A sharp slide in European stocks and US index futures pulled key equity benchmark indices in India sharply lower. As sell-off gripped the bourses in late trade, the barometer index, the S&P BSE Sensex, fell below the the psychological 26,000 mark. The Sensex and the 50-unit CNX Nifty, both, hit their lowest level in more than 9 weeks. The broad market showed weakness with almost three losers for every gainer on BSE. Shares of a number of small-cap and mid-cap companies dropped. The Sensex was provisinally down 376.26 points or 1.43% to 25973.07. Slide in BSE Small-Cap and Mid-Cap indices was sharper than the Sensex's decline in percentage terms. The BSE Small-Cap index was off 2.71%. The BSE Mid-Cap index was off 2.42%.
Metal and capital goods stocks led today's decline. Foreign portfolio investors sold shares worth a net Rs 694.67 crore during the previous trading session on Tuesday, 14 October 2014, as per provisional data. Meanwhile, India's merchandise export registered a muted growth of 2.7% in September 2014, data released the government early this week showed.
Meanwhile, various exit polls released after assembly elections in Maharashtra and Haryana showed that the BJP is set to wrest power from the Congress party in Haryana and will emerge as the single largest party in Maharashtra. Polling was held yesterday, 15 October 2014, for assembly elections in Maharashtra and Haryana. The counting of votes for elections in both these states takes places on Sunday, 19 October 2014, and the results will be out on the same day. BJP's seat tally in Maharashtra, according to various exit polls, varied from just over 100 to 150-plus, the latter a clear majority mark in a 288-member assembly. In 90-seat Haryana, exit polls gave BJP between 37 and 50-plus seats; the latter a majority mark. BJP's strong showing in assembly elections in Maharashtra and Haryana could boost Prime Minister Narendra Modi's ability to carry forward legislative reforms.
Index heavyweight Reliance Industries declined. Bajaj Auto declined after weak Q2 earnings. TCS and Hero MotoCorp edged lower in choppy trade ahead of their Q2 earnings. DLF edged higher in volatile trade after a steep slide in the stock during the previous trading session.
Earlier, a high volatility was witnessed at the onset of the trading session as key indices staged a strong recovery after a weak opening.
In overseas markets, European stocks tumbled as Spain's government fell short of its maximum target in a bond sale. Asian stocks declined amid growing concerns over economic growth around the world. Trading in US index futures indicated a weak opening of US stocks later in the global day.
Brent crude fell to near four-year lows amid growing concerns over the global economy.
More From This Section
In the foreign exchange market, the rupee edged lower against the dollar as India's trade deficit more than doubled to $14.25 billion in September 2014 from $6.12 billion in September 2013.
As per provisional figures, the S&P BSE Sensex was down 376.26 points or 1.43% to 25973.07. The index lost 415.35 points at the day's low of 25,933.98 in late trade, its lowest level since 13 August 2014. The index jumped 112.75 points at the day's high of 26,462.08 in early trade.
The CNX Nifty was down 115.80 points or 1.47% at 7,748.20, as per provisional figures. The index hit a low of 7,729.65 in intraday trade, its lowest level since 13 August 2014. The index hit a high of 7,893.90 in intraday trade.
The BSE Mid-Cap index was off 229.13 points or 2.42% at 9,243.95. The BSE Small-Cap index was off 288.16 points or 2.71% at 10,343.09.
The market breadth indicating the overall health of the market was weak with almost three losers for every gainer on BSE. 2,175 shares declined while 753 shares gained. A total of 91 shares were unchanged.
Capital goods stocks edged lower. Crompton Greaves (down 7.54%), ABB (down 5.23%), Siemens (down 4.19%), Bharat Heavy Electricals (down 2.79%), and L&T (down 1.43%) declined.
Metal and mining stocks declined as global commodity prices tumbled. Hindalco Industries (down 5.66%), JSW Steel (down 5.06%), Jindal Steel & Power (down 3.63%), Hindustan Zinc (down 1.57%), and Steel Authority of India (down 1.23%) edged lower.
Tata Steel declined 3.57% at Rs 439.85. The stock was volatile. The stock hit a high of Rs 468 and a low of Rs 437.10. The company before market hours today, 16 October 2014, announced the signing of a Memorandum of Understanding with Klesch Group to undertake detailed due diligence and negotiations for the potential sale of its long products Europe business and associated distribution activities. The memorandum covers several UK-based assets including Tata Steel's Scunthorpe steelworks, mills in Teesside, Dalzell and Clydebridge in Scotland, an engineering workshop in Workington and a rail consultancy in York, as well as other operations in France and Germany.
