After a range bound movement in afternoon trade, key benchmark indices extended losses and hit fresh intraday low in mid-afternoon trade as shares of index heavyweight ITC dropped. The barometer index, S&P BSE Sensex, was currently off 200.81 points or 0.7% at 28,298.73. ITC dropped after Health Minister J P Nadda said in a written reply in the Rajya Sabha that the Ministry of Health & Family Welfare has accepted recommendations of a committee that has suggested prohibition on sale of loose or single stick of cigarettes.
The market breadth indicating the overall health of the market was quite weak with more than three losers for every gainer on BSE. A number of side counters dropped. The BSE Mid-Cap index was off 2.07% and the BSE Small-Cap index was off 2.87%. The decline in these two indices was much sharper than the Sensex's slide in percentage terms.
The market sentiment was hit adversely by stock market regulator Securities and Exchange Board of India (Sebi) imposing restrictions on issue of Offshore Derivative Instruments (ODIs) by foreign portfolio investors (FPIs). The conditions imposed on issue of ODIs will come into effect immediately, Sebi said in a circular issued yesterday, 24 November 2014. Existing ODI positions which are not in conformity with the latest conditions imposed on issue of ODIs, can be continued till the expiry of the ODI contract.
Cairn India declined along with fall in crude oil prices.
The government intends to get the Insurance Laws Amendment Bill that seeks to enhance FDI limit in capital starved insurance sector passed during the month-long winter session of parliament which began yesterday, 24 November 2014. The government is also likely to introduce the constitutional amendment bill for the goods & services tax in the winter session of parliament.
Key benchmark indices have remained in red almost throughout the trading session so far.
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In overseas markets, European stocks edged higher after the latest data showed Germany's gross domestic product rose 0.1% in Q3 September 2014. Stocks in mainland China led gains in Asian stocks on speculation China will cut interest rates further. In the US yesterday, 24 November 2014, the S&P 500 and Dow Jones Industrial Average, both, attained another record closing high, on hopes that China will take further accommodative monetary policy action if needed.
In the foreign exchange market, the rupee edged higher against the dollar.
Brent crude oil futures edged lower as investors lowered their expectation of a significant output cut by producer group the Organization of the Petroleum Exporting Countries (OPEC) at a meeting this week.
Indian stocks may remain volatile this week as traders roll over positions in the futures & options (F&O) segment from November 2014 series to December 2014 series. The November 2014 derivatives contracts expire on Thursday, 27 November 2014.
At 14:17 IST, the S&P BSE Sensex was down 200.81 points or 0.7% at 28,298.73. The index slumped 246.25 points at the day's low of 28,253.29 in mid-afternoon trade, its lowest level since 21 November 2014. The index rose 41.68 points at the day's high of 28,541.22 in early trade.
The CNX Nifty was down 95.80 points or 1.12% at 8,434.35. The index hit a low of 8,433.10 in intraday trade, its lowest level since 21 November 2014. The index hit a high of 8,535.35 in intraday trade, a record high for the index.
The market breadth indicating the overall health of the market was quite weak with more than three losers for every gainer on BSE. 2,240 shares fell and 632 shares rose. A total of 82 shares were unchanged.
The BSE Mid-Cap index was off 211.47 points or 2.07% at 9,991.50. The BSE Small-Cap index was off 324.47 points or 2.87% at 10,994.36. The decline in these two indices was much sharper than the Sensex's slide in percentage terms.
Cairn India declined 2.06% along with fall in crude oil prices. Lower crude oil prices will result in lower realizations from crude sales for oil exploration firms such as Cairn India.
Index heavyweight and cigarette maker ITC dropped 3.03% to Rs 359.70. The stock hit high of Rs 378.80 and low of Rs 356.65 so far during the day. Health Minister J P Nadda stated in a written reply in the Rajya Sabha today, 25 November 2014, the Ministry of Health & Family Welfare has accepted recommendations of a committee that has suggested prohibition on sale of loose or single stick of cigarettes, increasing the minimum legal age for sale of tobacco products, increasing the fine or penalty amounts for violation of certain provisions of the Cigarettes and Other Tobacco Products (Prohibition of Advertisement and Regulation of Trade and Commerce, Production, Supply and Distribution) Act, 2003 (COTPA), as well as making such offences cognizable. In this regard, a draft note for Cabinet has been circulated for Inter-Ministerial consultation.
L&T declined 2.2%. With respect to press release dated 24 November 2014 titled L&T Technology Services closes acquisition of Dell's Engineering Services Business", the company has clarified on request of certain queries from the stock exchanges that L&T Technologies Services intends to acquire Dell's Engineering Services business located at US and India, subject to regulatory approvals. The acquisition price is $12.5 million, subject to customary net asset adjustments at the time of closing. There are no further disclosures.
Havells India declined 2.15%. The company said during market hours that in the annual surveillance conducted by ICRA of the credit rating assigned by it to the FD (Fixed Deposit) programme of the company, ICRA has upgraded the rating to MAAA (pronounced as M triple A) from MAA (pronounced as M double A) earlier. MAAA is the highest-credit-quality rating assigned by ICRA.
Meanwhile, foreign portfolio investors (FPIs) bought shares worth a net Rs 407.42 crore yesterday, 24 November 2014, as per provisional data.
