Key benchmark indices edged lower in choppy trade as macroeconomic worries resurfaced as crude oil prices rose. The barometer index, the S&P BSE Sensex, was provisionally down 57.05 points or 0.23%, off 236.65 points from the day's high and up 119.54 points from the day's low. The market breadth indicating the overall health of the market was negative.
Index heavyweight and cigarette major ITC gained after a block deal was executed on the counter on BSE today, 19 June 2014. Shares of PSU OMCs and state-run upstream oil firms dropped after international crude oil prices firmed up. Another trigger for the slide in the shares of ONGC and Oil India was reports that oil ministry has proposed that gas price hike should be restricted to incremental production rather than the entire production. Those reports also weighed on the shares of another gas producer Reliance Industries. Many PSU stocks declined after market regulator the Securities and Exchange Board of India (Sebi) at its board meeting today, 19 June 2014, recommended that all listed companies including PSUs should have at least 25% public shareholding in three years.
As per provisional closing, the S&P BSE Sensex was down 57.05 points or 0.23% to 25,189.20. The index lost 176.59 points at the day's low of 25,069.66 in early afternoon trade, its lowest level since 16 June 2014. The index jumped 179.60 points at the day's high of 25,425.85 in early trade.
The CNX Nifty was down 23.55 points or 0.31% to 7,534.65. The index hit a low of 7,502.55 in intraday trade, its lowest level since 16 June 2014. The index hit a high of 7,606.45 in intraday trade.
The market breadth indicating the overall health of the market was negative. On BSE, 1,586 shares declined and 1,406 shares gained. A total of 86 shares were unchanged.
The BSE Mid-Cap index was off 44.49 points or 0.49% at 8990.76. The BSE Small-Cap index was off 36.79 points or 0.37% at 9,836.85. Both these indices underperformed the Sensex.
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The total turnover on BSE amounted to Rs 3710 crore, lower than Rs 4288.99 crore on Wednesday, 18 June 2014.
Among the 30-share Sensex pack, 17 stocks declined and the rest of them gained.
Index heavyweight and cigarette major ITC rose 0.99% to Rs 336.35 on volume of 14.40 lakh shares. A block deal of 12.61 lakh shares was executed on the counter at Rs 336.35 per share at 14:55 IST on BSE today, 19 June 2014.
Oil and gas stocks dropped. State-run GAIL (India) declined 1.88%. Private sector oil explorer Cairn India fell 1.36%.
Shares of PSU OMCs dropped after international crude oil prices firmed up. BPCL (down 4.79%), HPCL (down 3.9%) and Indian Oil Corporation (down 2.88%), edged lower.
Higher crude oil prices could increase under-recoveries of PSU OMCs on domestic sale of diesel, LPG and kerosene at controlled prices. The government has already freed pricing of petrol.
Shares of state-run upsteam oil firms dropped on concerns their subsidy burden will rise along with increase in crude oil prices. ONGC lost 4.95% at Rs 421.25. Oil India shed 6.24% at Rs 561. ONGC and Oil India share part of the under-recoveries of state-run oil refining-cum-marketing firms (PSU OMCs ) arising from the government-imposed price caps on prices three key fuels -- diesel, LPG for domestic use and kerosene.
ONGC and Oil India also slipped after media reports suggested that the petroleum ministry has proposed that higher gas price as per the Rangarajan formula could be allowed only for incremental production over and above the current levels. This is an alternative to applying the formula unconditionally from 1 July 2014. Restricting the higher price to additional output, the ministry feels, would incentivise production while also protecting the interests of consuming industries like power and fertilisers, reports said.
Private sector oil major Reliance Industries was down 2.51% to Rs 1,040.05. The stock hit a high of Rs 1,076 and a low of Rs 1,031.85.
Many PSU stocks declined after market regulator the Securities and Exchange Board of India (Sebi) at its board meeting today, 19 June 2014, recommended that all listed companies including PSUs should have at least 25% public shareholding in three years. Under the current rule, while non-PSUs are required to have minimum 25% public shareholding, PSUs are required to have only 10% minimum public shareholding.
Coal India (down 2.07%), Steel Authority of India (Sail) (down 4.41%), National Aluminium Company (Nalco) (down 3.55%) and NHPC (down 0.76%) declined. MMTC (up 2.38%) and NMDC (up 0.71%) rose. The government holds a stake of 80% or more in these state-run companies.
