Trading for the week started on a weak note as key benchmark indices edged lower. After remaining range bound for a better part of the trading session, benchmark indices lost ground during the latter part of the trading session as European stocks reversed initial gains. The 50-unit CNX Nifty fell below the psychological 8,000 mark. The market breadth indicating the overall health of the market was negative. The barometer index, the S&P BSE Sensex, was provisionally off 106.82 points or 0.4% at 26,744.23.
Hindustan Unilever (HUL) slumped after the company at the time of announcing Q2 September 2014 results said that operating environment remained challenging with low market growth across categories during the quarter. Realty stocks dropped. DLF slumped after media reports suggested that the new BJP led state government in Haryana would inquire into all land scams, including the controversial deal between UPA chairperson Sonia Gandhi's son-in-law Robert Vadra and realty giant DLF. Jindal Steel & Power tumbled on buzz the Central Bureau of Investigation (CBI) has begun a probe into how Congress leader Naveen Jindal's company got permission from the environment ministry under Jayanti Natarajan in 2013, during United Progressive Alliance's government to mine iron ore in Asia's largest sal forest in the Naxal-affected Saranda area of Jharkhand. Index heavyweight Reliance Industries (RIL) declined.
In overseas markets, a slide in Italy's lenders sent European stocks lower. Asian stocks declined on concerns of slowdown in China.
Earlier, the Sensex and the 50-unit CNX Nifty had trimmed gains soon after hitting their highest level in almost five weeks at the onset of the trading session.
The Sensex and the Nifty snapped five-day winning streak today, 27 October 2014.
The market may remain volatile this week as traders roll over positions in the futures & options (F&O) segment from the near month October 2014 series to November 2014 series. The near month October 2014 derivatives contract expire on Thursday, 30 October 2014.
In the foreign exchange market, the rupee edged lower against the dollar in volatile trade as key equity benchmark indices dropped.
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Brent crude oil futures edged lower in choppy trade on ample oil supplies.
As per provisional figures, the S&P BSE Sensex was off 106.82 points or 0.4% at 26,744.23. The index fell 124.21 points at the day's low of 26,726.84 in late trade, its lowest level since 22 October 2014. The index jumped 143.91 points at the day's high of 26,994.96 at the onset of the trading session, its highest level since 23 September 2014.
The 50-unit CNX Nifty was down 22.85 points or 0.29% at 7,991.70, as per provisional figures. The index hit a low of 7,985.65 in intraday trade, its lowest level since 22 October 2014. The index hit a high of 8,064.40 in intraday trade, its highest level since 23 September 2014.
The total turnover on BSE amounted to Rs 2603 crore.
The BSE Mid-Cap index was off 80.94 points or 0.84% at 9,592.09, underperforming the Sensex. The BSE Small-Cap index was off 19.96 points or 0.19% at 10,642.69, outperforming the Sensex.
The market breadth indicating the overall health of the market was negative. On BSE, 1,602 shares dropped and 1,258 shares rose. A total of 108 shares were unchanged.
Hindustan Unilever (HUL) slumped after the company at the time of announcing Q2 September 2014 results said that operating environment remained challenging with low market growth across categories during the quarter. The stock lost 5.4%. The company's net profit rose 8.13% to Rs 988.16 crore on 11.26% rise in total income to Rs 7837.13 crore in Q2 September 2014 over Q2 September 2013. The result hit the market during trading hours today, 27 October 2014.
HUL said that the domestic consumer business grew 10% in Q2 September 2014, ahead of market, with 5% underlying volume growth. HUL said that the operating environment remained challenging during the quarter with low market growth across categories. Brand investments were sustained at competitive levels across segments, albeit lower than an exceptionally high base quarter. The impact of input cost inflation continued to be felt in Q2 September 2014 through higher consumption costs although commodities softened towards the end of the quarter. Profit before interest and tax (PBIT) grew by 14% and PBIT margin improved by 50 basis points, despite the higher consumption costs, additional depreciation charge and phasing out of excise duty benefits. Profit after tax before exceptional items, PAT (bei), grew by 8% to Rs 957 crore while net profit at Rs 988 crore, was up 8%, impacted by the increase in the effective tax rate, HUL said.
ONGC dropped 2.17%. The company's Chairman D.K. Sarraf was quoted as saying that the company wants to take advantage of falling oil prices to more than double its overseas output to the equivalent of 400,000 barrels per day of oil by 2018.
