Key benchmark indices edged lower, with a lion's shares of the losses materializing during the last one hour or so of trade. The barometer index, the S&P BSE Sensex, lost 255.69 points or 1.22%, off close to 260 points from the day's high and up about 55 points from the day's low. The Sensex and the 50-unit CNX Nifty, both, hit their lowest level in nearly one week. The market breadth, indicating the overall health of the market, turned negative from positive in late trade. Indian stocks dropped due to caution ahead of the release of the minutes from the US Federal Reserve's last meeting, possibly providing clues to the timing of its plan to slow monetary stimulus to the US economy. 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 minutes of the Fed's 29-30 October 2013 meeting will be released later in the global day today, 20 November 2013. In the foreign exchange market, the rupee edged lower against the dollar on demand for greenbacks by state-run oil refiners and on weakness in domestic equities.
Indian stocks snapped three-day winning streak today, 20 November 2013. From a recent low of 20,194.40 on 13 November 2013, the Sensex had garnered 696.42 points or 3.44% in three trading sessions to settle at 20,890.82 on Tuesday, 19 November 2013. The index has fallen 529.39 points or 2.5% in November so far (till 20 November 2013). The Sensex has garnered 1,208.42 points or 6.22% in calendar 2013 so far (till 20 November 2013). From a 52-week low of 17,448.71 on 28 August 2013, the Sensex has risen 3,186.42 points or 18.26%. From a record high of 21,321.53 on 3 November 2013, the Sensex has fallen 686.40 points or 3.21%.
Coming back to today's trade, index heavyweight and cigarette major ITC edged lower in volatile trade. Dabur India fell after a block deal on BSE. Index heavyweight Reliance Industries (RIL) edged lower in choppy trade. Banking pivotals declined. Jet Airways (India) edged higher in choppy trade after the company's board approved issue and allotment of shares on preferential basis to Abu Dhabi based Etihad Airways, thereby giving Etihad 24% equity in the Indian private carrier. IT stocks dropped.
The S&P BSE Sensex lost 255.69 points or 1.22% to settle at 20,635.13, its lowest closing level since 14 November 2013. The index lost 310.88 points at the day's low of 20,579.94 in late trade. The index rose 4.48 points at the day's high of 20,895.30 in mid-afternoon trade.
The CNX Nifty lost 80.45 points or 1.3% to 6,122.90, its lowest closing level since 14 November 2013. The index hit a low of 6,106.95 and a high of 6,204.35 in intraday trade.
The BSE Mid-Cap index fell 0.1%. The BSE Small-Cap index gained 0.23%. Both the indices outperformed the Sensex.
The BSE Metal index (up 0.16%), BSE Power index (down 0.29%), BSE Realty index (down 0.44%), BSE PSU index (down 0.57%), BSE FMCG index (down 0.88%), BSE IT index (down 1.03%), BSE HealthCare index (down 1.06%), BSE Oil & Gas index (down 1.15%), BSE Capital Goods index (down 1.17%), and BSE Teck index (down 1.21%), and outperformed the Sensex.
The BSE Bankex (down 1.76%), BSE Consumer Durables index (down 1.63%), and BSE Auto index (down 1.23%), and underperformed the Sensex.
The total turnover on BSE amounted to Rs 2126 crore, higher than Rs 1963 crore on Tuesday, 19 November 2013.
The market breadth, indicating the overall health of the market, turned negative from positive in late trade. On BSE, 1,268 shares declined and 1,247 shares rose. A total of 143 shares were unchanged.
Among the 30-share Sensex pack, 27 stocks declined and only three of them gained.
Index heavyweight and cigarette major ITC fell 0.8% to Rs 320.80 in volatile trade. The stock hit a high of Rs 325.75 and low of Rs 320.05.
Dabur India fell 1.34% to Rs 157.80. A block deal of 3.5 lakh shares was struck on the counter at Rs 157.50 per share at 12:49 IST on BSE today, 20 November 2013.
Index heavyweight Reliance Industries (RIL) lost 2.06% to Rs 858.65. The stock hit high of Rs 882.20 and low of Rs 857.25.
IT stocks dropped. Wipro (down 1.02%) and TCS (down 0.22%) declined.
