A bout of volatility was witnessed in late trade as the key benchmark indices trimmed losses after hitting fresh intraday low. The 50-unit CNX Nifty regained the psychological 6,000 mark after falling below that level in late trade. The barometer index, the S&P BSE Sensex, was provisionally down 372.73 points or 1.81%, up 73.17 points from the day's low and off 316.86 points from the day's high. The market breadth, indicating the overall health of the market, was weak. The market sentiment was hit adversely after minutes from the Federal Reserve's last meeting signaled US stimulus may be reduced in coming months. 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. In the foreign exchange market, the rupee edged lower against the dollar due to broad dollar gains after minutes from the US Federal Reserve's October policy meeting showed the US central bank considering an imminent slowing of its bond-buying program.
Index heavyweight and cigarette major ITC edged lower in choppy trade. IT major and index heavyweight Infosys trimmed intraday losses in late trade. Index heavyweight Reliance Industries extended intraday losses in late trade. Future Retail slumped after the National Stock Exchange after trading hours on Wednesday, 20 November 2013, said it would exclude the company from its derivatives segment. Kirloskar Oil Engines jumped after four block deals were executed on the scrip on BSE.
Key benchmark indices edged lower in early trade as Asian stocks fell after minutes from the Federal Reserve's last meeting signaled US stimulus may be reduced in coming months and as a preliminary gauge showed that China's manufacturing activity decelerated this month. The market extended initial losses in morning trade. The Sensex and the 50-unit CNX Nifty, both, hit one-week low. Weakness continued on the bourses in early afternoon trade. The Sensex and the 50-unit CNX Nifty, both, trimmed losses after hitting their lowest level in more than a week in afternoon trade. Weakness continued on the bourses in mid-afternoon trade as European stocks dropped in early trade there. A bout of volatility was witnessed in late trade as the key benchmark indices trimmed losses after hitting fresh intraday low. The Nifty regained the psychological 6,000 mark after falling below that level in late trade.
As per provisional closing, the S&P BSE Sensex was down 372.73 points or 1.81% to 20,262.40. The index lost 445.90 points at the day's low of 20,189.23 in mid-afternoon trade, its lowest level since 13 November 2013. The index fell 55.87 points at the day's high of 20,579.26 in opening trade.
The CNX Nifty was down 114.20 points or 1.87% to 6,008.70. The index hit a low of 5,985.40 in intraday trade, its lowest level since 13 November 2013. The index hit a high of 6,097.35 in intraday trade.
The market breadth, indicating the overall health of the market, was weak. On BSE, 1,551 shares declined and 923 shares gained. A total of 137 shares were unchanged.
The total turnover on BSE amounted to Rs 1803 crore, lower than Rs 2137 crore on Wednesday, 20 November 2013.
HDFC (down 3.53%), Sesa Sterlite (down 3.29%) and L&T (down 2.83%), edged lower from the Sensex pack.
Index heavyweight and cigarette major ITC fell 2.29% to Rs 313.60. The stock hit high of Rs 320.25 and low of Rs 311.10.
Index heavyweight Reliance Industries (RIL) lost 1.86% to Rs 847.45, with the stock extending fall in late trade. The stock hit high of Rs 861 and low of Rs 845.25.
IT major and index heavyweight Infosys lost 1.28% to Rs 3,359. The stock hit high of Rs 3,402 and low of Rs 3,316.05. The stock had hit a 52-week high of Rs 3,447.90 in intraday trade on 19 November 2013.
Bank pivotals declined. HDFC Bank fell 1.65%.
ICICI Bank fell 1.8%. ICICI Bank early this week 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.
State Bank of India slipped 1.7%
Capital goods pivotals dropped. Bhel (down 2.59%) and L&T (down 2.83%) declined.
Future Retail extended initial losses after the National Stock Exchange after trading hours on Wednesday, 20 November 2013, said it would exclude the company from its derivatives segment. The stock lost 7.56%. In a circular, the National Stock Exchange (NSE) said trading in futures and options (F&O) contracts of Future Retail would not be available with effect from 31 January 2014. NSE added that the existing unexpired contracts of expiry months November 2013, December 2013 and January 2014 would continue to be available for trading till their respective expiry and new strikes would also be introduced in the existing contract months.
