A broad based decline was witnessed on the bourses as selling intensified during the latter part of the trading session. The barometer index, the S&P BSE Sensex, settled at its lowest level in three weeks. The 50-unit CNX Nifty also settled at three-week low below the psychological 8,000 level. The Sensex dropped 324.05 points or 1.21% to settle at 26,492.51. The market breadth indicating the overall health of the market was weak, with more than two losers for every gainer on BSE. A number of side counters fell sharply. The BSE Mid-Cap index lost 3.42%. The BSE Small-Cap index shed 3.99%. Asian and European stocks were in red. Meanwhile, the latest data showed that India's merchandise exports registered a small increase of 2.35% in August 2014.
Power generation stocks fell across the board. Metal and mining stocks extended Monday's losses as a recent batch of weak data out of China raised concern of a sharp slowdown in the world's second-biggest economy. Hindalco Industries dropped on reports the Jharkhand government has ordered closure of five bauxite mines of aluminium major in the state as these mines have been operating under second deemed renewal. Bank stocks dropped. Private and state-run oil and gas stocks declined.
There is a concern that a tighter monetary policy in the US may slow inflow from foreign portfolio investors (FPIs) into the country. Investors across the globe are awaiting the outcome on the Federal Reserve's two-day policy meeting that begins today, 16 September 2014, to gauge the timing of interest rate hike in the US. The Fed is likely to raise short-term interest rates next year from their current near-zero levels, where they have been since December 2008.
Meanwhile, a deluge of new share sales could soak liquidity from the secondary equity market over the next few months. Fresh supply of paper is expected as companies aim to raise additional capital and as the government looks to trim stakes in state-run companies. The government kicked off a big-bang divestment programme last week by announcing stake-sale in three state-run firms.
Earlier, key indices had extended losses in afternoon trade after hovering in a narrow range in red with small losses until that time.
Asian and European stocks declined on caution ahead of the start of Federal Reserve's two-day policy meeting today, 16 September 2014.
In the foreign exchange market, the rupee edged higher against the dollar.
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Brent crude oil prices edged lower in choppy trade before the weekly oil inventory data in the US, the world's biggest oil consumer.
The S&P BSE Sensex lost 324.05 points or 1.21% to settle at 26,492.51, its lowest closing level since 26 August 2014. The index dropped 344.55 points at the day's low of 26,472.01 in late trade. The index rose 44.73 points at the day's high of 26,861.29 in early trade.
The CNX Nifty declined 109.10 points or 1.36% to settle at 7,932.90, its lowest closing level since 26 August 2014. The index hit a low of 7,925.15 in intraday trade. The index hit a high of 8,044.90 in intraday trade.
The total turnover on BSE amounted to Rs 4354 crore, higher than Rs 3605.01 crore on Monday, 15 September 2014.
The market breadth indicating the overall health of the market was weak, with more than two losers for every gainer on BSE. 2,230 shares declined and 803 shares rose. A total of 85 shares were unchanged.
The BSE Mid-Cap index fell 341.55 points or 3.42% to settle at 9,659.31. The BSE Small-Cap index declined 449.21 points or 3.99% to settle at 10,796.31.
All the 12 sectoral indices on BSE edged lower. The S&P BSE Realty index (down 3.42%), the S&P BSE Power index (down 3.26%), the S&P BSE Capital Goods index (down 2.7%), the S&P BSE Oil & Gas index (down 2.67%), the S&P BSE Consumer Durables index (down 2.56%), the S&P BSE Metal index (down 2.31%), the S&P BSE Bankex (down 2%), the S&P BSE Auto index (down 1.73%) and the S&P BSE Healthcare index (down 1.35%) underperformed the Sensex.
The S&P BSE FMCG index (down 0.05%), the S&P BSE IT index (down 0.27%) and the S&P BSE Teck index (down 0.52%) outperformed the Sensex.
Private and state-run oil and gas stocks declined. Among private sector, Reliance Industries (down 2.39%) and Cairn India (down 2.56%) declined.
PSU OMCs edged lower. HPCL (down 5.27%) and Indian Oil Corporation (IOCL) (down 6%) declined.