Zee Entertainment Enterprises was down marginally by 0.02% to Rs 276. A block deal of 10.79 lakh shares was executed on the counter at Rs 276.20 per share at 14:57 IST on BSE today, 19 June 2014.
Zee Media Corporation shed 0.25%. Zee Entertainment Enterprises after market hours on Wednesday, 18 June 2014, said its subsidiary Taj Television India will now distribute all the channels of Zee Entertainment Enterprises and Zee Media Corporation while also representing Turner channels as its authorized agent. Taj Television is India's largest distribution agency and has a repertoire of over 45 leading television channels.
Indian stocks witnessed high intraday volatility today, 19 June 2014. Key benchmark indices edged higher in early trade as Asian stocks rose after the US Federal Reserve after a monetary policy review on Wednesday, 18 June 2014, said a highly accommodative stance of monetary policy for the US economy remains appropriate at this juncture. Volatility struck the bourses in morning trade as the key benchmark indices retreated from intraday high hit in early trade only to regain strength later. The 50-unit CNX Nifty regained positive zone soon after reversing intraday gain to briefly turn negative. Volatility continued in mid-morning trade as the key benchmark indices regained positive zone after hitting fresh intraday low in negative zone. Key benchmark indices extended fall and hit fresh intraday low in early afternoon trade. Key benchmark indices recovered from the day's low in afternoon trade as European stocks rose in early trade there. Key benchmark indices rebounded from intraday low to regain positive zone in mid-afternoon trade. Intraday volatility continued in late trade.
Brent crude rose as investors worried about exports from Iraq as militant violence in the country continues. Brent crude futures for August delivery were up 12 cents at $114.38 a barrel. The contract had risen 81 cents to settle at $114.26 a barrel on Wednesday, 18 June 2014, the highest level since 6 September 2013.
Increase in oil prices has triggered macroeconomic worries for India which imports majority of its crude oil requirements. Increase in crude oil prices have raised concerns of increase in fuel price inflation and increase in India's current account deficit and fiscal deficit.
European shares edged higher on Thursday, 19 June 2014, as investor sentiment received a boost from the Federal Reserve which said the US economy is rebounding and that US interest rates would stay low for some time. Key benchmark indices in UK, France and Germany were up 0.82% to 0.93%.
Asian markets edged lower on Thursday, 19 June 2014, as crude rose as investors worried about exports from Iraq as militant violence in the country continues. Key benchmark indices in Singapore, Hong Kong, Indonesia and China fell by 0.06% to 1.55%. Key benchmark indices in Taiwan, South Korea and Japan rose by 0.13% to 1.62%.
Chinese Premier Li Keqiang vowed that his nation's economy will not suffer a so-called "hard landing," a report said.
Trading in US index futures indicated that the Dow could rise 9 points at the opening bell on Thursday, 19 June 2014. US stocks rallied on Wednesday, 18 June 2014, gaining the most in four weeks, after the Federal Reserve chief signaled no hurry to raise rates.
The Federal Reserve said growth is bouncing back and the job market is improving as it continued to reduce the monthly pace of asset purchases. The Federal Open Market Committee trimmed bond-buying by $10 billion for a fifth straight meeting, to $35 billion, keeping it on pace to end the program late this year.
In a statement, the Federal Open Market Committee (FOMC) said that if the incoming information broadly supports the committee's expectation of ongoing improvement in US labor market conditions and inflation moving back toward its longer-run objective, the committee will likely reduce the pace of asset purchases in further measured steps at future meetings. However, asset purchases are not on a preset course, and the committee's decisions about their pace will remain contingent on the committee's outlook for the labor market and inflation as well as its assessment of the likely efficacy and costs of such purchases. To support continued progress toward maximum employment and price stability, a highly accommodative stance of monetary policy remains appropriate at this juncture, the FOMC said. The committee was of the view that it will be appropriate to maintain the current zero to 1/4 percent target range for the federal funds rate for a considerable time after the asset purchase program ends, especially if projected inflation continues to run below the committee's 2% longer-run goal, and provided that longer-term inflation expectations remain well anchored.
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