Key benchmark indices dropped for second day in a row on speculation that US interest rates will rise sooner than expected. Higher interest rates could lure money to the US from emerging markets, including India. The barometer index, the S&P BSE Sensex, fell 207.91 points or 0.76% to settle at 27,057.41. Meanwhile, as per reports, Finance Minister Arun Jaitley will miss a meeting of finance ministers from the Group of 20 nations in Australia next week as he is still in hospital undergoing treatment. The market breadth indicating the overall health of the market was positive. Cigarette makers edged lower on reports that the government is considering a proposal to ban the sale of loose cigarettes. FMCG stocks declined. Oil and gas stocks dropped. PSU OMCs fell on reports that diesel prices may be cut for first time in seven years on declining crude oil prices.
Auto stocks were mixed. Realty stocks gained. Bank stocks declined on reports that the collective exposure of banks to coal blocks which are under legal scrutiny and related industries stands at a whopping Rs 4 lakh crore.
After an initial decline triggered by weakness in Asian stocks, key benchmark remained in red throughout the day.
In overseas markets, European stocks reversed intraday losses. Asian stocks dropped on concern that China's growth is slowing and speculation that US interest rates will rise sooner than expected.
In the foreign exchange market, the rupee edged lower against the dollar on concern improving US economic data will encourage the Federal Reserve to increase interest rates, eroding the attraction of higher-yielding assets elsewhere.
Brent crude oil futures edged higher amid intraday volatility after reaching 16-month low below $99 a barrel.
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The S&P BSE Sensex fell 207.91 points or 0.76% to settle at 27,057.41, its lowest closing level since 5 September 2014. The index lost 247.21 points at the day's low of 27,018.11 in late trade. The index fell 13.88 points at the day's high of 27,251.44 in early trade.
The CNX Nifty dropped 58.85 points or 0.72% to settle at 8,094.10, its lowest closing level since 5 September 2014. The index hit a low of 8,082.10 and a high of 8,135.75 in intraday trade.
The market breadth indicating the overall health of the market was positive. On BSE, 1,743 shares gained and 1,276 shares fell. A total of 88 shares were unchanged.
The BSE Mid-Cap index rose 7.42 points or 0.08% to settle at 9,850.79. The BSE Small-Cap index gained 65.05 points or 0.6% to settle at 10,951.03. Both these indices outperformed the Sensex.
The S&P BSE IT index (down 1.06%), the S&P BSE Teck index (down 0.86%), the S&P BSE Oil & Gas index (down 1.49%), the S&P BSE Consumer Durables index (down 1.56%), the S&P BSE FMCG index (down 1.48%) and the S&P BSE Capital Goods index (down 0.99%) underperformed the Sensex.
The S&P BSE Realty index (up 0.61%), the S&P BSE Bankex (down 0.06%), the S&P BSE Metal index (down 0.14%), the S&P BSE Auto index (down 0.41%), the S&P BSE Healthcare index (down 0.13%), and the S&P BSE Power index (up 0.11%) outperformed the Sensex.
The total turnover on BSE amounted to Rs 3221 crore, lower than turnover of Rs 3426.81 crore on Tuesday, 9 September 2014.
Bajaj Finance dropped 1.92%. The company said during trading hours that the Board of Directors of the company at its meeting held today, 10 September 2014, has approved the formation of a housing finance company as a wholly owned subsidiary and authorised the management to initiate formalities for setting up the same after reviewing the performance of the company's mortgage business spanning across loan against property/home loans and lease rental discounting.
Realty stocks edged higher. DLF (up 1.44%), Housing Development and Infrastructure (up 0.58%), Unitech (up 2.85%), Sobha (up 0.83%), and Anant Raj (up 4.77%) gained.
Auto stocks were mixed. Tata Motors (down 0.18%), Maruti Suzuki India (down 0.02%), and Hero MotoCorp (down 2.44%) declined. Bajaj Auto rose 1.12%.
TVS Motor Company rose 0.54%. Shares of TVS Motor were included for trading in NSE's futures & options segment from today, 10 September 2014.
Ashok Leyland gained 2.21% to Rs 41.60 after hitting a record high of Rs 42.15 in intraday trade. The company during trading hours on Tuesday, 9 September 2014 said it has bagged orders worth nearly Rs 1500 crore for supply of buses under JNNURM-II scheme. Ashok Leyland said it has received orders for around 4000 buses from a total of 22 STUs across the country. The supply of these buses has started and many of them are already carrying passengers, the company said in a statement.
