Weak global cues and an overnight rally in Brent crude oil prices weighed on key indices in India which snapped their recent winning streak that took them to record high. Nevertheless, benchmark indices trimmed intraday losses in late trade. The barometer index, the S&P BSE Sensex regained the psychological 27,000 level after falling below that mark in intraday trade. The Sensex lost 54.01 points or 0.2% to settle at 27,085.93. Higher crude oil prices could increase fiscal deficit and current account deficit and stoke fuel price inflation in India as the country imports 80% of its crude oil requirement. The market breadth indicating the overall health of the market was negative. Metal and realty stocks declined. Shares of realty major DLF slumped after the announcement of a court ruling regarding land allotted to the company in Gurgaon. IndusInd Bank fell after a block deal executed yesterday, 3 September 2014. Shares of two-wheeler makers gained. Banking, capital goods and power stocks also dropped. Cement stocks were mixed.
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.
Key indices remained in red for almost the entire trading session.
In overseas markets, European stocks edged lower as investors awaited the European Central Bank's next steps on interest rates and quantitative easing. Shares of property developers led decline in Asian stocks.
The S&P BSE Sensex shed 54.01 points or 0.2% to settle at 27,085.93, its lowest closing level since 2 September 2014. The index fell 167.55 points at the day's low of 26,972.39 in mid-afternoon trade. The index gained 29.18 points at the day's high of 27,169.12 in early trade.
The CNX Nifty shed 18.65 points or 0.23% to settle at 8,095.95, its lowest closing level since 2 September 2014. The index hit a low of 8,060.90 and a high of 8,114.80 in intraday trade.
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The market breadth indicating the overall health of the market was negative. On BSE, 1,715 shares declined and 1,246 shares advanced. A total of 98 shares were unchanged.
The BSE Mid-Cap index rose 10.20 points or 0.11% to settle at 9,615.07, outperforming the Sensex. The BSE Small-Cap index dropped 38.26 points or 0.36% to settle at 10,495.46, underperforming the Sensex.
The total turnover on BSE amounted to Rs 4943 crore, higher than Rs 3621.42 crore on Wednesday, 3 September 2014.
Among 30 Sensex shares, 19 declined while 11 stocks advanced.
Shares of two-wheeler makers rose on expectations of pick up in demand during the upcoming festive season. Hero MotoCorp (up 1.83%), TVS Motor Company (up 9.45%) and Bajaj Auto (up 3.25%) gained.
Capital goods stocks declined. Bharat Heavy Electricals (down 4.44%), Bharat Electronics (down 2.14%), Thermax (down 0.84%), Siemens (down 0.63%), Crompton Greaves (down 0.71%), and Alstom T&D India (down 0.94%) declined.
L&T fell 0.57%. The company in a clarification after market hours on Wednesday, 3 September 2014, with regard to news item that it is facing cost overrun of Rs 3000 crore for the Hyderabad Metro Rail project said that the anticipated amount of cost over run mentioned in the article is an approximate amount over the entire period of the project of 3 to 5 years, after considering several issues including delay in progress of acquisition of right of way, full impact of inflation, possible impact of re-organisation of AP state, possible non completion of project in time, etc, L&T said. Several of these issues may be addressed favourably during the execution of the project, the company added. The Govt is seized of the matter & is actively looking into the issues & a positive solution can emerge, L&T said.
The Hyderabad metro rail project is being implemented by a special purpose vehicle ( SPV)---L&T Metro rail (Hyderabad) (L&TMRHL). This SPV is a 99% subsidiary of L&TIDPL. L&TIDPL is a 97.5% subsidiary of L&T. L&T directly holds 1% in the SPV. The debt financing for L&TMRHL is non recourse to L&TIDPL & consequently to L&T, the company said. Commissioning of stage 1 is on schedule, it added.
