Private sector banks, public sector oil marketing companies (PSU OMCs) and index heavyweights HDFC, L&T and Infosys led losses as key benchmark indices edged lower in choppy trade. The Sensex lost 317.72 points or 1.22% to settle at 25,714.66. The 50-unit CNX Nifty lost 88.85 points or 1.13% to settle at 7,791.85. The Sensex fell below the psychological 26,000 mark. The barometer index hit its lowest closing level in more than a year. The Nifty hit its lowest closing level in more than 10 months. The market breadth indicating the overall health of the market turned negative from positive in late trade.
In overseas markets, Chinese stocks fell on fears that its economy is slowing at a faster pace than widely anticipated. European stocks edged lower as investors question China's efforts to stimulate growth in the world's second-largest economy.
FMCG shares witnessed selling pressure. Power generation stocks rose across the board.
Key indices witnessed intraday volatility today, 26 August 2015. After staging a strong rebound from an initial slide in morning trade, benchmark indices once again slipped into the red from green later. Key indices erased almost entire intraday losses in early afternoon trade. Benchmark indices weakened again in late trade.
Indian stocks may remain volatile tomorrow, 27 August 2015, as traders roll over positions in the futures & options (F&O) segment from the near month August 2015 series to September 2015 series. The near month August 2015 derivatives contracts are set to expire tomorrow, 27 August 2015.
Foreign portfolio investors (FPIs) pressed substantial sales of Indian stocks yesterday, 25 August 2015. FPIs sold shares worth a net Rs 1938.19 crore into secondary equity market yesterday, 25 August 2015, as per data from Central Depository Services (India). Domestic institutional investors (DIIs) bought shares worth a net Rs 1963.09 crore yesterday, 25 August 2015, as per provisional data released by the stock exchanges.
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The S&P BSE Sensex fell 317.72 points or 1.22% to settle at 25,714.66, its lowest closing level since 11 August 2014. The index fell 374.82 points at the day's low of 25,657.56 in late trade. The index rose 124.23 points at the day's high of 26,156.61 in morning trade.
The CNX Nifty fell 88.85 points or 1.13% to settle at 7,791.85, its lowest closing level since 17 October 2014. The index hit a low of 7,777.10 in intraday trade. The index hit a high of 7,930.05 in intraday trade.
The BSE Mid-Cap index dropped 83.16 points or 0.79% to settle at 10,477.16. The decline in this index was lower than the Sensex's decline in percentage terms. The BSE Small-Cap index rose 17.06 points or 0.16% to settle at 10,711.73, outperforming the Sensex.
The market breadth indicating the overall health of the market was turned negative from positive. On BSE, 1,345 shares fell and 1,321 shares rose. A total of 99 shares were unchanged.
The total turnover on BSE amounted to Rs 3057 crore, lower than turnover of Rs 4804.66 crore registered during the previous trading session.
Among the sectoral indices on BSE, the S&P BSE Bankex index (down 1.68%) underperformed the Sensex. The S&P BSE FMCG index (down 0.96%), BSE Healthcare index (down 1.14%), BSE IT index (down 0.96%), BSE Auto index (down 0.7%), BSE Capital Goods index (down 0.91%), BSE Consumer Durables index (down 0.47%), BSE Metal index (up 0.23%), BSE Oil & Gas index (down 0.98%), BSE Power index (up 1.64%), BSE Realty index (down 0.2%) and BSE Teck index (down 1.04%) outperformed the Sensex.
Bharti Airtel fell 2.57% at Rs 339.75. The stock hit a high of Rs 350.60 and a low of Rs 337.20 in intraday trade. Bharti Airtel after market hours today, 26 August 2015, announced that it has signed a definitive agreement to acquire 100% equity stake in Augere Wireless Broadband India (Augere), which holds 20 MHz of BWA spectrum in the telecom circles of Madhya Pradesh and Chhattisgarh.
Bank stocks edged lower. Among PSU banks, Union Bank of India (down 3.35%), Bank of Baroda (down 3.17%), Syndicate Bank (down 2.67%), Canara Bank (down 3.13%), Andhra Bank (down 2.68%), Bank of India (down 1.21%), Punjab National Bank (down 1.49%), Corporation Bank (down 1.26%) and IDBI Bank (down 0.27%) edged lower. Central Bank of India (up 0.79%) and Dena Bank (up 1.92%) edged higher.
State Bank of India (SBI) dropped 3% at Rs 245.80. The stock hit a high of Rs 253.70 and a low of Rs 245.25 in intraday trade. The bank announced after market hours yesterday, 25 August 2015, that the Central Board of the bank has cleared a proposal of preferential allotment of equity shares to Government of India, the principal shareholder of the bank. The size of the proposed preferential issue is Rs 5393 crore.
