Key benchmark indices once again slipped into the red in early 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 50.45 points or 0.19% at 26,386.57. Maruti Suzuki India and Mahindra & Mahindra (M&M) declined, while Tata Motors reversed initial losses after the Competition Commission of India imposed penalty on 14 car companies including Maruti Suzuki India, Mahindra & Mahindra (M&M) and Tata Motors after it found them to be in contravention of the provisions of the Competition Act, 2002 (the Act). Capital goods stocks declined.
Key indices had moved in a narrow range in mid-morning trade after recovering in early trade after a weak start.
Asian stocks declined in volatile trade. Brent crude oil prices rose for the second day in a row ahead of weekly US oil inventory data from the American Petroleum Institute.
At 12:17 IST, the S&P BSE Sensex was down 50.45 points or 0.19% at 26,386.57. The index dropped 105.19 points at the day's low of 26,331.83 in early trade, its lowest level since 21 August 2014. The index rose 44.95 points at the day's high of 26,481.97 in morning trade.
The CNX Nifty was down points or 0.24% to 7,887.30. The index hit a low of 7,871.65 in intraday trade, its lowest level since 21 August 2014. The index hit a high of 7,915.45 in intraday trade.
The market breadth indicating the overall health of the market was negative. On BSE, 1,495 shares fell and 1,060 shares rose. A total of 100 shares were unchanged.
The BSE Mid-Cap index was down 14.16 points or 0.15% at 9,266.94, outperforming the Sensex. The BSE Small-Cap index was down 65.73 points or 0.64% at 10,189.65, underperforming the Sensex.
Capital goods stocks declined. ABB (India) (down 0.62%), Bharat Heavy Electricals (Bhel) (down 1.77%), BEML (down 4.95%), L&T (down 1.93%) and Siemens (down 2.85%) declined.
Maruti Suzuki India and Mahindra & Mahindra (M&M) declined, while Tata Motors reversed initial losses after the Competition Commission of India imposed penalty on 14 car companies including Maruti Suzuki India, Mahindra & Mahindra (M&M) and Tata Motors after it found them to be in contravention of the provisions of the Competition Act, 2002 (the Act). Maruti Suzuki India (down 0.99%) and Mahindra & Mahindra (M&M) (down 0.25%) declined.
Tata Motors edged higher in volatile trade. The stock was up 0.35% at Rs 510.10. The scrip hit high of Rs 511.80 and low of Rs 497.20 so far during the day.
The Competition Commission of India (CCI) has levied a total penalty of Rs 2544.64 crore on 14 car makers at the rate of 2% of the average turnover. A penalty of Rs 1346.46 crore has been slapped on Tata Motors. The penalty for Maruti is Rs 471.14 crore and it is Rs 292.25 crore on M&M. The penalty is to be deposited within 60 days of receipt of the order.
The CCI said it found that the conduct of the car companies was in violation of the provisions of section 3(4) of the Competition Act, 2002 with respect to its agreements with local Original Equipment Suppliers (OESs) and agreements with authorized dealers whereby it imposed absolute restrictive covenants and completely foreclosed the aftermarket for supply of spare parts and other diagnostic tools. The 14 car companies were found to be indulging in practices resulting in denial of market access to independent repairers as the latter were not provided access to branded spare parts and diagnostic tools which hampered their ability to provide services in the aftermarket for repair and maintenance of cars. Having a monopolistic control over the spare parts and diagnostic tools of their respective brands, the car companies charged arbitrary and high prices for their spare parts. The car companies were also found to be using their dominant position in the market for spare parts and diagnostic tools to protect their market for repair services, thereby distorting fair competition, the CCI said.
Shree Cement rose 0.03%. The company's net profit fell 2.56% to Rs 277.02 crore on 11.45% increase in total income to Rs 1708.17 crore in Q4 June 2014 over Q4 June 2013. The result was announced after market hours on Monday, 25 August 2014. Shree Cement's net profit fell 21.59% to Rs 787.24 crore on 5.08% increase in total income to Rs 6072.25 crore in the year ended 30 June 2014 over the year ended 30 June 2013.
Meanwhile, Shree Cement announced after market hours on Monday, 25 August 2014, that its board approved acquiring 1.50 MTPA cement grinding unit of Jaiprakash Associates situated at Panipat in Haryana on going concern basis for consideration of approx Rs 360 crore subject to adjustment for any financial indebtedness and net working capital taken over as of the closing date, subject to satisfactory completion of due diligence and obtaining necessary approvals and consents.
The stock market may remain volatile this week as traders roll over positions in the futures & options (F&O) segment from the near month August 2014 series to September 2014 series. The near-month August 2014 F&O contracts expire on Thursday, 28 August 2014.
Foreign portfolio investors (FPIs) bought shares worth a net Rs 127.33 crore on Monday, 25 August 2014, as per provisional data from the stock exchanges.
The Supreme Court on Monday, 25 August 2014, deemed all coal block allocations made since 1993 as illegal. The allocations had no objective criteria and no fair and transparent procedure was followed, the Court said, adding they were impermissible. The quashing of these allocations still remains to be decided in further hearings. The court suggested the appointment of a panel of retired apex court judges to help the court in this matter. The case will be heard on 1 September next.
Brent crude prices rose for the second day in a row ahead of weekly US oil inventory data from the American Petroleum Institute. Brent for October settlement was up 13 cents at $102.78 a barrel. The contract rose 36 cents to settle at $102.65 a barrel on Monday, 25 August 2014.
In the foreign exchange market, the rupee edged higher against the dollar. The partially convertible rupee was hovering at 60.505, compared with its close of 60.565 on Monday, 25 August 2014.
Asian stocks declined in volatile trade today, 26 August 2014. Key benchmark indices in Indonesia, Japan, Singapore, Hong Kong and China fell 0.11% to 0.96%. Key benchmark indices in South Korea and Taiwan rose 0.04% to 0.35%.
Trading in US index futures indicated that the Dow could fall 11 points at the opening bell on Tuesday, 26 August 2014. US stocks gained on Monday, 25 August 2014, with S&P 500 index closing at a record high and moving above 2,000 mark in intraday trade for the first time, buoyed by activity and hints of more stimulus from the European Central Bank.
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