IT major Infosys fell 1.4% to Rs 3,395.50. The stock had hit a 52-week high of Rs 3,447.90 in intraday trade on Tuesday, 19 November 2013.
Bank pivotals dropped. HDFC Bank fell 2.02%.
ICICI Bank lost 3.48% to Rs 1,044.95. ICICI Bank on Monday, 18 November 2013, said that the bank acting through its Dubai branch, priced an issuance of 5.5 year fixed rate notes of an aggregate principal amount of $750 million. The notes were sold under the Rule 144A/Reg S format. The notes carry a coupon of 4.8% and were offered at an issue price of 99.609. The announcement was made after market hours on Monday, 18 November 2013.
State Bank of India fell 2.23%
The Reserve Bank of India has reportedly asked state-run lenders to start offering loans to self-help groups of women at discounted interest rates under a government program announced in February.
Bharat Heavy Electricals (Bhel) fell 0.39%. Bhel said during trading hours on Tuesday, 19 November 2013, that it received a major order from NTPC for supply and installation of the main plant package for a power project in Uttar Pradesh, involving one thermal power generating unit of 500 megawatts (MW). Valued at Rs 1300 crore, the order for the supply and installation of the steam generator, steam turbine generator and electrics package for the upcoming 500 MW Feroze Gandhi Unchahar Thermal Power Project (TPP), was received from NTPC BHEL Power Projects (NBPPL), a joint venture between NTPC and Bhel.
L&T dropped 1.77%.
Auto stocks edged lower. Tata Motors shed 1.28%. The company is reportedly planning to launch a new hatchback and a sub-4 metre sedan powered by an all-new 1.2 litre turbocharged petrol engine in 2014 to cash in on the popularity of petrol cars. These two new products will be the first few major product offerings from Tata Motors in the last 3-4 years since the launch of the Aria crossover in 2010-11, the media report added.
Maruti Suzuki India declined 1.91%. M&M dropped 0.44%.
Shares of two-wheeler makers declined. Hero MotoCorp (down 2.07%) and Bajaj Auto (down 1.97%), fell.
Hindalco Industries lost 2.5% to Rs 120.90, with the stock sliding on profit booking after a recent rally. The stock had rallied 11.51% in four trading sessions to settle at Rs 124 on Tuesday, 19 November 2013, from a recent low of Rs 111.20 on 12 November 2013.
Shares of pharmaceutical firm Wyeth rose by maximum permissible 20% upper circuit at Rs 776.80. Pfizer jumped 5.17% to Rs 1,415.80 after hitting a 52-week high of Rs 1,523 in intraday trade. Both these companies have announced scheduling of separate board meeting on 23 November 2013 to consider merger of the two pharmaceutical companies. The announcement was made before market hours today, 20 November 2013.
Ranbaxy Laboratories (Ranbaxy) dropped 1.81%. The company during market hours today, 20 November 2013, said it is celebrating its 20th anniversary in Ukraine. Establishing its operation in the Ukraine market in 1993, Ranbaxy is today the No. 1 player in the target market segment with key brands such as Cifran (Ciprofloxacin), Zanocin (Ofloxacin) and Ketanov (Ketorolac) and a market share of 10.3% as per Morion, MAT Q3, 2013.
The Ukraine pharmaceutical retail market is estimated at around $3.7 billion (Morion, MAT Q3, 2013) and is growing at a CAGR of around 15%.
Arun Sawhney, CEO & Managing Director, Ranbaxy said: "Ranbaxy has been providing high quality, affordable generic medicines to the citizens of Ukraine for the last two decades, thereby supporting the Government to bring down healthcare costs. We remain committed to the Ukraine market and its people and will continue to operate from our paradigm of Quality and Patients First".
Alok Batra, MD, Ranbaxy Ukraine said: "The Ukraine pharmaceutical market is driven by generics and there is immense potential for growth. We have strong professional team with established brands in the market and most of brands rank amongst the top three in their respective segments. In the coming years, we will be introducing more products in the CVS, GI, OTC, Anti-Infectives etc. segments to benefit doctors and patients in Ukraine".
