After reversing intraday gains in mid-morning trade, key benchmark indices moved in a narrow range near the flat line. The barometer index, the S&P BSE Sensex, slipped below the psychological 27,000 level after regaining that level in opening trade. The Sensex was currently down 21.87 points or 0.08% at 26,974. The BSE Mid-Cap index slipped into the red from green. The market breadth indicating the overall health of the market was positive. Auto stocks were mixed in reaction to reports that the government is looking at the proposal for extending excise duty concessions to the automobile sector beyond December. Shares of fertiliser companies extended Thursday's gains. Data due after trading hours today, 12 September 2014, is likely to show easing of consumer price inflation in August 2014 and a muted growth in industrial production in July 2014.
In overseas markets, Asian stocks edged higher after the latest data showed credit growth of Chinese financial institutions surged last month.
In the foreign exchange market, the rupee edged higher against the dollar in choppy trade.
Brent crude oil futures edged lower amid signs that crude supply will continue to rise even as global demand weakens.
At 11:15 IST, the S&P BSE Sensex was down 21.87 points or 0.08% at 26,974. The index gained 69.15 points at the day's high of 27,065.02 in early trade. The index fell 28.91 points at the day's low of 26,966.96 in mid-morning trade.
The CNX Nifty was down 11.95 points or 0.15% at 8,073.75. The index hit a high of 8,102.95 in intraday trade. The index hit a low of 8,072.75 in intraday trade.
The market breadth indicating the overall health of the market was positive. On BSE, 1,412 shares gained and 1,172 shares fell. A total of 84 shares were unchanged.
The BSE Mid-Cap index was off 1.76 points or 0.02% at 9,961.75. The BSE Small-Cap index was up 24.51 points or 0.22% at 11,135.43. Both these indices outperformed the Sensex.
The total turnover on BSE amounted to Rs 1398 crore by 11:15 IST, compared to a turnover of Rs 861 crore by 10:15 IST.
Among the 30-share Sensex pack, 18 stocks declined and rest of them gained.
Hindalco Industries (down 2.81%), Sun Pharmaceutical Industries (down 2.65%) and NTPC (down 0.89%) edged lower from the Sensex pack.
Auto stocks were mixed. Maruti Suzuki India (up 1.12%), Eicher Motors (up 2.57%) and Bajaj Auto (up 0.48%) gained. Mahindra & Mahindra (M&M) (down 0.17%), Ashok Leyland (down 0.23%), Hero MotoCorp (down 0.1%) and TVS Motor Company (down 1.2%) declined.
As per reports, the government is looking at the proposal for extending excise duty concessions to the automobile sector beyond December. The government is likely to send a proposal to finance ministry regarding extension of excise duty concession till 31 March 2015. In a relief to the automobile and consumer durable sectors, the government in June 2014 had announced extension of the excise duty concession by six months to 31 December 2014. The concessions were earlier valid till 30 June 2014.
The government had cut excise duty on cars, SUVs and two-wheelers as well as consumer durables in the Interim Budget in February 2014 to help the industry tide over a demand slump.
Tata Motors was up 0.18%. As per reports, Tata Motors has joined hands with UK-based Microlise to launch advanced telematics and fleet management services in the Indian market. Under the partnership, which is for an initial period of five years, both sides intend to utilise their respective strengths to deliver services through Tata Fleetman platform, a vehicle management and tracking system, which the Mumbai-based auto major had launched in 2012. While Microlise will provide the technology and solutions, Tata Motors will integrate them in its commercial vehicles and utilise its reach for service delivery, according to reports.
Shares of fertiliser companies extended Thursday's gains. Deepak Fertilisers & Petrochemicals Corporation (up 1.64%) Gujarat State Fertilisers and Chemicals (GSFC) (up 9.79%), Gujarat Narmada Valley Fertilizers & Chemicals (GNFC) (up 4.34%), Chambal Fertilisers & Chemicals (up 1.21%), Rashtriya Chemicals and Fertilisers (up 0.87%), National Fertilizers (up 2.17%), and Zuari Agro Chemicals (up 1.53%) edged higher.
