The key benchmark indices remained weak in afternoon trade tracking subdued Asian stocks and lower US index futures. The BSE 30-share Sensex was down 287.45 points or 1.8%, up close to 50 points from the day's low and off close to 300 points from the day's high.
Index heavyweight Reliance Industries slumped close to 3% after one of the judges withdrew from the Supreme Court hearing on gas dispute, citing potential conflict of interest. Realty, FMCG, IT and banking stocks, too, edged lower. But telecom stocks rose. The market breadth was positive.
Intraday volatility was high. The market drifted lower in early trade on weak Asian stocks. The market cuts losses in mid-morning trade. However, the intraday recovery proved short-lived. The market tumbled to a fresh intraday low in early afternoon trade.
The government said today it will release monthly wholesale price index (WPI) for October on 12 November 2009 and there will be no more weekly headline inflation data. It said food article index rose 13.39% and the primary articles index rose 8.94% in the year to 24 October 2009. The fuel price index fell 6.2%
Planning Commission Deputy Chairman Montek Singh Ahluwalia on Wednesday said the government would push for reforms in the financial sector but said such a move would not jeopardise India's growth prospects. He also said food price inflation was a concern but it should moderate by the end of this year. Ahluwalia said the country would miss a target of 9% annual growth between 2007/08 and 2011/12 as the global slump and the weakest monsoon in four decades hit output. The planning commission plans to reset the target.
The economy is expected to expand by 6.3% in the year to March 2010, the Planning Commission said in a report on Wednesday. The plan panel expects wholesale price inflation to go beyond 4-5% by end of March 2010.
Earlier, Finance Minister Pranab Mukherjee said on Tuesday, 3 October 2009 that the government has to continue with its fiscal stimulus and is confident of attaining it medium-term fiscal targets. He said non-farm credit growth remained an area of concern and said banks have been told to enhance credit growth.
Comments by the Finance Minister on Tuesday that there are no immediate plans to place curbs on capital inflows, send equities surging on Wednesday, 4 November 2009. His comments have put to rest speculation of government clamping capital controls after a deluge of foreign portfolio inflows this year. Brazil, another emerging economy, had last month slapped a 2% tax on foreign investments into equities and fixed income instruments.
The Reserve Bank of India at its monetary policy review, on 27 October 2009, left its key rates unchanged, but raised the wholesale price-based inflation projection for end-March 2010 sharply to 6.5% with an upward bias, from 5 % earlier.
Meanwhile, the finance ministry has reportedly firmed up details of its budget announcement that listed companies will have to achieve at least 25% public holding in a phased manner, opening up the possibility of a plethora of equity offerings from such firms. Beginning 1 April 2010, those companies falling short of the set target would have to divest at least 5% stake within a year and a similar amount in the following year till they reach the threshold prescribed, reports suggest.
The HSBC Markit Business Activity Index, based on a survey of 400 firms, rose to a 13-month peak of 56.78 in October 2009 after having dropped to a three-month low of 54.37 in September 2009. The index has been above 50, which separates expansion from contraction, for six months. Before that, it shrank for six months, hitting a trough of 40.3 in February 2009.
The business expectations sub-index recorded its fastest expansion since March 2008, at 79.47 in October 2009, compared with 74.82 in September 2009. Better market conditions, promotional strategies and good reputations were the main reasons for the increased confidence, the survey said
Rising crude oil costs have raised India's subsidy burden but the government has not taken any decision to revise state-set fuel prices, Oil Secretary R.S. Pandey said on Wednesday
Asian stocks fell on Thursday weighed by Wall Street's weak finish overnight and as the US Federal Reserve's policy statement provided few fresh cues. Key benchmark indices in Hong Kong, Japan, South Korea, Singapore and Taiwan fell by between 0.66% to 1.75%. But China's Shanghai Composite rose 0.85%.
The Federal Open Market Committee left its target interest rate unchanged and maintained its language suggesting ultra-low rates would be maintained for an extended period. The result was widely expected. Earlier, some investors were worried the Fed's language would be more hawkish.
Trading in US index futures indicated Dow could fall 35 points at the opening bell on Thursday, 5 November 2009.
In US on Wednesday, the Dow Jones Industrial Average lost most of its intraday gains in the last half hour of trade and closed up just 0.2%. Stocks had opened higher earlier in the day as investors cheered some encouraging readings on the economy.
The Dow rose 30.23 points, or 0.3%, to 9,802.14. The S&P 500 index rose 1.09 points, or 0.1%, to 1,046.50. The Nasdaq Composite Index fell 1.80 points, or 0.1%, to 2,055.52.
