Sensex, Nifty hit lowest level in almost 3 weeks

Key benchmark indices extended initial losses and hit fresh intraday low in morning trade. The barometer index, the S&P BSE Sensex and the 50-unit CNX Nifty, both, hit their lowest level in nearly three weeks. The Sensex was down 209.12 points or 1.06%, off about 135 points from the day's high and up close to 20 points from the day's low. The market breadth, indicating the overall health of the market, was negative. Indian stocks dropped today, 30 September 2013, as Asian stocks fell and as US index futures indicated a weak opening of US stocks later in the global day on concern the US government is headed for a shutdown amid a budget stalemate. In the foreign exchange market, the rupee dropped against the dollar.

Bharti Airtel extended intraday losses. Some pharma stocks bucked weak market. Bank stocks extended Friday's losses triggered by Reserve Bank of India (RBI) governor Raghuram Rajan's comments that the RBI is still worried about high inflation, even when taking out volatile food prices.

The market edged lower in early trade on weak Asian stocks. The market extended initial losses and hit fresh intraday low in morning trade. The barometer index, the S&P BSE Sensex and the 50-unit CNX Nifty, both, hit their lowest level in nearly three weeks.

The market sentiment was hit adversely by data showing that foreign funds were net sellers of Indian stocks on Friday, 27 September 2013. Foreign institutional investors (FIIs) sold shares worth a net Rs 244.95 crore on Friday, 27 September 2013, as per provisional data from the stock exchanges.

In the foreign exchange market, the rupee weakened against the dollar , tailing global risk-off sentiment on a potential shutdown of the US government. The partially convertible rupee was hovering at 62.74, compared with its close of 62.51/52 on Friday, 27 September 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 Reserve Bank of India (RBI) will unveil data on India's current account deficit and data on balance of payments at 17:00 IST today, 30 September 2013.

At 10:20 IST, the S&P BSE Sensex was down 209.12 points or 1.06% to 19,518.15. The index declined 232.03 points at the day's low of 19,495.24 in morning trade, its lowest level since 10 September 2013. The index fell 75.96 points at the day's high of 19,651.31 in opening trade.

The CNX Nifty was down 62.15 points or 1.07% to 5,771.05. The index hit a low of 5,763.80 in intraday trade, its lowest level since 10 September 2013. The index hit a high of 5,810.20 in intraday trade.

The market breadth, indicating the overall health of the market, was negative. On BSE, 854 shares fell and 583 shares rose. A total of 83 shares were unchanged.

Among the 30-share Sensex pack, 22 stocks fell and rest of them rose. Tata Steel (down 3.77%), Bhel (down 3.96%) and NTPC (down 2.3%), declined.

Bharti Airtel dropped 3.83%, with the stock extending intraday losses.

Bank stocks extended Friday's losses triggered by Reserve Bank of India (RBI) governor Raghuram Rajan's comments that the RBI is still worried about high inflation, even when taking out volatile food prices. Among private bank stocks, Kotak Mahindra Bank (down 1.49%), HDFC Bank (down 1.73%), Yes Bank (down 2.66%), Axis Bank (down 2.66%) and ICICI Bank (down 2.96%), declined.

State Bank of India (SBI) declined 2.11%. The bank announced after market hours on Friday, 27 September 2013, that it has repurchased a principal amount of $147 million of $1 billion 3.25% bonds due 2018 (the 2018 Bonds). The 2018 Bonds were issued by SBI on 18 April 2013 and are listed on the Singapore Exchange Securities Trading. The repurchase of the Bond took place between 26 August 2013 and 26 September 2013. The bank is in the process of cancelling the repurchased 2018 Bonds and the aggregate outstanding principal amount of the 2018 Bonds following such cancellation will be $853 million, SBI said in a statement.

Among other PSU bank stocks, Punjab National Bank, Canara Bank, Bank of India, Union Bank of India, and Bank of Baroda declined 2.49% to 3.52%.

ING Vysya Bank jumped 5.58% on reports ING Groep NV is seeking a buyer for its 43% stake in the bank. According to the media report, ING Groep NV, the biggest Dutch financial-services company, is said to be seeking a buyer for its 43% stake in ING Vysya Bank, as the prospects of limited purpose banking in India and tough competition in retail market make it rethink its local strategy.

ING may exit the domestic banking business comprising retail, corporate and treasury, to focus on corporate banking, the report said.

Report suggested that although ING Vysya may be an attractive asset for every private sector bank because of its clean books, 575 branches and loyal customers, Kotak Mahindra Bank seems to be best placed to benefit from the acquisition of ING Vysya. However, the report added that Kotak Mahindra Bank is not negotiating for a takeover.

As on 3 July 2013, ING Groep NV held 43.55% in ING Vysya Bank, through ING Mauritius Holdings and ING Mauritius Investments I. ING Mauritius Holdings held 33.85% stake and ING Mauritius Investments I held 9.69% stake in ING Vysya Bank.

