Modest losses were recorded on the domestic bourses as weakness in Asian stocks weighed on sentiment and as investors turned cautious ahead of a US Federal Reserve meeting later this week. The barometer index, the S&P BSE Sensex, dropped 150.77 points or 0.58% to settle at 25,705.93. The 50-unit CNX Nifty lost 43.15 points or 0.55% to settle at 7,829.10. Metal and auto stocks led the decline for key indices which hovered in negative zone almost throughout the trading session.
Among sectoral indices on BSE, losses for the S&P BSE Consumer Durables index (down 1.55%), the S&P BSE Metal index (down 2.34%), the S&P BSE Auto index (down 1.66%), the S&P BSE Capital Goods index (down 2.11%), and the S&P BSE Realty index (down 0.67%) exceeded the Sensex's decline in percentage terms. The losses for S&P BSE Power index (down 0.19%), the S&P BSE Teck index (down 0.19%), the S&P BSE Oil & Gas index (down 0.17%), the S&P BSE Bankex (down 0.4%) and the S&P BSE Healthcare index (down 0.08%) were lower than the Sensex's decline in percentage terms. The S&P BSE FMCG index (up 0.8%) and the S&P BSE IT index (up 0.03%) ended in green, with both these indices outperforming the Sensex.
In overseas markets, Chinese stocks led decline in Asian markets after a recent batch of disappointing Chinese economic data. The Shanghai Composite Index lost 3.52%, adding to a nearly 3% drop during the previous trading session. The major event this week is the US Federal Reserve's monetary policy meeting. At the two-day policy meeting which begins on 16 September 2015, the Federal Reserve policy makers will deliberate the first interest rate increase in nearly a decade. Higher US interest rates will drain liquidity from global emerging markets like India and redirect it to developed economies. The Fed has held its benchmark short-term interest rate near zero since December 2008.
The Sensex fell 150.77 points or 0.58% to settle at 25,705.93, its lowest closing level since 11 September 2015. The index lost 207.33 points at the day's low of 25,649.37 in mid-afternoon trade. The index rose 53.13 points at the day's high of 25,909.83 in early trade, its highest level since 2 September 2015.
The Nifty dropped 43.15 points or 0.55% to settle at 7,829.10, its lowest closing level since 11 September 2015. The Nifty lost 72.50 points at the day's low of 7,799.75 in mid-afternoon trade. The Nifty rose 7.75 points at the day's high of 7,880 in early trade, its highest level since 1 September 2015.
The market breadth indicating the overall health of the market was negative. On BSE, 1,521 shares declined and 1,100 shares rose. A total of 103 shares were unchanged.
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The BSE Mid-Cap index lost 0.77%. The decline in this index was higher than Sensex's decline in percentage terms. The BSE Small-Cap index fell 0.55%. The decline in this index was lower than Sensex's decline in percentage terms.
The total turnover on BSE amounted to Rs 2237 crore, higher than turnover of Rs 1979.79 crore registered during the previous trading session.
In sector trends, metal and mining stocks declined. Hindalco Industries (down 3.05%), Hindustan Zinc (down 1.1%) and NMDC (down 1.21%) edged lower. National Aluminium Company (up 1.36%) edged higher.
Steel stocks dropped. Jindal Steel & Power (down 2.96%), JSW Steel (down 4.49%), Tata Steel (down 5.22%) and Steel Authority of India (down 3.26%) edged lower. The government after trading hours yesterday, 14 September 2015, issued notification imposing a provisional safeguard duty effective from 14 September 2015 on import of hot-rolled flat products of non-alloy and other alloy steel in coils of a width of 600 mm or more at the rate of 20% ad-valorem for a period of 200 days. The safeguard duty is a global safeguard measure to protect the domestic industry and the levy is applicable on import of the concerned product from all countries.
Shares of coal mining giant Coal India were off 0.91% at Rs 336.15.
Cairn India rose 1.01%. Vedanta declined 4.16%. Vedanta and Cairn India have received no objection from the BSE and the NSE for the proposed merger of Cairn India with Vedanta.
Power generation and power distribution firms saw mixed trend. Adani Power (down 2.56%), Reliance Infrastructure (down 2.74%), Reliance Power (down 2.26%), JSW Energy (down 1.91%), and Tata Power (down 0.57%) edged lower. Torrent Power (up 1%), NTPC (up 0.68%), Power Grid Corporation of India (up 0.71%) and NHPC (up 0.62%) edged higher.
Auto stocks declined. Tata Motors (down 3.82%), Hero MotoCorp (down 1.6%), Ashok Leyland (down 2.62%), TVS Motor Company (down 0.58%), Mahindra & Mahindra (down 1.74%), Bajaj Auto (down 0.4%) and Eicher Motors (down 1.66%) edged lower.
Shares of Maruti Suzuki India (MSIL) were unchanged at Rs 4,320. The stock hit a high of Rs 4,415.70 and a low of Rs 4,320 in intraday trade. The Reserve Bank of India (RBI) yesterday, 14 September 2015 notified that foreign institutional investors (FIIs) can now invest up to 40% of the paid up capital of MSIL under the Portfolio Investment Scheme (PIS). RBI further announced that the total FII holding in MSIL has gone below the revised threshold limit and therefore the restrictions placed on the purchase of shares of MSIL have been withdrawn with immediate effect.
Index heavyweight and engineering & construction major L&T lost 3.22% at Rs 1,552.05 after a foreign bank reportedly downgraded the stock to hold and cut its earnings estimates of the company due to demand pushback expectations. The foreign bank reportedly slashed its earnings estimates of L&T by 2% for the year ending 31 March 2016 (FY 2016) and by 16% for the year ending 31 March 2017 (FY 2017). New orders are being deferred/pushed back in both India and the Middle East, the foreign bank reportedly said in a research report on L&T.
Index heavyweight and housing finance firm HDFC was off 0.69% at Rs 1,176.
Index heavyweight and housing finance firm Reliance Industries (RIL) gained 0.52% to Rs 867.55.
Bank stocks edged lower. Among PSU banks, Bank of Baroda (down 2.49%), Punjab National Bank (down 1.35%), Canara Bank (down 2.04%), IDBI Bank (down 1.65%), Syndicate Bank (down 1.18%), Andhra Bank (down 1.35%), Union Bank of India (down 1.16%), United Bank of India (down 0.71%) and State Bank of India (down 0.57%) declined. Bank of India rose 0.96%.
Among private sector banks, Axis Bank (down 2.6%), ICICI Bank (down 1.12%), Kotak Mahindra Bank (down 0.93%), HDFC Bank (down 0.53%), and Yes Bank (down 0.28%) edged lower. IndusInd Bank rose 0.71%.
On the macro front, the latest data showed that inflation based on the consumer price index (CPI) remained benign last month. The headline CPI inflation eased to 3.66% in August 2015 from 3.69% in July 2015. Among the CPI components, the inflation for food and beverages rose to 2.9% in August 2015 from 2.8% in July 2015. The core CPI inflation declined to 3.8% in August 2015 from 4% in July 2015.
The Sensex has lost 577.16 points or 2.19% in this month so far (till 15 September 2015). The Sensex has fallen 1,793.49 points or 6.52% in this calendar year so far (till 15 September 2015). From a 52-week low of 24,833.54 hit on 8 September 2015, the Sensex has risen 872.39 points or 3.51%. The Sensex is off 4,318.81 points or 14.38% from a record high of 30,024.74 hit on 4 March 2015.
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