Nifty settles at over nine-week low

Stocks from IT and auto sector, oil exploration and production companies' shares and index heavyweights ITC and L&T led losses for key benchmark indices. The barometer index, the S&P BSE Sensex, lost 256.42 points or 0.99% to settle at 25,610.53. The losses for the BSE Sensex were higher in percentage terms than those for the Nifty 50 index. The Nifty lost 62.75 points or 0.80% to settle at 7,762.25. Data showing acceleration of consumer price inflation in October 2015, deceleration in industrial production growth in September 2015 and weakness in global stocks hit sentiment on the domestic bourses adversely. After a weak opening, the Sensex and the Nifty remained in negative zone throughout the day's trading session. The Sensex hit its lowest closing level in nine weeks. The Nifty settled at over nine-week low.

The barometer index, the S&P BSE Sensex, lost 256.42 points or 0.99% to settle at 25,610.53, its lowest closing level since 11 September 2015. The Sensex slumped 326.22 points or 1.26% at the day's low of 25,540.73 in mid-morning trade. The barometer index lost 142.86 points or 0.55% at the day's high of 25,724.09 in opening trade.

The Nifty lost 62.75 points or 0.80% to settle at 7,762.25, its lowest closing level since 8 September 2015. The Nifty slumped 94.10 points or 1.2% at the day's low of 7,730.90 in early afternoon trade. The index lost 49.90 points or 0.63% at the day's high of 7,775.10 in mid-afternoon trade.

The market breadth indicating the overall health of the market was weak. On BSE, 1,659 shares declined and 934 shares advanced. A total of 151 shares were unchanged. The BSE Mid-Cap index fell 1.37%. The decline in this index was higher than the Sensex's decline in percentage terms. The BSE Small-Cap index fell 0.76%. The decline in this index was lower than Sensex's decline in percentage terms.

Among the sectoral indices on BSE, the S&P BSE Realty index (down 1.31%), the S&P BSE IT index (down 1.32%), the S&P BSE Teck index (down 1.36%), the S&P BSE FMCG index (down 1.5%), the S&P BSE Auto index (down 1.61%) and the S&P BSE Capital Goods index (down 1.97%), underperformed the Sensex. The S&P BSE Metal index (up 0.67%), the S&P BSE Consumer Durables index (up 0.20%), the S&P BSE Bankex (down 0.17%), the S&P BSE Power index (down 0.3%), the S&P BSE Oil & Gas index (down 0.55%) and the S&P BSE Healthcare index (down 0.94%), outperformed the Sensex.

Index heavyweight and cigarette major ITC dropped 1.69% to Rs 329.35. The stock hit a high of Rs 333.80 and low of Rs 327.10 in intraday trade.

Shares of oil exploration firms dropped along with crude oil prices. Cairn India (down 5.24%) and ONGC (down 3.17%) dropped. Lower crude oil prices would result in lower realizations from crude sales for oil exploration firms.

Reliance Industries (RIL) rose 0.06% to Rs 929.50. The stock hit high of Rs 937.15 and low of Rs 915 in intraday trade.

Oil India slumped 5.53% after global index provider MSCI removed the stock from MSCI India index following a semi-annual review of indices. It was one of the two stocks removed from the MSCI India index. MSCI said that the changes will be effective from the close of trading on 30 November 2015.

PSU OMCs rose as crude oil prices declined yesterday, 12 November 2015. BPCL (up 1.71%) and HPCL (up 2.95%) rose. Indian Oil Corporation shed 0.26%.

Lower crude oil prices could reduce under-recoveries of PSU OMCs on domestic sale of LPG and kerosene at controlled prices. However, a weakness in rupee against the dollar will restrict the benefit of falling global crude oil prices to that extent. A weak rupee raises the cost of imports. The government has already freed pricing of petrol and diesel.

In the global commodities market, Brent for December settlement was currently up 65 cents at $44.71 a barrel. The contract had fallen $1.75 a barrel or 3.82% to settle at $44.06 a barrel during the previous trading session. The December Brent contract expires today, 13 November 2015. Brent for January settlement was currently up 58 cents at $45.77 a barrel.

In the foreign exchange market, the rupee edged higher against the dollar. The partially convertible rupee was hovering at 66.17, compared with its close of 66.315 during the previous trading session on Tuesday, 10 November 2015.

PSU stocks were mixed. Container Corporation of India (down 1.27%), NTPC (down 0.83%), NMDC (down 1.57%) fell. Power Grid Corporation (up 0.66%), GAIL (India) (up 0.78%) and Power Finance Corporation of India (up 1.53%) rose.

Coal India rose 2.6%. The company announces its Q2 September 2015 result today, 13 November 2015.

Auto stocks dropped. Tata Motors (down 2.25%), Mahindra & Mahindra (M&M) (down 1.16%), Eicher Motors (down 2.8%), Bajaj Auto (down 3.31%), Hero MotoCorp (down 1.45%) and TVS Motor Company (down 0.22%) declined.

Maruti Suzuki India fell 2.45%. Ashok Leyland shed 0.22%. These are two among the total of four additions made in the MSCI India index. MSCI said that the changes will be effective from the close of trading on 30 November 2015.

Capital goods stocks edged lower. Bharat Heavy Electricals (Bhel) (down 1.88%), ABB India (down 0.81%), BEML (down 2.17%), Bharat Electronics (down 2.17%), Siemens (down 0.23%) and Thermax (down 2.74%) declined. Crompton Greaves rose 0.44%.

Index heavyweight and engineering and construction major L&T fell 2.46% to Rs 1,332.90. The stock hit high of Rs 1,362 and low of Rs 1,330 in intraday trade.

