A bout of volatility was witnessed as key benchmark indices reversed losses after hitting fresh intraday low in mid-afternoon trade. The market breadth indicating the overall health of the market was negative. The barometer index, the S&P BSE Sensex, was currently was up 6.38 points or 0.02% at 26,857.43. PSU OMCs declined.
In overseas markets, European stocks rose after the European Central Bank said most lenders passed stress tests. Asian stocks declined on concerns of slowdown in China. US stocks edged higher 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.
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 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 higher against the dollar.
Brent crude oil futures reversed intraday losses.
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At 14:17 IST, the S&P BSE Sensex was up 6.38 points or 0.02% at 26,857.43. The index fell 48 points at the day's low of 26,803.05 in mid-afternoon 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 up 4.20 points or 0.06% at 8,018.75. The index hit a low of 8,000.90 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 BSE Mid-Cap index was off 55.43 points or 0.57% at 9,617.60, underperforming the Sensex. The BSE Small-Cap index was up 5.21 points or 0.05% at 10,667.86, outperforming the Sensex.
The market breadth indicating the overall health of the market was negative. On BSE, 1,453 shares dropped and 1,212 shares rose. A total of 109 shares were unchanged.
PSU OMCs declined. BPCL (down 1.12%), HPCL (down 1.22%) and Indian Oil Corporation (down 1.9%) declined.
Infosys declined 0.17%. The company said during market hours that it worked with UCAS on its busiest day of the year to place a record number of students at universities and colleges in the UK. Infosys was appointed to support the technology system of UCAS earlier in 2014.
Maruti Suzuki India (MSIL) declined 0.11% to Rs 3,161. The stock was volatile. The stock hit high of Rs 3,188.50 and low of Rs 3,140 in intraday trade. With respect to a news item captioned "MFs dig in for fight on Maruti's Gujarat plant", the company today, 27 October 2014, clarified that it has already informed the stock exchanges in March 2014 that the company's board has approved that a 100% Suzuki subsidiary should make the investment in establishing new manufacturing facilities in Gujarat. The Suzuki subsidiary would enter into an exclusive contract for manufacturing cars for MSIL. This arrangement will result in MSIL making the same profit as it would have made if it had invested its own money, with an additional treasury income arising from MSIL not having to invest its own money. This would mean higher return on investment as compared to the option of the company investing its own funds in Gujarat capacity.
Manufacturing alone cannot ensure the success of a car company in the market as can be seen from the market shares in India of some car manufacturing giants of the world, MSIL said. For most of these companies, a limited sales and service network has been the most decisive factor for their market position, MSIL said. MSIL further said that most car companies in the world and India have a high level of outsourcing of manufacturing -- generally three-fourths of the car by value is outsourced. A car company to be successful has to carry out several functions like R&D, product development, sourcing, manufacturing, sales, service and supply of after-market parts, MSIL said.
Lupin declined 0.27% to Rs 1,387.85. The stock was volatile. The stock hit high of Rs 1,397.85 and low of Rs 1,382 so far during the day. With respect to a news item captioned "Lupin scouts for acquisition opportunities in US market", the company clarified before market hours today, 27 October 2014, that the company in its ordinary course of business continuously explores and evaluates business opportunities and the comments of CFO Mr. S Ramesh are general in nature and do not allude to any specific acquisition opportunity. The company continues to evaluate opportunities and going forward acquisitions in the US would have to satisfy its multiple aspirations of creating a meaningful speciality business, bolstering its existing brands business and acquiring technological capabilities that it would like to work on, Lupin said. Terming the US as a high growth market for the company, the Mumbai-based firm said it aims to grow at around 25% in the world's largest drug market. For Lupin, the US is a high growth market and the major contributor to the company's overall revenue and profitability.
In the foreign exchange market, the rupee edged higher against the dollar. The rupee was hovering at 61.2675, compared with its close of 61.28 during the previous trading session.
Brent crude oil futures reversed intraday losses. Brent crude for December delivery was up 5 cents at $86.18 a barrel. The contract had lost 70 cents to settle at $86.13 a barrel on Friday, 24 October 2014.
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.
European stocks rose today, 27 October 2014, after the European Central Bank's (ECB) stress test showed none of Europe's largest banks failed the test. Key benchmark indices in France, Germany and UK rose 0.6% to 0.75%.
The European Central Bank 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, Taiwan and Singapore were off 0.14% to 0.68%. Key benchmark indices in South Korea and Japan were up 0.33% 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 gain 45 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 reduced monthly purchases for a seventh time to $15 billion at its September meeting, staying on course to end the quantitative-easing program this week as the central bank weighs the timing of interest-rate rises. Minutes from the last meeting, when policy makers pledged to keep US borrowing costs low for a considerable time, showed officials expressed concern that the economy may be at risk from a global slowdown.
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