Concerns about global liquidity pulled Indian stocks lower in choppy trading session. The S&P BSE Sensex was provisionally down 165.88 points or 0.85%, off about 90 points from the day's high and up close to 145 points from the day's low. The market breadth, indicating the overall health of the market, was negative. Indian stocks snapped two day winning streak today, 8 July 2013, as weakness in Indian rupee against the dollar hit investor sentiment.
FMCG stocks rose after the latest data showed a further pick-up in sowing of kharif crops. Some PSU stocks surged. Bharti Airtel reversed intraday gains after a Zambia Information and Communications Technology Authority spokeswoman reportedly said Zambia has begun criminal proceedings against all the three mobile phone operators in the country including Bharti Airtel alleging poor quality mobile phone services. In metal stocks, Tata Steel hit 52-week low.
The market edged lower in early trade as Asian stocks fell after stronger than expected US job data fuelled expectations the US Federal Reserve will slow the pace of monetary stimulus later this year. Weakness continued in morning trade. The Sensex continued to hover in negative terrain in mid-morning trade. The market trimmed intraday losses in early afternoon trade. Key benchmark indices pared intraday losses in afternoon trade after European market opened higher. The market once again weakened in mid-afternoon trade.
Weakness in Indian rupee against the dollar kept investor sentiment edgy. The rupee hit record low against the dollar mirroring losses in most emerging market currencies after strong US employment data raised fears that the US Federal Reserve would roll back its monetary stimulus. The rupee was trading at 60.88 versus dollar, compared with Friday's close of 60.225/235. The rupee hit a record low below 61 against the dollar in intraday deals.
Indian government bonds came under selling pressure on fears that foreign investors would continue to pull out of Indian debt to chase higher bond yields in the US. The yield on the most traded 8.2% GS 2025 was at 7.7178%, higher that its close at 7.6731% on Friday, 5 July 2013. Bond prices and yields move in opposite directions. The Fixed Income Money Market and Derivatives Association of India, which along with the RBI oversees bond markets, said on its website that it had removed price filters on bonds for Monday's session.
As per provisional figures, the S&P BSE Sensex was down 165.88 points or 0.85% to 19,329.94. The index declined 309.90 points at the day's low of 19,185.92 in early trade, its lowest level since 3 July 2013. The index fell 73.13 points at the day's high of 19,422.69 in early trade.
The CNX Nifty was down 53.25 points or 0.91% to 5,814.65, as per provisional figures. The index hit a low of 5,775.55 in intraday trade, its lowest level since 3 July 2013. The index hit a high of 5,833.85 in intraday trade.
The total turnover on BSE amounted to Rs 1549 crore, lower than Rs 1626.52 crore on Friday, 5 July 2013.
The market breadth, indicating the overall health of the market, was negative. On BSE, 1,237 shares fell and 1,030 shares rose. A total of 106 shares were unchanged.
From the 30-share Sensex pack, 21 stocks fell and rest of them rose. ONGC (down 3.5%), HDFC (down 2.89%) and Tata Motors (down 2.57%), edged lower.
Hindalco Industries rose 0.9%, with the stock reversing intraday losses.
FMCG stocks rose after the latest data showed a further pick-up in sowing of kharif crops. Hindustan Unilever (up 0.16%), Marico (up1 19%), Dabur India (up 0.7%), Tata Global Beverages (up 1.83%), and Colgate Palmolive India (up 1.88%), gained. FMCG companies derive substantial revenue from rural sales.
The Centre on Friday, 5 July 2013, said that as per reports received from state governments, the total sown area in the country stands at 401.69 lakh hectare (lh) as on 5 July 2013, compared with 215.07 lh at this time last year.
The India Meteorological Department said on Friday, 5 July 2013, that the cumulative seasonal rainfall for the country as a whole from 1-30 June 2013 has been 32% above the Long period average (LPA) with excess/normal rainfall activity over 92% area of the country. For the country as a whole, cumulative rainfall during this year's monsoon has so far upto 3 July been 27% above the LPA. The cumulative seasonal rainfall activity continued to be excess over all the four homogeneous regions except east & northeast India, where it was 37% below LPA.
Index heavyweight and Cigarette market ITC rose 1.29%, with the stock extending intraday gains.
Some PSU stocks surged. State Trading Corporation of India (up 15.75%), Dredging Corporation of India (up 5.8%), Hindustan Copper (up 3.94%), and HMT (up 3.94%), surged.
Bharti Airtel fell 0.83% to Rs 293.10, with the stock reversing intraday gains after a Zambia Information and Communications Technology Authority spokeswoman reportedly said Zambia has begun criminal proceedings against all the three mobile phone operators in the country including Bharti Airtel alleging poor quality mobile phone services.