Realty stocks dropped. D B Realty (down 1.14%), Housing Development & Infrastructure (HDIL) (down 3.13%), Unitech (down 3.39%) and Sobha (down 5.47%) dropped.
DLF slumped 7.84% after media reports suggested that the new Bharatiya Janata Party (BJP) led state government in Haryana would inquire into all land scams, including the controversial deal between UPA chairperson Sonia Gandhi's son-in-law Robert Vadra and realty giant DLF. The BJP garnered a majority in the recently held state elections and Manohar Lal Khattar took oath as Haryana Chief Minister yesterday, 26 October 2014.
Jindal Steel & Power tumbled 7.9% on buzz the Central Bureau of Investigation (CBI) has begun a probe into how Congress leader Naveen Jindal's company got permission from the environment ministry under Jayanti Natarajan in 2013 during United Progressive Alliance's government to mine iron ore in Asia's largest sal forest in the Naxal-affected Saranda area of Jharkhand.
Index heavyweight Reliance Industries (RIL) declined 1.15% to Rs 942. The stock hit high of Rs 960.90 and low of Rs 937.65.
In the foreign exchange market, the rupee edged lower against the dollar in volatile trade as key equity benchmark indices dropped. The rupee was hovering at 61.32, compared with its close of 61.28 during the previous trading session.
Brent crude oil futures edged lower in choppy trade on ample oil supplies. Brent crude for December delivery was down 17 cents at $85.98 a barrel. The contract had lost 70 cents to settle at $86.13 a barrel on Friday, 24 October 2014. Global oil supply remains high despite persistent geopolitical risks in producers such as Iraq and Libya.
The government's decision this month to decontrol diesel prices and a sharp decline in global crude oil prices recently will help India in containing its fiscal deficit. The fall in global crude oil prices will also help India in containing its current account deficit and fuel price inflation. India imports 80% of its crude oil requirement. A slump in Brent crude since the end of June contributed to consumer-price gains slowing to 6.46% last month, the least since 2012.
Meanwhile, on the political front, the Election Commission of India on Saturday, 25 October 2014, announced schedule for assembly election in Jharkhand and Jammu & Kashmir. Polls in both the states will take place in five phases from 25 November 2014 to 20 December 2014. The results of polls in both these states will be announced on 23 December 2014.
A slide in Italy's lenders sent European stocks lower today, 27 October 2014. Key benchmark indices in France, Germany and UK were off 0.23% to 0.35%.
German business confidence dropped for a sixth month as the specter of a recession haunts Europe's largest economy. The Ifo institute's business climate index, based on a survey of 7,000 executives, dropped to 103.2 in October from 104.7 in September. That's the lowest since December 2012.
The European Central Bank (ECB) yesterday, 26 October 2014, said none of the largest institutions is lacking in its assessment of the quality of balance sheets. The ECB released the results of the stress test yesterday, 26 October 2014, as it is about to take on a supervisory role for the euro area's lenders. Only eight of those with a shortfall haven't already plugged capital gaps or satisfied the central bank with plans to shrink. That means just 6.35 billion euros ($8.1 billion) remains from a 25 billion-euro hole, with half of that in Italy. No French, German or Spanish institutions were required to raise more funds.
Asian stocks declined today, 27 October 2014, on concerns of slowdown in China. Key benchmark indices in China, Hong Kong, Indonesia, and Taiwan were off 0.21% to 0.96%. Key benchmark indices in South Korea, Singapore and Japan were up 0.11% to 0.63%.
China's economic growth will slow to 7.2% in the current quarter, down from the previous three months, as domestic demand weakens, said Song Guoqing, an academic member of the People's Bank of China monetary policy advisory committee. The nation's economy will probably expand 7.3% next year, Song said at a forum in Beijing on 25 October 2014. That view contrasts with a prediction by Fan Jianping, chief economist at a state research institute, who said he expects 7% growth in 2015 unless the central government imposes stronger-than-expected stimulus measures.
Trading in US index futures indicated that the Dow could fall 7 points at the opening bell today, 27 October 2014. US stocks jumped on Friday, 24 October 2014, helped by earnings from Microsoft and Procter & Gamble and as concerns eased over the possible spread of Ebola in the United States.
A two-day meeting of the Federal Open Market Committee (FOMC) on US monetary policy review begins tomorrow, 28 October 2014. The Fed is expected to announce the end of quantitative easing after the meeting. Investors will be looking to see if the Fed drops the "considerable period" for keeping rates low at its two-day policy meeting. As several Fed officials have come out with dovish comments recently, investors largely expect that guidance to be reiterated.
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