Published: August 19, 2013 10:14 IST | Updated: August 19, 2013 17:52 IST
Rupee breaches 63 level
The HinduHeavy FII outflows from the domestic equity market have been weighing on rupee. File photo
The Indian currency tumbled by Rs. 1.48 to 63.13, the biggest single day drop in a decade
The rupee on Monday breached the 63-level for the first time against the U.S. currency in late evening trade at the Interbank Foreign Exchange market on higher demand for dollar, particularly from oil importers.
The local currency tumbled by Rs. 1.48 to 63.13, despite a series of measures by RBI and government to arrest its slide.
Meanwhile, the BSE benchmark Sensex fell by 291 points to end at over 4-month low of 18,307.52 on Monday, as the investor sentiment had taken a hit with rupee touching new lows.
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Free-fall for Sensex, Nifty as rupee woes continue
FII selling in shares of banks, auto, pharma and FMCG eroded Rs 1 lakh crore in investor wealth with Sensex ending at 18,307.52, a drop of 290.66 points or 1.56%.
PTI Aug. 19, 2013
MUMBAI: Stock markets on Monday continued to wilt under heavy selling on rupee plummeting to new lows, with BSE Sensex slumping 291 points to over 4-month low and NSENifty diving 93 points to end at lowest level in 11 months.
Investors remained rattled after RBI on August 14 unveiled stern measures, including curbs on Indian firms investing abroad. Sensex last Friday crashed by 769 points — the worst fall in 4 years — on fears that more steps will be announced to control capital outflows to shore up the unit.
Investors remained rattled after RBI on August 14 unveiled stern measures, including curbs on Indian firms investing abroad. Sensex last Friday crashed by 769 points — the worst fall in 4 years — on fears that more steps will be announced to control capital outflows to shore up the unit.
Weakness in global markets and speculation over the US rolling back its economic stimulus package as early as next month also affected the sentiment.
Investors sentiment took a hit with rupee racing towards 63-level. The domestic currency was trading at its all-time of low of 62.8 in the late afternoon trade. Later, it breached 63-mark after stock markets closed for the day.
FII selling in shares of banks, auto, pharma and FMCG eroded Rs 1 lakh crore in investor wealth with Sensex ending at 18,307.52, a drop of 290.66 points or 1.56 per cent.
ICICI Bank, Bharti Airtel and Bajaj Auto were among biggest Sensex losers.
Similarly, the 50-issue NSE CNX Nifty also dipped by 93.10 points, or 1.69 per cent, to end at 5,414.75 — the lowst since September 2012. Also, SX40 index closed down 201.76 points, or 1.82 per cent, at 10,881.76.
"No respite has been seen today despite assurance from the government that situation of 1991 shall not be repeated and condition is not worse. Banking and Auto stocks led the fall today," said Nidhi Saraswat, senior research analyst, Bonanza Portfolio Ltd.
Banks were hit on concerns over mark-to-market losses on banks' portfolios, brokers said.
Bucking the weak trend, software exporting companies led by Infosys rose over one per cent on hopes the fall in rupee would improve their revenues.
Foreign institutional investors (FIIs) sold shares worth a net Rs 563.23 crore on last Friday, as per provisional data from the stock exchanges.
Most Asian stocks ended lower for a third straight day as worries about the Federal Reserve's policy outlook and rising US Treasury yields weighed on the sentiment. Key benchmark indices in Hong Kong, Singapore, South Korea and Taiwan were down by 0.13-0.76 per cent while indices in Japan and China rose by 0.79-0.83 per cent.
European markets were trading lower in their early trade as rise in US Treasury yields spooked investors. Key indices in France, Germany and UK eased by 0.22-0.63 per cent.
Moving back to the local market, 24 scrips out of the 30-share Sensex ended lower while six others finished higher.
"The quarterly results season has ended and growth for the current fiscal is expected to be lower than earlier estimates. A depreciating rupee will result in increased costs for various companies, thereby impacting margins. Even at lower stock prices, the valuations have not turned appealing," said Dipen Shah, Head - %G Research, Kotak Securities.
Major Sensex losers were Bharti Airtel (5.51 %), ICICI Bank (5.07 %), Bajaj Auto (4.55 %), Sun Pharma (4.05 %), Tata Motors (3.77 %), ONGC (3.73 %), M&M (3.51 %), Cipla (3.36 %), Hero MotoCorp (2.85 %) and SBI (2.60 %).
BHEL (2.45 %), L&T (2.43 %), NT% (2.15 %), ITC (1.80 %), HUL (1.63 %), Dr Reddy's Lab (1.20 %) and Maruti Suzuki (1.38 %) were also among the worst hit.
However, Tata Steel rose by 5 per cent, followed by Hindalco Ind (1.89 %), Jindal Steel (1.86 %), Tata Power (2.46 %) and Infosys (1.04 %).
Among the sectoral indices, S&P BSE bankex dropped by 3.40 per cent, followed by S&P BSE-Auto 3.13 per cent, S&P BSE-HC 2.49 per cent, S&P BSE-FMCG 2.07 per cent, S&P BSE-PSU 2.05 per cent, S&P BSE-CD 2.05 per cent, S&P BSE-CG 1.91 per cent and S&P BSE-Oil&Gas 1.38 per cent.
However, BSE-Metal rose by 1.78 per cent and BSE-IT by 0.31 per cent. Market breadth continued to remain negative as 1,401 shares finished with losses and 886 ended higher while 142 ruled steady. The total market turnover dropped to Rs 1,844.66 crore from Rs 2,132.35 crore on last friday.
FII selling in shares of banks, auto, pharma and FMCG eroded Rs 1 lakh crore in investor wealth with Sensex ending at 18,307.52, a drop of 290.66 points or 1.56 per cent.
