A bout of volatility was witnessed as the barometer index, the S&P BSE Sensex, trimmed losses after hitting fresh intraday low in afternoon trade. The Sensex was currently down 89.88 points or 0.35% at 25,575.39. The market breadth indicating the overall health of the market was negative. Weakness in Asian and European stocks weighed on sentiment. Rail related stocks were in demand after the Union Cabinet on Wednesday, 6 August 2014, allowed foreign investment in the Railways. Bhushan Steel fell by maximum permissible 20% lower circuit at Rs 243.70, with the scrip extending Wednesday's 20% slump.
Earlier, the key benchmark indices had once again slipped into the red in mid-morning trade after moving into positive zone from negative zone in morning trade.
At 13:15 IST, the S&P BSE Sensex was down 89.88 points or 0.35% to 25,575.39. The index rose 34.78 points at the day's high of 25,715.36 in morning trade. The index declined 126.51 points at the day's low of 25,538.76 in afternoon trade, its lowest level since 4 August 2014.
The CNX Nifty was down 22.60 points or 0.29% to 7,649.45. The index hit a high of 7,686.70 in intraday trade. The index hit a low of 7,638.70 in intraday trade, its lowest level since 5 August 2014.
The market breadth indicating the overall health of the market was negative. On BSE, 1,510 shares fell and 1,140 shares rose. A total of 114 shares were unchanged.
The BSE Mid-Cap index was down 37.83 points or 0.41% at 9,163.41. The BSE Small-Cap index was down 39.01 points or 0.39% at 10,057.27. Both these indices underperformed the Sensex.
Among the 30 Sensex shares, 16 declined and the remaining shares rose. Infosys (down 1.77%), TCS (down 1.45%), Sun Pharmaceutical Industries (down 1.38%), HDFC (down 1.14%), Bajaj Auto (down 1.09%), Tata Motors (down 1.06%), Hindalco Industries (down 0.60%), Hindustan Unilever (down 0.57%), Tata Power (down 0.47%) and GAIL (India) (down 0.44%) edged lower from the Sensex pack.
Tata Steel (up 1.94%), Bharat Heavy Electricals (up 0.78%), Coal India (up 0.75%), ONGC (up 0.62%), Hero MotoCorp (up 0.53%), ICICI Bank (up 0.43%), Maruti Suzuki India (up 0.30%), HDFC Bank (up 0.24%) and Cipla (up 0.13%) edged higher from the Sensex pack.
Rail related stocks were in demand after the Union Cabinet on Wednesday, 6 August 2014, allowed foreign investment in the Railways. Texmaco Rail & Engineering (up 6.78%), Kalindee Rail Nirman (Engineers) (up 5%), Kernex Microsystems (India) (up 4.95%), Hind Rectifiers (up 4.94%), Stone India (up 4.88%), Titagarh Wagons (up 2.18%), BEML (up 1.33%), Container Corporation of India (up 0.76%) and Zicom Electronic Security Systems (up 0.08%) edged higher.
According to reports, the Cabinet cleared the proposal to allow 100% FDI in railway infrastructure, barring operations, via the so-called automatic route.
Bhushan Steel fell by maximum permissible 20% lower circuit at Rs 243.70, with the scrip extending Wednesday's 20% slump. The stock was the biggest loser from the BSE 'A' group.
Shares of Bhushan Steel had dropped 4.23% to Rs 378.15 on Monday, 4 August 2014, after the Central Bureau of Investigation (CBI) on Saturday, 2 August 2014, arrested the now-suspended Chairman-cum-Managing Director of Syndicate Bank SK Jain after he had allegedly demanded a bribe of Rs 50 lakh from Bhushan Steel to not convert the company's outstanding loan into a Non Performing Asset (NPA). As per reports, Bhushan Steel had taken a loan of Rs 100 crore from Syndicate Bank while Prakash Industries had taken a loan of Rs 120 crore. Both companies were desperate to avoid their loans being declared NPAs for default in repayments.
