Key benchmark indices extended losses in afternoon trade as index heavyweight Reliance Industries (RIL) fell over 3%. A sudden reversal in cigarette maker ITC and selling in mobile operator Bharti Airtel also weighed on the key indices. Infosys and ONGC retained positive zone. The BSE Sensex was down 107.33 points or 0.57%, off close to 293 points from the day's high. and up close to 7 points from the day's low.
The market breadth was positive, with BSE mid-cap and small-cap indices hovering in positive terrain. A decline in European stocks at the onset of the trading session triggered profit taking on the domestic bourses, which witnessed a solid rally recently.
The barometer index BSE Sensex pared gains after a firm start took it to 8-1/2-week high above the psychological 19,000 level. The market came off lows later. The market pared gains in mid-morning trade as index heavyweight Reliance Industries (RIL) declined. The market slipped into the red later. A bout of volatility was witnessed as the key benchmark indices came off intraday lows early afternoon trade. The market hit a fresh intraday low in afternoon trade as index heavyweight Reliance Industries (RIL) slumped.
At 13:21 IST, the BSE Sensex was down 107.33 points or 0.57% to 18,738.54. The index fell 113.85 points at the day's low of 18,732.02 in afternoon trade. The Sensex jumped 185.51 points at the day's high of 19,031.38 in early trade, its highest level since 2 May 2011.
The S&P; CNX Nifty was down 33 points or 0.58% to 5,614.40. The Nifty hit high of 5,705.80 in intraday trade, its highest level since 3 May 2011.
The BSE Mid-Cap index was up 0.23% and the BSE Small-Cap index was up 0.39%. Both these indices outperformed the Sensex.
The market breadth, indicating the overall health of the market, was positive. On BSE, 1,488 shares advanced while 1,173 shares declined. A total of 132 shares remained unchanged. The breadth was much stronger at the onset of the trading session.
Among the 30-member Sensex pack, 14 stocks rose while the rest of them fell.
ITC reversed early gains and was now down 0.77% to 200.90. The stock reversed from its record high of Rs 205.50 hit early today.
Index heavyweight Reliance Industries (RIL) fell 3.74% to Rs 864, off the day's high of Rs 906. RIL's advance tax payment reportedly jumped 38.46% to Rs 900 crore in Q1 June 2011 over Q1 June 2010. Higher advance tax payment normally indicates higher profit for the period under review.
The RIL stock had witnessed a sell-off recently following reports a government watchdog has accused the Oil Ministry for favouring RIL by allowing it to double the development cost of its KG-D6 gas field. The stock had hit a 52-week low of Rs 829 in intraday trade on 20 June 2011. As per recent reports, a draft report of the Comptroller and Auditor General of India (CAG) has questioned the decision of the oil ministry and its technical arm, the Director General of Hydrocarbons (DGH), to allow RIL to raise the development cost of RIL's KG-D6 field.
RIL had clarified that it has fully complied with the requirements in its production-sharing contract at all times in conducting petroleum operations.
India's largest listed mobile operator by sales Bharti Airtel tumbled 3.06% to Rs 383.15 on profit taking.
India's largest car maker by sales Maruti Suzuki fell 2.28% after its total sales declined 8.8% to 80,298 units in June 2011 over June 2010. The company said production was adversely impacted due labour strike at Manesar plant in June 2011. There was no production for 10.5 days due to the strike. Another reason for lower production was planned shutdown at its units.
Hindustan Unilever (down 1.79%), Tata Steel (down 1.74%), Mahindra & Mahindra (down 1.04%), Cipla (down 0.92%) and NTPC (down 0.91%), edged lower from the Sensex pack.
Real estate developer DLF rose 3.44% to Rs 217.80 on reports the company plans to sell its shareholding in two IT special economic zones in Pune and Noida for Rs 1300 crore.
Oil and Natural Gas Corporation (ONGC) rose 1.61% to Rs 278.35 as the firm's earnings will get a boost if Cairn Energy and Vedanta Resources accept the conditions set by the government for the Cairn India deal. The Cabinet Committee on Economic Affairs (CCEA) on Thursday, 30 June 2011, granted conditional approval to Vedanta Resources' plan to buy British oil explorer Cairn Energy's Indian assets. CCEA approved the deal subject to the condition that Cairn India has to equally and retroactively share royalty payments with Oil and Natural Gas Corporation (ONGC) on crude-oil production from its main oil-producing block in Rajasthan, reports suggest.
ONGC, which holds a 30% stake in the block, currently pays the entire royalty under rules that had been meant to attract foreign investment in the oil-and-gas sector. Cairn India with the remaining 70% stake is the operator of the block. Shares of Cairn India jumped 3.78% to Rs 322.50.
