Two-wheeler makers skid as PSU OMCs may hike petrol price

A bout of volatility was witnessed as key benchmark indices trimmed initial losses. The S&P BSE Sensex was down 41.58 points or 0.22%, off close to 35 points from the day's high and up about 70 points from the day's low. The market breadth, indicating the overall health of the market, was negative. Weakness in Asian stocks weighed on sentiment. Index heavyweight and cigarette maker ITC edged lower. Another index heavyweight Reliance Industries (RIL) gained. Capital goods pivotals edged higher on renewed buying.

Shares of two wheeler makers extended initial losses on reports oil marketing companies, which are under tremendous pressure on account of weakening rupee, are looking to increase petrol prices by Rs 1.5-2/litre from Friday, 14 June 2013.

The market edged lower in early trade. The S&P BSE Sensex hit over 7-week low. The 50-unit CNX Nifty hit its lowest level in nearly 8 weeks. The market weakened once again after recovering from initial losses to hit fresh intraday high in morning trade.

Foreign institutional investors (FIIs) sold shares worth a net Rs 885.85 crore on Tuesday, 11 June 2013, as per provisional data from the stock exchanges.

At 10:20 IST, the S&P BSE Sensex was down 41.58 points or 0.22% to 19,101.42. The index declined 110.92 points at the day's low of 19,032.08 in early trade, its lowest level since 22 April 2013. The index fell 7.80 points at the day's high of 19,135.20 in morning trade.

The CNX Nifty was down 6.90 points or 0.12% to 5,781.90. The index hit a low of 5,756.10 in intraday trade, its lowest level since 18 April 2013. The index hit a high of 5,789.95 in intraday trade.

The market breadth, indicating the overall health of the market, was negative. On BSE, 707 shares fell and 521 shares rose. A total of 56 shares were unchanged.

Among the 30-share Sensex pack, 16 stocks fell and rest of them rose. TCS, Coal India and Maruti Suzuki India dropped by 1.14% to 1.69%.

Titan Industries tumbled 8.19%, with the stock extending Tuesday's 10.86% losses triggered by the company's announcement that the Reserve Bank of India (RBI) has clarified that all imports of gold for domestic consumption, either through banks, nominated agencies or directly can be made only with 100% cash margin. RBI has also clarified that credit of any kind from suppliers or bullion banks for import of gold for domestic use is prohibited, Titan said during trading hours on Tuesday, 11 June 2013. This will affect import of gold through all non consignment routes like gold on lease/loan, Titan Industries said. Titan imports gold for its retail gold jewellery business.

Titan said it had sought some clarifications on gold imports after the Reserve Bank of India issued a notification on 4 June 2013 on changes to the current terms governing import of gold in India.

Sun TV Network (down 3.77%), MMTC (down 3.75%), JSW Steel (down 3.73%) and Wockhardt (down 3.38%) were key losers from BSE 'A' group.

Index heavyweight and cigarette maker ITC declined 1.92%.

Another index heavyweight Reliance Industries (RIL) gained 0.8%.

Capital goods pivotals edged higher on renewed buying. L&T and Bhel rose by 0.09% to 0.74%.

Two wheeler makers extended initial losses on reports oil marketing companies, which are under tremendous pressure on account of weakening rupee, are looking to increase petrol prices by Rs 1.5-2/litre with effect from Friday, 14 June 2013. Hero MotoCorp and Bajaj Auto shed by 1.61% to 2.31%.

The Reserve Bank of India (RBI) on Tuesday took measures to increase the supply of dollars in the market including asking exporters to realise their dollar earnings and get them back into the country within one year to support a plunging rupee. The RBI also hastened the process of dollar inflows through online payment channels by increasing the amount that exporters can bring back to $10,000 from $3000. The new norms will be applicable with immediate effect, the Reserve Bank of India said. The rupee hit record low of 58.98 per dollar in intraday trade on Tuesday.

Dr. Raghuram G. Rajan, Chief Economic Adviser, Ministry of Finance, on Tuesday, 11 June 2013, said that the government continues to undertake measures to ensure the Current Account Deficit (CAD) is safely financed. Dr. Rajan issued the statement after a recent steep slide in rupee against the dollar. "In the coming weeks, we will be recommending the policies to enhance foreign direct investment (FDI) limits in a number of areas", he said. All this will help not just in the short term objective of financing the CAD but also in the longer term objective of ensuring sustainable growth, Dr. Rajan said.

Industrial production is seen rising 2.4% in April 2013, as per a poll of economist carried out by Capital Market. The Central Statistics Office (CSO) will unveil industrial output data for April 2013 today, 12 June 2013. Industrial production rose 2.5% in March 2013, compared with a revised growth of 0.46% in February 2013. Industrial production rose 1% for the year ended 31 March 2013 (FY 2013).

Consumer price inflation is seen easing further in May 2013. Inflation based on the combined consumer price index (CPI) for urban and rural India is seen easing further to 9% in May 2013, according to a poll of economist carried out by Capital Market. The combined consumer price inflation for rural and urban India eased to 9.39% in April 2013 from 10.39% in March 2013. The CSO will unveil data on the combined consumer price index for urban and rural India today, 12 June 2013.

Asian stocks fell on Wednesday as Japanese machinery orders declined more than expected and concern grew that central banks from Tokyo to Washington are increasingly reluctant to add stimulus. Key benchmark indices in Indonesia, Japan, Singapore and South Korea shed by 0.2% to 1.45%. Stock markets in Hong Kong, Taiwan and the Philippines were closed for holidays. Mainland Chinese markets are closed from Monday, 10 June 2013 till today, 12 June 2013, for the Dragon Boat Festival.

Japan's machinery orders, an indicator of future capital spending dropped 8.8% in April, more than estimated.

Trading in US index futures indicated that the Dow could gain 18 points at the opening bell on Wednesday, 12 June 2013. US stocks dropped on Tuesday after the Bank of Japan's status-quo policy decision revived concerns about the winding down of central bank stimulus measures. The restraint in Japan also raised questions about the US Federal Reserve's future direction of policy measures ahead of next week's Federal Open Market Committee meeting.

On Tuesday, Germany's constitutional court began hearing debate on whether the European Central Bank's Outright Monetary Transactions -- a yet-to-be-used program to buy bonds from struggling euro-bloc nations -- is allowable under German law. A ruling isn't expected until later this year, however.

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