Coal India rose 0.55%. The company during market hours said that five unions of the company have served a joint notice dated 31 August 2014 to Coal India to resort to work to rule with effect from 18 September to 20 September 2014 seeking the retrieval of mines from private companies and to protest against any further disinvestment. The unions issued a joint notice to the coal secretary. "Work to rule means workers will stick to their shifts and would not do anything that's not part of their job profile. This is likely to affect production at a time when coal stocks at power plants are running low, as per reports.
Jaiprakash Associates tumbled 17.6% at Rs 37.70. The company clarified during market hours that one of the promoters holding 72.36 crore shares, constituting 29.75% of the company's shares capital, has sold only 1.45% of share holding and continues to hold 68.83 crore shares, constituting 28.30% of the company's share capital. This small share holding has been disposed off by the promoter company to meet its requirement of funds including for social cause, Jaiprakash Associates said.
The promoters of Jaiprakash Associates continue to have full faith in the company and hope that the investor/stakeholders would continue to have confidence in the company and its Management, the company said.
The company issued the clarification after rumors in the market that the promoters are selling their share holding in the company.
Cement stocks were mixed. ACC (down 1.09%) and Ambuja Cements (down 1.12%) declined. UltraTech Cement rose 0.2%.
Grasim Industries declined 0.02%. Grasim has exposure to the cement sector through its subsidiary UltraTech Cement.
Shree Cement rose 1.52%.
Most IT stocks declined. TCS (down 0.66%), and Wipro (down 0.14%) declined. Tech Mahindra (up 1.09%) and HCL Technologies (up 0.11%) gained.
Infosys dropped 0.71%. The company said after market hours that it has been selected by BP to provide IT services, in particular application support and development to BP. The agreement is effective 1 September 2014.
Bank stocks declined. Canara Bank (down 1.22%), Bank of India (down 0.29%), Bank of Baroda (down 1.1%), ICICI Bank (down 0.51%), Yes Bank (down 0.91%), Federal Bank (down 0.44%), State Bank of India (down 0.54%) and HDFC Bank (down 0.55%) declined. Axis Bank rose 0.74%.
IndusInd Bank lost 0.94% at Rs 609.80. Private equity firm General Atlantic Service Company LLC on Wednesday, 3 September 2014, offloaded 65 lakh shares of IndusInd Bank on NSE at an average price of Rs 612 per share. Morgan Stanley Asia (Singapore) PTE picked up 34 lakh shares of IndusInd Bank at Rs 612 per share in this block deal.
Punjab National Bank lost 1.81%. The bank during market hours said that it is raising Rs 500 crore Tier-II Basel III compliant bonds at an annual coupon of 9.35% on private placement basis. The bond issue opened today, 4 September 2014, and it will conclude on 9 September 2014.
United Spirits lost 0.37% at Rs 2,390.25 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. The stock hit a high of Rs 2,436.90 and low of Rs 2,310.05. 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.
Power generation stocks dropped. Reliance Infrastructure (down 2.72%), Reliance Power (down 3.01%), Adani Power (down 0.2%), NHPC (down 1.62%), Tata Power (down 0.83%) declined. NTPC rose 1.93%.
Idea Cellular lost 2.96% at Rs 167.25 after multiple block deals were executed on the counter in opening trade on BSE today, 4 September 2014. Reportedly US-based private equity (PE) investor Providence Equity Partners has reduced its stake in Idea Cellular through block deals today, 4 September 2014. On BSE, a staggering 10.03 crore shares changed hands in the counter as against average daily volume of 7.78 lakh shares in the past one quarter. As of end of 30 June 2014, Providence Equity Partners held 33 crore shares or 9.31% stake in Idea Cellular through P5 Asia Investments (Mauritius).
Realty stocks tumbled. Oberoi Realty (down 5.28%), Unitech (down 6.25%), D B Realty (down 4.98%), Housing Development & Infrastructure (down 4%), Godrej Properties (down 2.69%), Prestige Estates Projects (down 0.25%), and Anant Raj (down 4.28%) declined.