BPCL declined 4.82%. BPCL reportedly paid 141% higher advance tax at Rs 487 crore in Q2 September 2014 over Q2 September 2013.
Meanwhile, media reports said that the government will decide on ending government control on diesel pricing after elections in two states next month, even though local prices of the fuel are currently higher than the global rates, making a case for a cut in retail prices. PSU OMCs now have over recovery of 35 paise per litre on sale of diesel, as per the latest data released by Petroleum Planning & Analysis Cell.
PSU OMCs are currently incurring daily under-recovery of Rs 190 crore on the sale of Diesel, PDS Kerosene and Domestic LPG.
Shares of state-run upstream oil companies declined. Oil India fell 2.17%. GAIL (India) declined 2.15%
State-run upstream oil and gas companies share a part of the under recoveries of state-run oil marketing companies (PSU OMCs) by allowing discount in the prices of crude oil, PDS kerosene, and domestic LPG based on the rates of discount communicated by the Ministry of Petroleum and Natural Gas and the Petroleum Planning & Analysis Cell.
ONGC dropped 2.73%. The company said during market hours that ONGC Videsh (OVL) and PetroVietnam, the major oil producing state owned company of Vietnam, have signed a Letter of Intent (LOI) to participate in the exploration of oil & gas in the offshore Vietnam. ONGC Videsh is a wholly owned subsidiary of ONGC. The LOI provides for expansion of exploration activities by OVL in Vietnam by considering participation in 2-3 additional blocks subject to technical and commercial viability and requisite approvals. In turn, PetroVietnam may consider participation in some of the exploration blocks of OVL on mutually agreeable terms subject to due-diligence.
Metal and mining stocks extended Monday's losses as a recent batch of weak data out of China raised concern of a sharp slowdown in the world's second-biggest economy. China is the world's largest consumer of steel, copper and aluminum. Jindal Steel & Power (down 2.55%), Sesa Sterlite (down 0.4%), JSW Steel (down 4.65%), NMDC (down 0.57%), Tata Steel (down 3.79%), National Aluminum Company (down 8.05%), Hindustan Zinc (down 5.65%), Steel Authority of India (Sail) (down 3.45%) and Hindustan Copper (down 3.11%) declined.
Hindalco Industries dropped 1.77% on reports the Jharkhand government has ordered closure of five bauxite mines of aluminium major in the state as these mines have been operating under second deemed renewal.The state government had issued similar closure notice to 12 iron ore mines of Tata Steel and Steel Authority of India along with Hindalco on September 8. The central government had ordered in July demanding closure of all mineral mine leases which fall under second deemed renewal.
Power generation stocks fell across the board. Reliance Infrastructure (down 5.82%), Tata Power Company (down 5.23%), CESC (down 5.51%), NTPC (down 2.65%), Reliance Power (down 4.72%), NHPC (down 4.28%), Jaiprakash Power Ventures (down 3.51%), Adani Power (down 3.76%), JSW Energy (down 6.26%) edged lower.
Bank stocks dropped. Among private sector banks, HDFC Bank (down 1.13%), ICICI Bank (up 1.65%), Federal Bank (down 5.27%), Kotak Mahindra Bank (down 1.74%) and Axis Bank (down 3.14%), declined.
Yes Bank fell 4.21% after Morgan Stanley Capital International excluded the stock from its standard and mid-cap indexes. The change will be effective from Thursday, 18 September 2014.
IndusInd Bank lost 0.96%. The bank has cut interest rate on savings bank account to 4.5% from 5.5% on daily balance less than Rs 1 lakh. The change is effective from 1 September 2014. The bank has, however, maintained the rate of 6% for daily balance equal to or greater than Rs 1 lakh. Savings deposits currently constitute 16.6% of the total deposits of IndusInd Bank (as on 30 June 2014).
Among PSU bank stocks, Canara Bank (down 5.99%), Punjab National Bank (down 4.32%) Syndicate Bank (down 5.37%), Andhra Bank (down 4.65%), and Oriental Bank of Commerce (down 5.16%) declined.
Union Bank of India dropped 4.63%. The bank reportedly paid 4.41% higher advance tax at Rs 355 crore in Q2 September 2014 over Q2 September 2013.
