A day after surging to fresh record high, key benchmark indices drifted lower today, 9 September 2014, as the dollar rose against a basket of other major global currencies on speculation US interest rates may rise faster than investors anticipated. The losses for key indices were small at close, with indices trimming intraday decline. An increase in US interest rates could reduce the attractiveness of higher-yielding emerging-market assets including Indian stocks. The barometer index, the S&P BSE Sensex, fell 54.53 points or 0.2% to settle at 27,265.32. The market breadth indicating the overall health of the market was positive. Capital goods, realty and IT stocks declined. Auto and bank stocks were mixed. Ashok Leyland jumped after the company said it has bagged orders worth nearly Rs 1500 crore for supply of buses under JNNURM-II scheme. Cipla rose after the company announced the commercial collaboration with UK-based S&D Pharma in the Czech Republic and Slovakia.
Key indices remained in red almost throughout the trading session. Earlier, key indices had briefly reversed small losses registered in early trade.
European stocks reversed initial gains amid concern US interest rates may rise faster than investors anticipated. Asian stocks rose, with Japanese shares gaining on a weak yen. Brent crude oil futures fell, extending previous day's decline.
The S&P BSE Sensex shed 54.53 points or 0.2% to settle at 27,265.32, its lowest closing level since 5 September 2014. The index fell 142.76 points at the day's low of 27,177.09 in afternoon trade. The index rose 8.42 points at the day's high of 27,328.27 in early trade.
The CNX Nifty shed 20.95 points or 0.26% to settle at 8,152.95, its lowest closing level since 5 September 2014. The index hit a low of 8,126.50 in intraday trade. The index hit a high of 8,174.55 in intraday trade.
The market breadth indicating the overall health of the market was positive. On BSE, 1,669 shares gained and 1,336 shares fell. A total of 95 shares were unchanged.
The BSE Mid-Cap index rose 49.70 points or 0.51% to settle at 9,843.37. The BSE Small-Cap index rose 34.15 points or 0.31% to settle at 10,885.98. Both these indices outperformed the Sensex.
The S&P BSE IT index (down 0.82%), the S&P BSE Teck index (down 0.45%), the S&P BSE Realty index (down 1.11%), the S&P BSE Oil & Gas index (down 0.49%), %), the S&P BSE Bankex (down 0.21%) and the S&P BSE Capital Goods index (down 0.43%) underperformed the Sensex.
The S&P BSE Consumer Durables index (up 1.75%), the S&P BSE Metal index (up 0.1%), the S&P BSE Auto index (up 0.34%), the S&P BSE Healthcare index (up 0.43%), the S&P BSE Power index (up 0.59%) and the S&P BSE FMCG index (up 0.86%) outperformed the Sensex.
The total turnover on BSE amounted to Rs 3408 crore, lower than Rs 3602.14 crore on Monday, 8 September 2014.
Capital goods stocks declined. Bharat Heavy Electricals (Bhel) (down 1.09%), BEML (down 2.19%), and Bharat Electronics (down 1.33%), declined.
L&T dropped 1.15%. L&T said during market hours that in a move to strengthen its design base in the infrastructure space, the company has acquired 50% of stake in L&T-Ramboll Consulting Engineers (LTR) hitherto held by Ramboll Denmark AS. With this acquisition, LTR now becomes a wholly owned subsidiary of L&T.
ABB India edged higher in volatile trade after the company's overseas parent firm ABB today, 9 September 2014, announced up to $4 billion share buyback program. The stock rose 3.26% at Rs 1,147, off sharply from its 52-week high of Rs 1,225.55 hit in intraday trade. ABB India's overseas parent firm ABB today, 9 September 2014, announced up to $4 billion share buyback program. The parent firm said that the company intends to allocate approximately three-quarters of the buyback program to a reduction of share capital and the remainder to support its employee share programs globally with a total of more than 22,000 participants.
The parent firm also today, 9 September 2014, presented its next level strategy and financial targets for the period 2015-2020, aimed at accelerating sustainable value creation. The world's biggest maker of power grids said it expects to grow operational earnings per share by 10% to 15% on a compound annual basis between 2015 and 2020. It aims to boost comparable sales by 4% to 7%, the company said.
Shares of some companies rose after the NSE said it will include these stocks in its futures & options (F&O) segment from Wednesday, 10 September 2014. TVS Motor Company (up 2.89%), Motherson Sumi Systems (up 1.89%), Eicher Motors (up 0.15%), SKS Microfinance (up 0.5%) and MindTree (up 0.52%) edged higher.
