Soon after extending intraday losses in mid-morning trade, key benchmark indices trimmed losses in early afternoon trade. The barometer index, the S&P BSE Sensex, was hovering below the psychological 27,000 mark, having fallen below that level in mid-morning trade. The Sensex was currently down 87.39 points or 0.32% at 26,970.02. The broad market depicted strength. The market breadth indicating the overall health of the market was strong. The BSE Small-Cap index was up 1.13%. Brent crude hovered near 17-month low which will augurs well for India as the country imports about 80% of its crude oil requirement.
India's largest FMCG company by sales Hindustan Unilever extended intraday gain to scale record high. ONGC, Coal India and NHPC declined in volatile trade after the Cabinet Committee on Economic Affairs on Wednesday, 10 September 2014, approved stake-sale in these three state-run firms. Tata Steel and Steel Authority of India declined on buzz that Jharkhand Government has ordered closure of 12 mines, including the mines controlled by these two steel giants.
On the macro front, data due later this week and early next week is likely to show easing of inflation in August 2014 and a muted growth in industrial production in July 2014. Meanwhile, the government has kicked off a big-bang divestment programme by announcing stake-sale in ONGC, Coal India and NHPC.
Earlier, key indices had lost ground after a firm opening triggered by overnight drop in Brent crude oil prices and gains in US stocks.
In overseas markets, Asian stocks were mixed after the latest data showed that China's inflation remained subdued last month.
In the foreign exchange market, the rupee edged higher against the dollar.
At 12:15 IST, the S&P BSE Sensex was down 87.39 points or 0.32% at 26,970.02. The index lost 152.91 points at the day's low of 26,904.50 in mid-morning trade, its lowest level since 2 September 2014. The index gained 93.37 points at the day's high of 27,150.78 at the onset of the trading session.
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The CNX Nifty was down 19.30 points or 0.24% at 8,074.80. The index hit a low of 8,057.30 in intraday trade, its lowest level since 5 September 2014. The index hit a high of 8,127.95 in intraday trade.
The market breadth indicating the overall health of the market was strong on BSE. 1,687 shares gained and 1,024 shares fell. A total of 103 shares were unchanged.
The BSE Mid-Cap index was up 83.18 points or 0.84% at 9,933.97. The BSE Small-Cap index was up 123.35 points or 1.13% at 11,074.38. Both these indices outperformed the Sensex.
The total turnover on BSE amounted to Rs 1809 crore by 12:15 IST, compared to a turnover of Rs 1561 crore by 11:15 IST.
India's largest FMCG company by sales Hindustan Unilever gained 1.42% to Rs 759.25, with the stock extending intraday gain. The stock hit a record high of Rs 763 in intraday trade. The stock hit a low of Rs 748.90 so far during the day.
ONGC, Coal India and NHPC declined in volatile trade after the Cabinet Committee on Economic Affairs on Wednesday, 10 September 2014, approved stake-sale in these three state-run firms.
Coal India was off 3.41% at Rs 361.15. The stock hit a high of Rs 374.60 and low of Rs 360.40 so far during the day.
Oil and Natural Gas Corporation (ONGC) was off 1.59% at Rs 438.20. The stock hit a high of Rs 447.50 and low of Rs 436.20 so far during the day.
NHPC was off 3.79% at Rs 21.55. The stock hit a high of Rs 22.45 and low of Rs 21.45 so far during the day.
The government will sell a 5% stake in ONGC, 10% in Coal India and 11.36% in NHPC. As on 30 June 2014, the government held 68.94% in ONGC, 89.65% in CIL and 85.96% in NHPC.
Tata Steel (down 0.62%) and Steel Authority of India (down 2.1%) declined on buzz that Jharkhand Government has ordered closure of 12 mines, including the mines controlled by these two steel giants. According to reports, the District Mining Office (DMO) of Chaibasa in Jharkhand has recently issued a closure notice to 12 of the 17 working iron ore mines in West Singhbhum, running under second and third subsequent deemed renewal. These mines account for around 30% and 25% of total iron ore requirement of Tata Steel and Sail, respectively, reports indicated.