Bank of India declined 3.59%. The bank reportedly paid 22.22% higher advance tax at Rs 330 crore in Q2 September 2014 over Q2 September 2013.
Bank of Baroda fell 2.45%. The bank reportedly paid 1.58% higher advance tax at Rs 640 crore in Q2 September 2014 over Q2 September 2013.
State Bank of India (SBI) declined 2.31%. The bank reduced interest rate on 1-3-year term deposit by 25 basis points (bps) and raised interest rate on 180-210 day term deposit by 25 bps. The stock was up 0.49%. SBI has raised interest rate on term deposits below Rs 1 crore with maturity period 180-210 days by 25 bps to 7.25% from 7%. Interest rate on term deposit with maturity period of 1 year to less than 3 years has been cut to 8.75% from 9%. The changes are effective from 18 September 2014.
SBI reportedly paid 24.1% higher advance tax at Rs 1390 crore in Q2 September 2014 over Q2 September 2013.
Tata Motors declined 2.78% after the company's Group global wholesales, including Jaguar Land Rover, fell 9.73% to 73,524 units in August 2014 over August 2013. Global wholesales of all Tata Motors' commercial vehicles and Tata Daewoo range declined 19.6% to 30,536 units in August 2014 over August 2013. Global wholesales of all passenger vehicles slipped 1.11% to 42,988 units in August 2014 over August 2013.
Hero MotoCorp shed 0.25%. The company said during market hours that it has entered into a Memorandum of Understanding (MOU) with the State Government of Andhra Pradesh to set-up a manufacturing plant in Chittoor district of the state of Andhra Pradesh. The plant with an investment of Rs 1600 crores approx will have a production capacity of around 1.8 million per annum.
Bosch gained 0.53%. The company said during market hours that the employee union of Bosch Bangalore plant has chosen to go on strike with effect from today, 16 September 2014, in order to press for their unreasonable demands. The strike will be considered as illegal, the company said. The management is in discussion with the union to restore normalcy at the earliest with the intervention of the Additional Labour Commissioner, Karnataka, the company said.
Cipla gained 1.1% after the company said after market hours on Monday, 15 September 2014, announced the signing of a non-exclusive licensing agreement with Gilead Sciences, Inc. for manufacturing and distribution of medicines for the treatment of hepatitis C. Under this licensing agreement, Cipla will be allowed to manufacture and market Sofosbuvir, Ledipasvir in 91 countries including its home markets India and South Africa under Cipla's own brand names. It also covers countries like Egypt which has a high incidence of Hepatitis C. The countries within the agreement account for more than 100 million people living with hepatitis C globally representing 54% of the total global infected population. As per the agreement, Cipla has the option of receiving a technology transfer of the manufacturing process from Gilead.
Lupin dropped 3.69%. The company announced during market hours that it has entered into a long-term strategic partnership with Merck Serono, the Biopharmaceutical division of Merck. Lupin will support Merck Serono in the implementation of the company's General Medicines portfolio expansion initiative in emerging markets thus addressing local needs for affordable, high?quality medicines. The agreement builds on an established working relationship between the two companies, and could add up to 20 new products to the current portfolio. The first launches are expected in 2016. Lupin and Merck agreed not to release any financial details of the transaction.
Cadila Healthcare fell 1.5%. The company said during market hours that it has received tentative approval from the USFDA to market Glipizide Extended release tablets in the strengths of 2.5mg, 5mg and 10mg. The drug falls in the ant-diabetic segment. The estimated sales in 2014 for Glipizide ER tablets in the United States is $90.1 million, as per IMS.
Separately, Cadila Healthcare and Gilead Sciences, Inc. on Monday, 15 September 2014, announced that they have signed a non-exclusive licensing agreement which will allow the generic manufacture of sofosbuvir and investigational single tablet regimen of ledipasvir/ sofosbuvir for distribution in 90 developing countries, including India.
Capital goods stocks reversed intraday gain in choppy trade. Bharat Heavy Electricals (Bhel) (down 1.73%), BEML (down 5.78%), Bharat Electronics (down 2.09%), Crompton Greaves (down 5.69%) Punj Lloyd (down 7.21%) and Thermax (down 0.71%) declined. ABB (India) rose 0.06%.