Typically, stocks about to enter the F&O segment gain ground due to expectations of improved liquidity and absence of circuit filters in the F&O segment.
Auto stocks were mixed. Maruti Suzuki India (down 0.2%), Hero MotoCorp (down 1.51%) and Bajaj Auto (down 1.53%) declined.
Tata Motors (up 1.32%) and Mahindra & Mahindra (M&M) (up 0.5%) edged higher.
Ashok Leyland gained 5.44% to Rs 40.70 after hitting a 52-week high of Rs 41.30 in intraday trade. The company during trading hours today, 9 September 2014 said has bagged orders worth nearly Rs 1500 crore for supply of buses under JNNURM-II scheme. Ashok Leyland said it has received orders for around 4000 buses from state transport undertakings (STUs). A total of 22 STUs across the country including Calcutta State Transport Corporation (CSTC), Bangalore Metropolitan Transport Corporation (BMTC), Andhra Pradesh State Road Transport Corporation (APSRTC), Jaipur City Transport Services (JCTSL), and Pune Mahanagar Parivahan Mahamandal (PMPML) have placed large orders on the company.
The supply of these buses has started and many of them are already carrying passengers, the company said in a statement.
Bharti Airtel rose 0.71%. Bharti Airtel said in a statement that while the company's network has been down in some parts of Jammu & Kashmir as a result of the unprecedented flooding there, the company's teams have been able to manage to revive several parts of the network there. Bharti Airtel said that the company is constantly monitoring the situation and is working with the authorities to normalize the services in the affected areas at the earliest possible. Bharti Airtel further said that the management believes that this temporary disruption will not cause any material loss in revenues or to the assets of the company.
Bharti Infratel lost 1.11%. Bharti Infratel said in a statement that while some of company's operations in some parts of Jammu & Kashmir have been affected in the unprecedented flooding there, the company's teams have been able to manage to materially mitigate the consequences. The company's teams are constantly monitoring the situation and are working with the authorities to fully normalize the operations in the affected areas at the earliest possible, Bharti Infratel said. The company further said it is adequately insured and the management does not expect any material financial impact on the company.
IT stocks edged lower. Infosys (down 1.15%), Wipro (down 0.7%), HCL Technologies (down 1.51%) and Tech Mahindra (down 1.96%) declined.
Tata Consultancy Services (TCS) shed 0.22% to Rs 2,630.30. The stock was volatile. The stock hit high of Rs 2,667 and low of Rs 2,626. TCS on Monday, 8 September 2014, reportedly reiterated its revenue and margin outlook for year ending 31 March 2015 (FY 2015).
PSU bank stocks were mixed. Punjab National Bank (up 0.75%), Bank of Baroda (up 1.47%) and State Bank of India (SBI) (up 0.12%) gained.
Bank of India (down 0.91%), Andhra Bank (down 1.84%), Oriental Bank of Commerce (down 1.47%) and Union Bank of India (down 1.53%) declined.
Shares of private banks were also mixed. Federal Bank (down 1.18%), Kotak Mahindra Bank (down 0.35%) and Axis Bank (down 0.31%), declined. Yes Bank (up 0.9%) and HDFC Bank (up 0.16%) gained.
ICICI Bank declined 1.31%. The bank said after market hours that the Board of Directors of the bank at its meeting held today, 9 September 2014, has approved 5-for-1 stock split.
IndusInd Bank rose 1.45%. The private sector bank during market hours said that it has opened a new branch in New Friends Colony, New Delhi. The bank said that it plans to further strengthen its presence and customer reach in the country's capital with more branches in the coming quarters. With the inauguration of new branch, IndusInd Bank now has 27 branches in New Delhi.
Cipla gained 2.73% to Rs 578.80. Cipla after market hours on Monday, 8 September 2014, announced the commercial collaboration with UK-based S&D Pharma in the Czech Republic and Slovakia. This collaboration will enable Cipla to focus on its core therapy areas, while S&D Pharma will be the key partner for generics, the company said. Under the collaboration, Cipla will be driving its respiratory product portfolio in both Czech Republic and Slovakia through a Cipla owned sales force team, managed by Cipla commercial head. S&D Pharma will physically distribute all products, including respiratory products, and this portfolio will increase over the next few years, Cipla said.
