A slide during the latter part of the trading session pushed key benchmark indices lower. The barometer index, the S&P BSE Sensex, regained the psychological 28,000 level after falling below level in intraday trade. The Sensex was provisionally off 116.67 points or 0.41% at 28,046.62. The market breadth indicating the overall health of the market was negative. Banks fell across the board. Metal shares reversed initial gains. Steel stocks declined.
Foreign portfolio investors (FPIs) sold shares worth a net Rs 101.98 crore yesterday, 18 November 2014, as per provisional data. Reserve Bank of India Governor Raghuram Rajan yesterday, 18 November 2014, said that there is a lot of work to be done to get India back on a strong growth path. The Organisation for Economic Cooperation and Development (OECD) today, 19 November 2014, said the Indian economy is showing signs of a turnaround and that new reforms, some of which are included in the package presented by Prime Minister Narendra Modi, need to be implemented to put the country on a path to strong, sustainable and inclusive growth.
After remaining range bound earlier during the day, key benchmark indices edged lower after a sudden slide in mid-afternoon trade. Earlier, the Sensex and the 50-unit CNX Nifty had pared gains after both these indices hit record high at the onset of trading session.
In overseas markets, European shares reversed initial losses ahead of the release of the minutes of the US Federal Reserve's October policy meeting later in the global day today, 19 November 2014. Asian stocks were mixed. US stocks edged higher yesterday, 18 November 2014, with the Dow Jones Industrial Average and the S&P 500, both, attaining record closing high as upbeat US housing data, as well as news of a snap election in Japan and better-than-expected data from Germany boosted investor sentiment.
In the foreign exchange market, the rupee edged lower against the dollar as key equity benchmark indices dropped.
Brent crude oil futures rose amid intraday volatility as OPEC producers appeared divided ahead of the oil cartel's meeting to discuss output next week.
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As per provisional closing, the S&P BSE Sensex was down 116.67 points or 0.41% to 28,046.62. The index fell 199.78 points at the day's low of 27,963.51 in late trade, its lowest level since 17 November 2014. The index jumped 130.72 points at the day's high of 28,294.01 at onset of the trading session, a record high for the index.
The CNX Nifty was down 43.60 points or 0.52% at 8,382.30, as per provisional closing. The index hit a low of 8,360.50 in intraday trade, its lowest level since 17 November 2014. The index hit a high of 8,455.65 in intraday trade, its record high level.
The BSE Mid-Cap index was off 60.65 points or 0.59% at 10,214.65. The BSE Small-Cap index was off 68.20 points or 0.6% at 11,374.96. Both these indices underperformed the Sensex.
The market breadth indicating the overall health of the market was negative. On BSE, 1,829 shares fell and 1,225 shares rose. A total of 93 shares were unchanged.
The total turnover on BSE amounted to Rs 3833 crore, higher than Rs 3657.51 crore yesterday, 18 November 2014.
Banks fell across the board. Among public sector banks, Bank of India (down 2.96%), Canara Bank (down 2.76%), Union Bank of India (down 2.56%), IDBI Bank (down 2.03%), Punjab National Bank (down 1.77%), Bank of Baroda (down 1.57%) and State Bank of India (down 0.67%), edged lower.
Among private sector banks, Yes Bank (down 2%), Kotak Mahindra Bank (down 0.7%), IndusInd Bank (down 0.89%), HDFC Bank (down 0.58%), Federal Bank (down 0.31%) and ICICI Bank (down 0.10%) edged lower.
Axis Bank rose 0.96%. The bank after market hours yesterday, 18 November 2014, said it priced $500 million 3.250% senior unsecured notes due 2020 (the Notes). The Notes are issued by Axis Bank's DIFC branch, Dubai and are rated Baa2 by Moody's, BBB- by S&P and BBB- by Fitch. The notes will be denominated in US dollars, and will bear fixed interest of 3.250% per annum, with interest payable semi-annually in arrears, Axis Bank said. The bank will apply the net proceeds of the issue to meet the funding requirement of its foreign branches and for general corporate purposes, Axis Bank said.
Metal and mining shares reversed initial gains. Hindalco Industries (down 0.35%), NMDC (down 1.12%), Hindustan Zinc (down 2.04%) and Sesa Sterlite (down 2.63%) edged lower.
Steel stocks declined. Tata Steel (down 3.08%), JSW Steel (down 2.48%), Steel Authority of India (down 2.57%) and Jindal Steel & Power (down 2.58%) edged lower.
In the foreign exchange market, the rupee edged lower against the dollar as key equity benchmark indices dropped. The partially convertible rupee was hovering at 61.915, compared with its close of 61.745 during the previous trading session.
