Key benchmark indices extended losses to hit fresh intraday lows in late trade. The barometer index, BSE Sensex, was provisionally down 284.72 points or 1.54%, off close to 380 points from the day's high and up about 50 points from the day's low. The Sensex and the 50-unit S&P CNX Nifty hit their lowest in nearly one week. Weakness in European stocks triggered profit booking on the domestic bourses after recent strong rally in share prices.
Index heavyweight Reliance Industries (RIL) declined more than 1%. State Bank of India (SBI) tumbled over 8% on reports that the bank has committed around Rs 1200 crore to beleaguered Kingfisher Airlines. Shares of many other state-run banks slumped. Metal and realty stocks dropped. The market breadth was weak. Except BSE IT index, all the other 12 sectoral indices on BSE were in the red.
The market pared gains after hitting 30-week high at the onset of the trading session. The market reversed direction and slipped into the red to hit fresh intraday low in morning trade. The market trimmed losses after sliding to hit fresh intraday low in mid-morning trade. The market moved in a narrow range in the negative terrain in early afternoon trade. Key benchmark indices pared losses in afternoon trade. A bout of volatility was witnessed as key benchmark indices slumped to hit fresh intraday lows after moving into positive zone for a brief period in mid-afternoon trade. The market extended losses to hit fresh intraday low in late trade.
The market may remain volatile tomorrow, 23 February 2012, as traders roll over positions in futures & options (F&O) segment from the near-month February 2012 series to March 2012 series. The near-month February 2012 F&O contracts expire tomorrow, 23 February 2012.
As per provisional figures, the BSE Sensex was down 284.72 points or 1.54% to 18,143.89. The index jumped 95.17 points at the day's high of 18,523.78 in early trade, its highest level since 27 July 2011. The index fell 332.80 points at the day's low of 18,095.81 in late trade, its lowest level since 16 February 2012.
The S&P CNX Nifty was down 104.40 points or 1.86% to 5,502.75, as per provisional figures. Nifty hit a high of 5,629.95, its highest level since 26 July 2011. The index hit a low of 5,491.35 in intraday trade, its lowest level since 16 February 2012.
BSE clocked turnover of Rs 3839 crore, higher than Rs 3537.89 crore on Tuesday, 21 February 2012.
The market breadth, indicating the overall health of the market, was weak. On BSE, 2,208 shares fell and 769 shares rose. A total of 106 shares were unchanged. The market breadth was positive earlier in the day.
Among the 30-share Sensex pack, 26 fell while rest of them gained.
Index heavyweight Reliance Industries (RIL) fell 1.04% to Rs 833.05, off the day's high of Rs 855.70. The company said after market hours on Tuesday, 21 February 2012, that it has agreed to form a joint venture with Russian petrochemical company SIBUR to make 100,000 metric tonnes of butyl rubber a year in Jamnagar in Gujarat. The stock had surged nearly 3% ahead of the announcement on Tuesday, 21 February 2012. RIL will own a 74.9% stake in the joint venture, which will be named Reliance Sibur Elastomers. SIBUR will hold the remaining 25.1% stake. The joint venture will invest $450 million to build the facility, which is expected to be commissioned by the middle of 2014.
The JV will cater to the demand for synthetic rubber from the Indian automotive industry of over 75,000 tonnes per year, which is currently satisfied by imports. Investment in the JV is in line with RIL's vision of emerging as a significant player in the global synthetic rubber market, RIL said in a statement.
ONGC rose 0.1%, with the stock extending Tuesday's 3.7% jump. Last week, a ministerial panel approved auctioning a 5% stake in the state-run explorer.
NTPC fell 1.75%. NTPC is set to place orders for 11 supercritical boilers and an equal number of turbines of 660 MW each with the Supreme Court ruling that Ansaldo Caldaie Boilers India, a unit of Italian boiler maker Ansaldo Caldaie SpA, had failed to technically qualify for the bidding process. The bidding process for the supercritical boilers was delayed by more than a year after Ansaldo Caldaie moved the Delhi High Court following its disqualification on technical grounds. The high court had upheld Ansaldo's plea that it was wrongly disqualified, against which NTPC moved the Supreme Court.
