Key benchmark indices hovered in negative zone in morning trade after a volatile start. At 10:17 IST, the barometer index, the S&P BSE was off 69.16 points or 0.27% at 25,787.54. The decline for the 50-unit CNX Nifty was higher than Sensex's decline in percentage terms. The Nifty was down 33.30 points or 0.42% at 7,838.95. The market breadth indicating the overall health of the market was positive. On BSE, 892 shares rose and 855 shares declined. A total of 83 shares were unchanged. The BSE Mid-Cap index was down 0.24%. The BSE Small-Cap index was down 0.02%. The decline in both these indices was lower than Sensex's decline in percentage terms.
Overseas cues were negative. China led decline in Asian stocks. US stocks closed lower yesterday, 14 September 2015 as investors awaited the Federal Reserve meeting later in the week. The Fed's policy-making committee holds a two-day meeting on 16 and 17 September 2015. The Fed has held its benchmark short-term interest rate near zero since December 2008.
Closer home, data released after market hours yesterday, 14 September 2015 showed that the all-India general CPI inflation was nearly flat 3.66% in August 2015 (new base 2012=100), compared with 3.69% (revised) reading in July 2015. The corresponding provisional inflation rate for rural area was 4.5% and urban area 2.7% in August 2015 as against 4.4% and 2.9% in July 2015. The core CPI inflation declined to 3.8% in August 2015 from 4% in July 2015.
In sectoral trends, Auto stocks declined. Tata Motors (down 0.81%), Hero MotoCorp (down 1.13%), Ashok Leyland (down 0.89%), TVS Motor Company (down 0.63%), Mahindra & Mahindra (down 0.63%) and Bajaj Auto (down 0.66%) edged lower. Eicher Motors (up 0.14%) edged higher.
Maruti Suzuki India (MSIL) gained after the Reserve Bank of India (RBI) yesterday, 14 September 2015 notified that foreign institutional investors (FIIs)/registered foreign portfolios investors (RFPIs)/qualified foreign investors (QFIs) can now invest up to 40% of the paid up capital of MSIL under the Portfolio Investment Scheme (PIS). The stock rose 1.66%. RBI further advised that the foreign shareholding by FIIs/RFPIs in MSIL have gone below the revised threshold limit. Hence, the restrictions placed on the purchase of shares of MSIL are withdrawn with immediate effect.
Shares of public sector oil marketing companies (PSU OMCs) gained after steep decline in global crude oil prices yesterday, 14 September 2015. BPCL (up 0.27%) and Indian Oil Corporation (up 0.36%) edged higher. HPCL (down 0.02%) edged lower.
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Decline in crude oil prices could reduce under-recoveries of PSU OMCs on domestic sale of LPG and kerosene at government controlled prices. The government has already decontrolled pricing of petrol and diesel.
In the global commodities markets, Brent crude oil futures edged lower. Brent for October settlement was currently off 3 cents at $46.34 a barrel. The contract had fallen $1.77 a barrel or 3.67% to settle at $46.37 a barrel during the previous trading session. The October Brent contract expires today, 15 September 2015. Brent for November settlement was currently up 12 cents at $47.47 a barrel.
Lower global crude oil prices augur well for India. India imports about 80% of its crude requirements and lower crude oil prices ease concerns on fiscal deficit, inflation and gives more room for the government to boost growth through spending on infrastructure. 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.
In the foreign exchange market, the rupee edged lower against the dollar. The partially convertible rupee was hovering at 66.43, compared with its close of 66.33 during the previous trading session.
Texmaco Rail & Engineering rose 4.07% after the company said its board of directors approved acquiring 76% stake in Bright Power for Rs 100 crore. The announcement was made after market hours yesterday, 14 September 2015. Texmaco Rail & Engineering said that the duly empowered Committee of Board of Directors of the company at its meeting held yesterday, 14 September 2015, approved the execution of a non-binding term-sheet with promoters of Bright Power Projects (India) (Bright Power) for the acquisition of 76% equity share capital of Bright Power at an enterprise value of about Rs 100 crore, subject to applicable conditions. The acquisition will be funded out of the internal accruals of the company, Texmaco Rail & Engineering said. With this acquisition, Texmaco Rail will be able to enter into OHE Rail sector and strengthen its positioning as a total rail solution provider company. The final transaction is expected to consummate over two to three months, subject to certain approvals/conditions and due diligence, with definitive documentation expected to be executed between the parties within next 45 days, Texmaco Rail & Engineering said.
Bright Power is an engineering, procurement and construction (EPC) company specialising in over head electrification (OHE) solutions for the Indian Railways. It also serves diverse sectors such as power, utilities, petrochemicals, pharmaceuticals and real estate.
Divi's Laboratories rose 0.71% after the company said it has fixed 26 September 2015 as record date for the purpose of determining the eligibility of shareholders entitled to receive 1:1 bonus shares. The announcement was made after market hours yesterday, 14 September 2015.
Nava Bharat Ventures jumped 5.36% after the company said it has entered into an agreement with Tata Steel for conversion of chrome ore into ferro chrome, and the arrangement will commence upon the receipt of ore and reductants from TSL during this month. The agreement is initially up to the end of March 2016 and extendable on mutually agreed terms for a further period of four years. The agreement requires that the entire smelting capacity of the Odisha plant is dedicated for TSL to produce up to 70,000 metric tonne (MT) of high carbon ferro chrome per annum, the company said. The announcement was made after market hours yesterday, 14 September 2015.
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