The market closed near its lows on weak results from State Bank of India and dismal global cues. The Nifty opened at the support we suggested yesterday at 6,050 and moved down sharply. Unless it closes above any previous day’s high, the index will head lower. The National Stock Exchange (NSE) reported a volume of 67.54 crore shares and advance-decline ratio of 235:1164.
The domestic market opened lower on weak global cues. HSBC's latest China's flash PMI which slipped below the level of 50 that separates expansion from contraction for the first time in seven months saw Asian markets, with the exception of China, in the red in morning trade. US markets settled lower on Wednesday after some Federal Reserve officials favoured reducing the asset purchase programme soon, as the economy was showing signs of recovery.
The global decline had an impact on Indian equities as well as the Nifty opened 45 points lower at 6,050 and the Sensex began the day at 19,971, a decline of 91 points from its previous close. The benchmarks hit their day’s high in initial trade itself, albeit in the negative. The Nifty rose to 6,081 and the Sensex inched higher to 20,028.
However, weak global cues and selling in capital goods, realty, power and banking stocks saw the indices taking a southward journey.
Meanwhile, the rupee declined by a huge 37 paise to trade at a new six-month low of 55.83 in early trade at the Interbank Foreign Exchange market on higher dollar demand and strengthening of the US currency overseas.
The market continued its downward move on pressure from capital goods, realty, consumer durables and power sectors. A weak opening of the key European markets ahead of the release of the flash purchase managers’ index data and the Japanese benchmark—Nikkei 225—tumbling over 7% today, also weighed on domestic investors.
State Bank of India, the country’s largest public sector lender, reported an 18.5% decline in its net profit for the fourth quarter of the fiscal ended 31 March 2013 to Rs3,299 crore, due to lower interest income and higher provisions towards bad loans. Net interest income fell 4% to Rs 11,079 crore as against Rs11,591 crore in Q4FY12 and provisions during the quarter jumped 33% to Rs4,181 crore from Rs3,140 crore in Q4FY12, while sequentially it rose 57% to Rs2,668 crore.
The market continued its decline in the late session in the absence of any positive triggers. The indices touched their lows in the closing minutes of trade with the Nifty falling to 5,956 and the Sensex declining to 19,635.
The market settled near the lows of the day on lower-than-expected quarterly results from SB and weak global cues. The Nifty declined 127 points (2.09%) to 5,967 and the Sensex dropped 388 points (1.93%) to finish the trading session at 19,674.
In line with the rout in the market indices, the broader indices also witnessed a sharp decline. The BSE Mid-cap index dropped 1.99% and the BSE Small-cap index tanked 2.20%.
All sectoral gauges settled lower. The main losers were BSE Realty (down 5.95%); BSE Capital Goods (down 5.19%); BSE Power (down 3.96%); BSE Bankex (down 2.84%); BSE PSU (down 0.68%) and BSE Oil & Gas (down 2.65%).
Out of the 30 stocks on the Sensex, only two settled higher. The gainers were HDFC (up 0.53%) and Sun Pharmaceutical Industries (up 46%). The key losers were SBI (down 7.96%); Larsen & Toubro (down 6.49%); Jindal Steel & Power (down 4.05%); Reliance Industries (down 3.99%) and NTPC (down 3.88%).
The top two A Group gainers on the BSE were—Oracle Financial Services Software (up 8.92%) and Marico (up 1.95%).
The top two A Group losers on the BSE were—Wockhardt (down 20%) and Unitech (down 10.95%).
The top two B Group gainers on the BSE were—Richa Industries (up 19.80%) and Eskay Knit India (down 17.19%).
The top two B Group losers on the BSE were—Brescon Advisors & Holdings (down 19.74%) and KBS India (down 19.73%).
Of the 50 stocks on the Nifty, six ended in the in the green. The main gainers were Tata Motors (up .84%); Sun Pharma (up 46%); HDFC (up 0.24%); Cipla (up 0.17%) and Hindustan Unilever (up 0.02%). The major losers were Reliance Infrastructure (down 9.96%); Jaiprakash Associates (down 8.24%); SBI (down 8.10%); DLF (down 7.26%) and Ranbaxy Laboratories (down 6.97%).
Markets in Asia settled lower with the Nikkei 225 crashing over 7% on weak flash Chinese manufacturing output data, concerns about the tapering of the quantitative easing by the US Federal Reserve and strengthening of the yen.
The Shanghai Composite declined 1.16%; the Hang Seng tumbled 2.54%; the Jakarta Composite tanked 1.66%; the KLSE Composite fell 0.61%; the Nikkei 225 plunged 7.32%; the Straits Times dropped 1.77%; the Seoul Composite contracted by 1.24% and the Taiwan Weighted settled 1.92% down.
At the time of writing, the key European indices were down between 1.98% and 2.73% and the US stock futures were trading in the red, indicating a lower opening for US stocks later in the day.
Back home, foreign institutional investors were net buyers of equities totalling Rs540.18 crore on Wednesday whereas domestic institutional investors were net sellers of stocks amounting to Rs973.14 crore.
Siyaram Silk Mills has signed as many as 27 franchise agreements during the first two months of the current fiscal, in its bid to expand its retail footprint. As per a press release issued by the company, Siyaram Silk Mills had set a target of signing 90 franchise deals during 2013-14. It is also targeting 500 outlets by 2016-17, against the existing 120. The stock fell 1.29% to close at Rs260 on the NSE.
McLeod Russel India, the world’s largest tea planter, said it has incorporated a trading outfit in Kenya to procure and supply African tea to the company’s Dubai blending unit. The Dubai blending unit is the second such facility for the company. McLeod Russel, the BM Khaitan group company, has a blending unit at Kolkata. The stock declined 4.25% to close at Rs300.85 on the NSE.
Glenmark Generics, a subsidiary of Glenmark Pharmaceuticals, is recalling multiple lots of three of its drugs from the US market due to “odd smell”, according to US Food and Drug Administration.A notification issued by the US Food and Drug Administration said that the drug major has initiated voluntary recall of its Gabapentin tablets 600mg, 500-count bottle and 800 mg, 500-count bottle; Pravastatin Sodium tablets 40 mg, 90-count bottle; and Topiramate tablets 200 mg, 60-count bottles from the US market following the identification of the problem. The stock rose 1.67% to close at Rs574.10 on the NSE.