Index heavyweight and software major Infosys declined 1.28% to Rs 1,095. The stock hit high of Rs 1,107 and low of Rs 1,090 in intraday trade.

Bank stocks saw mixed trend. Among private bank stocks, ICICI Bank (down 0.76%), IndusInd Bank (down 0.11%) declined.

HDFC Bank rose 0.48% to Rs 1,059, also its intraday high. The stock recovered in volatile trade. The stock hit a low of Rs 1,040.50 in intraday trade.

Shares of Axis Bank and Kotak Mahindra Bank extended gains registered during the previous trading session triggered by the government's announcement that it has decided to introduce full fungibility of foreign investment in private sector banks. Axis Bank rose 0.79%. Foreign institutional investors can now invest up to sectoral limit of 74% in private sector banks, provided that there is no change of control and management of the concerned bank.

The decision to introduce full fungibility of foreign investment in private sector banks is among a slew of reforms and liberalisation announced by the government early this week for attracting foreign direct investment in the country.

Kotak Mahindra Bank gained 1.98%. The aggregate foreign shareholding in Kotak Mahindra Bank has reached the threshold limit and therefore currently no further purchase of shares is allowed by foreign institutional investors in Kotak Mahindra Bank.

Yes Bank dropped 2.21%. Yes Bank plans to list a Green Bond of upto 330 million pounds through MTNs on the London Stock Exchange by December 2016. Yes Bank also intends to raise further capital in London potentially through the listing of Global depository Receipt (GDR) as part of its overall plan to raise 650 million pounds through fresh issue of equity shares.

Among PSU bank stocks, State Bank of India (SBI) (down 1.21%), IDBI Bank (down 3.05%), Bank of India (down 1.81%) and Union Bank of India (down 0.4%) declined. Punjab National Bank (up 2.27%), Bank of Baroda (up 0.4%), Canara Bank (up 0.97%) rose.

IT stocks declined on firm rupee. A firm rupee adversely affects operating profit margins of IT firms as the sector derives a lion's share of revenue from exports.

TCS (down 3.02%), Wipro (down 1.05%), HCL Technologies (down 1.86%), Oracle Financial Services Software (down 1.59%), Tech Mahindra (down 1.68%) declined.

Tech Mahindra shed 1.68%. Tech Mahindra and Temenos have implemented Temenos T24 core banking solution for Grameen Koota Financial Services (Grameen Koota).

Metal and mining stocks declined. Vedanta (down 4.23%), Hindustan Zinc (down 1.43%), Hindalco Industries (down 3.24%), NMDC (down 1.95%), Hindustan Copper (down 2.56%) edged lower.

National Aluminium Company fell 3.62% after net profit fell 33.78% to Rs 226.14 crore on 10.31% decline in total income to Rs 1,941.11 crore in Q2 September 2015 over Q2 September 2014. The result was announced on Thursday, 12 November 2015.

Steel stocks rose. JSW Steel (up 3.09%), Tata Steel (up 0.52%) and Jindal Steel & Power (up 8.84%) rose. Steel Authority of India (Sail) (down 1.97%) declined.

Cement stocks dropped. Ambuja Cements (down 2.65%), Shree Cement (down 4.61%), ACC (down 0.78%) and UltraTech Cement (down 1.13%) declined.

Grasim Industries was off 0.2% at Rs 3,600. Grasim has exposure to the cement sector through its holding in UltraTech Cement.

CESC surged 5.16% after the company announced Q2 result. CESC's net profit rose 1.56% to Rs 195 crore on 7.09% increase in total income to Rs 1797 crore in Q2 September 2015 over Q2 September 2014. The result was announced during trading hours today, 13 November 2015.

On the macro front, the latest data showed that inflation based on the consumer price index (CPI) accelerated to four-month high of 5% in October 2015, compared with 4.4% reading in September 2015. Among the CPI components, inflation of food and beverages increased to 5.3% in October 2015 from 4.3% in September 2015 mainly contributing to the rise in CPI inflation. The increase in prices of pulses was the key driver of food price inflation.

Another data showed that growth in industrial production moderated to 3.6% in September 2015 from a revised growth of 6.3% in August 2015. Industrial production growth for August 2015 was scaled down to 6.3% in the first revision compared with 6.4% reported provisionally. Meanwhile, the growth for June 2015 was reduced to 4.2% at the final revision against the first revision from 4.4%, while it remained above 3.8% reported provisionally.

The Fed-funds futures market is currently pricing in 70% probability of an increase in US benchmark interest rate in December 2015. Investors in emerging markets, including India are worried that once the Fed starts raising interest rates, it will drain liquidity from global emerging markets and redirect it to developed economies. The Fed has held its benchmark short-term interest rate near zero since December 2008. The ultra-loose monetary policy in the US has encouraged heavy investment in higher-yielding emerging markets. The next monetary policy review from the Fed is scheduled on 15-16 December 2015.

Overseas cues were negative. In Europe, key benchmark indices in Germany, France and UK hovered in red after the latest data showed that GDP growth in Germany, Europe's largest economy, decelerated to 0.3% in the third quarter from 0.4% in the second quarter. In Asia, Chinese stocks led decline in Asian equities as a slump in commodities markets deterred investors from riskier assets and as investors took the latest remarks from various US Federal Reserve officials as fresh a signal that the Fed is coming close to committing to an interest-rate increase in December 2015. US stocks dropped sharply yesterday, 12 November 2015, as a sharp slide in commodities triggered sell-off in shares of energy and raw-material providers.

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