Stock market regulator Securities and Exchange Board of India (Sebi) has imposed restrictions on issue of Offshore Derivative Instruments (ODIs) by foreign portfolio investors (FPIs). In a circular issued yesterday, 24 November 2014, Sebi said that a foreign portfolio investor (FPI) shall issue ODIs only to those ODI subscribers who are resident of a country whose securities market regulator is a signatory to International Organization of Securities Commission's Multilateral Memorandum of Understanding or a signatory to bilateral Memorandum of Understanding with Sebi. If the ODI applicant is a bank, the central bank of the country must be a member of Bank for International Settlements. An FPI cannot issue ODIs if the applicant is not resident in a country identified in the public statement of Financial Action Task Force as a jurisdiction having a strategic Anti-Money Laundering or Combating the Financing of Terrorism deficiencies to which counter measures apply or a jurisdiction that has not made sufficient progress in addressing the deficiencies or has not committed to an action plan developed with the Financial Action Task Force to address the deficiencies.
An FPI shall issue ODIs only to those subscribers which do not have opaque structures, Sebi said in a circular. Sebi also said that the investment restrictions which are applicable to FPIs will also apply to ODI subscribers.
Existing ODI positions which are not in conformity with these latest conditions imposed on issue of ODIs, can be continued till the expiry of the ODI contract. No additional issuances/renewal/rollover of such positions shall be permitted, Sebi said. The conditions imposed on issue of ODIs will come into effect immediately, Sebi said.
In the foreign exchange market, the rupee edged higher against the dollar. The partially convertible rupee was hovering at 61.925, compared with its close of 61.945 during the previous trading session.
Brent crude oil futures edged lower as investors lowered their expectation of a significant output cut by producer group the Organization of the Petroleum Exporting Countries (OPEC) at a meeting this week. Brent crude for January settlement was off 10 cents at $79.58 a barrel. The contract had fallen 68 cents to finish at $79.68 a barrel during the previous trading session.
Oil ministers from the OPEC are scheduled to meet in Vienna on Thursday, 27 November 2014, to consider whether to adjust their output target of 30 million barrels per day (bpd) for early 2015. OPEC, which pumps about 40% of the world's crude, has maintained its official quota at 30 million barrels a day since January 2012.
The government will announce data on gross domestic product (GDP) for Q2 September 2014 at 17:30 IST on Friday, 28 November 2014. India's GDP grew 5.7% in Q1 June 2014 over the corresponding period of the previous year.
The Reserve Bank of India (RBI) next undertakes monetary policy review on 2 December 2014. The central bank aims to limit consumer-price gains to 8% by January 2015 and 6% by January 2016. Over the longer term, the RBI aims to limit consumer-price gains to 4%, within a 2% band. The annual rate of inflation based on the combined consumer price index (CPI) for urban and rural India eased to 5.52% in October 2014 from 6.46% in September 2014, data released by the government on 12 November 2014 showed.
European stocks edged higher today, 25 November 2014, after the latest data showed Germany's gross domestic product rose 0.1% in Q3 September 2014. Key benchmark indices in Germany and France were up 0.03% to 0.17%. In the UK, the FTSE 100 was off 0.01%.
Germany's gross domestic product rose 0.1% in Q3 September 2014, the Federal Statistics Office said today, 25 November 2014, confirming initial estimate. The expansion marks a rebound from the prior three months, when GDP fell 0.1%
Stocks in mainland China led gains in Asian stocks today, 25 November 2014, on speculation China will cut interest rates further. Key benchmark indices in Indonesia, Singapore, South Korea and Japan were up 0.03% to 0.29%. Key benchmark indices in Hong Kong and Taiwan were off 0.07% to 0.21%.
In mainland China, the Shanghai Composite rose 1.37%. China's central bank reportedly cut the yield for a key short-term money rate today, 25 November 2014, for the fourth time this year, as regulators step up efforts to reduce funding pressure on Chinese companies. The reduction of the yield on the 14-day bond repurchase agreement (repo) to 3.4%, from 3.6%, follows a surprise cut to benchmark lending rates on Friday, 21 November 2014, to support the cooling economy, and follows similar moves in October and July as growth wobbled. The People's Bank of China cut one-year benchmark lending rates by 40 basis points to 5.6% late on Friday, and at the same time increased the maximum payable deposit rate to 3.3% from 3.2%.
In Japan, the minutes of the Bank of Japan's (BOJ) Oct. 31 monetary policy meeting released today, 25 November 2014, showed BOJ Governor Haruhiko Kuroda proposed the additional stimulus for the Japanese economy. In a speech, Kuroda today, 25 November 2014, stressed the bank's readiness to expand stimulus further to meet its price goal.
Trading in US index futures indicated that the Dow could fall 8 poits at the opening bell today, 25 November 2014. The S&P 500 and Dow Jones Industrial Average, both, attained another record closing high yesterday, 24 November 2014, on hopes that China will take further accommodative monetary policy action if needed. Small-caps rallied and outperformed their large counterparts, in a sign that the current bull market has not run out of steam yet. Trading volumes were lower than usual, as the week is cut short by Thanksgiving holiday on Thursday, 27 November 2014. Trading on Friday, 28 November 2014, will be a half-day session.
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