Meanwhile, the government has kicked off a big-bang divestment programme by announcing stake-sale in ONGC, Coal India and NHPC. The Cabinet Committee on Economic Affairs (CCEA) on Wednesday, 10 September 2014, approved disinvestment of 10% stake in Coal India, 5% stake in ONGC and disinvestment of 11.36% stake in NHPC. The government will raise about Rs 46000 crore from the divestment in these three PSU based the closing price of the shares of these three PSUs on Wednesday, 10 September 2014.
Finance Minister Arun Jaitley was released from hospital on Wednesday, 10 September 2014, after a longer-than-expected stay for treatment. Media reports said that Jaitley will not be able to attend a meeting of finance ministers from the Group of 20 nations in Australia next week. Jaitley was admitted to a private hospital in New Delhi on 1 September 2014 for planned surgery to manage a long-standing diabetic condition. He had been expected to leave after a few days, a report indicated.
Brent crude hovered near 17-month low. Brent for October settlement was off 4 cents at $98 a barrel. The contract fell $1.12 to settle at $98.04 a barrel yesterday, 10 September 2014, on rising supply and tepid demand. The price had slumped to $97.60 in intraday trade yesterday, the lowest intraday price since 18 April 2013.
Lower crude oil prices will help India in containing its fiscal deficit, current account deficit and fuel price inflation. India imports 80% of its crude oil requirement.
US President Barack Obama reportedly told Americans in a speech late on Wednesday, 10 September 2014 that he had authorized US air strikes for the first time in Syria and more attacks in Iraq in a broad escalation of a campaign against the Islamic State militant group. He said he would hunt down Islamic State militants "wherever they are," reports added.
In the foreign exchange market, the rupee edged higher against the dollar. The partially convertible rupee was hovering at 60.86, compared with its close of 60.955 on Wednesday, 10 September 2014.
Data due later this week and early next week is likely to show easing of inflation in August 2014 and a muted growth in industrial production in July 2014. The annual rate of inflation based on the combined consumer price indices (CPI) for urban and rural India is seen decelerating to 7.8% in August 2014, from 7.96% in July 2014, as per the median estimate of a poll of economists carried out by Capital Market. The government will release the CPI data for August 2014 at 17:30 IST tomorrow, 12 September 2014. The Reserve Bank of India (RBI) is targeting CPI inflation at 8% by January 2015 and 6% by January 2016.
Meanwhile, the growth in industrial production is seen decelerating to 1.9% in July 2014, from 3.4% in June 2014, as per the median estimate of a poll of economists carried out by Capital Market. Industrial production growth had eased to 3.4% in June 2014, from 5% increase recorded in May 2014. The government will release the industrial production data for July 2014 at 17:30 IST tomorrow, 12 September 2014.
The annual rate of inflation based on the monthly Wholesale Price Index (WPI) is seen decelerating to 4.43% in August 2014, from 5.19% in July 2014, as per the median estimate of a poll of economists carried out by Capital Market. The government will release the WPI data for August 2014 at 12 noon on Monday, 15 September 2014.
Asian stocks were mixed today, 11 September 2014, after the latest data showed that China's inflation remained subdued last month. Key benchmark indices in South Korea, Japan and Indonesia were up 0.25% to 0.76%. Key benchmark indices in Singapore, China, Hong Kong and Taiwan were off 0.3% to 0.74%.
China's consumer price index rose 2% August 2014 from a year earlier, which was slower than 2.3% rise in July 2014, according to data released by the National Bureau of Statistics today, 11 September 2014. The producer price index fell 1.2% in August 2014, extending a decline to 30th month.
Meanwhile, China's central bank is reportedly set to withdraw cash from the financial system this week for the first time since early August, reflecting concerns about accelerating inflows of speculative funds.
In Japan, Bank of Japan Governor Haruhiko Kuroda reportedly assured Prime Minister Shinzo Abe today, 11 September 2014, that the central bank won't hesitate to take further action should a 2% inflation target become difficult to achieve. In a meeting with Abe, Kuroda reportedly exchanged views with Abe over recent economic conditions, and told the prime minister that the global economy is on a recovery path. The BOJ governor also talked about consumer spending before and after April's sales tax increase, reports further indicated.
Trading in US index futures indicated that the Dow could fall 7 points at the opening bell today, 11 September 2014. US stocks edged higher on Wednesday, 10 September 2014, helped by rebound in Apple shares.
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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