Mahindra & Mahindra (M&M) dropped 1.43% on reports a domestic brokerage house cut the automaker to "reduce" from "add," and lowered the target price. The brokerage has reportedly cited high valuations as the key reason for the downgrade. The brokerage reportedly said M&M lost 13% market share in the utility vehicle segment over the past two years, describing that as a "significant loss". It said further re-rating of the stock would depend on curtailing subsidiary losses, improving consolidated returns on capital employed.
Bank stocks declined on reports that the collective exposure of banks to coal blocks which are under legal scrutiny and related industries stands at a whopping Rs 4 lakh crore. Among PSU bank stocks, State Bank of India (SBI) (down 0.56%), Punjab National Bank (down 0.13%), Bank of India (down 1.73%), Oriental Bank of Commerce (down 0.45%) and Union Bank of India (down 1.6%) declined. Bank of Baroda rose 0.38%.
After a day-long hearing on the fate of 218 coal blocks, the Supreme Court on Tuesday, 9 September 2014, reserved its judgement to an unspecified date. The Supreme Court had on 25 August 2014 held that the allocation of coal blocks to various firms between 1993 and 2009 was illegal.
Among private banks, IndusInd Bank (down 0.13%), Federal Bank (down 1.04%), Kotak Mahindra Bank (down 0.81%), Yes Bank (down 0.78%), HDFC Bank (down 0.96%) and Axis Bank (down 0.49%) declined.
ICICI Bank rose 1.53%. ICICI Bank after market hours on Tuesday, 9 September 2014, said that the board of directors of the bank at its meeting held on Tuesday, 9 September 2014, approved 5-for-1 stock split.
Steel Authority of India (Sail) fell 2.7%. As per reports, the government is proposing to offload 5% stake in Sail this month and provide more incentives to retail investors to increase their participation. The government owns 80% stake in Sail (as per shareholding pattern as on 30 June 2014).
Shares of cigarette makers fell on reports that the government is considering a proposal to ban the sale of loose cigarettes. Godfrey Philips India (down 6.09%), VST Industries (down 3.58%) and ITC (down 1.85%) edged lower.
A ban on sale of loose cigarettes will hit cigarette makers hard as 70% of retail sales of cigarettes take place in this form, according to reports. A ban on sale of loose cigarettes is among measures proposed by an expert panel set up by the health ministry, according to reports. Other suggestions include raising the age limit for consumption and increasing the fine for smoking in public spaces to Rs 20,000 from Rs 200, apart from making this a cognizable offence.
IT stocks were mostly lower. Infosys (down 1.84%), HCL Technologies (down 0.23%), Wipro (down 0.83%), TCS (down 1.03%) declined. Tech Mahindra rose 0.29%.
FMCG stocks declined. Colgate-Palmolive (India) (down 0.24%), Dabur India (down 1.1%), Hindustan Unilever (down 0.32%), Marico (down 1.58%), Nestle India (down 0.08%) and Tata Global Beverages (down 1.79%) declined. Britannia Industries rose 1.14%.
Godrej Consumer Products lost 5.22% to Rs 1,047.95, with the stock sliding on profit booking after recent rally. Shares of Godrej Consumer Products had rallied 8.87% in two trading sessions to settle at Rs 1,105.65 on Tuesday, 9 September 2014, from a recent low of Rs 1,015.50 on 5 September 2014.
Oil and gas stocks dropped. Cairn India (down 2.59%), Reliance Industries (down 1.65%), Oil India (down 2.36%) and ONGC (down 1.17%) declined.
PSU OMCs fell on reports that diesel prices may be cut for first time in seven years on declining crude oil prices. Indian Oil Corporation (down 2.18%), BPCL (down 2.18%), and HPCL (down 1.49%) declined.
As per reports, petrol prices may be cut by Re 1 a litre and there is also a likelihood of first reduction in diesel rates in seven years owing to continuous downtrend in international crude oil prices. Petrol and diesel rates are due for revision on 15 September 2014 and there is a possibility of reduction in retail prices if benchmark Brent crude continues to stay below $100 a barrel mark, reports added.
Diesel prices were last hiked on 31 August 2014 by 50 paise a litre in line with the January 2013 decision to raise rates in small doses every month to bridge the difference between retail selling price and cost. The under-recovery on diesel had reduced to just 8 paise a litre after the last increase.
Shares of shipbuilding firms rose on reports the government is considering a financial assistance scheme to revive the debt-laden and struggling shipbuilding industry. Pipavav Defence and Offshore Engineering Company (up 5%), Bharati Shipyard (up 9.9%) and ABG Shipyard (up 12.68%) gained.