The Fed specified for the first time that policy will stay unchanged as long as inflation expectations are stable and unemployment fails to decline. The Fed said household spending appears to be expanding but remains constrained by ongoing job losses, sluggish income growth, lower housing wealth, and tight credit.
In a statement, the Fed said the US economy had continued to pick up since its last meeting in September 2009, but it expressed concern the recovery was likely to be muted. The US central bank was more explicit than it had been previously on why it expects to be able to keep rates exceptionally low for a long time, citing the slack that has built up in the economy and the lack of an inflationary threat.
In another shift, the Fed said it would buy only about $175 billion of debt issued by federal housing agencies. It had planned to buy up to $200 billion to help keep mortgage costs low. The the Fed said it curtailed purchases because the supply of the debt was scarce.
In the latest economic data from the US, the ISM on Wednesday reported its gauge of the services sector dropped to 50.6 in October from 50.9 in September. The ADP reported that fewer jobs were lost in October than in previous months. ADP only estimates private sector jobs, not government jobs
The US government releases its official October employment report on Friday, 6 November 2009. The US unemployment rate is forecast at 9.9% in October 2009, slightly higher than 9.8% in September 2009, while non-farm payrolls are forecast to fall 175,000 from a drop of 263,000. But given the strong manufacturing data for the month which was released recently, the unemployment number could be better than expected
The European Central Bank (ECB) meets on Thursday, 5 November 2009. No rate change is expected and few expect it to offer clues on when it might change tack. The Bank of England (BOE) meets the same day and the market is waiting to see if it tops up its quantitative easing programme after the economy unexpectedly contracted between July-September 2009 period.
Governments and central banks around the world have injected trillions of dollars in the past year or so to pull the world out of a most severe recession since the 1930s Great Depression.
Meanwhile, policymakers from the Group of 20 club of rich and developing nations will gather in St Andrews, Scotland, on 6-7 November 2009 to follow up on agreements made at a leaders' summit in Pittsburgh in September 2009. The Chancellor, Alistair Darling, will host the meeting, with ministers acting on agenda items set for them at the Pittsburgh summit - economic recovery and finding funds to tackle climate change.
Closer home, the supply of paper by Indian firms appear limitless, raising concerns that additional share sales will suck liquidity from the secondary equity market. As per reports, Indian firms have garnered about $9 billion (Rs 32,400 crore at the current exchange rates) through sale of shares and convertible bonds to institutional buyers since April 2009. Indian companies are taking advantage of a surge in liquidity to recapitalize and fund capital expenditure after being starved of cash last year.
At 13:20 IST, the BSE 30-share Sensex was down 287.45 points or 1.8% to 15,625.18. The Sensex fell 347.24 points at the day's low of 15564.89 in early afternoon trade. The Sensex rose 14 points at the day's high of 15,926.13 in early trade.
The S&P CNX Nifty was down 76.40 points or 1.62% to 4634.40.
The market breadth, indicating the overall health of the market was positive. The breath was negative in early trade. On BSE, 1288 shares advanced as compared with 1152 that declined. A total of 90 shares remained unchanged.
From the 30 share Sensex pack, 26 stocks fell and 4 rose.
The BSE Mid-Cap index rose 0.32% and the BSE Small-cap index rose 0.34%.
Energy giant Reliance Industries fell 2.99% to Rs 1863.15 as the hearing in its gas dispute with Reliance Natural Resources is expected to resume during the day. However, the stock came off the day's low of Rs 1850.90. Justice B. Sudershan Reddy replaces R.V. Raveendran on the three-member bench headed by Chief Justice K.G. Balakrishnan. Raveendran stepped down yesterday saying his daughter works at a law firm that advises Mukesh Ambani's Reliance Industries.
In the previous hearing on 27 October 2009, the Supreme Court had observed that gas is a national resource owned by the Government and, therefore, subject to Government policy. The Court also asked why the brothers cannot settle the matter through arbitration or mutual consensus. The two brothers are fighting a legal battle in the apex court over division of natural gas produced by RIL from KG-D6. The Supreme Court began hearing arguments on the dispute from 20 October 2009.
The government on 27 October 2009 allocated additional 50 million cubic metres a day (mmscmd) of gas from Reliance Industries-operated east coast block D6. Power plants and refineries will get the bulk of Reliance Industries' gas from the Krishna-Godavari basin beyond the previously allotted 40 million metric standard cubic metres per day (mmscmd).
The empowered group of ministers (eGoM) also made some allotments for Reliance's petrochemical plants and refineries.
FMCG stocks fell on profit taking. ITC, Nestle India, Hindustan Unilever, Tata Tea and Marico fell by between 0.25% to 3.12%.