The Cabinet Committee on Economic Affairs on Monday, 15 September 2014, approved the "Scheme for Enhancement of Competitiveness of the Capital Goods Sector" to boost the Indian economy. The sub sectors of capital goods covered under the scheme are mainly for machine tools, textile machinery, construction and mining machinery, and process plant machinery. The proposed scheme addresses the issue of technological depth creation in the capital goods sector, besides creating common industrial facility centres. The scheme will be implemented in the 12th plan period and spill over to the 13th plan period with an estimated outlay of Rs 930.96 crore. The gross budgetary support (GBS) from the government for the scheme would be Rs 581.22 crore and the balance Rs 349.74 crore would be contributed by the stakeholder industries.
Larsen & Toubro (L&T) fell 2.89% to Rs 1,515.35. The stock was volatile. The stock hit high of Rs 1,568.90 and low of Rs 1,510. L&T after market hours on Monday, 15 September 2014 said that its construction division has won new orders worth Rs 2050 crore across various business segments in August 2014 and September 2014. The stock was volatile. The stock hit high of Rs 1,568.90 and low of Rs 1,552.65 so far during the day.
GMR Infrastructure lost 11.27%. GMR Infrastructure during market hours said that the company's board of directors at its meeting held today, 16 September 2014, has considered and approved, issue of equity shares by way of rights issue to the shareholders of the company for an amount upto Rs 1500 crore.
Seperately, GMR Infrastructure during market hours said that promoter holding company GMR Holdings has informed the company that it has made necessary financing arrangement for subscribing to the proposed rights issue of GMR Infrastructure.
IT stocks were mixed. HCL Technologies settled unchanged for the day at Rs 1,608.10.
Infosys rose 0.41% after the company said during market hours that Muji, a leading retailer in Japan, has deployed InteractEdge from Infosys which will enable Muji to deliver a superior shopping experience through real time insights into the buying behaviour of its customers.
Tata Consultancy Services (TCS) rose 0.13%. TCS reportedly paid 34.29% higher advance tax at Rs 1390 crore in Q2 September 2014 over Q2 September 2013.
Wipro fell 1.37%. Wipro after market hours on Monday, 15 September 2014 said that the company's subsidiary Wipro Arabia has entered into a strategic partnership with Saudi-based Saudi Electricity Company (SEC), the largest power utility company in the Middle East serving approximately 5 million customers in the Kingdom of Saudi Arabia (KSA). As part of this engagement, Wipro will implement and rollout the plant maintenance and project system functionality of the SAP ERP application for SEC's distribution business line across KSA.
Tech Mahindra declined 1.79%.
Realty stocks reversed initial gains in choppy trade. DLF (down 3.23%), D B Realty (down 3.72%), Indiabulls Real Estate (down 3.96%), Housing Development & Infrastructure (HDIL) (down 8.88%), Sobha (down 0.65%) and Unitech (down 6.2%) declined.
Himachal Futuristic Communications (down 17.13%), Oscar Investments (down 16.23%), Himadri Chemicals and Industries (down 15.61%), New Delhi Television (down 11.98%), Genus Power Infrastructures (down 11.72%), Dhunseri Petrochem & Tea (down 11.65%), Jayaswal Neco Industries (down 11.62%), OnMobile Global (down 11.19%), Zee News (down 10.86%) and Trident (down 10.73%) were the top losers from the S&P BSE Small-Cap index.
Gujarat State Fertilizers Company (GSFC) (down 9.86%), Amtek India (down 9.56%), Delta Corp (down 8.58%), Arvind (down 8.55%), Symphony (down 8%), Gujarat Pipavav Port (down 7.95%), Jain Irrigation Systems (down 7.89%) and Dalmia Bharat (down 7.30%) were the top losers from the S&P BSE Mid-Cap index.
In the foreign exchange market, the rupee edged higher against the dollar. The partially convertible rupee was hovering at 61.1, compared with its close of 61.14 during the previous trading session.
