Key benchmark indices alternately swung between positive and negative zone near the flat line after slipping into the red from green in afternoon trade. The barometer index, the S&P BSE Sensex, was just a tad higher for the day and the 50-unit CNX Nifty was marginally in negative zone. The Sensex was currently up 3.31 points or 0.01% at 26,317.60. Some progress was made on proposed goods and services tax (GST) after the empowered committee of state finance ministers on Wednesday, 20 August 2014, decided the common threshold for levy of GST. The market breadth indicating the overall health of the market was positive.
Bank stocks retained positive zone after Finance Minister Arun Jaitley reportedly said today, 21 August 2014, that the government was working to tighten up risk management in the banking sector. Axis Bank rose after the bank said its Board of Directors at a meeting held today, 21 August 2014, approved issuance of long term bonds/non-convertible debentures upto Rs 6000 crore on a private placement basis. Kotak Mahindra Bank scaled record high after the bank said a promoter group firm sold a 0.20% stake in the bank to comply with the central bank's guidelines on equity holding in local banks. FMCG stocks were mixed. Dr Reddy's Laboratories fell on reports that the company is in talks with a US regulator over allegations it violated packaging rules for some prescription drugs sold there between 2008 and 2012. Cement stocks declined.
After witnessing a bout of initial volatility, key indices had surged in mid-morning trade.
In overseas markets, European stocks slipped marginally today, 21 August 2014, in early trade after data showed a slowdown in Chinese manufacturing growth in August. Asian stocks were in red after a preliminary survey showed that manufacturing activity in China weakened in August to a three-month low. Brent crude dropped after yesterday's gains.
At 13:16 IST, the S&P BSE Sensex was up 3.31 points or 0.01% at 26,317.60. The index fell 51.77 points at the day's low of 26,262.52 in afternoon trade, its lowest level since 18 August 2014. The index jumped 150.51 points at the day's high of 26,464.80 in mid-morning trade.
The CNX Nifty was down 2.25 points or 0.03% to 7,873.05. The index hit a low of 7,855.95 in intraday trade, its lowest level since 18 August 2014. The index hit a high of 7,919.65 in intraday trade.
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The market breadth indicating the overall health of the market was positive. On BSE, 1,495 shares gained and 1,276 shares fell. A total of 99 shares were unchanged.
The BSE Mid-Cap index was up 24.50 points or 0.26% at 9,300.84. The BSE Small-Cap index was up 23.70 points or 0.23% at 10,287.21. Both these indices outperformed the Sensex.
Bank stocks retained positive zone after Finance Minister Arun Jaitley reportedly said today, 21 August 2014, that the government was working to tighten up risk management in the banking sector. Jaitley, in a speech, reportedly said that some recent incidents in the banking sector had been disturbing and expressed the hope that they would not be repeated.
Among PSU bank stocks, State Bank of India (SBI) (up 1.37%), Canara Bank (up 2.45%), Union Bank of India (up 5.91%), Bank of India (up 3.34%), Punjab National Bank (up 2.32%) Syndicate Bank (up 0.83%), Indian Overseas Bank (up 1.56%), Andhra Bank (up 1.75%), Oriental Bank of Commerce (up 1.8%) gained.
Among private sector banks, ICICI Bank (up 0.22%), HDFC Bank (up 1.55%), IndusInd Bank (up 0.53%), Federal Bank (up 2.71%) gained. Yes Bank shed 0.33%.
Kotak Mahindra Bank rose 2.11% to Rs 1,018 after hitting record high of Rs 1,025.75 in intraday trade. The bank said during market hours that Kotak Trustee Company, a promoter group entity of Kotak Mahindra Bank, sold 16 lakh shares of the bank today, 21 August 2014. The above sale has been undertaken pursuant to RBI's requirement to reduce the promoter shareholding in the bank, has today, 21 August 2014 said.
Axis Bank rose after the bank said its Board of Directors at a meeting held today, 21 August 2014, approved issuance of long term bonds/non-convertible debentures upto Rs 6000 crore on a private placement basis. The stock was up 0.94%.
FMCG stocks were mixed. Britannia Industries (down 0.93%), Hindustan Unilever (down 0.07%), Marico (down 1.03%), Nestle India (down 0.36%) and Tata Global Beverages (down 0.57%) declined. Colgate-Palmolive (India) (up 1.64%), Dabur India (up 1.57%), Godrej Consumer Products (up 2.2%) rose.
Index heavyweight and cigarette major ITC rose 0.65% to Rs 347.25. The stock hit high of Rs 349.15 and low of Rs 344.40 so far during the day.
Dr Reddy's Laboratories fell 1.56%. As per reports, Dr Reddy's Laboratories is in talks with a US regulator over allegations it violated packaging rules for some prescription drugs sold there between 2008 and 2012. In a US stock exchange filing this week, Dr Reddy's reportedly said that the US government's Consumer Product Safety Commission (CPSC) planned to seek civil penalties against the company for allegedly violating rules intended to prevent children from ingesting harmful substances. The company said any unfavourable outcome could result in significant liabilities and added that it disagreed with the allegations.