Ananth Kumar, Minister for Chemicals & Fertilizers, while speaking at the 4th National Conference on Agrochemicals 2014, in New Delhi last month reportedly said that the government proposes to come out with a new holistic fertiliser policy. In the Union Budget for the fiscal year ending 31 March 2015 (FY 2015) announced on 10 July 2014, Finance Minister Arun Jaitley said that the government will launch new urea policy.
Meanwhile, the provisional data released by the stock exchanges after trading hours yesterday, 11 September 2014, showed that foreign portfolio investors (FPIs) bought shares worth a net Rs 433.55 crore on that day.
Brent crude oil futures edged lower amid signs that crude supply will continue to rise even as global demand weakens. Brent for October settlement was off 25 cents at $97.83 a barrel. The contract rose 4 cents to settle at $98.08 a barrel yesterday, 11 September 2014, bouncing back from a 2-year low after Russia warned the US that air strikes in Syria against Islamist militants would be an act of aggression without a UN security mandate. The more active contract Brent for November settlement was off 22 cents at $98.64 a barrel.
Lower crude oil prices will help India in containing its fiscal deficit, current account deficit and fuel price inflation. India imports 80% of its crude oil requirement.
In the foreign exchange market, the rupee edged higher against the dollar in choppy trade. The partially convertible rupee was hovering at 60.87, compared with its close of 60.93 during the previous trading session.
Data due after trading hours today, 12 September 2014, is likely to show easing of consumer price inflation in August 2014 and a muted growth in industrial production in July 2014. The annual rate of inflation based on the combined consumer price indices (CPI) for urban and rural India is seen decelerating to 7.8% in August 2014, from 7.96% in July 2014, as per the median estimate of a poll of economists carried out by Capital Market. The government will release the CPI data for August 2014 at 17:30 IST today, 12 September 2014. The Reserve Bank of India (RBI) is targeting CPI inflation at 8% by January 2015 and 6% by January 2016.
Meanwhile, the growth in industrial production is seen decelerating to 1.9% in July 2014, from 3.4% in June 2014, as per the median estimate of a poll of economists carried out by Capital Market. Industrial production growth had eased to 3.4% in June 2014, from 5% increase recorded in May 2014. The government will release the industrial production data for July 2014 at 17:30 IST today, 12 September 2014.
The annual rate of inflation based on the monthly Wholesale Price Index (WPI) is seen decelerating to 4.43% in August 2014, from 5.19% in July 2014, as per the median estimate of a poll of economists carried out by Capital Market. The government will release the WPI data for August 2014 at 12 noon on Monday, 15 September 2014.
Monsoon rainfall between 1 June 2014 and 10 September 2014 was 11% below average, an India Meteorological Department (IMD) report dated 11 September 2014 showed. India's farming sector accounts for around 14% of the economy, but two-thirds of the nation's 1.2 billion people depend on farming for a livelihood and more than half of its arable land needs the summer rains.
Asian stocks edged higher today, 12 September 2014, after the latest data showed credit growth of Chinese financial institutions surged last month. Key benchmark indices in Japan, Indonesia, South Korea, China and Singapore were up 0.04% to 0.5%. Key benchmark indices in Taiwan and Hong Kong were off 0.27% to 0.99%.
Chinese banks stepped up lending in August after a big fall a month earlier, data from the central bank showed today, 12 September 2014. Chinese financial institutions issued 702.5 billion yuan ($114.6 billion) in new yuan loans in August, up sharply from 385.2 billion yuan in July. Total social financing--a broader measurement of credit in the economy--was 957.4 billion yuan in August, up from 273.1 billion yuan in July.
The Bank of Korea held its policy interest rate at 2.25% today, 12 September 2014, as widely expected after it cut the benchmark by a quarter-point at its previous meeting.
Trading in US index futures indicated a flat opening of US stocks on today, 12 September 2014. US stocks eked out small gains on Thursday, 11 September 2014, as an unexpected increase in weekly jobless claims and falling commodities prices encouraged investors to remain cautious. The main benchmarks finished in positive territory after trading in a tight range and spending much of the session in the red. The number of people who applied for jobless benefits last week unexpectedly rose, reaching the highest level since late June.
Investors will look to next week's Federal Open Market Committee (FOMC) meeting for fresh guidance on US interest rates. At the end of a two-day meeting on 16-17 September 2014, 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.
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