A bout of volatility was witnessed as key benchmark indices extended losses in early afternoon trade. The barometer index, the S&P BSE Sensex, and the 50-unit CNX Nifty, both, hit 3-week low. The Sensex was currently off 176.36 points or 0.65% at 26,811.10. The market breadth indicating the overall health of the market was weak. Global crude oil prices hovered near 5-1/2-year low amid continuing concerns about a global supply glut. Investors fear that the rout in global crude oil prices signals a weak global economy. Asian stocks were in green.
Foreign portfolio investors sold shares worth a net Rs 1570.76 crore yesterday, 6 January 2015, as per provisional data.
Pharma stocks edged lower. Aurobindo Pharma rose after the company said it has received USFDA nod to manufacture and market Valsartan Tablets in four strengths in US. Power Grid Corporation advanced after the Minister of Road Transport & Highways and Shipping Nitin Gadkari yesterday, 6 January 2015, laid the foundation of 400/220 kV sub-station with 2000 MVA capacity of PGCIL at Tughlakabad, Delhi.
Meanwhile, Finance Minister Arun Jaitley yesterday, 6 January 2015, said that ease of doing business is high priority for the government.
Global crude oil prices hovered near 5-1/2-year low amid continuing concerns about a global supply glut. Deregulation of diesel price announced by the Indian government in October 2014 and a sharp decline in global crude oil prices over the past few months will help reduce the government's fuel subsidy burden and help contain its fiscal deficit. The steep slide in global crude oil prices will also help India in containing its current account deficit and fuel price inflation. India imports 80% of its crude oil requirement.
Earlier, the Sensex had regained the psychological 27,000 level amid initial volatility.
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In overseas markets, Asian stocks edged higher. The US stock market endured another day of selling yesterday, 6 January 2015, due to slumping oil prices.
In the foreign exchange market, the rupee edged higher against the dollar.
Brent crude futures extended losses from 5-1/2-year low amid continuing concerns about a global supply glut.
At 12:17 IST, the S&P BSE Sensex was down 176.36 points or 0.65% at 26,811.10. The index dropped 211.34 points at the day's low of 26,776.12 in early afternoon trade, its lowest level since 17 December 2014. The index rose 64.14 points at the day's high of 27,051.60 in mid-morning trade.
The CNX Nifty was down 61.25 points or 0.75% at 8,066.10. The index hit a low of 8,065.45 in intraday trade, its lowest level since 17 December 2014. The index hit a high of 8,151.20 in intraday trade.
The BSE Mid-Cap index was off 82.38 points or 0.8% at 10,153.36. The BSE Small-Cap index was off 92.85 points or 0.85% at 10,893.37. The decline in both these indices was higher than the Sensex's decline in percentage terms.
The market breadth indicating the overall health of the market was weak. On BSE, 1,634 shares declined and 865 shares advanced. A total of 94 shares were unchanged.
Pharma stocks declined. Torrent Pharmaceuticals (down 1.83%), Glenmark Pharmaceuticals (down 1.55%), Divi's Laboratories (down 1.49%), Cadila Healthcare (down 0.96%), Dr Reddy's Laboratories (down 1.2%), Ranbaxy Laboratories (down 0.65%), Cipla (down 0.86%), Ipca Laboratories (down 0.78%), Sun Pharmaceutical Industries (down 0.56%), and GlaxoSmithkline Pharmaceuticals (down 0.05%) edged lower.
Lupin fell 1.25% at Rs 1,377.15. The company after market hours yesterday, 6 January 2015, announced that its US subsidiary Lupin Pharmaceuticals Inc. has launched its Valsartan Tablets USP, 40 mg, 80 mg, 160 mg and 320 mg strengths, the generic version for Novartis Pharmaceuticals Corporation's (Novartis) Diovan Tablets, 40 mg, 80 mg, 160 mg and 320 mg strengths, having received final approval from the United States Food and Drug Administration (FDA). Lupin's Valsartan Tablets 40 mg, 80 mg, 160 mg and 320 mg are the AB rated generic equivalent of Novartis's Diovan Tablets and is indicated for treatment of hypertension and heart failure. Diovan tablets had annual US sales of $2.08 billion (IMS MAT September, 2014), Lupin said.