Sesa Sterlite lost 4.09% at Rs 239.35. The company after market hours on Tuesday, 14 October 2014, in a clarification with regard to news item titled "Sesa Sterlite slumps on Supreme Court Order" said that the latest developments in Supreme Court does not relate to Sesa Sterlite. The written order of the Supreme Court is still awaited, the company said. As per the company's understanding, the situation, which is prevailing since 21 April 2014 judgment of Supreme Court, remains the same even today, Sesa Sterlite said.
Earlier, media reports indicated that the Supreme Court had on 14 October 2014 reiterated a prior ruling that all iron ore mined in Goa before 2007 belonged to the state. The court has ordered pre-2007 iron ore to be auctioned by a monitoring panel, reports stated.
Index heavyweight Reliance Industries (RIL) lost 3.21% at Rs 930.25. The stock was volatile. The stock hit a high of Rs 956.80 and a low of Rs 928.45. RIL's consolidated net profit rose 1.7% to a record Rs 5972 crore in Q2 September 2014 over Q2 September 2013. Turnover declined 4.3% to Rs 113396 crore in Q2 September 2014 over Q2 September 2013. The result was announced early this week.
DLF rose 5.19% at Rs 110.40. The stock was volatile. The stock hit a record low of Rs 100 in intraday. The scrip hit high of Rs 115.85. The stock had tumbled a staggering 28.46% in a single trading session on Tuesday, 14 October 2014, after stock market regulator Securities and Exchange Board of India (Sebi) issued an order on Monday, 13 October 2014, barring DLF and its chairman K.P. Singh along with five other company executives from accessing India's capital markets for three years. The order is related to lapses in disclosures made at time of the company's IPO in 2007. DLF has decided to contest the Sebi order.
Credit rating agency CRISIL yesterday, 15 October 2014, placed its ratings on the bank facilities and debt instruments of DLF on 'Rating Watch with Negative Implications'. CRISIL said that the Sebi order will adversely impact DLF's ability to access the capital markets and constrain its financial flexibility, which has been one of its key rating strengths, CRISIL said. The order will impact DLF's plans to raise funds through capital market instruments such as equity, commercial mortgage-backed securities (CMBS) and real estate investment trusts (REITs) over the medium term, CRISIL said.
CRISIL said it will remove the ratings from watch and take an appropriate rating action once it gets clarity on above issues, the extent of the impact that the order has on DLF's financial flexibility and its liquidity profile. CRISIL will continue to monitor the developments, and is in discussions with the company to understand the issues in detail, and its plans, it added. CRISIL has also placed its ratings on the bank facilities of DLF Info City Developers (Kolkata) (DLFICDK) on 'Rating Watch with Negative Implications'. DLFICDK is a wholly owned subsidiary of DLF and was set up to undertake the Kolkata Information Technology Park project. The company has completed the construction work and has leased out the project.
Bajaj Auto lost 1.7% at Rs 2,369.15. The stock was volatile. The stock hit a high of Rs 2,440 and a low of Rs 2,348.80. The company reported 29.41% fall in net profit to Rs 590.90 crore on 14.67% rise in total income to Rs 6076.70 crore in Q2 September 2014 over Q2 September 2013. The result was announced after market hours on Tuesday, 14 October 2014. The Q2 September 2014 net profit was weighed by an exceptional item of Rs 340.29 crore of National Calamity Contingency Duty (NCCD). Excluding exceptional item, profit after tax, would have rose 1.91% to Rs 853 crore in Q2 September 2014 over Q2 September 2013, Bajaj Auto said.
It may be recalled that Bajaj Auto had filed a writ petition before the Uttarakhand High Court in October 2011, claiming benefit of exemption from payment of NCCD by Pantnagar plant. On 9 October 2014, the court ruled otherwise, the company said. Accordingly in Q2 September 2014, the company recognised liability for the last seven and a half years (1 April 2007 to 30 September 2014) aggregating to Rs 340.29 crore. This is a one time only charge and going forward, the monthly charge towards NCCD is expected to be around Rs 3 crore per month, it added.
The company's export revenue rose 28.75% to Rs 2736 crore in Q2 September 2014 over Q2 September 2013. Operating earnings before interest, taxes, depreciation and amortization (EBITDA) before mark-to-market loss and CSR spends rose 3.65% to Rs 1248 crore in Q2 September 2014 over Q2 September 2013. Operating EBITDA margin before mark-to-market (MTM) gain/loss was reported at 20.8% in Q2 September 2014, lower than 23.1% in Q2 September 2013.