Kirloskar Oil Engines jumped 11.08% to Rs 164.45 on high volume of 28.84 lakh shares. A block deal of 6.40 lakh shares was hit on the counter at Rs 163.50 per share at 12:37 IST on BSE today, 21 November 2013. Second block deal of 9.60 lakh shares was executed at Rs 163.50 per share at 12:37 IST on BSE today, 21 November 2013. Third block deal of 3.20 lakh shares was executed at Rs 161.85 per share at 12:38 IST on BSE today, 21 November 2013. Fourth block deal of 8.50 lakh shares was executed at Rs 163.50 per share at 15:00 IST on BSE today, 21 November 2013.
Sterling Biotech was locked at 20% upper circuit at Rs 8.89 on BSE after the company said that at the meeting of the holders of the existing bonds held on Wednesday, 20 November 2013, the bond holders have passed and approved, amongst others, the extraordinary resolution to approve exchange and substitution of the existing bonds with and for the Zero Coupon Convertible Bonds due 2018 and the terms and conditions thereof. The bond holders have also agreed and approved that the conversion price of the Bonds due 2018 shall be Rs 60 per share, subject to Reserve Bank of India, Foreign Investment Promotion Board and such other regulatory approvals, if any, as may be required. The bond holders have also approved and agreed to suspend all litigations in India and UK till January 2014 and they had also agreed to withdraw the litigations in India and UK on completion of the exchange and substitution of the existing bonds with and for the Zero Coupon Convertible Bonds due 2018, Sterling Biotech said after trading hours on Wednesday, 20 November 2013.
In the foreign exchange market, the rupee edged lower against the dollar due to broad dollar gains after minutes from the US Federal Reserve's October policy meeting showed the US central bank considering an imminent slowing of its bond-buying program. The partially convertible rupee was hovering at 62.92, compared with its close of 62.57/58 on Wednesday, 20 November 2013.
India will close the special concessional swap rate offered to lenders raising funds abroad on 30 November 2013, according to the text of the speech Finance Minister P. Chidambaram gave in Singapore today, 21 November 2013. The window for the foreign currency non-resident (bank), or FCNR (B), is due to close on 30 November 2013, although some banks have pushed for an extension. "Two months ago, the Reserve Bank opened a special window to attract more funds into FCNR (B), and I am happy to report that, as I speak to you today, the scheme, which will close on November 30, 2013, has received $16 billion," Chidambaram said according to a copy of his speech, released in New Delhi by the finance ministry.
Indian government bond prices dropped after minutes from the US Federal Reserve's October policy meeting showed the US central bank considering an imminent slowing of its bond-buying program. The yield on most traded federal paper, 8.28% GS 2027, was hovering at 9.0725%, higher than its close of 9.0262% on Wednesday, 20 November 2013. The yield on 10-year benchmark federal paper, 7.16% GS 2023, was hovering at 9.0859%, higher than its close of 9.0355% on Wednesday, 20 November 2013. Bond yield and bond prices are inversely related.
The annual headline inflation is expected to moderate to near 5% as there was reasonable price stability in some major commodities, the finance minister said on Thursday, 21 November 2013. P. Chidambaram made the comment in a lecture at the National University of Singapore. Government data on 14 November 2013 showed that the headline inflation had accelerated to an eight-month high of 7% in October, mainly driven by higher fuel and manufactured goods prices. Chidambaram also said the fiscal deficit target of 4.8% of gross domestic product in 2013/14 would not be breached under any circumstances.
Fitch Ratings said in a report published on Wednesday, 20 November 2013, that the spillover effects of a weaker rupee have not significantly hurt India's creditworthiness, and hence would not trigger any rating action as this point. India's ratings already incorporate both the sovereign's vulnerabilities and tolerance for volatility in global financial market conditions, Fitch said.
The rating agency said that India's economy has not lost much momentum, with both agriculture and exports remaining resilient and providing a cushion. Fitch therefore expects the economy to recover with real GDP forecast to rise 4.8% in FY 2014 (financial year ending March 2014) and 5.8% in FY 2015, compared with a 5% rise in FY 2013. The modest economic recovery, however, will continue to undermine India's banking sector, which is facing a combination of weakening asset quality, eroding profit and declining capital. Nonetheless, these factors are likely to have only a moderate effect on the banking sector's ability to supply credit to the economy. Inflation has risen only moderately, despite higher import prices stemming from the weaker rupee. The Reserve Bank of India (RBI) has also signalled that it has started to place a greater focus on capping CPI. The current account deficit is narrowing, following measures to curb gold imports, a weaker exchange rate, and softer domestic demand. Fitch forecasts the current account deficit to decline to 3.1% of GDP in FY 2014 (versus 4.8% in FY 2013). This fall, however, will not be enough to shield India from further pressures related to the eventual start of Fed tapering.