Banking shares fell. Last week, the RBI did not relax mark-to-market rules for bank's debt holdings at a quarterly policy review on 27 October 2009. The market was been agog with talks over the past few days of the central bank hiking the ceiling on the portion of government securities that banks can park in held-to-maturity (HTM).
Another trigger for the recent pressure on banking stocks was the central banks' decision to streamline provisioning requirement on non-performing assets. The RBI, last week, asked banks to ensure by September 2010 that the total provisioning coverage against non-performing or bad loans aren't less than 70% of the outstanding amount.
India's largest private sector bank by net profit ICICI Bank fell 1.78% even as its ADR rose 7.19% on Wednesday. The bank's net profit rose 2.6% to Rs 1040.13 crore on a 12.7% decline in total income to Rs 8480.73 crore in Q2 September 2009 over Q2 September 2008. The result was announced during trading hours on 30 October 2009.
India's second largest private sector bank by net profit HDFC Bank fell 1.66% even as its ADR rose 4.15% on Wednesday.
India's largest bank by net profit State Bank of India (SBI) fell 2.56%. The bank's consolidated net profit rose 28.29% to Rs 3,133.16 crore on 22% rise in consolidated income to Rs 33,101.65 crore in Q2 September 2009 over Q2 September 2008. The results were announced on 31 October 2009.
IT stocks fell on profit taking after recent sharp rally triggered by better than expected Q2 results. India's largest software company by sales Tata Consultancy Services (TCS) fell 2.39%. The company recently secured a 150 million pounds software implementation contract for 15 years from Cardiff city council, UK.
India's third largest software company by sales Wipro fell 2.45% even as its ADR rose 2.36% on Wednesday. The company said on Thursday it had agreed to buy some personal care businesses of Yardley for about $45.5 million, adding to its consumer goods business. Wipro said it had signed an agreement with UK-based Lornamead group, which owns the Yardley brand, for the businesses in Asia, the Middle East, Australasia and some African markets.
India's second largest software company by sales Infosys fell 2.44% even as its ADR rose 1.56% on Wednesday.
Vishal Information Technologies fell 1.47%, after the company said its only promoter Tutis Technologies pledged additional 30 lakh shares representing 1.24% of the equity capital of the company.
Auto stocks fell on profit taking after recent sharp gains. Low interest rates and attractive benefits offered by companies pushed the aggregate sales of the industry in October 2009. The auto sales figures were announced on 2 November 2009.
India's largest small car marker by sales Maruti Suzuki India fell 2.4%. The company's total sales grew 32.4% to 85415 units in October 2009, compared with 64490 units posted in the same month a year ago.
India's largest tractor maker by sales Mahindra & Mahindra fell 0.92%. The company's overall sales climbed 32% in October this year to 18,410 units against 13,935 units in the same month last year.
India's largest truck marker by sales Tata Motors fell 1.66%. Its total sales grew 18% to 20,011 units last month against 17,014 units in the same period last year.
India's second largest bike marker by sales Bajaj Auto fell 0.46% The company reported 51.06% rise in total two-wheeler sales to 2,49,974 units in October 2009 as compared with 1,65,477 units in the same period a year ago.
India's largest bike marker by sales Hero Honda Motors fell 1.55%. The company reported a marginal increase in October sales at 354,156 units as against 352,449 units in the same month last year.
Rate sensitive realty shares fell in volatile trade. Last week, the RBI raised the provisioning requirements for loans to commercial real estate from 0.4% to 1% in its monetary policy review meet on 27 October 2009. DLF, Unitech , Omaxe, Indiabulls Real Estate fell by between 0.67% to 3.52%.
Telecom stocks rose on reports the Department of Telecom (DoT) will seek a fast-track approval from the finance ministry to slash the annual licence fee by up to a third for telecom operators with large network presence. It will also propose to the finance ministry that all licence fee be exempted for landline services, reports suggest. Bharti Airtel, reliance Communications and Idea Cellular rose by between 1.65% to 2.16%.
From A group stocks, Spice Communications, IFCI, Rashtriya Chemicals & Fertilisers, Suzlon Energy and Torrent Power rose by between 6.01% to 13.16%. Ambuja Cements, Indiabulls Financial Services, India Cements fell by between 3.76% to 4.85%.
Suzlon Energy surged 5.89%, on bargain hunting after the stock plunged more than 38% in the preceding eleven trading sessions.
Mercator Lines rose 3.13%, extending gains for the second consecutive day, after the stock had plunged nearly 34% in the preceding eight trading sessions.
Powered by Capital Market - Live News