Weakness continued on the bourses in morning trade. Amid weak cues from global stocks, the barometer index, the S&P BSE Sensex, and the 50-unit CNX Nifty, were both trading with losses of more than 1% each currently. Asian stocks fell as strong US jobs data fanned expectations that the US Federal Reserve may raise interest rates sooner than previously thought. The market breadth indicating the overall health of the market was weak. The Sensex was currently off 361.55 points or 1.23% at 29,087.40.
Bank stocks edged lower. TCS edged lower after the IT major issued lower-than-expected outlook for Q4 March 2015.
There is a concern that a tighter monetary policy in the US may slow foreign portfolio flows into emerging markets. Higher interest rates will boost returns on US debt and bank deposits, drawing money back from riskier emerging markets.
Foreign portfolio investors (FPIs) bought shares worth a net Rs 79.84 crore on Thursday, 5 March 2015, as per provisional data released by the stock exchanges. Domestic institutional investors (DIIs) sold shares worth a net Rs 193.54 crore on Thursday, 5 March 2015, as per provisional data. The stock market was closed on Friday, 6 March 2015, on account of Holi.
Earlier, the Sensex and the 50-unit CNX Nifty, both, hit their lowest level in more than a week as these two benchmark indices extended initial losses.
In the foreign exchange market, the rupee edged lower against the dollar on global risk-off sentiment.
Brent crude oil futures edged lower as upbeat US jobs data pushed the dollar higher, outweighing geopolitical tensions and the threat of output cuts in Libya and Iraq. Global crude oil prices have witnessed high volatility recently after a steep slide in prices during the second half of calendar year 2014. Deregulation of diesel price announced by the Indian government in October 2014 and a decline in global crude oil prices will help reduce the government's fuel subsidy burden and help contain its fiscal deficit. The slide in global crude oil prices will also help India in containing its current account deficit and fuel price inflation. However, a weakness in rupee against the dollar will restrict the benefit of falling global crude oil prices to that extent. A weak rupee raises the cost of imports. India imports 80% of its crude oil requirement.
In overseas markets, Asian stocks dropped after strong US jobs data fanned expectations that the US Federal Reserve may raise interest rates sooner than previously thought. US stocks fell sharply on Friday, 6 March2015, after stronger than expected data from the monthly jobs report heightened concerns that the Federal Reserve could raise interest rates by June 2015.
At 10:17 IST, the S&P BSE Sensex was down 361.55 points or 1.23% at 29,087.40. The index slumped 424.04 points at the day's low of 29,024.91 in morning trade, its lowest level since 28 February 2015. The index fell 127.89 points at the day's high of 29,321.06 in early trade.
The CNX Nifty was down 121.30 points or 1.36% at 8,816.45. The index hit a low of 8,803.20 in intraday trade, its lowest level since 28 February 2015. The index hit a high of 8,891.30 in intraday trade.
The BSE Mid-Cap index was down 84.07 points or 0.76% at 10,961.01. The BSE Small-Cap index was down 61.36 points or 0.54% at 11,395.49. The declines in both these indices were lower than fall in the Sensex in percentage terms.
The market breadth indicating the overall health of the market was weak. On BSE, 1,266 shares declined and 721 shares rose. A total of 87 shares were unchanged.
Bank stocks dropped. Among public sector banks, Corporation Bank (down 1.14%), State Bank of India (down 1.06%), Union Bank of India (down 2.22%), Punjab National Bank (down 2.05%), Bank of India (down 2.16%), IDBI Bank (down 1.96%), Indian Bank (down 1.63%), UCO Bank (down 1.75%), Allahabad Bank (down 1.97%), Syndicate Bank (down 2.38%), Andhra Bank (down 1.42%), Dena Bank (down 1.1%), Canara Bank (down 2.1%), Bank of Maharashtra (down 0.25%), Central Bank of India (down 0.92%), Vijaya Bank (down 0.94%), and Punjab & Sind Bank (down 1.3%) edged lower.
Among private sector banks, ICICI Bank (down 2.34%), IndusInd Bank (down 1.65%), Yes Bank (down 1.63%), Federal Bank (down 2.07%), HDFC Bank (down 1.75%), ING Vysya Bank (down 2.63%) and Kotak Mahindra Bank (down 2.33%) declined.
Axis Bank declined 2.58%. Axis Bank after market hours on Thursday, 5 March 2015, said that the bank has raised $250 million under the Euro 3 billion Medium Term Note Programme through its DIFC branch. The pricing finalization took place on 4 March 2015 and the settlement is scheduled on 11 March 2015. The notes will be consolidated to form a single series with the $500 million, 3.25% Notes due in 21 May 2020 issued on 21 November 2014. The issuance will take the outstanding issue size to a total of $750 million, Axis Bank said.
