A bout of volatility was witnessed as key benchmark indices slipped into the red from green and hit fresh intraday low in afternoon trade. The barometer index, the S&P BSE Sensex, once again fell below the psychological 27,000 level, having alternately moved above and below that level in intraday trade so far. It had fallen below that mark yesterday, 11 September 2014. The Sensex was currently down 26.04 points or 0.1% at 26,969.83. Benchmark indices have moved in a very narrow range so far during the trading session. The market breadth indicating the overall health of the market was positive. Shares of most private banks gained. Shares of most PSU banks declined. Most capital goods stocks declined. Data due after trading hours today, 12 September 2014, is likely to show easing of consumer price inflation in August 2014 and a muted growth in industrial production in July 2014.
Meanwhile, Transport Minister Nitin Gadkari reportedly said at an industry event today, 12 September 2014, that the government plans to launch Rs 2 lakh crore worth of infrastructure projects this year.
In overseas markets, European stocks edged higher in early trade before European Central Bank President Mario Draghi meets euro-area finance ministers. Asian stocks edged higher after the latest data showed credit growth of Chinese financial institutions surged last month.
In the foreign exchange market, the rupee edged higher against the dollar in choppy trade.
Brent crude oil futures edged higher in volatile trade on geopolitical worries.
At 13:15 IST, the S&P BSE Sensex was down 26.04 points or 0.1% at 26,969.83. The index fell 29.96 points at the day's low of 26,965.91 in afternoon trade. The index gained 69.15 points at the day's high of 27,065.02 in early trade.
The CNX Nifty was down 12.55 points or 0.16% at 8,073.15. The index hit a low of 8,071.60 in intraday trade. The index hit a high of 8,102.95 in intraday trade.
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The market breadth indicating the overall health of the market was positive. On BSE, 1,561 shares gained and 1,284 shares fell. A total of 94 shares were unchanged.
The BSE Mid-Cap index was almost unchanged for the day at 9,963.33. The BSE Small-Cap index was up 55.26 points or 0.5% at 11,166.18. Both these indices outperformed the Sensex.
Most capital goods stocks declined. Bharat Heavy Electricals (Bhel) (down 0.07%), BEML (down 0.67%) and Punj Lloyd (down 0.83%) declined.
Larsen & Toubro (L&T) shed 0.45% to Rs 1,589.20. The stock was volatile. The stock hit high of Rs 1,607 and low of Rs 1,585.55 so far during the day. L&T during market hours said that the company through its joint venture firm, L&T-MHPS Boilers, has secured an order worth Rs 1885 crore from NTPC. The contract includes setting up of two units of 660 megawatt each supercritical steam generators for Tanda Thermal Power Plant Stage-II on an engineering, procurement and construction (EPC) basis. The project is scheduled to be completed in 46 and 52 months for the respective units, L&T said.
Bharat Electronics fell 0.34% on turning ex-dividend today, 12 September 2014, for final dividend of Rs 17.30 per share for the year ended 31 March 2014.
Shares of most private banks gained. Yes Bank (up 0.22%), Kotak Mahindra Bank (up 0.36%), HDFC Bank (up 0.13%), and Axis Bank (up 0.11%) gained. But, Federal Bank declined 0.16%.
ICICI Bank declined 0.13%. ICICI Bank, acting through its Dubai branch, priced an issuance of 5.5 year fixed rate notes of an aggregate principal amount of $500 million. The notes carry a coupon of 3.50% and were offered at an issue price of 99.653. The announcement was made after market hours on Thursday, 11 September 2014.
Shares of most PSU banks declined. Bank of Baroda (down 0.49%), Oriental Bank of Commerce (down 0.34%), Syndicate Bank (down 0.36%) and Union Bank of India (down 0.55%) declined. Punjab National Bank (up 0.04%) and Bank of India (up 0.8%) gained.
State Bank of India (SBI) fell 0.2%. In response to media reports captioned "Indian bank branches face closure amid UK crackdown", State Bank of India during market hours said that the Prudential Regulatory Authority's (PRA) final Supervisory Statement on international banks operating in the UK jurisdiction is not expected to have any material impact on SBI. SBI said that while SBI UK operations undertake retail banking activities above the prescribed de-minimis levels, PRA is expected to take a position with regard to each non-EEA (European Economic Area) branch only after evaluating the Home State Supervisory equivalence, resolvability etc. SBI UK operations will decide on their future banking model (branch or subsidiary) on receipt of the final evaluation from PRA, SBI said.
Meanwhile, the provisional data released by the stock exchanges after trading hours yesterday, 11 September 2014, showed that foreign portfolio investors (FPIs) bought shares worth a net Rs 433.55 crore on that day.
