After a bout of initial volatility, key benchmark indices drifted lower in morning trade. With small losses for the day, the barometer index, the S&P BSE Sensex and the 50-unit CNX Nifty, both, hit their lowest level in more than two weeks. The Sensex was currently down 61.50 points or 0.23% at 26,755.06. But, the broad market depicted strength. The market breadth indicating the overall health of the market was strong with more than two gainers for every loser on BSE. Key indices dropped after the latest data showed that India's merchandise exports registered a small increase of 2.35% in August 2014. Asian stocks were in red. Realty stocks rose on renewed buying. State Bank of India (SBI) rose after the bank reduced interest rate on 1-3-year term deposit by 25 basis points (bps) and raised interest rate on 180-210 day term deposit by 25 bps.
Key indices alternately swung between positive and negative terrain at the onset of the trading session after opening higher.
Asian stocks declined on caution ahead of the start of Federal Reserve's two-day policy meeting today, 16 September 2014.
In the foreign exchange market, the rupee edged higher against the dollar.
Brent crude oil prices were little changed just below $98 a barrel today, 16 September 2014, holding gains after recovering from its lowest price in more than two years in previous session but capped by a soft global economic outlook
At 10:15 IST, the S&P BSE Sensex was down 61.50 points or 0.23% at 26,755.06. The index dropped 62.03 points at the day's low of 26,754.53 in morning trade, its lowest level since 1 September 2014. The index rose 44.73 points at the day's high of 26,861.29 in early trade.
The CNX Nifty was down 19.95 points or 0.25% at 8,022.05. The index hit a low of 8,019.65 in intraday trade, its lowest level since 1 September 2014. The index hit a high of 8,044.90 in intraday trade.
The market breadth indicating the overall health of the market was strong with more than two gainers for every loser on BSE. 1,453 shares gained and 645 shares fell. A total of 57 shares were unchanged.
The BSE Mid-Cap index was up 40.37 points or 0.4% at 10,041.23. The BSE Small-Cap index was up 81.58 points or 0.76% at 11,330.70. Both these indices outperformed the Sensex.
Realty stocks gained. DLF (up 1.96%), D B Realty (up 1.46%), Anant Raj (up 3.43%), Housing Development & Infrastructure (HDIL) (up 1.81%), Sobha (up 1.09%) and Unitech (up 4.13%) rose.
State Bank of India (SBI) rose after the bank reduced interest rate on 1-3-year term deposit by 25 basis points (bps) and raised interest rate on 180-210 day term deposit by 25 bps. The stock was up 0.49%. SBI has raised interest rate on term deposits below Rs 1 crore with maturity period 180-210 days by 25 bps to 7.25% from 7%. Interest rate on term deposit with maturity period of 1 year to less than 3 years has been cut to 8.75% from 9%. The changes are effective from 18 September 2014.
Hero MotoCorp dropped 0.22%. The company reportedly plans to invest Rs 1600 crore to set up a new manufacturing plant in southern India. Hero has signed a preliminary agreement with the Andhra Pradesh state government to set up the plant, to be spread across 600 acres, which can produce upto 1.8 million vehicles annually, according to reports.
Bosch gained 1.21%. The company said during market hours that the employee union of Bosch Bangalore plant has chosen to go on strike with effect from today, 16 September 2014, in order to press for their unreasonable demands. The strike will be considered as illegal, the company said. The management is in discussion with the union to restore normalcy at the earliest with the intervention of the Additional Labour Commissioner, Karnataka, the company said.
In the foreign exchange market, the rupee edged higher against the dollar. The partially convertible rupee was hovering at 61.045, compared with its close of 61.14 during the previous trading session.
Provisional data released by the stock exchanges after trading hours on Monday, 15 September 2014, showed that foreign portfolio investors (FPIs) sold shares worth a net Rs 74.59 crore on that day.
Brent crude oil prices were little changed just below $98 a barrel, holding gains after recovering from its lowest price in more than two years in previous session but capped by a soft global economic outlook. Brent for November settlement was up 3 cents at $97.91 a barrel. Brent for November settlement ended up 0.84% to settle at $97.88 a barrel on Monday, 15 September 2014. The October contract which expired on Monday, 15 September 2014 dipped to a 26-month low at $96.21 in its final session.
On macro front, India's merchandise exports registered a small increase of 2.35% at $26.95 billion in August 2014 over August 2013, data released by the government after trading hours yesterday, 15 September 2014, showed. Imports rose 2.08% at $37.79 billion in August 2014 over August 2013. Oil imports declined 14.97% at $12.83 billion in August 2014 over August 2013. Non-oil imports jumped 13.82% at $24.95 billion in August 2014 over August 2013. The trade deficit increased to $10.83 billion in August 2014, from $10.68 billion in August 2013.
Asian stocks declined today, 16 September 2014, on caution ahead of the start of Federal Reserve's two-day policy meeting today, 16 September 2014. Key benchmark indices in Indonesia, Singapore, Taiwan and Japan were off 0.18% to 0.69%. Key benchmark indices in China and South Korea were up 0.08% to 0.4%.
The morning session on the Hong Kong Stock Exchange was canceled due to Typhoon Kalmaegi.
Foreign direct investment into China, a gauge of external confidence, slumped to a four-year low amid widening antitrust probes into multinational companies. Inbound investment was $7.2 billion in August, down 14% from a year earlier, the Ministry of Commerce said on its website today in Beijing after a 17% drop in July. It was the first back-to-back decline of more than 10% since 2009.
Trading in US index futures indicated a flat opening of US stocks on Tuesday, 16 September 2014. US stocks closed mostly lower on Monday, 15 September 2014, with losses led by technology and small-cap stocks as investors continued to unload riskier position ahead of this week's pivotal Federal Reserve policy meeting.
Economic data yesterday showed US industrial production unexpectedly declined in August for the first time in seven months as automakers slowed assembly lines.
Investors will look to Federal Open Market Committee (FOMC) meeting for fresh guidance on US interest rates. A two-day policy meeting of the Federal Open Market Committee (FOMC) starts today, 16 September 2014. At the end of a two-day meeting, 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.
The Fed will also announce US economic projections after the policy meet. Fed now releases economic projections four times a year (March, June, September, and December). Traditionally, the Fed forecasts covered GDP, the PCE price index, and the civilian unemployment rate. However, the forecast report additionally now includes forecasts for the appropriate timing of the next change in the fed funds rate and the expected fed funds rate at the end of the next two years. The policy meet will be followed by a press conference by Federal Reserve Chairwoman Janet Yellen on 17 September 2014.
The Federal Reserve after two-day policy meeting on 30 July 2014, said it would reduce its purchases of mortgage and Treasury bonds by $10 billion to $25 billion monthly from $35 billion earlier, as widely expected.
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