Key benchmark indices hovered in negative terrain in mid-morning trade. The decline was very small. The barometer index, the S&P BSE Sensex, was currently down 27.28 points or 0.1% at 26,789.28. But, the broad market depicted strength. The market breadth indicating the overall health of the market was strong. Key indices dropped after the latest data showed that India's merchandise exports registered a small increase of 2.35% in August 2014. Asian stocks were in red. Capital goods stocks edged higher. L&T rose after the company said that its construction division has won new orders worth Rs 2050 crore across various business segments in August 2014 and September 2014.
Earlier, small losses took key indices to their lowest level in more than two week in morning trade.
Asian stocks declined on caution ahead of the start of Federal Reserve's two-day policy meeting today, 16 September 2014.
In the foreign exchange market, the rupee edged higher against the dollar.
Brent crude oil prices edged higher, holding gains after recovering from its lowest price in more than two years in previous session but capped by a soft global economic outlook
At 11:15 IST, the S&P BSE Sensex was down 27.28 points or 0.1% at 26,789.28. The index dropped 71.02 points at the day's low of 26,745.54 in morning trade, its lowest level since 1 September 2014. The index rose 44.73 points at the day's high of 26,861.29 in early trade.
The CNX Nifty was down 9.70 points or 0.12% at 8,032.30. The index hit a low of 8,019.65 in intraday trade, its lowest level since 1 September 2014. The index hit a high of 8,044.90 in intraday trade.
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The market breadth indicating the overall health of the market was strong. 1,484 shares gained and 980 shares fell. A total of 98 shares were unchanged.
The BSE Mid-Cap index was up 39.64 points or 0.4% at 10,040.50. The BSE Small-Cap index was up 78.49 points or 0.7% at 11,324.01. Both these indices outperformed the Sensex.
Capital goods stocks gained. ABB (India) (up 0.34%), Bharat Heavy Electricals (Bhel) (up 0.5%), BEML (up 1.44%), Bharat Electronics (up 0.21%), Crompton Greaves (up 0.14%) Punj Lloyd (up 1.42%) and Thermax (up 0.31%) gained.
The Cabinet Committee on Economic Affairs on Monday, 15 September 2014, approved the "Scheme for Enhancement of Competitiveness of the Capital Goods Sector" to boost the Indian economy. The sub sectors of capital goods covered under the scheme are mainly for machine tools, textile machinery, construction and mining machinery, and process plant machinery. The proposed scheme addresses the issue of technological depth creation in the capital goods sector, besides creating common industrial facility centres. The scheme will be implemented in the 12th plan period and spill over to the 13th plan period with an estimated outlay of Rs 930.96 crore. The gross budgetary support (GBS) from the government for the scheme would be Rs 581.22 crore and the balance Rs 349.74 crore would be contributed by the stakeholder industries.
Larsen & Toubro (L&T) rose 0.04% to Rs 1,561 after the company after market hours on Monday, 15 September 2014 said that its construction division has won new orders worth Rs 2050 crore across various business segments in August 2014 and September 2014. The stock was volatile. The stock hit high of Rs 1,568.90 and low of Rs 1,552.65 so far during the day.
In the foreign exchange market, the rupee edged higher against the dollar. The partially convertible rupee was hovering at 61.09, compared with its close of 61.14 during the previous trading session.
Provisional data released by the stock exchanges after trading hours on Monday, 15 September 2014, showed that foreign portfolio investors (FPIs) sold shares worth a net Rs 74.59 crore on that day.
Brent crude oil prices edged higher, holding gains after recovering from its lowest price in more than two years in previous session but capped by a soft global economic outlook. Brent for November settlement was up 14 cents at $98.02 a barrel. The contract had risen 0.84% to settle at $97.88 a barrel on Monday, 15 September 2014. The October contract which expired on Monday, 15 September 2014 dipped to a 26-month low at $96.21 in its final session.
On macro front, India's merchandise exports registered a small increase of 2.35% at $26.95 billion in August 2014 over August 2013, data released by the government after trading hours yesterday, 15 September 2014, showed. Imports rose 2.08% at $37.79 billion in August 2014 over August 2013. Oil imports declined 14.97% at $12.83 billion in August 2014 over August 2013. Non-oil imports jumped 13.82% at $24.95 billion in August 2014 over August 2013. The trade deficit increased to $10.83 billion in August 2014, from $10.68 billion in August 2013.
Asian stocks declined today, 16 September 2014, on caution ahead of the start of Federal Reserve's two-day policy meeting today, 16 September 2014. Key benchmark indices in Hong Kong, Indonesia, Singapore, Taiwan and Japan were off 0.06% to 0.74%. Key benchmark indices in China and South Korea were up 0.28% to 0.42%.
Trading resumed on Hong Kong Stock Exchange after morning session was canceled due to Typhoon Kalmaegi.
Foreign direct investment into China, a gauge of external confidence, slumped to a four-year low amid widening antitrust probes into multinational companies. Inbound investment was $7.2 billion in August, down 14% from a year earlier, the Ministry of Commerce said on its website today in Beijing after a 17% drop in July. It was the first back-to-back decline of more than 10% since 2009.
Trading in US index futures indicated a flat opening of US stocks on Tuesday, 16 September 2014. US stocks closed mostly lower on Monday, 15 September 2014, with losses led by technology and small-cap stocks as investors continued to unload riskier position ahead of this week's pivotal Federal Reserve policy meeting.
Economic data yesterday showed US industrial production unexpectedly declined in August for the first time in seven months as automakers slowed assembly lines.
Investors will look to Federal Open Market Committee (FOMC) meeting for fresh guidance on US interest rates. A two-day policy meeting of the Federal Open Market Committee (FOMC) starts today, 16 September 2014. At the end of a two-day meeting, 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.
The Fed will also announce US economic projections after the policy meet. Fed now releases economic projections four times a year (March, June, September, and December). Traditionally, the Fed forecasts covered GDP, the PCE price index, and the civilian unemployment rate. However, the forecast report additionally now includes forecasts for the appropriate timing of the next change in the fed funds rate and the expected fed funds rate at the end of the next two years. The policy meet will be followed by a press conference by Federal Reserve Chairwoman Janet Yellen on 17 September 2014.
The Federal Reserve after two-day policy meeting on 30 July 2014, said it would reduce its purchases of mortgage and Treasury bonds by $10 billion to $25 billion monthly from $35 billion earlier, as widely expected.
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