Indian Overseas Bank (IOB) edged higher after a Committee of Directors of the bank set the issue price at Rs 41.37 per equity share for the purpose of allotment of equity shares to Government of India (GoI) on preferential basis. The stock rose 0.99% at Rs 35.55. The preferential issue price of Rs 41.37 per share was set at a premium of 17.52% to the closing price of the stock on BSE yesterday, 25 August 2015. IOB will issue a total of 48.56 crore shares to its principle shareholder viz. the Government of India to raise Rs 2009 crore. The state-run bank made the announcement after market hours yesterday, 25 August 2015.
Among private sector banks, IndusInd Bank (down 3.05%), Kotak Mahindra Bank (down 1.86%), ICICI Bank (down 1.78%), Axis Bank (down 1.27%) and HDFC Bank (down 0.75%) edged lower. Yes Bank (up 0.26%) edged higher.
Power generation stocks rose across the board. Reliance Infrastructure (up 7.65%), JSW Energy (up 4.48%), Tata Power (up 2.29%), Reliance Power (up 2.09%), NHPC (up 0.31%), Adani Power (up 1.17%), Torrent Power (up 0.77%) and NTPC (up 0.29%) edged higher. GVK Power & Infrastructure (down 0.67%) edged lower.
FMCG shares witnessed selling pressure. Britannia Industries (down 3.36%), GlaxoSmithkline Consumer Healthcare (down 2.07%), Bajaj Corp (down 2.04%), Nestle India (down 1.62%), Godrej Consumer Products (down 1.19%), Jyothy Laboratories (down 1.17%), Hindustan Unilever (down 0.09%), Tata Global Beverages (down 0.68%) and Procter & Gamble Hygiene and Health Care (down 0.64%) edged lower. Colgate-Palmolive (India) (up 0.59%) and Marico (up 0.16%) edged higher.
Dabur India rose 1.3% at Rs 277.20. With regard to news item titled "US FDA issues import alert to Dabur's Alwar Unit", Dabur India clarified after market hours yesterday, 25 August 2015, that the United States Food and Drug Administration (USFDA) has not put any restriction on import and sale of products manufactured at Dabur's Alwar unit. The USFDA has, however, sought some additional information and the company is in the process of submitting the required information. This is a routine procedural matter and will not impact the company's business in the US, Dabur India said.
Shares of public sector oil marketing companies (PSU OMCs) edged lower. BPCL (down 2.98%) and HPCL (down 1.94%) edged lower.
In the global commodities markets, Brent crude oil futures edged higher. Brent for October settlement was currently up 22 cents at $43.43 a barrel. The contract had risen 52 cents or 1.22% to settle at $43.21 a barrel during the previous trading session.
In the foreign exchange market, the rupee edged lower against the dollar. The partially convertible rupee was currently hovering at 66.1425, compared with its close of 66.10 during the previous trading session.
Indian Oil Corporation (IOCL) dropped 0.22% at Rs 393.90. The stock hit a high of Rs 413.85 and a low of Rs 387.35 in intraday trade. A filing with the stock exchanges showed that India's biggest domestic institutional investor, Life Insurance Corporation of India (LIC), bought 20.87 crore shares or 8.59% stake in Indian Oil Corporation (IOCL) in the recently completed divestment of Government of India's stake in the company. This means that LIC bought majority of the shares that were on offer. The Government of India, the principle shareholder of IOCL, sold 24.27 crore shares aggregating to a 10% stake in IOCL through the stock exchanges mechanism on 24 August 2015. With the acquisition of the large quantum of shares in the Offer for Sale for divestment of the Government of India's stake in IOCL, LIC's stake in IOCL has risen to 11.11% from 2.52% earlier.
Meanwhile, IOCL after market hours yesterday, 25 August 2015, announced that subsequent to signing of a Memorandum of Understanding (MoU) between Government of India (GoI) and Government of Nepal on 24 August 2015, IOCL and Nepal Oil Corporation (NOC) have signed an MoU for construction of 1.3 million metric tonne per annum (MMTPA) capacity Raxaul-Amlekhgunj petroleum product pipeline along with some works at Amlekhganj Petroleum Depot of NOC. The estimated cost of the project is Rs 275 crore and the completion period is 30 months after receipt of statutory clearances. This pipeline will ensure long term supply of petroleum products to Nepal from IOCL as well as stability of supplies from India to Nepal, which will benefit both the countries, IOCL said.