In the foreign exchange market, the rupee edged lower against the dollar on global risk-off sentiment. The partially convertible rupee was hovering at 62.70, compared with its close of 62.17 during the previous trading session on Thursday, 5 March 2015. India's financial markets were closed on Friday, 6 March 2015, on account of Holi.
Brent crude oil futures edged lower as upbeat US jobs data pushed the dollar higher, outweighing geopolitical tensions and the threat of output cuts in Libya and Iraq. Brent for April settlement was off 45 cents at $59.28 a barrel. The contract had declined 75 cents or 1.24% to settle at $59.73 a barrel during the previous trading session.
Meanwhile, proceedings in parliament during the ongoing Budget session of Parliament are being closely watched. The government seeks to have the Bills replacing the six Ordinances passed by both the Houses of Parliament before 20 March 2015 when the first part of the Budget session of parliament concludes. The Lok Sabha has already passed five Bills seeking to replace five Ordinances relating to Amending the Citizenship Act, introduction of e-rikshaws, allocation of coal mines through open bidding, increase in foreign investment ceiling in the insurance sector to 49% from 26% and allocation of non-coal mineral resources through auction. The Parliament is scheduled to be reconvened on 20 April 2015 for the second part of the Budget session while the six Ordinances will lapse on 5 April 2015 as per the provisions of the Constitution.
Government business in the Lok Sabha for the current week includes consideration and passing of the Right to Fair Compensation and Transparency in Land Acquisition. Eight hours have been allocated for discussion on the LARR (Amendment) Bill, 2015 in the Lok Sabha.
In the Rajya Sabha, two Bills to replace Ordinances viz., The Mines and Minerals (Development & Regulation) Amendment Bill, 2015 and Motor Vehicles (Amendment) Bill, 2015, both as passed by Lok Sabha have been listed for consideration and passing on Monday, 9 March 2015. Statutory Resolutions seeking disapproval of the two related Ordinances will also be taken up along with the Bills, according to a government statement on Saturday, 7 March 2015. Motor Vehicles (Amendment) Bill, 2014 is one of the three Bills already pending in the Rajya Sabha, for the withdrawal of which the government has earlier moved Motions and the same were deferred following some issues raised by the opposition. The other two pending Bills relate to hiking foreign investment ceiling in the insurance sector and allocation of coal blocks through open bidding.
The government will unveil industrial production data for January 2015 on Thursday, 12 March 2015. The government will release the combined consumer price index (CPI) data (rural/urban) for February 2015 on the same day.
Asian stocks dropped today, 9 March 2015, after strong US jobs data fanned expectations that the US Federal Reserve may raise interest rates sooner than previously thought. Key indices in Japan, South Korea, Indonesia, China, Hong Kong, Taiwan and Singapore were off 0.6% to 1.05%.
In Japan, the latest revised data showed that the nation's gross domestic product rose an annualised 1.5% in the October-December quarter, less than the preliminary reading of a 2.2% increase as capital expenditure weakened. On a quarter-on-quarter basis, the economy grew 0.4% in the fourth quarter, the Cabinet Office data showed.
In China, the latest data showed China's exports picked up in the first two months of 2015, propelled by February's exceptionally strong performance that was inflated by the timing of Lunar New Year, while a slide in imports pointed to persistent weakness in the economy. Data released by the General Administration of Customs on Sunday, 8 March 2015, showed that China posted a record trade surplus of $60.6 billion last month. February exports jumped 48.3% from a year earlier, the strongest rise since May 2010 and comfortably beat market expectations, but customs office cautioned about reading too much into the figure given seasonal distortions. A 20.5% slide in February imports was the sharpest since the global financial crisis.
Trading in US index futures indicated that the Dow could fall 27 points at the opening bell today, 9 March 2015. US stocks fell sharply on Friday, 6 March2015, after stronger than expected data from the monthly jobs report heightened concerns that the Federal Reserve could raise interest rates by June 2015.
The US Labor Department said employers added 295,000 workers in February, beating forecasts. It was the longest run of 200,000-plus increases since 1994. The jobless rate dropped to 5.5% from 5.7% in January.
In Europe, the European Central Bank (ECB) is set to begin its long-awaited 1.1 trillion euro ($1.2 trillion) quantitative easing programme to stimulate growth and ward off deflation across the eurozone. The programme calls for the eurozone central bank to buy around 60 billion euros of public and private bonds each month -- a policy it will apply until at least September 2016.
The ECB on Thursday, 5 March 2015, left its main rate, the one that it charges on its regular bank loans, at a record low of 0.05%. It also kept its deposit rate at minus-0.2%, meaning that banks pay to park excess cash at the central bank. The Bank of England also on Thursday, 5 March 2015, kept interest rates on hold, marking the sixth anniversary of ultra-loose monetary policy.
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