Many other pharma shares declined. Cipla (down 1.82%), Dr Reddy's Laboratories (down 1.07%), Sun Pharmaceutical Industries (down 1.42%), Lupin (down 1.07%), and Glenmark Pharmaceuticals (down 1.77%), declined.
PSU OMCs edged lower in choppy trade after Oil Minister Veerappa Moily said that the Centre will likely free up diesel pricing from government control over the next six months with gradual price increases. HPCL (down 1.24%), Indian Oil Corporation (down 1.85%) and BPCL (down 2.82%), edged lower.
Currently, state-run oil refining-cum-marketing companies (PSU OMCs) sell diesel at state-fixed discounted rates. Earlier this year, the government allowed them to increase the price by about 50 paise per month as part of a plan to gradually remove the subsidies given on the fuel. Still, the companies sell each liter of diesel at a loss of about Rs 9, Mr. Moily told reporters today, 20 November 2013. But that is significantly lower compared with a loss of Rs 14 per litre earlier this year, he added. Mr. Moily's comments indicate the government may take new measures to eliminate subsidies in the coming months, such as allowing the companies to increase the price by a bigger margin every month.
Such a move would help reduce the government's fuel subsidy, thereby improving the government's finances. It would also help PSU OMCs as the government doesn't fully compensate them for their revenue loss, and state-run oil producers who currently need to give deep discounts on the crude oil they supply to PSU OMCs. Increasing the price of diesel at this time will be tricky for the government with general elections just a few months away. Higher diesel prices will fan inflation. Also, the fuel is used by farmers, who form a big chunk of voters in India, to run their water pumps to irrigate crops. Mr. Moily said he wasn't worried about any political repercussions of freeing up diesel pricing.
Adani Ports and Special Economic Zone (APSEZL) advanced after credit rating firm ICRA upgraded the long-term rating for the Rs 800-crore long term bank facility of Adani Petronet (Dahej) Port (APPPL). The stock was up 0.91%. Shares of Petronet LNG rose 0.28%. APPPL is a special purpose joint venture company between the Adani Ports and Special Economic Zone and Petronet LNG (PLL). It was incorporated on in January 2003 for the purpose of financing, development, operation and maintenance of Solid Cargo Port Terminal (SCPT) at Dahej. APSEZL holds 74% stake and PLL holds the reamining 26% stake in APPPL (as per the shareholding patter as on 31 December 2010).
ICRA said that the rating upgrade takes into account the strong ramp-up of cargo for the year FY 2013, with the port handling around 7.5 million tonnes of cargo, significantly higher than the full year cargo of FY 2012 of 2.14 million tonnes. The growth in volume has resulted in a sharp growth in top line, along with healthy profitability levels. The positive outlook factors in ICRA's expectation that the company's cargo volumes would continue to show healthy growth in the near term notwithstanding weak macro-economic environment, because of its competitive position. The port continues to benefit from mechanization, leading to high discharge rates in the range of over 40,000 tpd, along with adequate back-up facility. ICRA also notes the company has availed foreign currency loans, and has also opted for Principal only Swap (POS) on the underlying Rupee Term Loans, since it has natural hedge because of dollar denominated marine income. Though this has benefitted the company in terms of lowering its cost of borrowing, it exposes the company to timing risk in relation to long term foreign currency loan and derivatives, ICRA said.
The rating continues to factor in the favorable characteristics of the port location, which provides proximity to cargo consumption centres in Northern and North-Western India (primarily Gujarat, Madhya Pradesh, Maharashtra & Rajasthan); the deep draft enabling handling of large vessels; and the all-weather conditions. The rating also factors in the strength of the principal promoter APSEZL as well as the presence of a strong entity like PLL as a 26% equity partner, with adequate board representation, thereby strengthening the governance structure for the company, ICRA said.