DLF tumbled 8.6% at Rs 167.30. The company before market hours said that in a judgement passed on Wednesday, 3 September 2014, a judgement was passed by the Punjab and Haryana High Court in a writ petition filed before it challenging the acquisition by Haryana state government with respect to 350 acres of land in Wazirabad Village, Gurgaon. The court while upholding the acquisition has passed certain observations regarding the allotment of the land to DLF. DLF said it is awaiting a copy of the order and can offer detailed comments only after that. However, at this juncture the company would only like to clarify that the said land was awarded to DLF by two rounds of international competitive bidding process, DLF said. The company further clarified that the above stated project is an independent project to be developed in the future and has no correlation whatsoever with any of the ongoing, existing or completed projects of the company including DLF 5, the company said.
PSU OMCs declined as oil prices rebounded yesterday, 3 September 2014, from Tuesday's sharp slide. BPCL (down 0.4%), HPCL (down 1.72%), and Indian Oil Corporation (down 1.75%) declined.
Higher crude oil prices could increase under-recoveries of state-run oil marketing companies (PSU OMCs) on domestic sale of diesel, LPG and kerosene at controlled prices. The government has adopted the policy of gradually increasing diesel prices to eliminate under recovery and deregulate the diesel prices. The government has already freed pricing of petrol.
Index heavyweight Reliance Industries (RIL) lost 0.83% after the company before market hours announced mutual and amicable separation in the agreement for strategic partnership between Reliance Ventures (RVL), a wholly owned subsidiary of RIL and Infrastructure Leasing and Financial Services (IL&FS) to co-promote the model economic township (MET) project of Reliance Haryana SEZ (RHSL). The MET project is being developed by RHSL, a wholly owned subsidiary of RVL, in the industrial model township framework. IL&FS became a strategic partner in this project in January 2011.
The MET project will continue to be developed in the industrial model township framework on the directly purchased land. Development work has been started over 290 acres of land as an industrial colony, RIL said. Some Japanese majors have established their manufacturing units in the MET project, RIL said in a statement.
Metal shares dropped. Steel Authority of India (down 2.67%), Tata Steel (down 2.89%), JSW Steel (down 1.51%), Sesa Sterlite (down 0.3%), NMDC (down 0.75%) 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 was off 3.74%. 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 was off 3.77%. 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.
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.
The Sensex snapped its 9-day winning streak today, 4 September 2014. The barometer index had risen 825.65 points or 3.14% in nine trading sessions to settle at a record closing high of 27,139.94 on Wednesday, 3 September 2014, from a recent low of 26,314.29 on 20 August 2014. The Sensex has gained 447.82 points or 1.68% in this month so far (till 4 September 2014). The Sensex has gained 5,915.25 points or 27.94% in calendar year 2014 so far (till 4 September 2014). From a 52-week low of 18,166.17 on 3 September 2013, the Sensex has risen 8,919.76 points or 49.1%.
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 22 cents at $102.55 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 60.465, compared with its close of 60.4825 during the previous trading session.
European stocks edged lower today, 4 September 2014, as investors awaited the European Central Bank's next steps on interest rates and quantitative easing. Key benchmark indices in France and Germany were off 0.19% to 0.56%. In UK, the FTSE 100 index was up 0.15%.
German factory orders surged the most in more than one year in July after weak demand in the second quarter contributed to an economic contraction. Orders, adjusted for seasonal swings and inflation, rose 4.6% from June, when they slid a revised 2.7%, the Economy Ministry in Berlin said today. That's the biggest increase since June 2013.
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. The UK central bank is expected to keep its benchmark rate unchanged at 0.5%, the level it held since March 2009.
Shares of property developers led decline in Asian stocks today, 4 September 2014. Key indices in Japan, Taiwan, Indonesia, Hong Kong, and Singapore were off 0.07% to 0.36%. Key indices in South Korea and China rose 0.25% to 0.8%.
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 gain 13 points at the opening bell on Thursday, 4 September 2014. 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.
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