Meanwhile, CBI Director Ranjit Sinha has reportedly ordered an internal inquiry after his team did not arrest Bhushan Steel vice-chairman Neeraj Singhal during searches at his residence in the Syndicate Bank bribery case, despite clear instructions to pick him up. Neeraj Singhal is on the run from the time of the raid and the CBI has been trying to trace him since, so that he can be arrested, reports added. Neeraj Singhal filed an anticipatory bail application in a local court which came for hearing on Wednesday, 6 August 2014. The application was reportedly dismissed.
Bharti Infratel (down 6.35%), UPL (down 4.49%), Apollo Tyres (down 2.33%) and Piramal Enterprises (down 2.19%) were the other major losers in the BSE 'A' group.
Aban Offshore was down 0.27% at Rs 780. The company announced during trading hours today, 7 August 2014, that the allotment committee at the meeting held on 7 August 2014 has allotted 11.25 lakh shares to Deepa Reji Abraham, belonging to promoter group, pursuant to receipt of balance 75% of purchase price in respect of preferential warrants issued in February 2014.
The government has opened up the defense and railway industries to more investment by foreign firms, in a move to attract more international capital and expertise to the sectors. The Union Cabinet on Wednesday, 6 August 2014, approved raising the maximum amount of foreign ownership allowed in military-equipment making firms to 49% from the previous cap of 26%. It also agreed to allow up to 100% foreign direct investment in railway-construction companies.
Last month, Finance Minister Arun Jaitley in the Union Budget 2014-15 had announced proposed to raise the ceiling on FDI in defence equipment manufacturing companies to 49% from 26%. In his maiden rail budget, Railway Minister D V Sadananda Gowda had last month said that the government was planning to open up the cash-starved railways to FDI.
The latest measures to open up the economy come at a time when the government is struggling to get the Insurance Laws (Amendment) Bill, 2008 passed in Rajya Sabha. The insurance bill seeks to increase the FDI limit in the insurance sector from 26% to 49%. While the Narendra Modi government has a majority in Lok Sabha, it is in a minority in the Rajya Sabha and needs the help of opposition parties to pass the bill. The insurance bill has to be passed by both the Houses of Parliament to become a law. Congress and few other opposition parties are demanding that the insurance bill be sent to a select committee of the Rajya Sabha as it has undergone substantive changes since the time it was introduced by the erstwhile UPA government.
In the foreign exchange market, the rupee edged higher against the dollar. The partially convertible rupee was hovering at 61.48, compared with its close of 61.5025 on Wednesday, 6 August 2014.
Most European indices were trading lower in early trade on Thursday, 7 August 2014. Key benchmark indices in France and Germany were down by 0.24% to 0.39%. However, UK's FTSE 100 was up 0.02%.
A policy meeting of the Governing Council of the European Central Bank (ECB) will be held today, 7 August 2014, in Frankfurt to decide euro zone interest rates. The Bank of England also holds its policy meeting today, 7 August 2014.
Asian stocks fell today, 7 August 2014, as tensions mounted over Ukraine. Key benchmark indices in China, Indonesia, Taiwan, Hong Kong, Singapore, and South Korea were off 0.14% to 1.34%. Japan's Nikkei Average rose 0.48%.
Trading in US index futures indicated that the Dow could gain 7 points at the opening bell on Thursday, 7 August 2014. US stocks edged higher on Wednesday, 6 August 2014, on gains in consumer-staples shares.
The US on Wednesday, 6 August 2014, joined NATO and Poland in warning there's a risk Russia could send troops into Ukraine.
Russia will reportedly ban billions of dollars of food imports from the US and other nations in retaliation for sanctions imposed over the turmoil in Ukraine. Russian President Vladimir Putin yesterday ordered restrictions on imports for one year from countries that have imposed or supported sanctions against Russia
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