Key benchmark indices dropped in choppy trade, with investor sentiment hit by a weak rupee. The S&P BSE Sensex reached its lowest closing level in 5-1/2 weeks. The 50-unit CNX Nifty settle at 6-week low. The Sensex lost 90.26 points or 0.46%, off close to 280 points from the day's high and up about 30 points from the day's low. The market breadth, indicating the overall health of the market, was negative.
Indian stocks fell for the second straight day today, 7 June 2013. From a recent high of 19,568.22 on 5 June 2013, the Sensex has declined 138.99 points or 0.71% in two trading sessions. The Sensex has lost 331.07 points or 1.67% in this month so far (till 7 June 2013). The Sensex has gained 2.52 points or 0.01% in calendar 2013 so far (till 7 June 2013). From a 52-week high of 20,443.62 on 20 May 2013, the Sensex has fallen 1,014.39 points or 4.96%. From a 52-week low of 16,485.02 on 8 June 2012, the Sensex has surged 2,944.21 points or 17.85%.
Coming back to today's trade, Dr Reddy's Laboratories scaled record high. IT stocks rose on a weak rupee. Index heavyweight Reliance Industries (RIL) reversed intraday gains triggered by its telecom unit, Reliance Jio Infocomm, and Reliance Communications announcing a pact for sharing of RCom's nationwide telecom tower infrastructure.
Bank stocks extended intraday losses in late trade. Auto stocks declined. Metal stocks also fell. Car major Maruti Suzuki India declined as the company suspended production for a day at both of its plants in Manesar and Gurgaon today, 7 June 2013, to adjust inventory levels in response to falling sales.
The rupee hit one-year low below the 57 mark and was trading at 57.05 against the dollar versus its previous close of 56.84/85. A weak rupee makes imports costlier, stoking inflation concerns, thereby capping the Reserve Bank of India's scope to extend monetary easing and counter the slowest economic growth in a decade.
The S&P BSE Sensex lost 90.26 points or 0.46% to settle at 19,429.23, its lowest closing level since 29 April 2013. The index lost 121.98 points at the day's low of 19,397.51 in late trade. The index jumped 192.06 points at the day's high of 19,711.55 in afternoon trade, its highest level since 4 June 2013.
The CNX Nifty lost 40.40 points or 0.68% to 5,881, its lowest closing level since 26 April 2013. The index hit a low of 5,871.30 in intraday trade. The index hit a high of 5,972.70 in intraday trade, its highest level since 4 June 2013.
The BSE Mid-Cap index fell 0.56% and underperformed the Sensex. The BSE Small-Cap index shed 0.1% and outperformed the Sensex.
The BSE IT index (up 1.59%), BSE Teck index (up 0.72%), BSE HealthCare index (down 0.04%) and BSE FMCG index (down 0.19%), outperformed the Sensex
The BSE Auto index (down 1.39%), BSE Realty index (down 1.36%), BSE Bankex (down 1.34%), BSE Power index (down 1.32%), BSE PSU index (down 1.26%), BSE Metal index (down 1.18%), BSE Capital Goods index (down 0.98%), BSE Consumer Durables index (down 0.95%) and BSE Oil & Gas index (down 0.89%), underperformed the Sensex.
The total turnover on BSE amounted to Rs 2258 crore, higher than Rs 1688.62 crore on Thursday, 6 June 2013.
The market breadth, indicating the overall health of the market, was negative. On BSE, 1,328 shares fell and 1,029 shares rose. A total of 165 shares were unchanged.
Among the 30-share Sensex pack, 22 stocks fell and rest of them rose.
Auto stocks declined. Car major Maruti Suzuki India declined 2.04%, with the stock extending initial losses. The company has suspended production for a day at both of its plants in Manesar and Gurgaon today, 7 June 2013, to adjust inventory levels in response to falling sales.
A firm yen also weighed on the Maruti counter as it could make imports of components costlier for the car major.
M&M and Tata Motors dropped by 1.58% to 2.27%.
Bank stocks fell across the board. Axis Bank, ICICI Bank, HDFC Bank and shed by 0.92% to 2.85%.
Among PSU bank stocks, Canara Bank, State Bank of India (SBI), Union Bank of India, Bank of India, Bank of Baroda and Punjab National Bank dropped by 1.27% to 4.27%.
Metal stocks also fell. Jindal Steel & Power, Sterlite Industries, Sail, Hindalco Industries and Tata Steel dropped by 0.73% to 2.28%.
Index heavyweight Reliance Industries (RIL) declined 0.97% with the stock reversing intraday gains. The company today, 7 June 2013, said that its telecom unit, Reliance Jio Infocomm, and Reliance Communications have signed a definitive agreement for sharing of RCom's nationwide telecom towers infrastructure. Under the terms of the agreement, Reliance Jio Infocomm will utilise upto 45,000 ground and rooftop based towers across RCom's nationwide network for the accelerated roll out of its state of the art 4G services. The deal is valued at about Rs 12000 crore.
The agreement provides for joint working arrangements to configure the scope of additional towers to be built at new locations to ensure deep penetration and seamless delivery of next generation services, RIL and RCom said. This agreement follows the inter-city optic fiber sharing agreement already signed in April 2013 as part of a comprehensive framework of business co-operation between Reliance Jio Infocomm and Reliance Communications.
Shares of Reliance Communication dropped in choppy trade. The stock was off 1.4% at Rs 116.40. The stock hit high of Rs 119.90 and low of Rs 115.55 so far during the day.
Bharti Airtel dropped 2.4%.
IT stocks rose on a weak rupee. Infosys, TCS and Wipro gained by 0.8% to 3.48%. A weak rupee boosts revenue of IT firms in rupee terms as the sector derives a lion's share of revenue from exports.
