Tuesday 24 September 2013

Market remains choppy; IT and Metals under pressure

Market has largely remained rangebound with IT, Metals shares coming under pressure

Benchmark share indices continue to remain volatile in a narrow range in afternoon trades as gains in HDFC and L&T helped offset losses in Bharti Airtel and IT shares. Overall breath of the market remains negative. Out of total 2110 stocks traded, 937 advanced while 1019 declined while 154 remained unchanged on the BSE.  

At 12:50am, the 30-share BSE Sensex was up 68 points or 0.3 per cent higher trading at 19,969 levels while 50-share NSE Nifty was up 21 points or 0.4 per cent at 5,910 levels. Broader markets reversed earlier gains and are now trading flat; the BSE Mid-cap and small-cap indices are up 0.1 and 0.05 per cent respectively

On the sectoral front, Capital goods, Auto and Consumer durables are up 1% followed by power, healthcare, FMCG, Oil & Gas, banks and PSU which are the major gainers while Metal, IT, TECk and Realty are the laggards on the BSE.

Meanwhile, the global ratings agency Fitch on Monday took negative ratings actions against three public sector undertakings (PSU) banks, Punjab National Bank, Bank of Baroda and Indian Bank, downgrading long term and viability ratings by one notch each.

Revenue growth was slowing due to lower loan growth and the margins were squeezed due to high funding costs; this had led to pressure on internal capital generation, Fitch said.

Most of the state-owned banks such as Bank of India, Punjab National Bank and State Bank of India are trading lower by 2-4% on NSE.

Rupee

The rupee weakened further in early trade today due to persistent month-end dollar demand from importers. Weakness in Asian currencies also affected rupee.

The weakening bias is expected to continue during this week.

At 12:55am, the rupee was trading at Rs 62.55 compared with previous close of Rs 62.60 per dollar.

Citibank said it's time to buy Asian currencies as outflows from the region ebb and the US Federal Reserve's decision to maintain its record stimulus helps reverse a four-month slide.

According to currency dealers, foreign banks are selling dollars which is helping the rupee, else the Indian currency would have breached the Rs 63 per dollar mark.

The benchmark 10-year bond yield opened down 8 basis points at 8.77%.

Global markets

Taking its cue from a softer Wall Street, MSCI's broadest index of Asia-Pacific shares outside Japan eased 0.4%. Returning from holiday, Tokyo's Nikkei dipped 0.3% in very light volumes.

Lacking an obvious culprit, dealers tended to blame uncertainty about when the Federal Reserve will start trimming its asset buying following last week's shock decision to maintain the program at $85 billion a month.

Top BSE gainers at this hour are: Maruti Suzuki, Tata Motors, Larsen & Toubro and Tata Power Co. Among the laggards are Jindal Steel, St Bk of India, Sun Pharma Inds., Sesa Goa and HDFC Bank.

JP Associates, Unitech, Yes Bank, Ashok Leyland are among the volume buzzers on the NSE.

Overall breath of the market remains negative. Out of total 2110 stocks traded, 937 advanced while 1019 declined while 154 remained unchanged on the BSE.


Smart moves

Mahanagar Telephone Nigam Limited (MTNL) is locked in upper circuit of 10% at Rs 15.32 on BSE with no sellers on the counter on reports of signing pact with BSNL to utilise each other’s network for providing pan-India mobile services. The stock opened at Rs 14.15 and has seen a combined 3.09 million shares changing hands on the counter so far. There are pending buy orders for 8.04 million shares on BSE and NSE at 1045 hours.

The promoters of Videocon Industries are selling 1.8 million shares of the company through the offer for sale (OFS) route to comply with the minimum public shareholding (MPS) requirement.The company has fixed floor price of Rs 177 per share for the transaction.  Floor price is the minimum price at which bids can be made.

In the first hour of the OFS, the company had received only 10 bids after its secondary market price dropped below the floor price.

Shares of Videocon were last trading at Rs 174.75, down Rs 2.25, or 1.27%.

Lupin is trading higher by 2% at Rs 868 on BSE after the pharmaceutical company announced that it has signed an agreement with US-based Onset Dermatologics under which it will market the latter's skin disease treatment medicine Locoid Lotion in the American market.

Locoid is the most highly prescribed mid-potency steroid brand in the US. The medicine is a corticosteroid indicated for the topical treatment of mild to moderate Atopic Dermatitis in patients 3 months of age and older, Lupin said in a regulatory filing.

The stock opened at Rs 854 and has seen a combined 160,000 shares changing hands on the counter in early morning deals on BSE and NSE.

State Bank of India slumped in morning session trade after it was downgraded by global ratings agency Moody's a day earlier post market hours. Rating agency Moody’s has downgraded its rating for State Bank of India’s (SBI) senior unsecured debt and local currency deposit from Baa2 to Baa3 due to  increasing pressures on credit from the economic slowdown.

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