Key benchmark indices languished in negative terrain in mid-morning trade. The barometer index, the S&P BSE Sensex, was down 128.34 points or 0.51%, off close to 125 points from the day's high and up about 55 points from the day's low. The market sentiment was hit adversely as the government's decision to defer revision in gas prices by three months came contrary to market expectations that the new government will quickly take business-friendly decisions aimed at economic revival. Prime Minister Narendra Modi is perceived as a business friendly leader.
Automobile stocks rose after the government on Wednesday, 25 June 2014, announced extension of concessional excise duty on automobiles by six months up to 31 December 2014.
The market breadth indicating the overall health of the market was positive.
At 11:20 IST, the S&P BSE Sensex was down 128.34 points or 0.51% to 25,185.40. The index shed 184.68 points at the day's low of 25,129.06 in morning trade, its lowest level since 24 June 2014. The index fell 4.41 points at the day's high of 25,309.33 in early trade.
The CNX Nifty was down 34.40 points or 0.45% to 7,534.85. The index hit a low of 7,514.65 in intraday trade, its lowest level since 23 June 2014. The index hit a high of 7,570.20 in intraday trade.
The market breadth indicating the overall health of the market was positive. On BSE, 1243 shares gained and 1,139 shares fell. A total of 93 shares were unchanged.
The BSE Mid-Cap index was up 18.13 points or 0.2% at 9,226.79. The BSE Small-Cap index was up 2.16 points or 0.02% at 10,014.95. Both these indices outperformed the Sensex.
Automobile stocks rose after the government on Wednesday, 25 June 2014, announced extension of concessional excise duty on automobiles by six months up to 31 December 2014. TVS Motor Company (up 3.26% to Rs 150.60), Mahindra & Mahindra (M&M) (up 0.47% to Rs 1,176), Bajaj Auto (up 0.55% to Rs 2,291.45), Tata Motors (up 0.08% to Rs 443.75) and Hero MotoCorp (up 0.45% to Rs 2,651.80), edged higher.
Ashok Leyland rose 0.92% to Rs 38.45. The company said during market hours that the company and Yes Bank signed memorandum of understanding whereby Yes Bank will extend retail financing to Ashok Leyland's commercial vehicles customers. With this tie up, the company will be able to leverage the extensive branch network and customer reach of Yes Bank and provide more efficient and effective service to its customers.
However, Maruti Suzuki India was down 0.73% to Rs 2,459.40.
A bout of volatility was witnessed as key benchmark indices trimmed losses after a weak opening. A sudden slide took key benchmark indices lower in morning trade. It languished in negative terrain in mid-morning trade.
Indian stocks may remain volatile today, 26 June 2014, as traders roll over positions in the futures & options (F&O) segment from the near month June 2014 series to July 2014 series. The near-month June 2014 F&O contract expire today, 26 June 2014.
In the foreign exchange market, the rupee was unchanged against the dollar. The partially convertible rupee was hovering at 60.1325, compared with its close of 60.125/135 on Wednesday, 25 June 2014.
The government on Wednesday, 25 June 2014, announced extension of concessional excise duty on automobiles, capital goods and consumer durables by six months up to 31 December 2014. It may be recalled that the Congress led United Progressive Alliance (UPA) government had in Interim Budget for 2014-15 in February this year had reduced excise duty on small cars, two wheelers, scooters and commercial vehicles to 8% from 12%. Excise duty on sports utility vehicles (SUVs) was cut to 24% from 30% and that on mid and large cars was cut to 24/20% from 27/24%. At that time, the reduction is excise duty was restricted till 30 June 2014 as an interim relief measure for the auto sector.
Similarly, excise duty was cut to 10% from 12% for a period up to 30 June 2014 for capital goods and consumer durable falling under chapter 84 and chapter 85 of the Schedule to the Central Excise Tariff Act. The chapter 84/85 includes products like boiler, turbine, transformers, motors, air conditioners, toaster, oven, switches, switchgears etc.
Asian stocks rose on Thursday, 26 June 2014, amid optimism the US economy is emerging from a worse-than-estimated contraction last quarter. Key benchmark indices in Japan, China, Indonesia, Singapore, Hong Kong, South Korea and Taiwan rose by 0.27% to 0.87%.
Trading in US index futures indicated that the Dow could gain 14 points at the opening bell on Thursday, 26 June 2014. US stocks gained for the first time in three days on Wednesday, 25 June 2014, as investors speculated the economy is recovering from a first-quarter contraction and Monsanto Co. announced a $10 billion stock buyback plan.
A report showed that US gross domestic product shrank 2.9% in the first quarter, the worst reading since 2009. Orders for business equipment climbed in May, a sign that corporate investment is helping revive the economy after slumping at the start of the year.
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