Some pharma stocks bucked weak market. Cipla (up 0.2%) and Sun Pharmaceutical Industries (up 0.31%), gained.

Lupin rose 1.19%, with the stock extending initial gain after the company after market hours on Friday, 27 September 2013, announced that it has received final approval for its Vyfemla Tablets (Norethindrone and Ethinyl Estradiol Tablets USP, 0.4mg/0.035 mg) from the United States Food and Drugs Administration (USFDA) to market a generic version of Warner Chilcott Company, LLC's Ovcon 35 Tablets (Norethindrone and Ethinyl Estradiol Tablets USP, 0.4mg/0.035 mg). Lupin's US subsidiary Lupin Pharmaceuticals Inc. shall commence marketing the product shortly.

Lupin's Vyfemla Tablets (Norethindrone and Ethinyl Estradiol Tablets USP, 0.4 mg/0.035 mg) is the AB rated generic equivalent of Warner Chilcott's Ovcon 35 Tablets and is indicated for the prevention of pregnancy in women who elect to use this product as a method of contraception.

As per IMS MAT March 2013 data, Warner Chilcott Company, LLC.'s Ovcon 35 Tablets had annual sales of approximately $22.3 million in the US.

Ranbaxy Laboratories rose 0.55% after the company after market hours on Friday, 27 September 2013, said that ICRA has assigned the rating of [ICRA]A1+ (pronounced as A One Plus) to the company's commercial paper (CP)/short term debt (STD) programme for an enhanced amount of Rs 800 crore. Earlier CP/STD programme of the company for Rs 1200 crore was also assigned the same rating i.e. [ICRA]A1+.

Instruments with [ICRA]A1+ rating are considered to have very strong degree of safety regarding timely payment of financial obligations. Such instruments carry lowest credit risk, Ranbaxy Lab said.

But, Dr Reddy's Laboratories fell 0.97%.

The government said on Friday that it will allow unlisted Indian companies to list directly and raise capital overseas to retire debt or for acquisitions or operational needs abroad. The move comes at a time when the government is battling to trim the current account deficit and attract dollar inflows.

A finance ministry statement said unlisted Indian companies would be allowed for two years, on a pilot basis, to list and raise capital abroad without the requirement of prior or subsequent listing in the country. "At present, unlisted companies that are incorporated in India are not allowed to directly list in overseas markets without prior or simultaneous listing in Indian markets," the statement said. After the initial two year period, the impact of this arrangement will be reviewed. While raising resources abroad, the listing company shall be fully compliant with the FDI policy in force, the finance ministry said. In case funds raised are not utilized abroad such companies would be asked to remit the money back to India within 15 days and these funds would be parked only in AD category banks recognized by RBI.

Asian stocks fell on Monday, 30 September 2013, on concern the US government is headed for a shutdown amid a budget stalemate. Key benchmark indices in Japan, Hong Kong, Taiwan, Indonesia, Singapore and South Korea fell 0.46% to 1.6%. China's Shanghai Composite rose 0.61%

A Chinese manufacturing gauge unexpectedly rose less than a preliminary estimate in September, highlighting challenges for Premier Li Keqiang in sustaining a rebound from a two-quarter economic slowdown. The Purchasing Managers' Index from HSBC Holdings Plc and Markit Economics rose to 50.2 in September from 50.1 in August. The final number was less than last week's 51.2 preliminary reading. A similar gauge from the government is due tomorrow, 1 October 2013.

China opened a new free trade zone in Shanghai on Sunday in what has been hailed as potentially the boldest reform in decades, and gave fresh details on plans to liberalise regulations governing finance, investment and trade in the area. The Shanghai FTZ, which covers an area of nearly 29 sq km on the eastern outskirts of the commercial hub, was approved by China's State Council, or cabinet, in July. Some Chinese and foreign firms are already setting up subsidiaries in the zone. A total of 25 companies so far have been approved to start operations in a variety of sectors, alongside 11 financial institutions, most of which are domestic banks but including the mainland subsidiaries of Citibank and DBS.

Trading in US index futures indicated that the Dow could fall 102 points at the opening bell on Monday, 30 September 2013. US stocks Friday closed a downcast week on a sour note, declining amid relentless partisan squabbling over a budget bill to avert a partial US government shutdown.

Republican-led House voted Sunday to delay President Barack Obama's health-care law by one year. If the two sides can't agree by the Tuesday-morning deadline, thousands of government employees will be unable to work. There's one more vote before the shutdown would take place.

Even if Congress resolves the budget fight by the Oct. 1 deadline, US lawmakers would move to the next fiscal dispute over raising the $16.7 trillion debt ceiling.

The Federal Open Market Committee (FOMC) holds a two-day policy meeting on 29-30 October 2013. On 18 September 2013, the Fed surprised economists and investors with its decision to delay scaling back its stimulus amid concerns about the strength of the economic recovery.

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