India's budget remains under pressure as the central government's (CG) fiscal deficit in the first six months of FY 2014 stood at 76% of the full-year target, Fitch said. The authorities have indicated that they are still committed to lowering the fiscal deficit to 4.8% of GDP (versus 4.9% in FY 2013). To achieve this, the CG is likely to clamp down heavily on expenditures in 2H FY 2014.
Fitch rates India at "BBB-minus", the lowest investment grade rating. It revised its outlook for the country to "stable" from "negative" in June.
European stocks dropped on Thursday, 21 November 2013, after minutes from the US Federal Reserve's latest meeting showed the central bank could start to taper its asset purchases at one of the next meetings. Data from China showing slower growth in the manufacturing sector also hampered the investing mood. Key benchmark indices in UK, Germany and France were off 0.17% to 0.73%.
German private-sector activity grew in November at its fastest rate in almost a year. Data provider Markit said Thursday a preliminary reading of its composite Purchasing Managers' Index for Germany rose to 54.3 in November from 53.2 in October, putting it further above the 50 threshold that denotes month-to-month growth. The expansion was fastest in the services sector, the index for which climbed to 54.5, while the index for manufacturing--the heart of Germany's export-driven economy--edged up to 52.5, its strongest reading in over two years. New orders taken by businesses across the economy also rose at the fastest rate in over two years.
France's economy worsened in November, a survey suggested Thursday, as activity in the private sector ended a brief period of growth to fall at the fastest rate in five months. Data provider Markit said a preliminary reading of its composite Purchasing Managers' Index for France fell to 48.5 in November, underneath the 50 threshold that denotes month-to-month growth. The index in September and October had shown gradually rising activity among manufacturers and service providers, with readings of 50.5 in both months. Incoming business fell, as did employment and firms' confidence about future activity levels. Activity fell across both the manufacturing and services industries.
Asian stocks fell on Thursday, 21 November 2013, after minutes from the Federal Reserve's last meeting signaled US stimulus may be reduced in coming months and as a preliminary gauge showed that China's manufacturing activity decelerated this month. Key benchmark indices in Taiwan, Hong Kong, China, Singapore, Indonesia and South Korea fell by 0.04% to 1.28%. Japan's Nikkei 225 index rose 1.92%.
China manufacturing activity growth slipped to a two-month low as export orders swung to a decline, according to preliminary results from HSBC's monthly gauge of the sector, released Thursday. The "flash" version of the HSBC/Markit China manufacturing Purchasing Managers' Index eased to 50.4, compared to last month's 50.9 reading.
China may not be able to end its reliance on investment and exports for growth over the next three to five years despite plans for economic restructuring, an adviser to the central bank said on Thursday, 21 November 2013. Speaking at a financial seminar, Song Guoqing said that China's high savings rate is hindering the government's efforts to boost domestic consumption and reduce the role of exports and investment in driving growth. China's high savings rate is partly due to an aging population combined with a lack of a reliable social safety net, he noted.
The Bank of Japan kept its policy rates and asset-purchasing program unchanged Thursday, as widely expected. The decision, which came just three weeks after the central bank's previous policy statement, was unanimous. It also made no changes to its assessment of the economy, which it said "has been recovering moderately" as "exports have generally been picking up." It also cited gains for businesses' fixed investment and corporate profits.
Trading in US index futures indicated that the Dow could advance 19 points at the opening bell on Thursday, 21 November 2013. US stocks fell on Wednesday, 20 November 2013, after the minutes of the Federal Reserve's October meeting minutes signaled the central bank is on track to slow down its $85 billion a month bond bond-buying program that has boosted the equity market. Central bank policy makers "generally expected that the data would prove consistent with the committee's outlook for ongoing improvement in labor-market conditions and would thus warrant trimming the pace of purchases in coming months," according to minutes of the Federal Open Market Committee's Oct. 29-30 meeting.
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