Cement stocks declined. Ambuja Cements (down 1.14%), ACC (down 0.24%), UltraTech Cement (down 1.31%) declined. Shree Cement gained 1.38%.
Grasim Industries was off 0.68% at Rs 3,423. Grasim has exposure to the cement sector through its subsidiary UltraTech Cement.
In the foreign exchange market, the rupee edged lower against the dollar after Federal Reserve minutes indicated that policy makers talked at their last meeting about a sooner-than-anticipated hike to US interest rates. The partially convertible rupee was hovering at 60.785, compared with its close of 60.62 on Wednesday, 20 August 2014.
The empowered committee of state finance ministers on Wednesday, 20 August 2014, reportedly decided that the common threshold for levy of goods and services tax (GST) would be kept at Rs 10 lakh in general category states and Rs 5 lakh in special category states. This means GST will be levied on all retailers and service providers with a turnover of more than Rs 10 lakh in general category states and Rs 5 lakh in special category states. The decision removes a key stumbling block in the finalisation of the GST structure and is expected to speed up the talks on implementation of the tax reform. However, significant differences still persist between the Centre and the states regarding GST, reports suggest. GST, a major indirect tax reform, will replace service tax, excise, state value-added tax and a number of other local levies.
Meanwhile, India's macroeconomic worries have eased on falling crude oil prices. India imports about 80% of its crude oil requirement. Brent dropped to below $102 a barrel as concerns over excess oil supply and slowing demand weighed on prices. The October Brent crude contract was down 33 cents at $101.95 a barrel. The contract gained 72 cents a barrel to settle at $102.28 a barrel yesterday, 20 August 2014. Brent had hit 14-month low of $101.07 a barrel early this week.
Foreign portfolio investors (FPIs) bought shares worth a net Rs 251.36 crore on Wednesday, 20 August 2014, as per provisional data from the stock exchanges.
The Union Cabinet on Wednesday, 20 August 2014, at a meeting chaired by the Prime Minister, Narendra Modi gave its approval for Digital India - a programme to transform India into digital empowered society and knowledge economy. The programme will be implemented in phases from the current year till 2018. The Digital India is transformational in nature and would ensure that Government services are available to citizens electronically. It would also bring in public accountability through mandated delivery of government's services electronically, a Unique ID and e-Pramaan based on authentic and standard based interoperable and integrated government applications and data basis, a government statement said.
European stocks slipped marginally today, 21 August 2014, after data showed a slowdown in Chinese manufacturing growth in August. Key benchmark indices in UK, France and Germany were down 0.01% to 0.12%.
Data released today, 21 August 2014, showed that German services and manufacturing activity slowed in August. The preliminary reading of a Purchasing Managers Index for the two industries fell to 54.9 in August from 55.7 in July, London-based Markit Economics said. A reading above 50 indicates expansion.
French manufacturing activity contracted for a fourth month in August, signaling that the euro area's second-largest economy is unlikely to return to growth after stagnating in the first half. A Purchasing Managers Index for the manufacturing industry fell to 46.5 in August from 47.8 in July, London-based Markit Economics said today, 21 August 2014. That's the lowest level in more than a year. A composite gauge of both manufacturing and services activity rose to 50 in August, the mark that divides expansion from contraction, from 49.4 in July.
Asian shares fell today, 21 August 2014, as a disappointing survey on Chinese manufacturing stoked concerns about the regional giant. Key benchmark indices in Taiwan, Hong Kong, Indonesia, China, and South Korea were off 0.37% to 1.38%. Key benchmark indices in Japan and Singapore were up 0.06% to 0.85%.
The HSBC/Markit Flash China Manufacturing Purchasing Managers' Index (PMI) fell to 50.3 in August from July's 18-month high of 51.7, missing forecasts.
Trading in US index futures indicated that the Dow could fall 8 point at the opening bell on Thursday, 21 August 2014. Most US stocks closed higher on Wednesday, 20 August 2014, shaking off a dip that came after Federal Reserve minutes indicated that policy makers talked at their last meeting about a sooner-than-anticipated hike to interest rates.
The minutes from the two-day meeting of the Federal Open Market Committee in late July showed that Fed officials came closer to an agreement on how to exit from the most aggressive stimulus. At that meeting, the Fed trimmed its monthly bond-buying program by an additional $10 billion. The minutes showed that some participants were increasingly uncomfortable with the committee's forward guidance on keeping its benchmark rate low for a "considerable time,". Many participants said they might have to raise borrowing costs sooner than they had anticipated. The US central bank has kept its benchmark rate at almost zero since December 2008.
Federal Reserve Chairwoman Janet Yellen will give a speech tomorrow, 22 August 2014, at the annual Fed summit in Jackson Hole, Wyo. Fed Chair Janet Yellen is reportedly expected to acknowledge during the conference that while economic data has generally been supportive, she remains concerned about slack in the labor market.
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