Key indices fell for the second day in a row today, 16 September 2014. The Sensex has lost 568.53 points or 2.1% in two trading days from recent high of 27,061.04 on 12 September 2014. The Sensex has declined 145.60 points or 0.54% in this month so far (till 16 September 2014). The Sensex has gained 5,321.83 points or 25.13% in calendar year 2014 so far (till 16 September 2014). From a record high of 27,354.99 on 8 September 2014, the Sensex has declined 862.48 points or 3.15%. From a 52-week low of 19,264.72 on 1 October 2013, the Sensex has risen 7,227.79 points or 37.51%.
Provisional data released by the stock exchanges after trading hours on Monday, 15 September 2014, showed that foreign portfolio investors (FPIs) sold shares worth a net Rs 74.59 crore on that day.
Brent crude oil prices edged lower in choppy trade before the weekly oil inventory data in the US, the world's biggest oil consumer. Brent for November settlement was off 1 cent at $97.87 a barrel. The contract had risen 0.84% to settle at $97.88 a barrel on Monday, 15 September 2014. The October contract which expired on Monday, 15 September 2014 dipped to a 26-month low at $96.21 in its final session.
On macro front, India's merchandise exports registered a small increase of 2.35% at $26.95 billion in August 2014 over August 2013, data released by the government after trading hours yesterday, 15 September 2014, showed. Imports rose 2.08% at $37.79 billion in August 2014 over August 2013. Oil imports declined 14.97% at $12.83 billion in August 2014 over August 2013. Non-oil imports jumped 13.82% at $24.95 billion in August 2014 over August 2013. The trade deficit increased to $10.83 billion in August 2014, from $10.68 billion in August 2013.
European stocks dropped today, 16 September 2014, as investors awaited the outcome of the latest Federal Reserve meeting. Key benchmark indices in UK, France and Germany were off 0.35% to 0.64%.
UK inflation slowed to match the least in five years in August as a supermarket price war and weather effects pushed food prices down the most in more than a decade. The rate of consumer-price growth fell to 1.5% from 1.6% in July, the Office for National Statistics said today in London.
Meanwhile, investors are also waiting the 18 September 2014 referendum on Scottish independence.
Asian stocks declined today, 16 September 2014, on caution ahead of the start of Federal Reserve's two-day policy meeting today, 16 September 2014. Key benchmark indices in Hong Kong, Indonesia, Singapore, China, Taiwan and Japan were off 0.28% to 1.82%. South Korea's Kospi rose 0.35%.
Foreign direct investment into China, a gauge of external confidence, slumped to a four-year low amid widening antitrust probes into multinational companies. Inbound investment was $7.2 billion in August, down 14% from a year earlier, the Ministry of Commerce said on its website today in Beijing after a 17% drop in July. It was the first back-to-back decline of more than 10% since 2009.
Trading in US index futures indicated that the Dow could fall 29 points at the opening bell on Tuesday, 16 September 2014. US stocks closed mostly lower on Monday, 15 September 2014, with losses led by technology and small-cap stocks as investors continued to unload riskier position ahead of this week's pivotal Federal Reserve policy meeting.
Economic data yesterday showed US industrial production unexpectedly declined in August for the first time in seven months as automakers slowed assembly lines.
Investors will look to Federal Open Market Committee (FOMC) meeting for fresh guidance on US interest rates. A two-day policy meeting of the Federal Open Market Committee (FOMC) starts today, 16 September 2014. At the end of a two-day meeting, the FOMC is widely expected to announce cut in Fed's monthly bond-buying program by another $10 billion to $15 billion, staying on track to end the program at its October meeting. The Fed is likely to raise short-term interest rates next year from their current near-zero levels, where they have been since December 2008.
The Fed will also announce US economic projections after the policy meet. Fed now releases economic projections four times a year (March, June, September, and December). Traditionally, the Fed forecasts covered GDP, the PCE price index, and the civilian unemployment rate. However, the forecast report additionally now includes forecasts for the appropriate timing of the next change in the fed funds rate and the expected fed funds rate at the end of the next two years. The policy meet will be followed by a press conference by Federal Reserve Chairwoman Janet Yellen on 17 September 2014.
The Federal Reserve after two-day policy meeting on 30 July 2014, said it would reduce its purchases of mortgage and Treasury bonds by $10 billion to $25 billion monthly from $35 billion earlier, as widely expected.
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