NTPC had floated tender in October 2009 for the supply of 11 supercritical boilers -- nine for its own projects and two for Damodar Valley Corporation (DVC). These projects are envisaged for implementation under the 12th Five-year capacity addition programme. Besides Ansaldo, three bidders -- Bharat Heavy Electricals (Bhel), a consortium of Larsen & Toubro Power and Mitsubishi Heavy Industries and a JV between BGR Energy and Hitachi Power Europe GmbH -- had qualified in the first phase of bidding. NTPC will now invite price bids for supercritical boilers from these three bidders.
Shares of power equipment maker fell on profit taking after recent strong gains. India's largest power equipment maker by sales Bhel slumped 3.85%.
India's biggest engineering & construction firm by order book, Larsen & Toubro, fell 1.22%. L&T said during trading hours on Tuesday, 21 February 2012, that its Metering & Protection Systems business has agreed to form a strategic partnership with UK-based Cyan Holdings to collaborate in the development, supply and delivery of advanced metering solutions comprising L&T electricity meters integrated with Cyan's wireless communication modules for AMI, Smart Metering and Smart Grid Pilot projects.
Shares of power equipment makers had surged recently as a favourable court ruling has paved the way for state-run power generation major NTPC to place bulk orders for boilers based on supercritical technology.
FMCG stocks dropped. United Spirits, Hindustan Unilever, Dabur India and Nestle India shed by between 0.19% to 14.38%. Cigarette maker ITC rose 0.97%.
India's largest software services exporter by revenue, TCS rose 1.15% to Rs 1248.05. The stock scaled a record high of Rs 1,266 in intraday trade today, 22 February 2012. The company's chief executive N. Chandrasekaran said in a recent media interview that the company expects business momentum to strengthen next fiscal year as clients have started loosening their purse strings despite economic uncertainties.
Bank stocks edged lower on profit taking after recent strong gains. India's largest private sector bank by branch network ICICI Bank declined 2.63%.
State Bank of India (SBI) fell 8.11% on reports that the bank has committed around Rs 1200 crore to beleaguered Kingfisher Airlines, including working capital of Rs 400 crore, bank guarantee of Rs 500 crore and loan repayment extension worth Rs 250-300 crore.
Shares of many other state-run banks fell. Oriental Bank of Commerce, United Bank of India, Bank of India, Syndicate Bank, Vijaya Bank, Allahabad Bank, Dena Bank, Union Bank of India, Canara Bank, Bank of Baroda, and Punjab National Bank lost 4.62% to 9.07%
India's second largest bank by net profit HDFC Bank fell 0.21% to Rs 530. The stock had hit a record high of Rs 538.85 in intraday trade today, 22 February 2012.
The BSE Bankex rose 7.11% in the preceding six sessions to 12,838.84 on 21 February 2012, from a recent low of 11,986.92 on 10 February 2012. The BSE Bankex had outperformed the market over the past one month until 21 February 2012, gaining 17.66% compared with the Sensex's 10.09% rise. The index had also outperformed the market in past one quarter, rising 30.58% as against 15.57% rise in the Sensex.
Airline stocks tumbled as oil rose to a nine-month high on Tuesday on Greece's bailout. Jet Airways, Kingfisher Airlines and SpiceJet shed by between 6.53% to 9.59%. Jet fuel or aviation turbine fuel (ATF) typically makes up almost half of an airline's operating cost. Prices of jet fuel are directly linked to crude oil prices. State-run oil marketing companies--Indian Oil Corporation, Bharat Petroleum Corporation and Hindustan Petroleum Corporation revise jet fuel prices on the 1st and 16th of every month based on the average international crude price in the preceding fortnight.
Metal stocks reversed initial gains. Jindal Steel & Power, JSW Steel, Sail, Hindustan Zinc, Tata Steel, and Hindalco Industries fell by between 2.53% to 4.9%.
Sterlite Industries (India) slumped 6.62% and Sesa Goa fell 4.18% on media reports that the Vedanta Resources group may merge iron ore firm Sesa Goa with copper and aluminium maker Sterlite Industries to simplify and consolidate its corporate structure.
