After a range bound movement in mid-morning trade, key benchmark indices drifted lower in early afternoon trade. The barometer index, the S&P BSE Sensex, and CNX Nifty, both hit their lowest level in more than 9 weeks. The Sensex was currently trading below the psychological 26,000 mark, having alternately moved above and below that level earlier during the day. The Sensex was currently down 74.58 points or 0.28% at 25,927.05. The market breadth indicating the overall health of the market was weak. The BSE Small-Cap index was off almost 1%. Meanwhile, foreign portfolio investors sold shares worth a net Rs 1128.37 crore yesterday, 16 October 2014, as per provisional data.
Bank stocks edged higher. Axis Bank advanced after the bank announced a reduction in its base rate by 10 basis points. IndusInd Bank rose after the bank issued a clarification with regard to a media news item pertaining to its foray into asset reconstruction business. Praj Industries surged after strong Q2 earnings.
Earlier, key indices had bounces back after a weak opening.
In overseas markets, Asian stocks were mixed. US stocks recovered from early losses yesterday, 16 October 2014, as St. Louis Federal Reserve Bank President James Bullard said policy makers should consider delaying the end of bond purchases to halt the decline in inflation expectations.
Brent crude oil prices climbed from the lowest level in almost four years on speculation prices decreased more than justified.
In the foreign exchange market, the rupee edged higher against the dollar, tracking stronger Asian currencies.
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At 11:15 IST, the S&P BSE Sensex was down 74.58 points or 0.28% at 25,927.05. The index lost 88.57 points at the day's low of 25,910.77 in mid-morning trade, its lowest level since 13 August 2014. The index rose 85.82 points at the day's high of 26,085.16 in early trade.
The CNX Nifty was down 21.15 points or 0.27% at 7,727.05. The index hit a low of 7,723.85 in intraday trade, its lowest level since 13 August 2014. The index hit a high of 7,769.45 in intraday trade.
The BSE Mid-Cap index was off 47.27 points or 0.51% at 9,196.68. The BSE Small-Cap index was off 99.90 points or 0.96% at 10,244.09.
The market breadth indicating the overall health of the market was weak. On BSE, 1,374 shares dropped while 817 shares rose. A total of 87 shares were unchanged.
Bank stocks advanced. ICICI Bank (up 1.24%), Kotak Mahindra Bank (up 1.24%), State Bank of India (up 0.91%), HDFC Bank (up 0.73%), Yes Bank (up 0.58%), Punjab National Bank (up 0.68%), and Bank of India (up 0.04%) gained.
IndusInd Bank rose 0.53% at Rs 649.35. The bank during market hours in a clarification with regard to news item titled "IndusInd Bank to foray into asset reconstruction business" said that the article is factually correct and part and parcel of the bank's normal scope of lending and investment activity. The bank will work with asset reconstruction companies, but is not setting up one itself, IndusInd Bank said. The bank is already in the business of reconstruction and recovery of some of its own non-performing assets and this is purely an extension of such historical activity, IndusInd Bank said.
Axis Bank rose 0.9% at Rs 397.45. The bank on Thursday, 16 October 2014, said it has reduced its base rate by 10 basis points to 10.15% per annum (p.a.) from 10.25% with effect from 15 October 2014. The bank attributed the reduction in base rate to decline in cost of funds. The cost of funds has eased due to softening of interest rates based on improving liquidity and other macroeconomic developments, Sidharth Rath, President (Treasury, Business Banking & Capital Markets), Axis Bank said in a statement.
Praj Industries rose 3.32% at Rs 63.75 after consolidated net profit surged 284.39% to Rs 24.87 crore on 36.45% increase in total income from operations to Rs 265.04 crore in Q2 September 2014 over Q2 September 2013. The result was announced after market hours yesterday, 16 October 2014.
Meanwhile, the provisional data released by the stock exchanges after trading hours yesterday, 16 October 2014, showed that foreign portfolio investors (FPIs) sold shares worth a net Rs 1128.37 crore on that day.
In the foreign exchange market, the rupee edged higher against the dollar, tracking stronger Asian currencies. The partially convertible rupee was hovering at 61.58, compared with its close of 61.84 during the previous trading session.
Reserve Bank of India (RBI) Governor Raghuram Rajan said in Hyderabad yesterday, 16 October 2014, that the drop in bond yields is partly signaling RBI's success in controlling inflation. The RBI is targeting consumer price inflation of 8% by January 2015 and 6% by January 2016.
Brent crude oil prices climbed from the lowest level in almost four years on speculation prices decreased more than justified. Brent for December settlement was up 54 cents at $86.36 a barrel. The contract had risen $1.70 a barrel to settle at $85.82 a barrel yesterday, 16 October 2014.
Asian stocks were mixed today, 17 October 2014. Key indices in Japan, China, Taiwan, and South Korea were off 0.88% to 1.14%. Key indices in Hong Kong, Singapore and Indonesia were up 0.24% to 0.94%.
China is expected to release third-quarter economic growth figures on Tuesday, 21 October 2014.
The MNI China Business Indicator fell to a eight-month low of 51.7 in October, the latest data showed today, 17 October 2014. It was down from September's reading of 52.2. While the indicator remains above the breakeven 50 line that separates expansion from contraction, the trend weakened further, with business sentiment below the average of 54 seen over the past 12 months.
Trading in US index futures indicated that the Dow could gain 26 points at the opening bell today, 17 October 2014. US stocks ended little changed yesterday, 16 October 2014, with the Dow industrials recouping much of a 206-point deficit, as investors balanced worries about global growth against mostly better-than-expected US earnings and economic reports.
The National Association of Home Builders (NAHB)/Wells Fargo housing market index fell unexpectedly last month, official data showed on Thursday, 16 October 2014. In a report, NAHB said that NAHB Housing Market Index fell to 54, from 59 in the preceding month.
The Federal Reserve may want to extend its bond-buying program beyond October to keep its policy options open given falling US inflation expectations, Federal Reserve Bank of St. Louis President James Bullard said yesterday, 16 October 2014.
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