Mahindra Satyam rose 1.19% after the company said after market hours on Thursday, 6 June 2013, that it has won a new multiyear contract from Bridgestone Europe for its managed services. The company will work on SAP based mission critical applications for Bridgestone Europe. Mahindra Satyam has been working with Bridgestone since 2005 in providing IT application development and support services.
At the end of FY 2012-13, 23% of Mahindra Satyam's total earnings came from Europe. Europe is also a key market for the company in terms of banking, aerospace and defense, sales domains, Mahindra Satyam said.
Dr Reddy's Laboratories rose 2.82% to Rs 2,192.65. The stock hit record high of Rs 2,200 in intraday trade today, 7 June 2013.
Kansai Nerolac Paints lost 1.44% as the stock turned ex-dividend today, 7 June 2013, for dividend of Rs 11 per share for the year ended 31 March 2013.
Mahindra Lifespace Developers jumped 3.82% after the company's board recommended raising foreign institutional investors' investment limit in the paid up equity share capital of the company to 49% from 30%.
Shares of companies whose fortunes are linked to orders from Indian Railways edged higher. Kalindee Rail Nirman (Engineers), Kernex Microsystems (India) and Titagarh Wagons rose by 0.03% to 4.4%.
Shipping Corporation of India (SCI) jumped 4.54% after the company signed a Memorandum of Understanding with GAIL (India) for transportation of LNG sourced by GAIL from USA. Shares of GAIL (India) edged lower in choppy trade. The stock was down 1.18% at Rs 306.85. The stock hit high of Rs 313 and Rs 306.25. Under the MoU, both GAIL and SCI will cooperate for transportation of 5.8 million tonnes per annum (MTPA) of LNG being sourced by GAIL from Sabine Pass and Cove Point terminals in USA. The cooperation would include SCI assisting GAIL in the charter hiring of LNG ships and GAIL assigning step-in right to SCI in the ownership of LNG ships.
GAIL has signed a LNG sales and purchase Agreement with Cheniere Energy Partners, LP (Cheniere) to procure 3.5 MTPA of LNG from the latter's Sabine Pass Terminal in Louisiana, USA for a period of 20 years. GAIL has also signed a terminal service agreement with Dominion through GAIL Global (USA) LNG LLC for booking 2.3 MTPA liquefaction capacity in the Cove Point LNG liquefaction terminal project located at Lusby in the state of Maryland. As the agreements are on FOB basis, GAIL is required to make its own arrangements for transportation of LNG from these terminals. The transportation of LNG is expected to begin from mid-2017.
Capital goods pivotals reversed intraday gains. L&T declined 1.09%. The company on Thursday, 6 June 2013, said that its construction division won new orders worth Rs 2002 crore in various business segments in May and June 2013. L&T on Wednesday, 5 June 2013, said that a joint venture company viz. Larsen Toubro Arabia LLC, has achieved a major breakthrough in the Kingdom of Saudi Arabia by securing a large engineering, procurement and construction (EPC) project from the Saudi Arabian Oil Company (Saudi Aramco). The project is scheduled to be completed in 37 months.
State run power equipment maker, Bhel, dropped 1.25%.
Shares of organised retailers fell as the government said on Thursday in a clarification of rules announced last year that the foreign supermarkets entering India must invest in new supply chain infrastructure, such as warehouses and cold-storages, rather than buying existing assets. Trent, Future Retail and Shoppers Stop dropped 0.45% to 2.66%.
The government allowed global supermarket operators to enter India in September 2012, and stipulated at the time that at least 50% of the investment made by the foreign company must be in supply chain infrastructure.
The government said investments in the supply chain and logistics networks could be made in any Indian state, irrespective of whether the state supports the entry of foreign retailers. The government also said global retailers have to source 30% of their processed goods, not including fresh produce, from small industries and will only be allowed to sell these goods through retail stores, and not wholesale outlets.
European markets edged lower on caution ahead of the much anticipated nonfarm payrolls report from the US. Key benchmark indices in UK and Germany were down 0.31% to 0.68%. France's CAC 40 was flat.
German industrial production surged the most in more than a year in April as construction activity surged after an unusually long winter damped output. Production jumped 1.8% from March, when it gained 1.2%, the Economy Ministry in Berlin said today.
The European Central Bank (ECB) and the Bank of England (BoE) on Thursday, 6 June 2013, held their main interest rates at record lows, with the ECB saying data supports its forecast of a gradual economic recovery across the region. The ECB and BoE both held their benchmark interest rates at the record-low level of 0.5%.
Asian stocks fell on Friday as gains in yen weighed on Japanese shares and as investors awaited a US jobs report later in the global day. Key benchmark indices in Singapore, Japan, Indonesia, Taiwan and South Korea shed 0.01% to 2.72%.
Chinese stocks dropped ahead of a long weekend and before the release of a slew of economic data over the next three days, including monthly inflation and exports. Key benchmark indices in China and Hong Kong were off 1.21% to 1.39%. Mainland Chinese markets are closed from Monday, 10 June 2013 to Wednesday, 12 June 2013, for the Dragon Boat Festival.
Trading in US index futures indicated that the Dow could fall 23 points at the opening bell on Friday, 7 June 2013. US stocks ended higher on Thursday, snapping a two-session losing streak, as investors eagerly awaited Friday's May employment report for clues about monetary policy. Data showed that US jobless claims fell by 11,000 to 346,000 in the week ended June 1, essentially in line with expectations.
Federal Reserve Chairman Ben Bernanke said last month that the bank could start scaling back its aggressive easing program in coming months if data continue to improve.
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