Realty stocks reversed initial gains on profit taking. DLF, HDIL and Unitech dropped by between 7.61% to 8.31%. From a recent low of 1370.23 on 2 January 2012, the BSE Realty index jumped 58.36% to 2169.96 on 21 February 2012.
The government is working with state governments for early implementation of a goods and services tax (GST), Finance Minister Pranab Mukherjee said on Wednesday, 22 February 2012.
India's economy is expected to grow an annual 7.1% in the current financial year that ends in March, and 7.5 to 8% in the next financial year, C. Rangarajan, chairman of Prime Minister Manmohan Singh's economic advisory council said. The economy has lost momentum as euro zone debt woes coupled with high interest rates and policy paralysis at home have hit capital investment. Rangarajan released the document 'Review of the Economy 2011-12' at a Press Conference in New Delhi today. He said a likely overshoot in fiscal deficit over the budgeted 4.6% of gross domestic product is a matter of concern and the government must lay out a roadmap for fiscal consolidation.
Meanwhile, the Multi Commodity Exchange (MCX) on Tuesday, 21 February 2012, raised Rs 95.62 crore from 12 anchor investors. MCX's initial public offer (IPO) opened for bidding today and will close on Friday, 24 February 2012. The IPO was subscribed 59% by 15:00 IST today.
Foreign institutional investors (FIIs) bought shares worth a net Rs 1400.17 crore on Tuesday, 21 February 2012, as per provisional data from the stock exchanges. FIIs have bought shares worth a net Rs 13549.43 crore in this month so far (21 February 2012), as per provisional data from the stock exchanges. The inflow this month comes on the top of heavy purchases last month. FIIs bought shares worth a net Rs 10357.70 crore in January 2012, as per data from Securities & Exchange Board of India (Sebi).
The government said on Tuesday that inflation based on the consumer price index (CPI) rose 7.65% in January 2012. The annual CPI data released for the first time on Tuesday measures retail prices in major food groups, fuel, clothing, housing and education across rural and urban India. The new CPI price series is gradually expected to displace wholesale price data as the primary indicator of inflationary trends.
Finance Minister Pranab Mukherjee will present the annual budget for 2012/13 on 16 March 2012, while the railways budget will be presented on 14 March 2012. The budget session of parliament will start on 12 March 2012. The government will present on March 15 the Economic Survey for 2011/12, a document on the state of economy prepared by the economic division in the ministry of finance. The annual budget is usually presented on the last working day of February. However, the budget has been delayed this time due to the ongoing assembly polls. Polling for assembly elections in five states concludes in early March 2012.
Reports indicate that the finance ministry is considering a proposal to increase excise duty from 10% to 12%, although still lower than the level before the 2008 financial crisis. The move is aimed at helping the government improve its fiscal situation but it is expected to push up the cost of almost all manufactured goods from food products to consumer durables and automobiles.
European stock markets drifted lower on Wednesday on weak economic data. Key benchmark indices in France, UK and Germany shed by between 0.33% to 1.02%.
Private-sector activity across the 17-nation euro zone contracted unexpectedly in February, according to the preliminary Markit purchasing managers index for the region released Wednesday. The index declined to 49.7 from 50.4 in January. A reading of less than 50 indicates a contraction in activity.
Asian markets were mixed on Wednesday amid concerns over Europe's Greek aid deal and higher oil prices. Key benchmark indices in Hong Kong, China, South Korea, Japan and Taiwan rose by between 0.22% to 1.01%. Key benchmark indices in Indonesia, and Singapore were down by between 0.2% to 0.97%.
China's manufacturing sector contracted in February for the fourth straight month as new export orders dropped sharply in the face of the euro-area debt crisis, the HSBC flash purchasing managers index showed on Wednesday. The PMI, the earliest indicator of China's industrial activity, rose to a four-month-high at 49.7 in February from 48.8 in January. The PMI has been below 50, which demarcates expansion from contraction, for most of the last eight months.
Trading in US index futures indicated a flat opening of US stocks on Wednesday, 22 February 2012. US stocks finished mostly higher on Tuesday after European officials agreed to another round of aid for Greece, pushing the Dow Jones Industrial Average briefly above 13,000 for the first time since 2008
