Key benchmark indices dropped for second day in a row on speculation that US interest rates will rise sooner than estimated. Higher interest rates could lure money to the US from emerging markets, including India. The barometer index, the S&P BSE Sensex, was provisionally down 204.13 points or 0.75% at 27,061.19. 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. Index heavyweight and cigarette major ITC 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.
After an initial decline triggered by weakness in Asian stocks, key benchmark languished in red throughout the day.
In overseas markets, European stocks edged lower as the region's governments weighed tougher sanctions on Russia and concern grew the UK may be heading for partition. Asian stocks dropped on concern that China's growth is slowing and speculation that US interest rates will rise sooner than estimated.
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 lower amid intraday volatility after reaching 16-month low below $99 a barrel.
As per provisional closing, the S&P BSE Sensex was down 204.13 points or 0.75% at 27,061.19. The index lost 247.21 points at the day's low of 27,018.11 in late trade, its lowest level since 5 September 2014. The index fell 13.88 points at the day's high of 27,251.44 in early trade.
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The CNX Nifty was down 51.25 points or 0.63% at 8,101.70. The index hit a low of 8,082.10 in intraday trade, its lowest level since 5 September 2014. The index hit 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 was up 10.42 points or 0.11% at 9,853.79. The BSE Small-Cap index was up 62.60 points or 0.58% at 10,948.58. Both these indices 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.
Index heavyweight and cigarette major ITC edged lower on reports that the government is considering a proposal to ban the sale of loose cigarettes. The stock shed 1.85% at Rs 351.05. The stock hit high of Rs 357.85 and low of Rs 350.50. 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.
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.
Meanwhile, the provisional data released by the stock exchanges after trading hours yesterday, 9 September 2014, showed that foreign portfolio investors (FPIs) bought shares worth a net Rs 479.40 crore on that day.
Brent crude oil futures edged lower amid intraday volatility after reaching 16-month low below $99 a barrel. Brent for October settlement was down 7 cents at $99.09 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 60.91, compared with its close of 60.60 on Tuesday, 9 September 2014.
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 dropped for a fourth day today, 10 September 2014, as the region's governments weighed tougher sanctions on Russia and concern grew the UK may be heading for partition. Key benchmark indices in France, Germany and UK were off 0.15% to 0.39%.
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 fall 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.
At the end of a two-day meeting on 16-17 September 2014, the Federal Open Market Committee (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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