India's NSE index hits 11-month lows; rupee, Fed watched

Mon Aug 19, 2013 4:36pm IST

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Stocks

   

* BSE index falls 1.56 pct; NSE ends 1.69 pct lower
    * Rupee sags to record low despite government steps
    * FIIs extend sales in index futures, turn sellers in cash

    By Abhishek Vishnoi
    MUMBAI, Aug 19 (Reuters) - India's NSE index fell nearly 2
percent on Monday to its lowest close in 11 months, as blue
chips slumped after a record low rupee aided fears of foreign
selling and more steps by the central bank to stem dollar
outflows.
    India's benchmark 10-year bond yield also rose to its
highest level in five years, to pre-Lehman crisis levels, as the
rupee fell to a record low of 62.82 to the dollar despite
several efforts from policymakers to arrest the slide.
 
    The rupee's slide has fuelled expectations of more action
from the Reserve Bank of India (RBI), which last week curbed
outflows from companies and individuals, roiling stock and bond
markets.  
    Also, foreign institutional investors (FIIs) extended
selling in index futures for a fourth day on Friday, totalling
sales of 20.63 billion rupees ($334.31 million), indicating they
are bracing for lower levels in cash shares in the near term,
dealers said. 
    "A depreciating rupee will result in increased costs for
various companies, thereby impacting margins. Thus, even at
lower stock prices, the valuations have not turned appealing,"
said Dipen Shah, head of Private Client Group Research, Kotak
Securities.
    The benchmark BSE index fell 1.56 percent, or
290.66 points, to end at 18,307.52, adding to Friday's 4 percent
fall, marking its lowest close in nearly four months. 
    The broader NSE index slumped 1.69 percent, or 93.10
points, to end at 5,414.75, marking its lowest close since Sept.
11, 2012.
    Investors are also waiting to see if minutes of the Federal
Reserve's last policy meeting due on Wednesday will provide some
clarity on when it might start scaling back stimulus.
    Blue chips including ICICI Bank fell 5 percent on
fears that foreign investors may pare their holdings in Indian
stocks as the rupee hit a new low. 
    Among other large cap stocks, ITC Ltd fell 2
percent, while Sun Pharmaceutical Industries Ltd 
slumped 4.1 percent.
    Bharti Airtel Ltd lost 5.4 percent, weighed down
by concerns over higher foreign currency loans.
    Shares in Tata Motors Ltd fell 3.9 percent after
Moody's said the company's shrinking market share in passenger
and commercial vehicle sales was credit negative and would lead
to weaker operating performance. 
    Axis Bank Ltd plunged 5.8 percent adding to
Friday's 8.8 percent fall after MSCI said it would exclude the
bank from its standard and large-cap indexes. 
 
    Titan Industries Ltd fell 2.4 percent after
slumping 12.1 percent on Friday as the central bank banned
imports of gold coins and medallions and required domestic
buyers to pay cash for the yellow metal, among other measures.
 
    However among stocks that gained, technology shares such as
Infosys Ltd rose 0.9 percent as a falling rupee was
seen improving its realisations.
   
   For additional stocks on the move double click        
     
  FACTORS TO WATCH                                              
* Dollar steady but ripe for gains before Fed minutes     
* Oil above $110 on Egypt unrest, Fed policy worries       
* Core debt yields rise, knocking emerging markets   
* Foreign institutional investor flows          
* For closing rates of Indian ADRs                       
                       
   ASIA-PACIFIC STOCK MARKETS:                                  
Pan-Asia........ Japan.......   S.Korea... 
S.E. Asia.......        Hong Kong...  Taiwan.... 
Australia/NZ....        India.......  China..... 
                        
   OTHER MARKETS:                                               
Wall Street ....         Gold ....... Currency.. 
Eurostocks.....         Oil ........  JP bonds... 
ADR Report .....       LME metals. US bonds.. 
Stocks News US.. Stocks News Europe     
                       
   DIARIES & DATA:                                              
Indian Data Watch   Asia earnings diary 
U.S. earnings diary     European diary       
Indian diary          Wall Street Week Ahead  
Eurostocks Week Ahead                                   
                         
   TOP NEWS:                                                    
   For top Asian company news, double click on:       
   U.S. company news  European company news  
   Forex news        Global Economy news  
   Technology news  Telecoms news        
   Media news       Banking news           
   Politics/General    Asia Macro data      

 (Editing by Anand Basu)
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