A sudden slide took key benchmark indices lower in morning trade. The barometer index, the S&P BSE Sensex, was down 152.53 points or 0.6%, off close to 150 points from the day's high and up about 30 points from the day's low. The market sentiment was hit adversely as the government's decision to defer revision in gas prices by three months came contrary to market expectations that the new government will quickly take business-friendly decisions aimed at economic revival. Prime Minister Narendra Modi is perceived as a business friendly leader.
The market breadth indicating the overall health of the market was positive.
Gas utility stocks dropped while fertiliser stocks rose after the Cabinet Committee on Economic Affairs (CCEA) on Wednesday, 25 June 2014, deferred a decision on revision of natural gas pricing for three months. Shares of state-run gas transmission major GAIL (India) declined.
At 10:20 IST, the S&P BSE Sensex was down 152.53 points or 0.6% to 25,161.21. The index shed 184.68 points at the day's low of 25,129.06 in morning trade, its lowest level since 24 June 2014. The index fell 4.41 points at the day's high of 25,309.33 in early trade.
The CNX Nifty was down 38.60 points or 0.51% to 7,530.65. The index hit a low of 7,514.65 in intraday trade, its lowest level since 23 June 2014. The index hit a high of 7,570.20 in intraday trade.
The market breadth indicating the overall health of the market was positive. On BSE, 963 shares gained and 961 shares fell. A total of 63 shares were unchanged.
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The BSE Mid-Cap index was down 10.63 points or 0.12% at 9,198.03. The BSE Small-Cap index was down 14.32 points or 0.14% at 9.998.47. Both these indices outperformed the Sensex.
Gas utility stocks dropped after the Cabinet Committee on Economic Affairs (CCEA) on Wednesday, 25 June 2014, deferred a decision on revision of natural gas pricing for three months. Gujarat Gas Company (down 2.57% to Rs 412), Gujarat State Petronet (down 2.58% to Rs 81.10), and Indraprastha Gas (down 0.78% to Rs 339) declined.
Shares of state-run gas transmission major GAIL (India) shed 0.89% to Rs 463.25.
Fertiliser stocks rose after the Cabinet Committee on Economic Affairs (CCEA) on Wednesday, 25 June 2014, deferred a decision on revision of natural gas pricing for three months. National Fertilizer (up 1.01% to Rs 45.20), Gujarat Narmada Valley Fertilizers & Chemicals (GNFC) (up 1.46% to Rs 104.10), Rashtriya Chemicals & Fertilizers (up 1.41% to Rs 68.50), Chambal Fertiliser & Chemicals (up 2.37% to Rs 58.25) and Coromandel International (up 1.24% to Rs 260.45) gained.
Fertilisers companies use domestic gas for manufacturing urea and complex fertilisers. The decision to defer gas price revision means that gas will be sold at prevailing price of $4.2 per unit until end September 2014.
The government said that comprehensive discussions are necessary on the issue of natural gas pricing and the gas pricing guidelines. The government said that consultations will be held with all stakeholders and public interest will be kept in mind.
The price of natural gas would have doubled to $8.4 per unit from 1 April 2014 after the Congress led United Progressive Alliance (UPA) government in January this year approved a new formula for pricing all domestic gas from 1 April 2014. However, gas price revision could not be implemented because of the electoral code of conduct due to Lok Sabha elections in April-May 2014.
Essar Oil hit 5% upper circuit at Rs 112 on BSE after a floor price for delisting of its shares from the stock exchanges was set at Rs 108.18 a share. The company announced the floor price for delisting during trading hours.
On 23 June 2014, the board of directors of the company had proposal from its promoter Essar Energy Holdings (EEHL) seeking to delist the equity shares of the company.
A bout of volatility was witnessed as key benchmark indices trimmed losses after a weak opening. A sudden slide took key benchmark indices lower in morning trade.
Indian stocks may remain volatile today, 26 June 2014, as traders roll over positions in the futures & options (F&O) segment from the near month June 2014 series to July 2014 series. The near-month June 2014 F&O contract expire today, 26 June 2014.
In the foreign exchange market, the rupee edged lower against the dollar. The partially convertible rupee was hovering at 60.17, compared with its close of 60.125/135 on Wednesday, 25 June 2014.
The government on Wednesday, 25 June 2014, announced extension of concessional excise duty on automobiles, capital goods and consumer durables by six months up to 31 December 2014. It may be recalled that the Congress led United Progressive Alliance (UPA) government had in Interim Budget for 2014-15 in February this year had reduced excise duty on small cars, two wheelers, scooters and commercial vehicles to 8% from 12%. Excise duty on sports utility vehicles (SUVs) was cut to 24% from 30% and that on mid and large cars was cut to 24/20% from 27/24%. At that time, the reduction is excise duty was restricted till 30 June 2014 as an interim relief measure for the auto sector.
Similarly, excise duty was cut to 10% from 12% for a period up to 30 June 2014 for capital goods and consumer durable falling under chapter 84 and chapter 85 of the Schedule to the Central Excise Tariff Act. The chapter 84/85 includes products like boiler, turbine, transformers, motors, air conditioners, toaster, oven, switches, switchgears etc.
Asian stocks rose on Thursday, 26 June 2014, amid optimism the US economy is emerging from a worse-than-estimated contraction last quarter. Key benchmark indices in Japan, China, Indonesia, Singapore, Hong Kong, South Korea and Taiwan rose by 0.2% to 0.93%.
Trading in US index futures indicated that the Dow could gain 11 points at the opening bell on Thursday, 26 June 2014. US stocks gained for the first time in three days on Wednesday, 25 June 2014, as investors speculated the economy is recovering from a first-quarter contraction and Monsanto Co. announced a $10 billion stock buyback plan.
A report showed that US gross domestic product shrank 2.9% in the first quarter, the worst reading since 2009. Orders for business equipment climbed in May, a sign that corporate investment is helping revive the economy after slumping at the start of the year.
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