Maruti Suzuki India rose 0.11% at Rs 4,204.20. The stock hit a high of Rs 4,260.80 and a low of Rs 4,119 in intraday trade. The stock turned ex-dividend today, 26 August 2015, for final dividend of Rs 25 per share for the year ended 31 March 2015 (FY 2015).
Index heavyweight and construction major L&T dropped 2.04% at Rs 1,592.50. The stock hit a high of Rs 1,644 and a low of Rs 1,585.55 in intraday trade. The company announced during trading hours today, 26 August 2015, that the Power Transmission and Distribution Business unit of the company has won an order valued at Rs 864 crore in the Middle East market from Qatar General Electricity & Water Corporation. The order encompasses the engineering, procurement and construction of two substation packages.
Index heavyweight and housing finance major HDFC fell 3.77% to Rs 1,102.45. The stock hit a high of Rs 1,158 and a low of Rs 1,093.80 in intraday trade.
Index heavyweight and IT major Infosys fell 1.95% to Rs 1,065.35. The stock hit a high of Rs 1,099 and a low of Rs 1,059.60 in intraday trade.
The Sensex has declined 2,399.90 points or 8.53% in this month so far (till 26 August 2015). The Sensex has fallen 1,784.76 points or 6.49% in this calendar year so far (till 26 August 2015). The Sensex has risen 416.24 points or 1.64% from a 52-week low of 25,298.42 hit yesterday, 25 August 2015. The Sensex is off 4,310.08 points or 14.35% from a record high of 30,024.74 hit on 4 March 2015.
Meanwhile, according to a summary of the electronic consultation that the Reserve Bank of India (RBI) held with the Technical Advisory Committee on Monetary Policy in the run up to the monetary policy review on 4 August 2015, four out of seven external members of the committee recommended a cut in the repo rate at the 4 August policy review. Three of them suggested a reduction in repo rate by 25 basis points and one member suggested a 50 basis points reduction. Three members recommended a status quo in the repo rate, with one of them suggesting a reduction in the statutory liquidity ratio (SLR) by 50 basis points. The RBI kept the repo rate unchanged at the 4 August policy review.
Meanwhile, investors continue to watch the progress of the monsoon rains which will have a bearing on food prices and rural income. India's weather office, the India Meteorological Department (IMD), said in a daily report issued yesterday, 25 August 2015, that for the country as a whole, cumulative rainfall during this year's monsoon season was 11% below the Long Period Average (LPA) until 25 August 2015. Region wise, the rainfall was 20% below the LPA in South Peninsula, 14% below the LPA in Central India, 6% below the LPA in East & Northeast India and 5% below the LPA in Northwest India until 25 August 2015.
The June-September southwest monsoon is critical for the country's agriculture because a considerable part of the country's farmland is dependent on the rains for irrigation.
In overseas markets, European stocks edged lower today, 26 August 2015, as market enthusiasm over stimulus measures enacted by China faded. Key benchmark indices in Germany, UK and France were off 0.54% to 0.6%.
Chinese stocks fell in choppy trade today, 26 August 2015, even after the nation's central bank announced fresh measures after trading hours yesterday, 25 August 2015, to ease monetary policy to battle the country's deepening economic slowdown. In mainland China, the Shanghai Composite lost 1.27%. In Hong Kong, the Hang Seng index lost 1.52%. China's central bank, People's Bank of China (PBOC), today, 26 August 2015, announced that it will inject 140 billion yuan ($21.80 billion) into the financial system through a short-term liquidity adjustment (SLO) operation. The SLO loans come with a 2.3% interest rate. Short-term liquidity operations were launched by the PBOC in 2013 to reduce fluctuations in liquidity and stabilize interbank funding costs. The decision comes a day after the Chinese central bank cut its benchmark interest rates and lowered the reserve-requirement ratio for banks in the wake of recent stock-market turmoil in the country.
The Shanghai Composite Index fell 7.6% yesterday, 25 August 2015, following an 8.5% plunge on Monday, 24 August 2015. China's surprise move to devalue its currency by almost 2% two weeks ago has magnified worries that its economic slowdown is worse than official data shows.
In other Asian markets, Key benchmark indices in Taiwan, Indonesia, Japan and South Korea were up by 0.22% to 3.2%. In Singapore, the Straits Times was off 0.46%.
Trading in US index futures indicated that the Dow could surge 291 points at the opening bell today, 26 August 2015. In a dramatic reversal to a morning rally, US stocks relinquished all of their opening gains to finish with losses yesterday, 25 August 2015, as selling accelerated during the last one hour or so of the trading session. The latest economic data showed that new-home sales bounced back in July, while a separate report showed consumer confidence rising more than projected in August. The Conference Board, a private research group, said that its index of consumer confidence rose to 101.5 in August, bouncing back after a steep decline in July.
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