Reportedly the government is mulling various options which include lower bank interest rates, infrastructure status to shipyards, a separate fund and also special subsidy to shipbuilders who source raw material and parts locally.
Shares of shipping companies also rose. Great Eastern Shipping Company (up 2.26%), Shipping Corporation of India (up 9.25%), Mercator (up 4.91%) and Varun Shipping Company (up 19.67%) gained.
Shares of jewellery retailers fell on reports the government is not considering an immediate gold import duty cut.
Thangamayil Jewellery (down 2.2%) PC Jeweller (down 0.61%), Tara Jewels (down 0.27%), Tribhovandas Bhimji Zaveri (TBZ) (down 0.3%), Titan Company (down 2.9%) declined. Gitanjali Gems was flat.
The government had raised the import duty on the gold in 2013 to 10% to limit overseas purchases by the second-biggest bullion consumer and help trim bloated current account deficit. However, a dramatic improvement in the deficit had raised market expectations of a duty cut, reports added.
From a record closing high of 27,319.85 on 8 September 2014, the Sensex has declined 262.44 points or 0.96% in two trading sessions. The Sensex has gained 419.30 points or 1.57% in this month so far (till 10 September 2014). The Sensex has gained 5,886.73 points or 27.8% in calendar year 2014 so far (till 10 September 2014). From a lifetime high of 27,354.99 struck on 8 September 2014, the Sensex has fallen 297.58 points or 1.08%. From a 52-week low of 19,264.72 on 1 October 2013, the Sensex has risen 7,792.69 points or 40.45%.
Brent crude oil futures edged higher amid intraday volatility after reaching 16-month low below $99 a barrel. Brent for October settlement was up 9 cents at $99.25 a barrel. The contract dropped to a fresh 16-month low below $99 a barrel in intraday trade today, 10 September 2014, as ample supplies weighed.
Representatives of 28 European Union (EU) governments will meet in Brussels today, 10 September 2014, to discuss tougher economic sanctions on Russia for its involvement in the Ukraine crisis. The talks follow the EU's decision this week to put on hold a second package of economic penalties.
In the foreign exchange market, the rupee edged lower against the dollar on concern improving US economic data will encourage the Federal Reserve to increase interest rates, eroding the attraction of higher-yielding assets elsewhere. The partially convertible rupee was hovering at 60.88, compared with its close of 60.60 on Tuesday, 9 September 2014. The Indian currency weakened past 61 against the dollar in intraday trade.
Meanwhile, as per reports, Finance Minister Arun Jaitley will miss a meeting of finance ministers from the Group of 20 nations in Australia next week as he is still in hospital undergoing treatment. Jaitley was admitted to a private hospital in New Delhi on 1 September 2014 for surgery to manage a long-standing diabetic condition, and had originally been expected to leave after a few days.
European stocks reversed intraday losses today, 10 September 2014. Key benchmark indices in France and UK were up 0.13% to 0.25%. Germany's DAX was flat.
In the UK, opinion polls have indicated that the result of a Sept. 18 referendum on Scottish independence is too close to call.
The growth of French industrial production slowed sharply in July, statistics showed today, 10 September 2014. Industrial production in the euro zone's second largest economy expanded 0.2% in July. The expansion, however, is much lower than the 1.2% revised increase recorded in the previous month. French statistics department revised the June figure down from the 1.3% growth figure released a month ago.
Asian stocks edged lower today, 10 September 2014, on concern that China's growth is slowing and speculation that US interest rates will rise sooner than estimated. Key benchmark indices in Taiwan, Hong Kong, Singapore, Indonesia and China were off 0.13% to 1.93%. Japan's Nikkei 225 index rose 0.25%. South Korean stock market will reopen tomorrow, 11 September 2014, after a three-day break for the Harvest Moon festival.
China's money-supply growth in August eased to the slowest pace in five months. M2, the government's broadest measure, rose 12.8% in August from a year earlier, lower than 13.5% rise in July
Trading in US index futures indicated that the Dow could gain 14 points at the opening bell today, 10 September 2014. US stocks fell on Tuesday, 9 September 2014, as Apple shares declined and as bond yields hit their highest in a month on concerns the Federal Reserve could raise interest rates sooner than some investors had expected.
Investors will look to next week's Federal Open Market Committee (FOMC) meeting for fresh guidance on US interest rates. At the end of a two-day meeting on 16-17 September 2014, 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.
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