Volatility continued as key benchmark indices once again slipped into the red after reversing intraday losses in mid-afternoon trade. The market breadth indicating the overall health of the market was negative. The barometer index, the S&P BSE Sensex, was currently down 39.64 points or 0.15% at 26,428.72. Foreign portfolio investors (FPIs) sold shares worth a net Rs 851.24 crore yesterday, 25 September 2014, as provisional data. Global cues were negative. Bank stocks reversed intraday losses.
Earlier, key indices had slumped in afternoon trade after alternately swinging between positive and negative zone near the flat line.
In overseas markets, European stocks edged lower after a survey showed German consumer confidence is expected to deteriorate for a second consecutive month in October. Asian stocks dropped after steep losses for US stocks overnight. US stocks fell sharply yesterday, 25 September 2014, on a report that Russian lawmakers are drafting legislation that would allow the government to seize foreign assets in response to sanctions by US and the European Union imposed on account of Russia's aggression in Ukraine.
In the foreign exchange market, the rupee edged lower against the dollar on month-end dollar demand from importers for paying month-end import bills.
Brent crude oil prices edged lower as hefty supplies capped price gains and outweighed concerns that rising tensions in the Middle East could disrupt supply.
At 14:15 IST, the S&P BSE Sensex was down 39.64 points or 0.15% at 26,428.72. The index lost 247.87 points at the day's low of 26,220.49 in afternoon trade, its lowest level since 18 August 2014. The index jumped 110.19 points at the day's high of 26,578.55 in morning trade.
The CNX Nifty was down 11.40 points or 0.14% at 7,900.45. The index hit a low of 7,841.80 in intraday trade, its lowest level since 18 August 2014. The index hit a high of 7,952.95 in intraday trade.
The market breadth indicating the overall health of the market was negative. On BSE, 1,656 shares fell and 1,152 shares rose. A total of 91 shares were unchanged.
The BSE Mid-Cap index was off 31.09 points or 0.33% at 9,319.63. The BSE Small-Cap index was off 47.44 points or 0.45% at 10,397.35.
Bank stocks reversed intraday losses. Union Bank of India (up 1.84%), Bank of India (up 1.11%), Syndicate Bank (up 2.33%), Dena Bank (up 0.87%), Indian Bank (up 0.03%), Canara Bank (up 3.11%), Indian Overseas Bank (up 4.44%), Andhra Bank (up 2.75%), and Oriental Bank of Commerce (up 2.2%) gained. Punjab National Bank fell 0.75%.
Among private sector banks, IndusInd Bank (up 1.25%), Yes Bank (up 2.37%), Federal Bank (up 1.29%), HDFC Bank (up 1.25%) and Axis Bank (up 2.43%), gained. ICICI Bank declined 1%. Kotak Mahindra Bank dropped 1.02%.
Bank stocks had tumbled recently amid concerns of bad loans due to their exposure to coal mines after the Supreme Court's decision on Wednesday, 24 September 2014, cancelling most coal block allocations since 1993.
The Supreme Court in its verdict Wednesday, 24 September 2014, cancelled the allocation of 214 out of 218 coal blocks it had already declared illegal due to irregularities in the allocation of the blocks. Of these, licenses for 172 coal blocks which weren't in production stand canceled immediately, while licenses for 42 blocks which were producing coal or were close to starting production would stand canceled after six months, the court said. The six months' time has been allowed to ensure coal supplies don't get affected until the government comes out with a fresh policy for auctioning the canceled coal blocks. Coal India will take over operations of the cancelled coal blocks until they are re-auctioned.
The court also slapped a penalty of Rs 295 per tonne on operating coal blocks for coal already extracted from the blocks.
State Bank of India (SBI) rose 1.13% to Rs 2,405.20. The stock hit high of Rs 2,413.60 and low of Rs 2,348 in intraday trade. Arundhati Bhattacharya, Chairman of the bank was quoted by the media as saying that she does not believe that the entire exposure to companies that will be impacted by the recent Supreme Court judgement quashing 214 coal blocks will be written off. The bank reportedly has more than Rs 4000 crore exposure to companies that will be impacted by the recent Supreme Court judgement quashing 214 coal blocks. On upcoming Reserve Bank policy on 30 September 2014, she is expecting a status quo, with maybe some tweaking on the CRR side, report said.
In the foreign exchange market, the rupee edged lower against the dollar on month-end dollar demand from importers for paying month-end import bills. The partially convertible rupee was hovering at 61.37 compared with its close of 61.34 during the previous trading session.
Brent crude oil prices edged lower as hefty supplies capped price gains and outweighed concerns that rising tensions in the Middle East could disrupt supply. Brent for November settlement was off 19 cents at $96.81 a barrel. The contract had risen 5 cents a barrel or 0.05% to settle at $97 a barrel yesterday, 25 September 2014.
Prime Minister Narendra Modi will reach the United States today, 26 September 2014, for a five-day official visit. The Indian Prime Minister will meet US President Barack Obama at the White House on 29-30 September 2014. The two leaders will discuss a range of issues of mutual interest in order to expand and deepen the US-India strategic partnership. They will discuss ways to accelerate economic growth, bolster security cooperation, and collaborate in activities that bring long-term benefits to both countries and the world.
The Reserve Bank of India (RBI) undertakes fourth bi-monthly monetary policy review on 30 September 2014. The central bank's policy stance after the review could provide cues on the direction of interest rates in the coming months. The central bank is targeting consumer price inflation at 8% by end January 2015 and 6% by end January 2016.
European stocks edged lower today, 26 September 2014, after a survey showed German consumer confidence is expected to deteriorate for a second consecutive month in October. Key indices in Germany and UK were off 0.25% to 0.27%. France's CAC 40 rose 0.06%.
A sentiment survey released today, 26 September 2014, showed that German consumer confidence is expected to deteriorate for a second consecutive month in October. The monthly survey of GfK market research group showed consumer confidence falling to 8.3 points for October from an unrevised 8.6 points in September. Nonetheless, confidence remains "at a good level," GfK said. Germany is Europe's biggest economy.
French consumer confidence remained stable as expected in September, survey data from the statistical office Insee showed today, 26 September 2014. The consumer confidence remained at 86 for the third consecutive month in September.
Asian stocks dropped today, 26 September 2014, after steep losses for US stocks overnight. Key benchmark indices in Indonesia, Japan, South Korea, Hong Kong, Taiwan and Singapore were off 0.11% to 1.61%. China's Shanghai Composite was up 0.11%.
Japan's annual core consumer inflation eased in August, in another sign that the Bank of Japan could be forced into additional easing steps to meet its 2% price goal sometime next fiscal year.
Trading in US index futures indicated that Dow could gain 16 points at the opening bell today, 26 September 2014. US stocks fell sharply on Thursday, 25 September 2014, on a report that Russian lawmakers are drafting legislation that would allow the government to seize foreign assets in response to sanctions by US and the European Union imposed on account of Russia's aggression in Ukraine.
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