Aurobindo Pharma rose 1.62% at Rs 1,105.90 after market hours yesterday, 6 January 2015, announced that the company has received final approval from the US Food & Drug Administration (USFDA) to manufacture and market Valsartan Tablets USP, 40mg, 80mg, 160mg and 320mg. The product is ready for launch, Aurobindo Pharma said. Aurobindo now has a total of 195 abbreviated new drug application (ANDA) approvals from USFDA, which includes 170 final approvals and 25 tentative approvals, the company said.
State-run Power Grid Corporation of India (PGCIL) rose 0.4% at Rs 136.65. The Minister of Road Transport & Highways and Shipping Nitin Gadkari yesterday, 6 January 2015, laid the foundation of 400/220 kV sub-station with 2000 MVA capacity of PGCIL at Tughlakabad, Delhi. In order to facilitate handling of increasing quantum of power with reliability, four nos. of 400/220kV substations along with associated 400kV transmission network under Inter State Transmission System (ISTS) are being implemented within the periphery of Delhi to import power from various sources outside Delhi. These ISTS 400/220 kV substations are planned to be established at Rajghat, Tughlakabad, Karampura and Papankalan in Delhi by PGCIL, the Ministry of Power said after trading hours yesterday, 6 January 2015.
Mangalore Chemicals & Fertilizers was up 0.22% at Rs 89.20. The company during market hours today, 7 January 2015, announced the resumption of the operation of the company's urea plant. Earlier, the company had announced shutting of operation of the urea plant with effect from 1 October 2014 in view of the Govt. of India notifications.
In the foreign exchange market, the rupee edged higher against the dollar. The partially convertible rupee was hovering at 63.4550, compared with its close of 63.58 during the previous trading session.
Brent crude futures extended losses from 5-1/2-year low amid continuing concerns about a global supply glut. Brent for February settlement was off 67 cents at $50.43 a barrel. The contract had lost $2.01 a barrel or 3.78% to settle at $51.10 a barrel during the previous trading session, its lowest settlement since April 2009.
Finance Minister Arun Jaitley yesterday, 6 January 2015, said that ease of doing business is high priority for the government. The Finance Minister made these comments during the Pre Budget Consultative Meeting with the representatives of Trade and Industry. Jaitley said that implementation of nationwide goods and services tax (GST) is expected to improve the tax administration regime and would help in bringing more transparency in the system and ensure smooth flow of goods. It will also help in better implementation and collection of taxes, he said. The Finance Minister said that reforms measures undertaken by the government in coal sector, insurance and amendments in Land Acquisition Act etc will make a major difference in improving the Indian economy's performance.
Asian equity markets edged higher today, 7 January 2015. Key indices in China, Taiwan, Singapore, South Korea, Japan, Hong Kong and Indonesia were up 0.01% to 0.54%.
Trading in US index futures indicated that the Dow could gain 42 points at the opening bell today, 7 January 2015. The US stock market endured another day of selling yesterday, 6 January 2015, due to slumping oil prices. Investors appear to discount positive effect of lower oil prices on broader economy and continue to view the slide in crude as a symptom of slower global growth, which will threaten improving US economy. The US services sector expanded in December at its slowest rate since February as growth in new business and employment declined, an industry report showed yesterday, 6 January 2015.
The Fed will release minutes of the Federal Open Market Committee (FOMC) meeting held on 16 and 17 December 2014 later in the global day today, 7 January 2015. The Fed minutes may shed light on policy makers' views on the appropriate timing of the first interest-rate increase since 2006 and the conditions that would prompt them to tighten policy. At the two-day meeting in December, the FOMC had said it would be patient on the timing of an increase, replacing an earlier pledge to keep borrowing costs low for a "considerable time".
The US Labor Department reports monthly payroll data for December 2014 on Friday, 9 January 2015.
Meanwhile, Vietnam devalued its currency by weakening dong's reference rate for the second time since June, according to a statement on the central bank's website posted late yesterday, 6 January 2015. The currency is allowed to trade as much as 1 percent either side of the rate, which was reduced by 1 percent to 21,458 dong per dollar, effective today, 7 January 2015.
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