ICICI Bank, Bharti Airtel and Bajaj Auto were among biggest Sensex losers.
Similarly, the 50-issue NSE CNX Nifty also dipped by 93.10 points, or 1.69 per cent, to end at 5,414.75 — the lowst since September 2012. Also, SX40 index closed down 201.76 points, or 1.82 per cent, at 10,881.76.
"No respite has been seen today despite assurance from the government that situation of 1991 shall not be repeated and condition is not worse. Banking and Auto stocks led the fall today," said Nidhi Saraswat, senior research analyst, Bonanza Portfolio Ltd.
Banks were hit on concerns over mark-to-market losses on banks' portfolios, brokers said.
Bucking the weak trend, software exporting companies led by Infosys rose over one per cent on hopes the fall in rupee would improve their revenues.
Foreign institutional investors (FIIs) sold shares worth a net Rs 563.23 crore on last Friday, as per provisional data from the stock exchanges.
Most Asian stocks ended lower for a third straight day as worries about the Federal Reserve's policy outlook and rising US Treasury yields weighed on the sentiment. Key benchmark indices in Hong Kong, Singapore, South Korea and Taiwan were down by 0.13-0.76 per cent while indices in Japan and China rose by 0.79-0.83 per cent.
European markets were trading lower in their early trade as rise in US Treasury yields spooked investors. Key indices in France, Germany and UK eased by 0.22-0.63 per cent.
Moving back to the local market, 24 scrips out of the 30-share Sensex ended lower while six others finished higher.
"The quarterly results season has ended and growth for the current fiscal is expected to be lower than earlier estimates. A depreciating rupee will result in increased costs for various companies, thereby impacting margins. Even at lower stock prices, the valuations have not turned appealing," said Dipen Shah, Head - %G Research, Kotak Securities.
Major Sensex losers were Bharti Airtel (5.51 %), ICICI Bank (5.07 %), Bajaj Auto (4.55 %), Sun Pharma (4.05 %), Tata Motors (3.77 %), ONGC (3.73 %), M&M (3.51 %), Cipla (3.36 %), Hero MotoCorp (2.85 %) and SBI (2.60 %).
BHEL (2.45 %), L&T (2.43 %), NT% (2.15 %), ITC (1.80 %), HUL (1.63 %), Dr Reddy's Lab (1.20 %) and Maruti Suzuki (1.38 %) were also among the worst hit.
However, Tata Steel rose by 5 per cent, followed by Hindalco Ind (1.89 %), Jindal Steel (1.86 %), Tata Power (2.46 %) and Infosys (1.04 %).
Among the sectoral indices, S&P BSE bankex dropped by 3.40 per cent, followed by S&P BSE-Auto 3.13 per cent, S&P BSE-HC 2.49 per cent, S&P BSE-FMCG 2.07 per cent, S&P BSE-PSU 2.05 per cent, S&P BSE-CD 2.05 per cent, S&P BSE-CG 1.91 per cent and S&P BSE-Oil&Gas 1.38 per cent.
However, BSE-Metal rose by 1.78 per cent and BSE-IT by 0.31 per cent. Market breadth continued to remain negative as 1,401 shares finished with losses and 886 ended higher while 142 ruled steady. The total market turnover dropped to Rs 1,844.66 crore from Rs 2,132.35 crore on last friday.
Published: August 19, 2013 17:27 IST | Updated: August 19, 2013 18:18 IST
India Inc. debt rises to Rs 6.4 trillion
The group also includes Jaypee, GMR, GVK, JSW, Lanco and Videocon
The country’s 10 leading business houses, including Reliance Group, Vedanta, Essar and Adani, have seen their total debt levels soar by 15 per cent to over Rs 6 lakh crore during the last fiscal while profitability continues to remain under pressure, a research report said Monday.
The cumulative debt of these groups, which also include Jaypee, GMR, GVK, JSW, Lanco and Videocon, is likely to further increase in the current fiscal because of rupee depreciation and delays in projects being undertaken by many of them, Credit Suisse said in its annual House of Debt report for India.
According to the report, the collective debt of these 10 groups rose to Rs 6,31,025 crore at the end of last fiscal ended March 31, 2013, from Rs 5,47,361 crore a year ago.
“For most of them the debt increase has outpaced capex and asset sales are yet to take off. The rising stress is visible with some loans of Lanco, JPA, and (Anil Ambani-led) Reliance groups already being restructured,” it said.
“The largest increases have been at groups such as GVK, Lanco and ADA where the gross debt levels are up 24 per cent year-over-year .... Asset sales-key for de-leveraging for most of these—have still not taken off; only GMR and Videocon have had some success on that front,” Credit Suisse said.
The report also warned of additional asset quality stress of banks because of growing debt levels of big business houses.
While large corporate NPLs (non performing loans) are still low, the overleverage in the large corporate segment is high and is a potential source of additional asset quality stress for banks, it said, while adding that corporate asset quality issues are likely to persist for the banking sector.
Observing that the rupee weakening could cause further “pain” going further, the report said that delays in power projects being undertaken by many of these groups could result in more of their debt being restructured.
However, companies such as Adani Power, Reliance Power and GMR Infra would see their operating capacities double if the projects were to come on stream as expected.
“Many corporates’ loans are 40-70 per cent foreign currency denominated; therefore, the sharp depreciation in the rupee is adding to their debt burden. Adani Enterprise and Reliance Comm have the largest percentage of borrowings through forex loans,” it said.
The report further warned that “with the 6.7 per cent currency depreciation in FY13, corporates such as Reliance Comm, Adani Enterprise and JP Associates, have seen a forex hit equivalent to their FY13 profit after tax. With the rupee down 12 per cent since March 2013, the liabilities on account of this must have increased further.”