As fears of a slowdown in Chinese economy continued to weigh on Chinese and European stocks, key equity benchmark indices in India edged lower in choppy trade. The barometer index, the S&P BSE Sensex, lost 325.45 points or 1.25% at 25,706.93, as per provisional closing data. The 50-unit CNX Nifty lost 90.85 points or 1.15% at 7,789.85, as per provisional closing data. The Sensex provisionally settled below the psychological 26,000 mark. Earlier, the Sensex had regained the psychological 26,000 level after falling below that level in early trade. The market breadth indicating the overall health of the market turned negative from positive in late trade.
In overseas markets, Chinese stocks fell on fears that its economy is slowing at a faster pace than widely anticipated. European stocks edged lower as investors question China's efforts to stimulate growth in the world's second-largest economy.
FMCG shares witnessed selling pressure. Shares of public sector oil marketing companies fell. Index heavyweights HDFC, Infosys and L&T declined.
Key indices witnessed intraday volatility today, 26 August 2015. After staging a strong rebound from an initial slide in morning trade, benchmark indices once again slipped into the red from green later. Key indices erased almost entire intraday losses in early afternoon trade. Benchmark indices weakened again in late trade.
Indian stocks may remain volatile in the near future as traders roll over positions in the futures & options (F&O) segment from the near month August 2015 series to September 2015 series. The near month August 2015 derivatives contracts are set to expire tomorrow, 27 August 2015.
Foreign portfolio investors (FPIs) pressed substantial sales of Indian stocks yesterday, 25 August 2015. FPIs sold shares worth a net Rs 2080.01 crore yesterday, 25 August 2015, as per provisional data released by the stock exchanges. Domestic institutional investors (DIIs) bought shares worth a net Rs 1963.09 crore yesterday, 25 August 2015, as per provisional data released by the stock exchanges.
As per provisional closing, the S&P BSE Sensex fell 325.45 points or 1.25% to 25,706.93. The index fell 374.82 points at the day's low of 25,657.56 in late trade. The index rose 124.23 points at the day's high of 26,156.61 in morning trade.
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The CNX Nifty fell 90.85 points or 1.15% at 7,789.85, as per provisional closing. The index hit a low of 7,777.10 in intraday trade. The index hit a high of 7,930.05 in intraday trade.
The BSE Mid-Cap index was down 83.16 points or 0.79% at 10,477.16. The decline in this index was lower than the Sensex's decline in percentage terms. The BSE Small-Cap index was up 17.06 points or 0.16% at 10,711.73, outperforming the Sensex.
The market breadth indicating the overall health of the market was turned negative from positive. On BSE, 1,336 shares fell and 1,333 shares rose. A total of 96 shares were unchanged.
The total turnover on BSE amounted to Rs 3057 crore, lower than turnover of Rs 4804.66 crore registered during the previous trading session.
FMCG shares witnessed selling pressure. Britannia Industries (down 3.26%), Bajaj Corp (down 2.2%), GlaxoSmithKline Consumer Healthcare (down 1.65%), Godrej Consumer Products (down 1.51%), Nestle India (down 1.49%), Hindustan Unilever (down 1.42%), Jyothy Laboratories (down 1.12%), Tata Global Beverages (down 0.68%), Procter & Gamble Hygiene & Health Care (down 0.5%) and Marico (up 0.05%), edged lower. Colgate Palmolive (India) (up 0.75%) and Dabur India (up 0.93%), edged higher.
Index heavyweight and housing finance major HDFC fell 3.28% to Rs 1,108. The stock hit a high of Rs 1,158 and a low of Rs 1,093.80 in intraday trade.
Index heavyweight and construction major L&T fell 2.04% to Rs 1,592.50. The stock hit a high of Rs 1,644 and a low of Rs 1,585.55 in intraday trade. The company announced during trading hours today, 26 August 2015, that the Power Transmission and Distribution Business unit of the company has won an order valued at Rs 864 crore in the Middle East market from Qatar General Electricity & Water Corporation. The order encompasses the engineering, procurement and construction of two substation packages
Index heavyweight and IT major Infosys fell 1.95% to Rs 1,065.35. The stock hit a high of Rs 1,099 and a low of Rs 1,059.60 in intraday trade.
Shares of public sector oil marketing companies edged lower. BPCL (down 2.98%) and HPCL (down 1.94%) edged lower.
In the global commodities markets, Brent crude oil futures edged higher. Brent for October settlement was currently up 5 cents at $43.26 a barrel. The contract had risen 52 cents or 1.22% to settle at $43.21 a barrel during the previous trading session.
In the foreign exchange market, the rupee edged lower against the dollar. The partially convertible rupee was currently hovering at 66.1225, compared with its close of 66.10 during the previous trading session.
