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Wednesday, July 24, 2013

Market may edge lower in early trade on weak Asian stocks

The market may edge lower in early trade on weak Asian stocks. Trading of CNX Nifty futures on the Singapore stock exchange indicates that the Nifty could fall 30 points at the opening bell. Indian stocks will react to the latest measures announced by the Reserve Bank of India (RBI) on Tuesday, 23 July 2013, to support the rupee which fell to a record low against the dollar this month. The market may remain volatile in the near future as traders roll over positions in the futures & options (F&) segment from the July 2013 series to August 2013 series. The near month July 2013 derivatives contracts expire tomorrow, 25 July 2013.

Ambuja Cements, Cairn India and Hero MotoCorp unveil quarterly results today, 24 July 2013. Among other major corporate results today, 24 July 2013, include that of Central Bank of India, Dabur India, United Phosphorus and Yes Bank.

Metal stocks may edge lower after a survey showed that China's manufacturing-sector activity is slowing further this month. China is the world's largest consumer of copper and aluminum.

Meanwhile, the Reserve Bank of India took new steps on Tuesday to support the rupee, signalling it will stay the course with its defence of the currency despite the risks to economic growth. The central bank tightened liquidity further and made it even harder for lenders to access funds with measures including lowering the amount banks can borrow or lend under its daily liquidity window. The RBI lowered the overall limit for borrowing under the daily liquidity adjustment facility (LAF) -- which offers funds in exchange for collateral -- for each bank to 0.5% of deposits from 1%. The central bank also said banks now needed to maintain 99 percent of their daily cash reserve ratio requirements -- the deposits they must set aside -- with the RBI, compared with 70% now. The change takes effect from the two-weekly period starting July 27. The RBI also announced the sale of short end cash management bills of Rs 6000 crore to drain out more cash from the banking system.

Key benchmark indices edged higher on Tuesday, 23 July 2013 as upmove in global stocks boosted sentiment. The S&P BSE Sensex rose 143.01 points or 0.71% at 20,302.13 on that day, its highest closing level since 4 January 2011.

Foreign institutional investors (FIIs) bought shares worth a net Rs 211.35 crore on Tuesday, 23 July 2013, as per provisional data from the stock exchanges.

Asian stocks fell on Wednesday as private survey showed manufacturing weakened further in July in China. Key benchmark indices in China, Hong Kong, Indonesia, Japan, Singapore and Taiwan were down by 0.05% to 0.89%. South Korea's Kospi rose 0.17%.

China's manufacturing weakened further in July, signaling the worst of the nation's slowdown has yet to be reached, according to a preliminary survey of purchasing managers. The reading of 47.7 for an index released today by HSBC Holdings Plc and Markit Economics, was less than estimated and if confirmed in the final report Aug. 1, would be the lowest in 11 months. Readings below 50 indicate contraction.

Japan's exports rose for a fourth straight month in June as a weak yen made the nation's products more competitive and shipments to the European Union rebounded. Exports gained 7.4% from a year earlier, the Finance Ministry said in Tokyo today.

US stocks ended mostly lower on Tuesday after a decline in a regional manufacturing gauge prompted concern, but the Dow Jones Industrial Average climbed to a record close. The Federal Reserve Bank of Richmond said manufacturing activity in the central Atlantic region weakened.