Hindalco Industries (up 2.07%), Reliance Communications (up 1.04%), Infosys (up 0.95%), Hero Honda Motors (up 0.92%), Sterlite Industries (up 0.80%) and Reliance Infrastructure (up 0.66%), edged higher from the Sensex pack.
Top gainers in the BSE Mid-Cap index were, Blue Dart Express (up 6.03%), Jindal Poly Films (up 5.88%), Tecpro Systems (up 5.66%), Godfrey Philips India (up 4.73%) and WABCO-TVS India (up 4.38%).
Top gainers in the BSE Small-Cap index were, Prime Focus (up 16.70%), Jindal Worldwide (up 14.35%), Hindustan Dorr-Oliver (up 13.70%), Mukand (up 11.31%) and Excel Crop Care (up 10.51%).
The market soon enters the crucial period of corporate earnings. Investors will closely watch the post-Q1 June 2011 result management commentary to gauge the future earnings outlook at a time when firms are witnessing costs pressures amid rising interest rates and staff costs. A hike in transportation costs will add to cost pressure of India Inc. As per reports, freight rates have gone up by 8% to 9% on all routes across India following the latest hike in diesel prices.
Housing finance major HDFC unveils Q1 June 2011 results on Friday, 8 July 2011. IT bellwether Infosys Technologies will unveil Q1 results on 12 July 2011.
Foreign institutional investors (FIIs) bought shares worth a massive Rs 1591.34 crore on Thursday, 30 June 2011, as per the provisional data released by the stock exchanges. FII inflow totaled Rs 2662.74 crore in June 2011, as per the data from the stock exchanges.
The manufacturing sector lost steam last month with marked declines in output indicating taut monetary conditions may be taking hold even as prices remained at elevated levels, a survey showed on Friday, 1 July 2011. The HSBC Markit Purchasing Managers' Index, based on a survey of around 500 companies, showed a sharp fall to 55.3 in June from 57.5 in May, its lowest level since September last year and the steepest monthly fall since November 2008.
The India Meteorological Department (IMD) on Thursday, 30 June 2011, said widespread rainfall is expected over Uttar Pradesh, the largest sugarcane growing state, in the next three to five days. The IMD said a slight increase in rainfall activity is also expected in the southern regions, while scattered rains are likely over central parts. Rainfall from the start of the monsoon season until 30 June 2011 was 182 millimeters, 11% above the long-term average.
According to reports, there could be a lull in the rains in the first week of July 2011 and that may continue until mid-July 2011. Rainfall in the month of July is considered crucial as sowing of a number of crops starts in June and good July rains determine the soil moisture and ensure proper development of the crops planted in June.
Merchandise exports rose 56.9% to $25.9 billion in May 2011 from a year earlier, according to provisional data issued Friday by the Ministry of Commerce. Imports rose 54.1% to $40.9 billion, largely due to a rise in non-oil imports, which were up 71% from a year earlier at $30.75 billion. Oil imports in May rose 18.6% to $10.2 billion.
During the April-May period--the first two months of the current fiscal year--exports rose 45.3% to $49.8 billion, while imports rose 33.3% to $73.7 billion.
European stocks declined in early trade after the latest data showed manufacturing activity across the 17-nation euro zone grew at its slowest pace in 18 months in June 2011. The key benchmark indices in Germany, UK and France were down by between 0.12% to 0.23%
The Markit euro-zone purchasing managers index declined to 52 in June 2011 from 54.6 in May 2011. Over the past two months, output growth has weakened to the greatest extent since late 2008, said Chris Williamson, chief economist at Markit. This reflects a combination of lackluster domestic demand in many countries, especially the austerity-hit periphery, as well as a near-stagnation of export sales.
Asian stocks rose on Friday on optimism Greece will avoid default after Greece's austerity program cleared the final hurdle in parliament on Thursday, 30 June 2011. The key benchmark indices in Japan, Indonesia, South Korea, Singapore and Taiwan were up by between 0.35% to 1.19%. Stock markets in Hong Kong and Thailand were closed for a holiday.
China's Shanghai Composite reversed early gains and was down 0.10% after two surveys showed that China's manufacturing activity slowed more than expected in June 2011
Trading in US index futures indicated a flat opening of US stocks on Friday, 1 July 2011. Data out Thursday showed the Chicago PMI rose to 61.1%, up from 56.6%, well above economists' forecasts. US markets are closed on Monday, 4 July 2011, for Independence Day holiday.
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