Weak global cues and an overnight rally in Brent crude oil prices weighed on key indices in India which snapped their recent winning streak. The barometer index, the S&P BSE Sensex, snapped its 9-day winning streak. Nevertheless, benchmark indices trimmed intraday losses in late trade. The Sensex regained the psychological 27,000 level after falling below that mark in intraday trade. The Sensex was provisionally off 55.22 points or 0.2% at 27,084.72. 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.
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.
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.
As per provisional figures, the S&P BSE Sensex was off 55.22 points or 0.2% at 27,084.72. The index fell 167.55 points at the day's low of 26,972.39 in mid-afternoon trade, its lowest level since 2 September 2014. The index gained 29.18 points at the day's high of 27,169.12 in early trade.
The CNX Nifty shed 18.50 points or 0.23% at 8,096.10, as per provisional figures. The index hit a low of 8,060.90 in intraday trade, its lowest level since 2 September 2014. The index hit a high of 8,114.80 in intraday trade.
The market breadth indicating the overall health of the market was negative. On BSE, 1,718 shares declined and 1,242 shares advanced. A total of 99 shares were unchanged.
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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.
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.
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.
DLF tumbled 8.25% at Rs 167.95. 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.
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.
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 14 cents at $102.63 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 60.445, 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 0.18% to 0.53%. In UK, the FTSE 100 index was up 0.14%.
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 0.08% 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 fall 5 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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