Amid weak global cues, key benchmark indices extended losses and hit fresh intraday low in mid-afternoon trade. The barometer index, the S&P BSE Sensex, hit lowest level in almost three weeks. The 50-unit CNX Nifty hit lowest level in more than 2-1/2 weeks after falling below the psychological 8,000 level. The Sensex was currently down 237.86 points or 0.89% at 26,578.70. The market breadth indicating the overall health of the market was weak, with more than two losers for every gainer on BSE. The BSE Mid-Cap index was off 2.72%. The BSE Small-Cap index was off 3.25%. Metal and mining stocks extended Monday's losses as a recent batch of weak data out of China raised concern of a sharp slowdown in the world's second-biggest economy. Hindalco Industries dropped on reports the Jharkhand government has ordered closure of five bauxite mines of aluminium major in the state as these mines have been operating under second deemed renewal.
There is a concern that a tighter monetary policy in the US may slow inflows from foreign portfolio investors (FPIs) into the country. Investors across the globe are awaiting the outcome on the Federal Reserve's two-day policy meeting that begins today, 16 September 2014, to gauge the timing of interest rate hike in the US. The Fed is likely to raise short-term interest rates next year from their current near-zero levels, where they have been since December 2008.
Meanwhile, the latest data showed that India's merchandise exports registered a small increase of 2.35% in August 2014.
Earlier, key indices had extended losses in afternoon trade after hovering in a narrow range in red with small losses until that time.
Asian and European stocks declined on caution ahead of the start of Federal Reserve's two-day policy meeting today, 16 September 2014.
In the foreign exchange market, the rupee edged higher against the dollar.
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Brent crude oil prices edged lower in choppy trade before the weekly oil inventory data in the US, the world's biggest oil consumer.
At 14:18 IST, the S&P BSE Sensex was down 237.86 points or 0.89% at 26,578.70. The index dropped 266.27 points at the day's low of 26,550.29 in mid-afternoon trade, its lowest level since 27 August 2014. The index rose 44.73 points at the day's high of 26,861.29 in early trade.
The CNX Nifty was down 80.70 points or 1% at 7,961.30. The index hit a low of 7,950.90 in intraday trade, its lowest level since 28 August 2014. The index hit a high of 8,044.90 in intraday trade.
The market breadth indicating the overall health of the market was weak, with more than two losers for every gainer on BSE. 2,142 shares declined and 774 shares rose. A total of 84 shares were unchanged.
The BSE Mid-Cap index was down 272.52 points or 2.72% at 9,728.34. The BSE Small-Cap index was down 365.79 points or 3.25% at 10.879.73.
Metal and mining stocks extended Monday's losses as a recent batch of weak data out of China raised concern of a sharp slowdown in the world's second-biggest economy. China is the world's largest consumer of steel, copper and aluminum. Jindal Steel & Power (down 1.04%), Sesa Sterlite (down 0.7%), JSW Steel (down 2.26%), NMDC (down 1.88%), Tata Steel (down 3.27%), National Aluminum Company (down 6.21%), Hindustan Zinc (down 3.4%), Steel Authority of India (Sail) (down 2.07%) and Hindustan Copper (down 1.37%) declined. But, Bhushan Steel rose 0.97%.
Hindalco Industries dropped 1.35% on reports the Jharkhand government has ordered closure of five bauxite mines of aluminium major in the state as these mines have been operating under second deemed renewal.The state government had issued similar closure notice to 12 iron ore mines of Tata Steel and Steel Authority of India along with Hindalco on September 8. The central government had ordered in July demanding closure of all mineral mine leases which fall under second deemed renewal.
In the foreign exchange market, the rupee edged higher against the dollar. The partially convertible rupee was hovering at 61.1125, compared with its close of 61.14 during the previous trading session.
Provisional data released by the stock exchanges after trading hours on Monday, 15 September 2014, showed that foreign portfolio investors (FPIs) sold shares worth a net Rs 74.59 crore on that day.
Brent crude oil prices edged lower in choppy trade before the weekly oil inventory data in the US, the world's biggest oil consumer. Brent for November settlement was off 36 cents at $97.52 a barrel. The contract had risen 0.84% to settle at $97.88 a barrel on Monday, 15 September 2014. The October contract which expired on Monday, 15 September 2014 dipped to a 26-month low at $96.21 in its final session.
On macro front, India's merchandise exports registered a small increase of 2.35% at $26.95 billion in August 2014 over August 2013, data released by the government after trading hours yesterday, 15 September 2014, showed. Imports rose 2.08% at $37.79 billion in August 2014 over August 2013. Oil imports declined 14.97% at $12.83 billion in August 2014 over August 2013. Non-oil imports jumped 13.82% at $24.95 billion in August 2014 over August 2013. The trade deficit increased to $10.83 billion in August 2014, from $10.68 billion in August 2013.
European stocks dropped today, 16 September 2014, as investors awaited the outcome of the latest Federal Reserve meeting. Key benchmark indices in UK, France and Germany were off 0.19% to 0.55%.
UK inflation slowed to match the least in five years in August as a supermarket price war and weather effects pushed food prices down the most in more than a decade. The rate of consumer-price growth fell to 1.5% from 1.6% in July, the Office for National Statistics said today in London.
Meanwhile, investors are also waiting the 18 September 2014 referendum on Scottish independence.
Asian stocks declined today, 16 September 2014, on caution ahead of the start of Federal Reserve's two-day policy meeting today, 16 September 2014. Key benchmark indices in Hong Kong, Indonesia, Singapore, China, Taiwan and Japan were off 0.12% to 1.82%. South Korea's Kospi rose 0.35%.
Foreign direct investment into China, a gauge of external confidence, slumped to a four-year low amid widening antitrust probes into multinational companies. Inbound investment was $7.2 billion in August, down 14% from a year earlier, the Ministry of Commerce said on its website today in Beijing after a 17% drop in July. It was the first back-to-back decline of more than 10% since 2009.
Trading in US index futures indicated that the Dow could fall 25 points at the opening bell on Tuesday, 16 September 2014. US stocks closed mostly lower on Monday, 15 September 2014, with losses led by technology and small-cap stocks as investors continued to unload riskier position ahead of this week's pivotal Federal Reserve policy meeting.
Economic data yesterday showed US industrial production unexpectedly declined in August for the first time in seven months as automakers slowed assembly lines.
Investors will look to Federal Open Market Committee (FOMC) meeting for fresh guidance on US interest rates. A two-day policy meeting of the Federal Open Market Committee (FOMC) starts today, 16 September 2014. At the end of a two-day meeting, the FOMC is widely expected to announce cut in Fed's monthly bond-buying program by another $10 billion to $15 billion, staying on track to end the program at its October meeting. The Fed is likely to raise short-term interest rates next year from their current near-zero levels, where they have been since December 2008.
The Fed will also announce US economic projections after the policy meet. Fed now releases economic projections four times a year (March, June, September, and December). Traditionally, the Fed forecasts covered GDP, the PCE price index, and the civilian unemployment rate. However, the forecast report additionally now includes forecasts for the appropriate timing of the next change in the fed funds rate and the expected fed funds rate at the end of the next two years. The policy meet will be followed by a press conference by Federal Reserve Chairwoman Janet Yellen on 17 September 2014.
The Federal Reserve after two-day policy meeting on 30 July 2014, said it would reduce its purchases of mortgage and Treasury bonds by $10 billion to $25 billion monthly from $35 billion earlier, as widely expected.
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