Key benchmark indices edged lower in a volatile morning trade after hitting fresh intraday high. The barometer index, the S&P BSE Sensex, and the CNX Nifty reversed gains after hitting their highest levels in four weeks. The market breadth indicating the overall health of the market turned negative from positive. The barometer index, the S&P BSE Sensex, was currently down 61.39 points or 0.22% at 27,775.82.
Mahindra & Mahindra rose after tie up with Japanese firm. Metal shares declined on weak Chinese data. Power generation stocks declined.
Foreign portfolio investors bought shares worth a net Rs 123.49 crore yesterday, 20 May 2015, as per provisional data. Domestic institutional investors (DIIs) bought shares worth a net Rs 103.58 crore yesterday, 20 May 2015, as per provisional data released by the stock exchanges.
In the overseas market, Asian stocks were mixed. US stocks ended slightly lower yesterday, 20 May 2015, after the minutes from last month's Federal Reserve meeting showed officials were unlikely to raise interest rates in June amid a slowdown in economic growth.
At 10:21 IST, the S&P BSE Sensex was down 61.39 points or 0.22% at 27,775.82. The index rose 74.23 points at the day's high of 27,911.44 in morning trade, its highest level since 23 April 2015. The index fell 116.10 points at the day's low of 27,721.11 in morning trade, its lowest level since 19 May 2015.
The CNX Nifty was down 28.65 points or 0.34% at 8,394.60. The index hit a high of 8,446.35 in intraday trade, its highest level since 23 April 2015. The index hit a low of 8,383.40 in intraday trade, its lowest level since 19 May 2015.
The BSE Mid-Cap index was down 60.24 points or 0.57% at 10,590.54. The BSE Small-Cap index was down 42.36 points or 0.38% at 11,164.49. The decline in both these indices was higher than the Sensex's decline in percentage terms.
The market breadth indicating the overall health of the market turned negative from positive. On BSE, 1,089 shares fell and 785 shares rose. A total of 82 shares were unchanged.
Mahindra & Mahindra (M&M) was up 0.11%. The company announced during trading hours today that it entered into a strategic partnership with Japan's Mitsubishi Heavy Industries (MHI) in the agricultural machinery field. Under the definitive agreement, M&M will invest $25 million for acquiring 33% voting stake in MHI subsidiary, Mitsubishi Agricultural Machinery Co. (MAM), through fresh issue of common shares and Class A (non-voting) shares of MAM. The deal is expected to close by October 1, 2015, with the new funding to be used to increase MAM's capital base.
Mitsubishi Agricultural Machinery is a full range agri-machinery company producing and selling tractors, combine harvesters, rice transplanters and other agri-machinery. It had revenues of approximately JPY 50 bn (USD 408 mn) in 2014-15. The agreement was signed by Kazuaki Kimura, President and CEO, MHI Machinery, Equipment & Infrastructure, Katsumi Tottori, President, MAM and Rajesh Jejurikar, President & Chief Executive (Farm Equipment & Two Wheeler), Mahindra & Mahindra.
Metal shares declined on weak Chinese data. National Aluminum Company (down 1.31%), Steel Authority of India (down 1.27%), Vedanta (down 1.09%), Bhushan Steel (down 0.74%), NMDC (down 0.72%), JSW Steel (down 0.71%), Jindal Steel & Power (down 0.55%), Hindalco Industries (down 0.11%) and Hindustan Zinc (down 0.03%), edged lower. Hindustan Copper was up 0.31%. China is the world's largest consumer of copper, steel, and aluminium.
Tata Steel fell 4.36% to Rs 345.60. The stock hit a high of Rs 351 and a low of Rs 344.15 so far during the day. On a consolidated basis, Tata Steel posted net loss of Rs 5674.29 crore in Q4 March 2015 as compared to net profit of Rs 1035.87 crore in Q4 March 2014. The result was announced after market hours yesterday, 20 May 2015. Total income from operations (net) fell 20.65% to Rs 33666.18 crore in Q4 March 2015 over Q4 March 2014. Total exceptional expense surged to Rs 4811.20 crore in Q4 March 2015 from Rs 45.84 crore in Q4 March 2014. The exceptional expense included non-cash write down of goodwill and other assets in certain nonperforming business units with the group, primarily relating to European operations and the group's investments in coal assets.
Power generation stocks declined. CESC (down 1.26%), Tata Power (down 1.04%), JSW Energy (down 0.89%), Reliance Infrastructure (down .55%), Jaiprakash Power Ventures (down 0.54%), Adani Power (down 0.48%), NTPC (down 0.44%), Reliance Power (down 0.28%), Torrent Power (down 0.21%) and GMR Infrastructure (down 0.2%), edged lower. NHPC was up 0.26%.
Asian stocks were mixed. Key benchmark indices in Hong Kong, Indonesia, Singapore, South Korea and Taiwan were down by 0.04% to 1.08%. Key benchmark indices in China, Japan and Singapore were up by 0.02% to 1.12%.
The preliminary HSBC China Manufacturing Purchasing Managers Index, a gauge of nationwide manufacturing activity, edged up to 49.1 in May, compared with a final reading of 48.9 in April, HSBC Holdings PLC said today, 21 May 2015. The reading was still below the key 50 mark, which separates expansion from contraction when compared with the previous month, said Markit, which releases the index with HSBC.
The preliminary PMI figure, also called the HSBC Flash China PMI, is based on 85% to 90% of total responses to HSBC's survey each month, and is issued about one week before the final PMI reading.
Meanwhile, China's State Council has unveiled a 10-year plan for upgrading the nation's manufacturing capacity so it can catch up with production powerhouses like Germany and fend off competition from other developing countries. The Ministry of Industry and Telecommunication Technology (MIIT), which led the creation of the Made in China 2025 plan, said the strategy is intended to give China an edge in innovation, green development and quality goods. The MIIT put the focus on 10 sectors, including high-end computerized machinery and robotics, aerospace equipment, renewable-energy cars and biological medicine.
US stocks ended slightly lower yesterday, 20 May 2015, after the minutes from last month's Federal Reserve meeting showed officials were unlikely to raise interest rates in June amid a slowdown in economic growth. Officials at the Fed's April policy meeting believed it would be premature to raise interest rates in June and that a bump in inflation was being offset by a weaker labour market and softer data, according to the minutes. Also, first-quarter earnings season is drawing to a close, contributing to the muted action in the stock market.
Chicago Federal Reserve President Charles Evans reportedly said in Munich yesterday, 20 May 2015, that a hike in US interest rates is not likely to be appropriate until early 2016. Evans, who has long argued for a delay to rate hikes so as not to undermine economic recovery, said that the US central bank should not move on rates until there was greater confidence that its inflation goal could be hit within one or two years, according to reports. Evans is a voting member this year on Fed policy and among the most dovish of US central bankers.
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