aimed at mapping out a blueprint for reform, after data yesterday showed the nation's broadest measure of new credit fell by more than estimated in October.

Trading in US index futures indicated that the Dow could gain 21 points at the opening bell on Tuesday, 12 November 2013. US stocks rose on Monday, with the Dow Jones Industrial Average extending a record, as investors awaited retailer earnings reports to gauge the strength of consumer demand and the likelihood of cuts to monetary stimulus.

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