Brent crude oil futures edged higher in volatile trade on geopolitical worries. Brent for October settlement was up 13 cents at $98.21 a barrel. The contract rose 4 cents to settle at $98.08 a barrel yesterday, 11 September 2014, bouncing back from a 2-year low after Russia warned the US that air strikes in Syria against Islamist militants would be an act of aggression without a UN security mandate. The more active contract Brent for November settlement was up 29 cents at $99.15 a barrel.
US President Barack Obama yesterday, 11 September 2014, said that the US will join the European Union in stiffening sanctions on Russia over Ukraine.
In the foreign exchange market, the rupee edged higher against the dollar in choppy trade. The partially convertible rupee was hovering at 60.755, compared with its close of 60.93 during the previous trading session.
Data due after trading hours today, 12 September 2014, is likely to show easing of consumer price inflation in August 2014 and a muted growth in industrial production in July 2014. The annual rate of inflation based on the combined consumer price indices (CPI) for urban and rural India is seen decelerating to 7.8% in August 2014, from 7.96% in July 2014, as per the median estimate of a poll of economists carried out by Capital Market. The government will release the CPI data for August 2014 at 17:30 IST today, 12 September 2014. The Reserve Bank of India (RBI) is targeting CPI inflation at 8% by January 2015 and 6% by January 2016.
Meanwhile, the growth in industrial production is seen decelerating to 1.9% in July 2014, from 3.4% in June 2014, as per the median estimate of a poll of economists carried out by Capital Market. Industrial production growth had eased to 3.4% in June 2014, from 5% increase recorded in May 2014. The government will release the industrial production data for July 2014 at 17:30 IST today, 12 September 2014.
The annual rate of inflation based on the monthly Wholesale Price Index (WPI) is seen decelerating to 4.43% in August 2014, from 5.19% in July 2014, as per the median estimate of a poll of economists carried out by Capital Market. The government will release the WPI data for August 2014 at 12 noon on Monday, 15 September 2014.
Monsoon rainfall between 1 June 2014 and 10 September 2014 was 11% below average, an India Meteorological Department (IMD) report dated 11 September 2014 showed. India's farming sector accounts for around 14% of the economy, but two-thirds of the nation's 1.2 billion people depend on farming for a livelihood and more than half of its arable land needs the summer rains.
European stocks edged higher today, 12 September 2014, before European Central Bank President Mario Draghi meets euro-area finance ministers and the US releases data on retail sales and consumer confidence. Key benchmark indices in France and UK were up 0.02% to 0.16%. Germany's DAX fell 0.02%.
Draghi will meet with euro-area finance ministers in Milan today, 12 September 2014, to discuss economic recovery and progress on the region's banking union. Draghi reportedly said yesterday, 11 September 2014, that investment in the euro area's economy will only return to pre-crisis levels if governments work with the ECB to achieve reforms and stimulate growth.
Asian stocks edged higher today, 12 September 2014, after the latest data showed credit growth of Chinese financial institutions surged last month. Key benchmark indices in Japan, Indonesia, South Korea, China and Singapore were up 0.06% to 0.88%. Key benchmark indices in Taiwan and Hong Kong were off 0.21% to 1.07%.
Chinese banks stepped up lending in August after a big fall a month earlier, data from the central bank showed today, 12 September 2014. Chinese financial institutions issued 702.5 billion yuan ($114.6 billion) in new yuan loans in August, up sharply from 385.2 billion yuan in July. Total social financing--a broader measurement of credit in the economy--was 957.4 billion yuan in August, up from 273.1 billion yuan in July.
The Bank of Korea held its policy interest rate at 2.25% today, 12 September 2014, as widely expected after it cut the benchmark by a quarter-point at its previous meeting.
Trading in US index futures indicated a flat opening of US stocks on today, 12 September 2014. US stocks eked out small gains on Thursday, 11 September 2014, as an unexpected increase in weekly jobless claims and falling commodities prices encouraged investors to remain cautious. The main benchmarks finished in positive territory after trading in a tight range and spending much of the session in the red. The number of people who applied for jobless benefits last week unexpectedly rose, reaching the highest level since late June.
Investors will look to next week's Federal Open Market Committee (FOMC) meeting for fresh guidance on US interest rates. At the end of a two-day meeting on 16-17 September 2014, the FOMC is widely expected to announce cut in Fed's monthly bond-buying program by another $10 billion to $15 billion, staying on track to end the program at its October meeting. The Fed is likely to raise short-term interest rates next year from their current near-zero levels, where they have been since December 2008.
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