Brent crude oil futures rose amid intraday volatility as OPEC producers appeared divided ahead of the oil cartel's meeting to discuss output next week. Brent for January settlement was currently up 22 cents at $78.69 a barrel. The contract had lost 84 cents to settle at $78.47 a barrel yesterday, 18 November 2014.
Oil ministers from the Organization of the Petroleum Exporting Countries (OPEC) are scheduled to meet in Vienna on 27 November 2014 to consider whether to adjust their output target of 30 million barrels per day (bpd) for early 2015.
Reserve Bank of India Governor Raghuram Rajan yesterday, 18 November 2014, said that there is a lot of work to be done to get India back on a strong growth path. India will focus on sustainable economic growth and developed economies should do the same, Rajan told reporters in Mauritius yesterday, 18 November 2014, according to reports. "Lots of work to do to get India back on a strong growth path. The government has been putting together a series of reforms which I think cumulatively amount to big reforms. The central bank is putting together reforms. My sense is we will do what it takes," Rajan said.
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.
The Organisation for Economic Cooperation and Development (OECD) today, 19 November 2014, said the Indian economy is showing signs of a turnaround. New reforms, some of which are included in the package presented by Prime Minister Narendra Modi, need to be implemented to put the country on a path to strong, sustainable and inclusive growth, according to the latest OECD Economic Survey of India. According to the survey, India's GDP should grow by more than 6.5% annually in the coming years.
Investment and exports are driving the rebound, but growth will be sustained at a stronger pace if further steps are taken, the OECD said. In the near term, stable and lower inflation and smaller deficits are needed, it said. Structural improvements to the business climate are crucial for medium term growth, and in the longer-term, health improvements and increased female participation in the labour market will sustain strong and inclusive growth, the OCED said.
The OECD said that India should formally adopt a flexible inflation-targeting framework, which will help contain inflation expectations and provide support for saving and investment. It also suggested implementing a broad national value-added tax goods and services tax (GST) and cutting energy subsidies, as part of wider efforts to put public finances on a stronger footing. Reducing barriers to manufacturing growth, which has contributed relatively little to growth of GDP or exports, will be critical, the OECD said.
India's reform agenda should also seek to increase women's economic participation rates, which are often drastically below those of men. Over a long-term, more and better jobs for women would raise equity and boost growth by over 2 percentage points annually, the OECD said.
European shares reversed initial losses today, 19 November 2014, ahead of the release of the minutes of the US Federal Reserve's October policy meeting later in the global day today, 19 November 2014. Key benchmark indices in France and Germany were up 0.08% to 0.18%. In UK, the FTSE 100 was off 0.06%.
The Bank of England's (BOE) Monetary Policy Committee voted 7-2 at its November meeting to keep rates on hold, according to minutes released today, 19 November 2014. The minutes from the meeting on 5 and 6 November 2014 show seven members were in favor of leaving the key interest rate at a record low of 0.5%, where it has stood since March 2009. The minutes record that dissenting members Martin Weale and Ian McCafferty voted for a rise in the BOE's benchmark rate -- known as Bank Rate -- to 0.75% from a low of 0.5%, as they did at the August and September gatherings. All members voted in favor of keeping the 375 billion-pound ($585 billion) asset-purchase program unchanged.
Asian stocks were mixed today, 19 November 2014. Key benchmark indices in Indonesia, Singapore and Taiwan were up 0.50% to 1.18%. Key benchmark indices in China, Hong Kong and South Korea were off 0.01% to 0.66%.
In Japan, the Nikkei 225 Average lost 0.32%. The Bank of Japan (BOJ) after a monetary policy review today, 19 November 2014, decided to maintain its large-scale easing policy and stick to its upbeat assessment of the economy despite dismal growth figures released earlier this week that prompted Prime Minister Shinzo Abe to delay a tax increase and call early elections. While government data released early this showed the world's third-biggest economy unexpectedly fell into a recession, the BOJ maintained the view that a moderate recovery trend has taken hold, suggesting that the downturn sparked by a tax increase earlier in the year will be short-lived.
The relatively optimistic view contrasts with the judgment by Mr. Abe that the economy isn't strong enough to go ahead with a second increase in the sales tax planned for next year. The prime minister said yesterday, 18 November 2014, that the rise in the tax rate would be delayed by 18 months and that he would seek a popular mandate for the postponement and his economic policy platform known as Abenomics in an election next month.
Trading in US index futures indicated that the Dow could fall 11 points at the opening bell today, 19 November 2014. US stocks edged higher yesterday, 18 November 2014, with the Dow Jones Industrial Average and the S&P 500, both, attaining record closing high as upbeat US housing data, as well as news of a snap election in Japan and better-than-expected data from Germany boosted investor sentiment.
The US Federal Reserve will release the minutes of its policy meeting held on 28-29 October 2014 later in the global day today, 19 November 2014. The US central bank ended its bond-buying program last month amid an improving labor market.
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