Given the initial response to the Discover 150, the company looks forward to a very rewarding future, Bajaj Auto said.
TCS lost 1.01% at Rs 2,672.45. The stock was volatile. The stock hit a high of Rs 2,751.55 and a low of Rs 2,665. The company announces its Q2 September 2014 results today, 16 October 2014.
Hero MotoCorp lost 0.41% at Rs 2,845. The stock was volatile. The stock hit a high of Rs 2,912 and a low of Rs 2,725.25. The company announces its Q2 September 2014 results today, 16 October 2014.
Meanwhile, the provisional data released by the stock exchanges after trading hours on Tuesday, 14 October 2014, showed that foreign portfolio investors (FPIs) sold shares worth a net Rs 694.67 crore on that day. The stock market was closed yesterday, 15 October 2014, on account of assembly election in Maharashtra.
In the foreign exchange market, the rupee edged lower against the dollar as India's trade deficit more than doubled to $14.25 billion in September 2014 from $6.12 billion in September 2013. The partially convertible rupee was hovering at 61.86, compared with its close of 61.42 during the previous trading session.
India's merchandise export rose 2.7% to $28.90 billion in September 2014, data released after market hours on Tuesday, 14 October 2014 showed. Exports of engineering goods exports jumped 20.2%, exports of gems & jewellery rose 11.1%, exports of readymade garments rose 15.9%, rice exports rose 17.7% and exports of organic and inorganic chemicals rose 7.1%. The merchandise imports surged at more than two-and-half year pace of 26% to $43.15 billion in September 2014. Thus, the trade deficit more than doubled to $14.25 billion in September 2014 from $6.12 billion in September 2013, while also galloped from $10.84 billion in August 2014.
Brent crude fell to near four-year lows amid growing concerns over the global economy. Brent for November settlement was off 62 cents at $83.16 a barrel. The contract expires today, 16 October 2014. Brent for December settlement was off 63 cents at $83.49 a barrel.
Lower crude oil prices will help India in containing its fiscal deficit, current account deficit and fuel price inflation. India imports 80% of its crude oil requirement. However, the weakness in rupee against the dollar will restrict the impact of lower crude oil prices.
European stocks tumbled today, 16 October 2014, as Spain's government fell short of its maximum target in a bond sale. Key benchmark indices in UK, France and Germany were off 1.82% to 2.76%.
The yield on Spain's 10-year bond jumped the most since June 2013 after the government raised 3.2 billion euros ($4.1 billion) in bond actions, below its maximum target of 3.5 billion euros. Greek bonds extended their drop to a fourth day.
The European Union has reportedly started a two-week probe of euro-area governments' draft budgets. As yields on 10-year securities from Europe's most-indebted nations surged yesterday, 15 October 2014, led by Greece and sweeping up Portugal, Ireland and Italy, the European Commission started a process of picking apart nations' 2015 spending plans, seeking to defuse potential fiscal time bombs.
German Chancellor Angela Merkel told parliament today, 16 October 2014, that Europe must push ahead with efforts to cut public deficits and improve competitiveness because the euro zone debt crisis has not yet been overcome and its causes have not been eliminated. Merkel said European Union leaders must bear in mind, as they debate ways to boost growth, that painful fiscal reforms have begun to pay off.
Meanwhile, the latest data from Eurostat confirmed that inflation in the euro zone fell to an almost five-year low of 0.3% in September.
Mounting anxiety over global growth and the spread of Ebola dragged Asian bourses lower today, 16 October 2014. Key indices in China, Hong Kong, Singapore, Japan, South Korea, Indonesia, and Taiwan were off 0.25% to 2.22%.
China attracted $9 billion of foreign direct investment in September, up 1.9% from a year earlier, the Ministry of Commerce said in a statement today, 16 October 2014. The figure was up from August's $7.2 billion, which was down 14% from a year earlier and the lowest level since July 2010.
Trading in US index futures indicated that the Dow could fall 138 points at the opening bell today, 16 October 2014. US stocks closed lower on Wednesday, 15 October 2014, but retraced some lost ground in late trading from historic intraday losses, as disappointing economic data fueled growth fears, which were compounded by the spread of Ebola after a second case was reported in the US. Data yesterday, 15 October 2014, showed that US retail sales fell 0.3% last month on a broad pullback in consumer spending in the world's largest economy.
According to the Fed's Beige Book of economic conditions data released yesterday, 15 October 2014, officials there see the economy moving at a modest-to-moderate pace, with consumer spending gaining at a slight-to-moderate pace.
Powered by Capital Market - Live News