Indian Oil Corporation fell 0.22% to Rs 393.90. The stock hit a high of Rs 413.85 and a low of Rs 387.35 in intraday trade. A filing with the stock exchanges showed that India's biggest domestic institutional investor, Life Insurance Corporation of India (LIC), bought 20.87 crore shares or 8.59% stake in Indian Oil Corporation (IOCL) in the recently completed divestment of Government of India's stake in the company. This means that LIC bought majority of the shares that were on offer. The Government of India, the principle shareholder of IOCL, sold 24.27 crore shares aggregating to a 10% stake in IOCL through the stock exchanges mechanism on 24 August 2015. With the acquisition of the large quantum of shares in the Offer for Sale for divestment of the Government of India's stake in IOCL, LIC's stake in IOCL has risen to 11.11% from 2.52% earlier.
Meanwhile, IOCL after market hours yesterday, 25 August 2015, announced that subsequent to signing of a Memorandum of Understanding (MoU) between Government of India (GoI) and Government of Nepal on 24 August 2015, IOCL and Nepal Oil Corporation (NOC) have signed an MoU for construction of 1.3 million metric tonne per annum (MMTPA) capacity Raxaul-Amlekhgunj petroleum product pipeline along with some works at Amlekhganj Petroleum Depot of NOC. The estimated cost of the project is Rs 275 crore and the completion period is 30 months after receipt of statutory clearances. This pipeline will ensure long term supply of petroleum products to Nepal from IOCL as well as stability of supplies from India to Nepal, which will benefit both the countries, IOCL said.
Meanwhile, according to a summary of the electronic consultation that the Reserve Bank of India (RBI) held with the Technical Advisory Committee on Monetary Policy in the run up to the monetary policy review on 4 August 2015, four out of seven external members of the committee recommended a cut in the repo rate at the 4 August policy review. Three of them suggested a reduction in repo rate by 25 basis points and one member suggested a 50 basis points reduction. Three members recommended a status quo in the repo rate, with one of them suggesting a reduction in the statutory liquidity ratio (SLR) by 50 basis points. The RBI kept the repo rate unchanged at the 4 August policy review.
Meanwhile, investors continue to watch the progress of the monsoon rains which will have a bearing on food prices and rural income. India's weather office, the India Meteorological Department (IMD), said in a daily report issued yesterday, 25 August 2015, that for the country as a whole, cumulative rainfall during this year's monsoon season was 11% below the Long Period Average (LPA) until 25 August 2015. Region wise, the rainfall was 20% below the LPA in South Peninsula, 14% below the LPA in Central India, 6% below the LPA in East & Northeast India and 5% below the LPA in Northwest India until 25 August 2015.
The June-September southwest monsoon is critical for the country's agriculture because a considerable part of the country's farmland is dependent on the rains for irrigation.
In overseas markets, European stocks edged lower today, 26 August 2015, as market enthusiasm over stimulus measures enacted by China faded. Key benchmark indices in Germany, UK and France were off 1.10% to 1.32%.
Chinese stocks fell in choppy trade today, 26 August 2015, even after the nation's central bank announced fresh measures after trading hours yesterday, 25 August 2015, to ease monetary policy to battle the country's deepening economic slowdown. In mainland China, the Shanghai Composite lost 1.27%. In Hong Kong, the Hang Seng index was off 1.52%. China's central bank, People's Bank of China (PBOC), today, 26 August 2015, announced that it will inject 140 billion yuan ($21.80 billion) into the financial system through a short-term liquidity adjustment (SLO) operation. The SLO loans come with a 2.3% interest rate. Short-term liquidity operations were launched by the PBOC in 2013 to reduce fluctuations in liquidity and stabilize interbank funding costs. The decision comes a day after the Chinese central bank cut its benchmark interest rates and lowered the reserve-requirement ratio for banks in the wake of recent stock-market turmoil in the country.
The Shanghai Composite Index fell 7.6% yesterday, 25 August 2015, following an 8.5% plunge on Monday, 24 August 2015. China's surprise move to devalue its currency by almost 2% two weeks ago has magnified worries that its economic slowdown is worse than official data shows.
In other Asian markets, Key benchmark indices in Taiwan, Indonesia, Japan and South Korea were up by 0.22% to 3.2%. In Singapore, the Straits Times was off 0.46%.
Trading in US index futures indicated that the Dow could surge 193 points at the opening bell today, 26 August 2015. In a dramatic reversal to a morning rally, US stocks relinquished all of their opening gains to finish with losses yesterday, 25 August 2015, as selling accelerated during the last one hour or so of the trading session. The latest economic data showed that new-home sales bounced back in July, while a separate report showed consumer confidence rising more than projected in August. The Conference Board, a private research group, said that its index of consumer confidence rose to 101.5 in August, bouncing back after a steep decline in July.
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