Jet Airways (India) edged higher in choppy trade after the company's board approved issue and allotment of shares on preferential basis to Abu Dhabi based Etihad Airways, thereby giving Etihad 24% equity in the Indian private carrier. The stock rose 1.54% to Rs 325.50. The scrip hit high of Rs 338.80 and low of Rs 320.55. Jet Airways (India)'s board of directors at its meeting held today, 20 November 2013, approved the issue and allotment of 2.72 crore shares at Rs 754.7361607 per share to Abu Dhabi based Etihad Airways on a preferential basis in terms of the investment agreement entered between Etihad and the company on 24 April 2013 and amendments thereto and pursuant to the approval of the shareholders on 24 May 2013 by way of special resolution. The announcement was made during trading hours. Jet Airways will mop up Rs 2057.66 crore from the preferential allotment of shares to Etihad. Etihad will hold 24% of the post issue paid up share capital of the company, Jet Airways (India) said.
Jet Airways (India) also said that at a board meeting held today, 20 November 2013, Mr. James Hogan and Mr. James Rigney, both nominees of Etihad Airways PJSC, have been appointed as additional directors on the board of the Jet Airways (India).
Jet Airways (India) after market hours said that the board of directors of the company has approved the sale of the Jet Privilege Frequent Flyer Programme business of the company to its subsidiary, Jet Privilege as a going concern on a slump sale basis. The company and Etihad Airways PJSC have also agreed to make equity investment in Jet Privilege following which Jet Privilege will become 50.1% owned by Etihad Airways PJSC (with Jet Airways holding approximately 49.9%).
The consummation of the transaction is subject to the approval of the Competition Commission of India and will only be effected after receipt of such approval, Jet Airways said.
Sugar shares rose on reports that the Centre has convened a high-level meeting today, 20 November 2013, which is expected to discuss a relief-package for the crisis-ridden sugar industry in Uttar Pradesh (UP) and Maharashtra, which could include interest-free loans from banks.
Bajaj Hindusthan (up 13.85%), Dhampur Sugar Mills (up 18.98%), Sakthi Sugars (up 17.67%), Balrampur Chini Mills (up 9.64%), Triveni Engineering & Industries (up 12.09%), Shree Renuka Sugars (up 8.08%), Dwarikesh Sugar Industries (up 18.32%) and Oudh Sugar Mills (up 15.41%) surged.
Sugar industry in Uttar Pradesh and Maharashtra, the two largest producing states, have not yet started crushing sugarcane in the new crop year, which started in October, citing mounting cane arrears, huge unsold stocks and the inability to pay high price to farmers.
Meanwhile, sugar manufacturers based in Uttar Pradesh (UP) have announced suspension of operations, following an impasse over announcement of state sugarcane price. Sugar mills officially declared that the sugar industry of the state would stand non-operative till the Rangarajan formula is adopted to fix the cane price.
Bombay Dyeing & Manufacturing Company jumped 4.68% after the company denied a media report that the Bombay High Court had directed the company to hand over Wadala land to BMC and Mhada. Bombay Dyeing & Manufacturing Company (Bombay Dyeing) issued the clarification during trading hours today, 20 November 2013.
A media report today, 20 November 2013, suggested that in a bid to end the stalemate over development of Bombay Dyeing's mill properties at Wadala and Lower Parel, the Bombay High Court, in an interim order on Tuesday, 19 November 2013, asked the textile major to hand over around 66,651 square metres of land to the BMC and Mhada. Bombay Dyeing, however, clarified that no such interim order has been passed and the report is false and misleading. The Bombay High Court has posted the matter for orders today, 20 November 2013. Hence, the news item is totally speculative and unsubstantiated, Bombay Dyeing said in a statement. As and when the Bombay High Court passes any order in the matter, the firm will notify the exchanges about the same, the company said.
Amara Raja Batteries jumped 3.63% to Rs 331.05 after a foreign brokerage raised its price target on the stock to Rs 376 from Rs 350 earlier.
Reliance Broadcast Network rose by maximum permissible 5% upper circuit after the company said that credit rating agency CARE has assigned rating of CARE AAA (SO) to long term bank facilities of Rs 12 crore of the company. The announcement was made after market hours on Tuesday, 19 November 2013.
Credit rating agency CARE has assigned rating of CARE AAA (SO) to long term bank facilities of Rs 12 crore of Reliance Broadcast Network based on the credit enhancement in the form of unconditional and irrevocable corporate guarantee provided by Reliance Capital (RCL) for ensuring the timely servicing of the bank facilities of Reliance Broadcast Network. RCL is a financial services company of the Anil Ambani-led Reliance group.
