Weakness continued on the bourses in the early afternoon trade, with the barometer index, the S&P Sensex, falling below the psychological 27,000 level. The Sensex was currently down 145.92 points or 0.54% at 26,994.02. Weakness in Asian stocks and an overnight rally in Brent crude oil prices dampened sentiment. The market breadth indicating the overall health of the market was weak. The BSE Small-Cap index was off 1.01%. Bank stocks declined. Hindalco Industries and Jindal Steel & Power (JSPL) tumbled on reports that some coal mines of these two companies have not been included by the government in the list of 46 blocks for which the government has requested the Supreme Court for an exemption from possible cancellation. United Spirits dropped after reporting net loss in Q4. Meanwhile, India's Intelligence Bureau has reportedly issued an all-India alert after Al Qaeda leader Ayman al Zawahri announced the formation of an Indian branch of his militant group.
Earlier, after extending initial losses which took it below the psychological 27,000 mark, the Sensex had regained that level in mid-morning trade. Before that the Sensex had slipped into the red soon after opening a tad higher.
In overseas markets, shares of property developers led decline in Asian stocks.
At 12:13 IST, the S&P BSE Sensex was down 145.92 points or 0.54% at 26,994.02. The index fell 158.39 points at the day's low of 26,981.55 in early afternoon trade, its lowest level since 2 September 2014. The index gained 29.18 points at the day's high of 27,169.12 in early trade.
The CNX Nifty was down 50.45 points or 0.62% at 8,064.15. The index hit a low of 8,062.65 in intraday trade, its lowest level since 2 September 2014. The index hit a high of 8,114.80 in intraday trade.
The market breadth indicating the overall health of the market was weak. On BSE, 1,684 shares declined and 903 shares advanced. A total of 71 shares were unchanged.
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The BSE Mid-Cap index was down 65.59 points or 0.68% at 9,539.28. The BSE Small-Cap index was down 106.53 points or 1.01% at 10,427.19. Both these indices underperformed the Sensex.
Among 30-share Sensex pack, 24 stocks declined while remaining gained.
Bank stocks declined. Punjab National Bank (down 2.14%), Canara Bank (down 1.73%), Bank of India (down 1.93%), IndusInd Bank (down 1.06%), Bank of Baroda (down 1.3%), ICICI Bank (down 1.64%), Yes Bank (down 1.37%), Federal Bank (down 0.83%), Axis Bank (down 0.75%), State Bank of India (down 0.59%) and HDFC Bank (down 0.08%) declined.
Hindalco Industries and Jindal Steel & Power (JSPL) tumbled on reports that some coal mines of these two companies have not been included by the government in the list of 46 blocks for which the government has requested the Supreme Court for an exemption from possible cancellation.
Hindalco Industries tumbled 4.05% at Rs 168.05. According to reports, Hindalco Industries was allocated the Mahan Coal block to feed its power-hungry aluminium plant in Madhya Pradesh. Mahan Coal is a joint venture between Hindalco Industries and Essar Power, which have already invested Rs 20000 crore for setting up end-use plants. With Mahan Coal block's name missing from the list of 46 blocks for which the government requested the Supreme Court for an exemption, the chances of a de-allocation have risen, clouding the long-term viability of the project, reports added.
Jindal Steel & Power (JSPL) shed 4.04% at Rs 228.10. As per reports, JSPL's Utkal B1 block also did not find a mention in the government list, reports indicated. And just like Hindalco, JSPL too needs access to cheap coal from Utkal B1 mine to make money on its ambitious steel and power project at Angul in Odisha, reports added.
Last week, the Supreme Court held that the allocation of coal blocks to various firms between 1993 and 2009 was illegal. Following that, the government asked the court to spare 40 producing and six soon-to-be-operational blocks from cancellation, and instead impose penalties on the operators for any wrongdoing while procuring them.
United Spirits lost 1.31% at Rs 2,367.75 after the company reported a net loss of Rs 5380.10 crore in Q4 March 2014 compared with net profit of Rs 56.02 crore in Q4 March 2013. Total income from operations rose 3.84% to Rs 1943.34 crore in Q4 March 2014 over Q4 March 2013. The result was announced before market hours today, 4 September 2014.
The company reported a net loss of Rs 5102.82 crore for the year ended 31 March 2014 (FY 2014) compared with net profit of Rs 320.80 crore in the year ended 31 March 2013 (FY 2013). Total income from operations rose 1.58% to Rs 8516.60 crore in FY 2014 over FY 2013.
On consolidated basis, the company reported a net loss of Rs 4489.08 crore in FY 2014, higher than net loss of Rs 101.20 crore in FY 2013. Total income from operations rose 1.11% to Rs 10615.41 crore in FY 2014 over FY 2013.
Meanwhile, India's Intelligence Bureau has reportedly issued an all-India alert after Al Qaeda leader Ayman al Zawahri announced the formation of an Indian branch of his militant group. The government has asked all the states to be on high alert for any possible attack, as per media reports. In a 55-minute video posted online Zawahri described the formation of Al-Qaeda in the Indian subcontinent as a glad tidings for Muslims in Burma, Bangladesh, Assam, Gujarat, Ahmedabad, and Kashmir and said that the new wing would rescue Muslims there from injustice and oppression.
Brent crude oil futures rallied Wednesday, 3 September 2014, on expectations that steps toward a cease-fire in eastern Ukraine could boost economic growth in Europe. Brent for October settlement surged $2.43 a barrel or 2.4% to settle at $102.77 a barrel yesterday, 3 September 2014. In today's trading, Brent for October settlement was down 64 cents at $102.13 a barrel.
Higher crude oil prices could increase fiscal deficit and current account deficit and stoke fuel price inflation. India imports 80% of its crude oil requirement.
Russian President Vladimir Putin on Wednesday, 3 September 2014, said he and his Ukrainian counterpart Petro Poroshenko had agreed to the outlines of a cease-fire for eastern Ukraine, calling for the separatists there to end their offensive and Kiev to pull its forces back.
In the foreign exchange market, the rupee edged higher against the dollar. The partially convertible rupee was hovering at 60.4550, compared with its close of 60.4825 during the previous trading session.
Shares of property developers led decline in Asian stocks today, 4 September 2014. Key indices in Japan, China, Hong Kong, Taiwan, Indonesia and Singapore were off 0.14% to 0.33%. In South Korea, the Seoul Composite index was up 0.27%
The Bank of Japan kept its record stimulus unchanged today, 4 September 2014 as Governor Haruhiko Kuroda looks to keep stoking inflation and boost economic momentum that's been sapped by a higher sales tax. The central bank kept its pledge to increase the monetary base at an annual pace of 60 trillion yen to 70 trillion yen ($667 billion), the bank said in a statement today, 4 September 2014.
Trading in US index futures indicated that the Dow could fall 7 points at the opening bell on Thursday, 4 September 2014. US stock markets closed mostly lower on Wednesday, 3 September 2014, pulled down by a fall in Apple and other technology companies.
The US economy expanded at a modest to moderate pace over the past six weeks as a booming auto industry and tourism continued to drive growth, the Federal Reserve said in its Beige Book on Wednesday, 3 September 2014.
In Europe, a monthly meeting of the European Central Bank (ECB) is scheduled today, 4 September 2014. There are expectations that the European Central Bank (ECB) will announce quantitative easing in the coming months to bolster growth and counter downward pressures on prices in the euro zone. At US Federal Reserve's annual symposium in the United States on 22 August 2014, ECB President Mario Draghi said that expectations of future inflation in Europe exhibited significant declines at all horizons this month.
Bank of England will also announce its monetary-policy decision later in the global day today, 4 September 2014.
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