Tata Motors skids

A bout of volatility was witnessed as key benchmark indices trimmed losses after hitting fresh intraday low in morning trade. The barometer index, the S&P BSE Sensex, was down 103.51 points or 0.49%, up about 40 points from the day's low and off close to 50 points from the day's high. Weakness in Asian stocks hit sentiment on the domestic bourses adversely. In the foreign exchange market, the rupee edged lower against the dollar.

Capital goods pivotals declined for the second day in a row. Bank stocks fell across the board. Tata Motors extended initial losses. The market breadth, indicating the overall health of the market, was even.

Asian stocks edged lower on Wednesday, 11 December 2013, on speculation a US budget agreement will boost prospects of tapering the Federal Reserve's stimulus program. The US central bank currently buys bonds worth $85 billion a month in a bid to hold interest rates low and encourage economic growth in the world's biggest economy. Fed's bond-buying program has been a source of liquidity for most Asian and emerging markets this year.

The market edged lower in early trade on weak Asian stocks. A bout of volatility was witnessed as key benchmark indices trimmed losses after hitting fresh intraday low in morning trade.

At 10:20 IST, the S&P BSE Sensex was down 103.51 points or 0.49% to 21,151.75. The index fell 144.30 points at the day's low of 21,110.96 in morning trade, its lowest level since 6 December 2013. The index declined 54.75 points at the day's high of 21,200.51 in early trade.

The CNX Nifty was down 28.20 points or 0.45% to 6,304.85. The index hit a low of 6,286.70 in intraday trade, its lowest level since 6 December 2013. The index hit a high of 6,313.25 in intraday trade.

The market breadth, indicating the overall health of the market, was even. On BSE, 833 shares rose and an equal number of shares dropped. A total of 130 shares were unchanged.

From the 30-share Sensex pack, 22 stocks fell and rest rose. ONGC (down 1.16%), Hero MotoCorp (down 1.14%) and Dr Reddy's Laboratories (down 1.05%) edged lower from the Sensex pack.

Tata Motors fell 2.66%, with the stock extending initial losses.

Capital goods pivotals declined for the second day in a row. Bhel fell 1.87%.

Shares of engineering and construction major L&T lost 1.7%. The company on Tuesday, 10 December 2013, said its subsidiary -- L&T Shipbuilding -- has bagged orders valued at $154 million for six specialized commercial vessels in Q3 December 2013 so far.

Bank stocks fell across the board. AXIS Bank (down 1.04%), ICICI Bank (down 1.07%) and HDFC Bank (down 1.29%) declined.

Among PSU bank stocks, Canara Bank (down 1.95%), Union Bank of India (down 1.14%), Bank of India (down 0.73%), and Punjab National Bank (down 1.54%) dropped.

State Bank of India (SBI) dropped 1.15%. The state-run bank early this week said that the Government of India (GoI) has accorded its approval to the bank to raise Rs 9576 crore of equity during the current financial from the market by way of Qualified Institutions Placement (QIP) as per law with the condition that the Gol holding shall not come down below 58%. The GoI has also accorded its approval to SBI to increase its "Issued Capital" by Rs 11576 crore in accordance with Section 5(2) of SBI Act, 1955, subject to requisite approvals.

United Breweries rose 2.36% to Rs 794.55 after Dutch beer maker Heineken International BV, on Tuesday, 10 December 2013, hiked its stake in United Breweries for an estimated Rs 275 crore. According to the information available with the bourses, Heineken International BV acquired a total of 35.58 lakh shares, amounting to 1.35% stake, of United Breweries through open market. The shares were purchased, from Citicorp Finance (India) on an average price of Rs 772.90, valuing the transaction at Rs 275 crore. As on 30 September 2013, Heineken International BV held 4.27 lakh shares, equivalent to 0.16% holding, in United Breweries, while Heineken UK, held 84.89 lakh shares, amounting to 3.21% stake, in the Vijay Mallya-led company.

In the foreign exchange market, the rupee edged lower against the dollar on speculation a US budget agreement will boost prospects of tapering the Federal Reserve's stimulus program. The partially convertible rupee was hovering at 61.305, compared with its close of 61.04/05 on Tuesday, 10 December 2013.

On macro front, the government will unveil industrial production data for October 2013 tomorrow, 12 December 2013. Industrial production rose 2% in September 2013, showing increase in growth from 0.4% growth recorded in August 2013.

Data on inflation based on the general consumer price index (CPI) for November 2013 will also be unveiled tomorrow, 12 December 2013. The CPI inflation (combined) for October 2013 stood at 10.09% (y-o-y) higher than 9.84% (y-o-y) seen in September 2013.

The Reserve Bank of India (RBI) announces next Mid-Quarter Review of Monetary Policy for 2013-14 on 18 December 2013. The Third Quarter Review of Monetary Policy for 2013-14 is scheduled 28 January 2014.

The Asian Development Bank (ADB) on Wednesday kept its growth forecast for India at 4.7% for this year, and sees the country growing at 5.7% in 2014. The Manila-based bank slightly raised its forecast for China this year and the next, aided by the impact of government reforms and better prospects for key trading partners. The bank lifted its 2013 forecast for China to 7.7%, from 7.6% in October. It now sees 2014 growth at 7.5% rather than 7.4%. However, the ADB lowered estimates for Southeast Asia this year and in 2014, in the wake of a strong typhoon in the Philippines and political uncertainties in Thailand. The bank kept its growth forecast for developing Asia at 6% this year and 6.2% next year.

Asian stocks edged lower on Wednesday, 11 December 2013, on speculation a US budget agreement will boost prospects of tapering the Federal Reserve's stimulus program. Key benchmark indices in Taiwan, South Korea, Indoensia, Singapore, China, Japan and Hong Kong were off 0.34% to 1.24%. Fed's bond-buying program has been a source of liquidity for most Asian and emerging markets this year.

Trading in US index futures indicated that the Dow could gain 6 points at the opening bell on Wednesday, 11 December 2013. US stocks fell on Tuesday as investors weighed federal budget negotiations and better-than-estimated economic data to gauge the timing of any Federal Reserve stimulus cuts. The US budget deal, worked out between chief negotiators Senator Patty Murray and Representative Paul Ryan, would set spending at about $1.01 trillion in 2014, higher than the $967 billion required in a 2011 budget accord. A partial shutdown in October lasted for 16 days because lawmakers couldn't agree on how to fund the government.

Meanwhile, the latest data showed job openings in the US climbed to a five-year high in October, indicating employers were confident about demand even as Washington's budget impasse shuttered parts of the federal government. Another report showed wholesale trade sales and inventories increased more than economists forecast.

The Federal Open Market Committee (FOMC) holds a two-day policy meeting on interest rates in the United States on 17-18 December 2013. The US central bank currently buys bonds worth $85 billion a month in a bid to hold interest rates low and encourage economic growth in the world's biggest economy. Minutes of the Fed's October meeting released on 20 November 2013 showed officials may reduce their $85 billion a month of bond buying if the economy improves as anticipated.

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