In the foreign exchange market, the rupee edged lower against the dollar on demand for greenbacks by state-run oil refiners and on weakness in domestic equities. The partially convertible rupee was hovering at 62.58, compared with its close of 62.36/37 on Tuesday, 19 November 2013.
Bond prices dropped on concerns that higher diesel prices will fan inflation. Oil Minister Veerappa Moily today, 20 November 2013, said that the Centre will likely free up diesel pricing from government control over the next six months with gradual price increases. The yield on most traded federal paper, 8.28% GS 2027, was hovering at 9.0262%, higher than its close of 8.9942% on Tuesday, 19 November 2013. The yield on 10-year benchmark federal paper, 7.16% GS 2023, was hovering at 9.0355%, higher than its close of 9.0093% on Tuesday, 19 November 2013. Bond yield and bond prices are inversely related.
Increasing the price of diesel at this time will be tricky for the government with general elections just a few months away. Higher diesel prices will fan inflation. Also, the fuel is used by farmers, who form a big chunk of voters in India, to run their water pumps to irrigate crops. Mr. Moily said he wasn't worried about any political repercussions of freeing up diesel pricing.
On the political front, an unprecedented 78.50% of the nearly 1.40 crore electors voted in the second phase of polling for the Assembly elections in Chhattisgarh on Tuesday, 19 November 2013. The first phase of elections in the 90-member assembly on 11 November 2013 had seen polling of 75.53%.
European stocks edged lower on Wednesday, 20 November 2013, ahead of a busy day for US economic data and minutes of the October US Federal Reserve meeting. Key benchmark indices in UK, Germany and France were off 0.08% to 0.27%.
Asian shares declined on Wednesday, 20 November 2013, on caution ahead of the release of the minutes from the US Federal Reserve's last meeting, possibly providing clues to the timing of its plan to slow monetary stimulus to the US economy. Key benchmark indices in Taiwan, Japan, Indonesia, Singapore and South Korea fell by 0.25% to 1.08%. Key benchmark indices in China and Hong Kong rose 0.18% to 0.62%.
China's central bank today, 20 November 2013, elaborated on plans to free up foreign-exchange controls. The People's Bank of China will "basically" end normal intervention in the currency market and broaden the yuan's daily trading limit, Governor Zhou Xiaochuan said, without giving a time frame. The daily range will be widened in an "orderly way" as China seeks to enhance the currency's two-way flexibility, Zhou wrote in an article in a guidebook explaining reforms outlined last week following a Communist Party meeting.
Bank of Japan Governor Haruhiko Kuroda and his board gather for a two-day policy meeting starting today, 20 November 2013.
Trading in US index futures indicated that the Dow could fall 15 points at the opening bell on Wednesday, 20 November 2013. US stocks dropped on Tuesday, 19 November 2013, as investors weighed rising valuations and disappointing earnings forecasts.
Later in the day, the Federal Reserve is slated to release the minutes from its last meeting, possibly providing clues to the timing of its plan to slow monetary stimulus to the US economy. The minutes will be from the October 29-30 meeting.
Federal Reserve Chairman Ben S. Bernanke on Tuesday, 19 November 2013, said the central bank's main interest rate will probably remain near zero for a considerable time after asset purchases end. Bernanke said the Fed is committed to highly accommodative policies, echoing recent comments from other Fed officials including Janet Yellen, who has been nominated to succeed him. The labor market has shown meaningful improvement since the Fed's bond-buying program started, Bernanke said in remarks prepared for a speech to economists in Washington. A "preponderance of data" would be needed to begin removing accommodation, he said. Benchmark interest rates may remain low perhaps well after the jobless rate falls below the Fed's 6.5% threshold, he said.
The US central bank buys $85 billion of Treasuries and mortgage-backed securities each month to put downward pressure on borrowing costs.
The Organization for Economic Cooperation and Development cut its global growth forecasts on Tuesday, 19 November 2013, citing a slowdown in developing nations. The world economy will probably expand 2.7% this year and 3.6% in 2014, instead of the 3.1% and 4% predicted in May, the Paris-based OECD said in a semi-annual report.
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