Shares of Bharti Airtel had risen as much as 4.14% at the day's high of Rs 307.80, in intraday trade after the company announced during market hours today, 8 July 2013, that it has retired equivalent debt from the proceeds of Rs 6796 crore of the preferential allotment in June 2013 of 5% equity shares in Bharti Airtel at Rs 340 per share to Qatar Foundation Endowment. Bharti Airtel said that this significant debt reduction will result in an improvement in the capital structure and balance sheet leverage for the company. In June 2013, Bharti had issued 19.98 crore new equity shares, representing 5% equity stake in the company, to Qatar Foundation Endowment for a total consideration of Rs 6796 crore.
Tata Steel declined 1.59% to Rs 260.60. The stock hit 52-week low of Rs 258.25 in intraday trade today, 8 July 2013.
MMTC was locked at 5% lower circuit at Rs 83.90, also its 52-week low, with the stock extending recent steep slide triggered by government concluding the divestment of 9.33% stake in the firm at a huge discount to the stock's ruling market price. On 13 June 2013, the Government of India (GoI) sold 9.33% stake in MMTC via Offer for Sale (OFS) through stock exchanges mechanism at an indicative price of Rs 60.86 per share, at a discount of 71.21% to the closing price of the stock of Rs 211.45 on 12 June 2013.
Gitanjali Gems was locked at 5% lower circuit at Rs 174, also its 52-week low, after credit rating agency CARE on Friday, 5 July 2013, revised the ratings assigned to the bank facilities/instruments of Gitanjali Gems (GGL) and its subsidiaries/step-down subsidiaries and placed them on credit watch. The revision in the ratings takes into account stressed liquidity position of GGL as evidenced by full utilisation of the existing working capital limits which along with the recent RBI guidelines on gold import for domestic purpose would further put pressure on its liquidity position, CARE said. CARE further added that it has also taken into account the significant erosion in share price and market capitalisation of the company in the last two weeks of June 2013 which in CARE's opinion would have weakening effect on GGL's financial flexibility and liquidity. The rating has been placed on credit watch due to lack of adequate information in-order to take a final view, the rating agency added.
Prime Minister Dr. Manmohan Singh will meet the captains of Indian industry on 29 July 2013 to review steps to revive the economy, a statement from the prime minister's office (PMO) said. The discussion will cover measures to correct the Current Account Deficit, measures to revive industrial growth, depreciation of the rupee and its impact on trade and industry, skill development and ways of accelerating it and development of the Delhi-Mumbai Industrial Corridor (DMIC), the Chennai-Bangalore Industrial Corridor (CBIC), and the Amritsar-Delhi-Kolkata Industrial Corridor (ADKIC).
European markets edged higher on Monday, 8 July 2013, as investors waited for Alcoa Inc. to kick off the US earnings season later in the global day. Key benchmark indices in UK, France and Germany were up 1.09% to 2.16%.
Asian stocks dropped on Monday, 8 July 2013, after a better-than-forecast monthly US jobs report fueled speculation that the Federal Reserve may begin reducing stimulus this year. Key benchmark indices in China, Hong Kong, Indonesia, Singapore, Japan, South Korea and Taiwan shed by 0.45% to 3.68%.
Chinese stocks were also hit by concerns that Beijing won't ease policies despite slowing growth. In a statement issued on Friday, 5 July 2013, elaborating on its pursuit of economic restructuring and reforms, the State Council -- China's cabinet -- indicated it would strengthen supervision of wealth-management products and emphasized financial-market stability, but it also hinted it would loosen controls on banks' interest rates only gradually. The State Council also suggested tighter controls over credit to industries with excess production capacity.
Trading in US index futures indicated that the Dow could gain 68 points at opening bell on Monday, 8 July 2013. US stocks surged on Friday, 5 July 2013, after government data showed the nation added more jobs than forecast last month. The non-farm payrolls increased by 195,000 in June and the unemployment rate held steady at 7.6% as more people entered the workforce. Job growth in previous months also was revised higher.
Federal Reserve Chairman Ben Bernanke on 19 June 2013 said that the central bank may taper the pace of its bond purchases, currently set at $85 billion a month, as early as this year if the economy continues to improve in line with its forecasts.
The minutes of Federal Open Market Committee's (FOMC) policy meeting held on 19 June 2013, will be released on Wednesday, 10 July 2013. The minutes may provide more insight into the Fed's outlook on monetary stimulus. Bernanke is also due to deliver a speech on that day.
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