Key benchmark indices edged lower amid initial volatility after Reserve Bank of India (RBI) Governor Raghuram Rajan in an interview to a newspaper retained hawkish monetary policy stance by saying that monetary policy should aim at bringing down inflation expectations. The market sentiment was also hit adversely after International Monetary Fund on Tuesday, 8 October 2013, forecast economic growth for India to dip to 4.25% in the year to 31 March 2014 (FY 2014). The barometer index, the S&P BSE Sensex, was down 103.91 points or 0.52%, up 52.74 points from the day's low and off 38.50 points from the day's high. The market breadth, indicating the overall health of the market, was negative.
Bank pivotals edged lower in early trade on Rajan's hawkish monetary policy stance. Tata Motors edged higher in early trade after the company on Tuesday announced the lunch of its Nano minicar range with a new model that can run on either petrol or compressed natural gas. DLF edged higher in early trade after the company on Tuesday said its subsidiaries have divested 60% stake in Star Alubuild Private (Star Alubuild), at an enterprise value of Rs 79.80 crore.
In the foreign exchange market, the rupee fell below 62 aginst the dollar. The partially convertible rupee was hovering at 62.155, weaker than its close of 61.7925/8025 on Tuesday, 8 October 2013.
Foreign institutional investors (FIIs) bought shares worth a net Rs 226.32 crore on Tuesday, 8 October 2013, as per provisional data from the stock exchanges.
At 9:29 IST, the S&P BSE Sensex was down 103.91 points or 0.52% to 19,879.70. The index lost 156.65 points at the day's low of 19,826.96 in early trade. The index fell 65.41 points at the day's high of 19,918.20 in opening trade.
The CNX Nifty was down 34.25 points or 0.58% to 5,894.15. The index hit a low of 5,877.10 in intraday trade. The index hit a high of 5,900.55 in intraday trade.
The market breadth, indicating the overall health of the market, was negative. On BSE, 409 shares declined and 395 shares gained. A total of 33 shares were unchanged.
The total turnover on BSE amounted to Rs 119 crore by 09:30 IST.
Among the 30-share Sensex pack, 24 stocks declined and rest of them gained. GAIL (India) (down 1.05%), Maruti Suzuki India (down 0.95%) and L&T (down 0.76%) edged lower from the Sensex pack.
Bank pivotals edged lower in early trade on Rajan's hawkish monetary policy stance. HDFC Bank (down 1.11%) and ICICI Bank (down 2.9%) declined.
The Reserve Bank of India said on Tuesday that banks will not be allowed to bid for term repos at or below the prevailing repo rate and it will conduct 7-day and 14-day repos on alternate Fridays starting 11 October 2013. RBI Governor Raghuram Rajan told a business news channel on Tuesday that term repos of 7-day and 14-day tenors announced by the bank late on Monday were meant as an effort to develop term money markets.
The Reserve Bank of India (RBI) in a surprise announcement on Monday evening announced measures to improve liquidity conditions in the banking system. The RBI announced a reduction in the marginal standing facility (MSF) rate by 50 basis points to 9% with immediate effect. The central bank has also decided to provide additional liquidity through term repos of 7-day and 14-day tenor for a notified amount equivalent to 0.25% of net demand and time liabilities (NDTL) of the banking system through variable rate auctions on every Friday beginning from 11 October 2013.
State Bank of India lost 1.46%. The state-run bank after market hours on Tuesday, 8 October 2013, announced revision in the interest rate on bulk deposits of Rs 1 crore and above. The interest rate for bulk deposits for the tenors 7 days to 60 days will be 8.5% per annum with effect from 10 October 2013.
Tata Motors rose 0.53%. The company on Tuesday, 8 October 2013, announced the launch of the new Tata Nano CNG emax. The Tata Nano CNG emax is powered by a fuel efficient, state-of-the-art engine, with CNG and Petrol bi-fuel system options. The car has the lowest carbon footprint of 75.6 g/km and is the most fuel efficient car in India with a mileage of 36 km/kg, Tata Motors said in a statement. The Tata Nano CNG emax will now be available across CNG markets like Delhi, Gujarat, parts of Maharashtra and Lucknow.
The Tata Nano CNG emax price range starts at Rs 2.45 lakhs, ex-showroom Ahmedabad for the Nano CX and goes upto Rs. 2.72 lakhs ex-showroom Ahmedabad for the Nano LX.
DLF rose 0.61%. The company after market hours on Tuesday, 8 October 2013 said its two subsidiaries viz. DLF Home Developers and DLF Projects have divested 60% stake in Star Alubuild (Star Alubuild), a subsidiary, at an enterprise value of Rs 79.80 crore. Star Alubuild specializes in designing, engineering, fabrication and installation of curtain walls for commercial buildings, retail malls and doors & windows for projects throughout India. Accordingly, Star Alubuild has ceased to be subsidiary of the company, DLF said. The transaction is a part of DLF's objective of divesting its non core assets.
Reliance Infrastructure shed 0.42%. A meeting of the board of directors of the company will be held today, 9 October 2013, to consider raising long term resources through borrowings in the domestic/international market for the purpose of refinancing of rupee debt, capital expenditure etc.
The International Monetary Fund (IMF) forecast economic growth for India to dip to 4.25% in the year to 31 March in its World Economic Outlook released on Tuesday, saying the economy would continue to underperform because of regulatory, infrastructural, and financing issues. The multilateral agency expects the country's growth to improve somewhat to 5% in the next fiscal year if exports strengthen and supply bottlenecks ease.
Asian markets were trading mostly lower on Wednesday, 9 October 2013, as the stalemate in Washington increased fears the world's largest economy might breach the federal debt ceiling, causing the Treasury to default on debt.. Key benchmark indices in China, Taiwan, Hong Kong and Indonesia fell by 0.08% to 0.49%. Key benchmark indices in Singapore and Japan rose by 0.41% to 0.63%.
US stocks fell on Tuesday hit by growing jitters over the budget impasse in Washington, with the partial government shutdown extending into a second week with few signs of a deal to end it or raise the nation's debt ceiling.
President Barack Obama on Tuesday warned of economic chaos if the US fails to pay its bills.
The Federal Open Market Committee (FOMC) holds a two-day policy meeting on 29-30 October 2013. The lack of data may make it harder for the Federal Reserve to assess the economy's strength as policy makers mull the timing of reductions in bond buying. Government data from payrolls to retail sales will be delayed as long as the shutdown continues. 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.
The International Monetary Fund on Tuesday cut its global growth forecast to 2.9% for 2013 from its July estimate of 3.1%. IFS sees a modest pickup next year to 3.6%.
Powered by Capital Market - Live News