Realty stocks declined. DLF (down 1.5%), Indiabulls Real Estate (down 2.22%), Housing Development and Infrastructure (down 1.05%), Unitech (down 3.21%), Godrej Properties (down 1.41%), Oberoi Realty (down 1.23%) and Parsvnath Developers (down 3.25%) declined.
Shares of tyre makers surged as domestic rubber prices have fallen to a five-year low.
CEAT rose 1.38% at Rs 788.95. The stock hit a record high of Rs 848.90 in intraday trade.
Apollo Tyres rose 0.57% at Rs 210.95. The stock hit a record high of Rs 217.70 in intraday trade.
MRF rose 1.02% at Rs 29,887.15. The stock hit a record high of Rs 30,289 in intraday trade.
Goodyear India advanced 0.31% at Rs 633.60. The stock hit a record high of Rs 663 in intraday trade.
TVS Srichakra rose 2.75% at Rs 987.75. The stock hit a record high of Rs 1,009.05 in intraday trade.
JK Tyre & Industries fell 0.57% to Rs 368.40. The stock reversed direction after hitting record high of Rs 391.55 in intraday trade.
As per reports, domestic rubber prices have seen sharpest fall in five years, hitting Rs 126 per kg. Decline in rubber prices could boost profit margin of tyre firms. Rubber is a key raw material in tyre manufacturing. Also recent steep decline in crude oil prices aided rally in tyre stocks. Nearly 30% of raw material for tyres is derived from crude products.
Shares of organised retailers fell after Commerce Minister Nirmala Sitharaman reportedly said on Monday, 8 September 2014, that the government will not allow foreign direct investment in multi-brand retail.
Future Retail (down 0.29%) and Shoppers Stop (down 0.95%) declined. Trent rose 0.75%.
Earlier, the United Progressive Alliance (UPA) government had opened the multi-brand retail sector for foreign investment and allowed up to 51% foreign direct investment (FDI) in the sector. While the National Democratic Alliance (NDA) government is against FDI in the sector, it has not yet initiated any move to scrap the policy of allowing FDI in multi-brand retail approved by the UPA government.
Key benchmark indices had surged to fresh record high yesterday, 8 September 2014, following a decline in Brent crude prices. Provisional data released by the stock exchanges after trading hours yesterday, 8 September 2014, showed that foreign portfolio investors (FPIs) bought shares worth a net Rs 1162.98 crore on that day.
The Sensex has gained 627.21 points or 2.35% in this month so far (till 9 September 2014). The Sensex has gained 6,094.64 points or 28.78% in calendar year 2014 so far (till 9 September 2014). From a record high of 27,354.99 struck on Monday, 8 September 2013, the Sensex has fallen 89.67 points or 0.32%. From a 52-week low of 19,264.72 on 1 October 2013, the Sensex has risen 8,000.60 points or 41.52%.
Brent crude oil futures edged lower, extending previous day's decline amid concerns of ample global supply and slower-than-expected growth in the world's top oil consumers. Brent for October settlement was off 31 cents at $99.89 a barrel. The contract fell 62 cents to settle at $100.20 a barrel yesterday, 8 September 2014. It had slumped to $99.36 in intraday trade yesterday, the lowest since 1 May 2013, before rebounding into three-digit territory.
Lower crude oil prices will help India in containing its fiscal deficit, current account deficit and fuel price inflation. India imports 80% of its crude oil requirement. However, the weakness in rupee against the dollar will limit the benefit of lower crude oil prices.
Iraq's parliament yesterday, 8 September 2014, approved a new government headed by Prime Minister Haider al-Abadi in a move to save Iraq from collapse.
The European Union yesterday, 8 September 2014, adopted new sanctions against Russia over the Ukraine crisis, but enforcement will be delayed while an assessment is being done on whether a ceasefire in Ukraine is holding. The measures will target the ability of Russia's top oil producers to raise capital in Europe, according to reports.
In the foreign exchange market, the rupee edged lower against the dollar on a broad strength in dollar in global currency markets. The partially convertible rupee was hovering at 60.55 compared with its close of 60.295 on Monday, 8 September 2014.
The Supreme Court reportedly ended its hearing today, 9 September 2014, into whether it would cancel more than 200 coal blocks it had previously ruled illegal. Chief Justice of India Rajendra Mal Lodha was quoted as saying that a judgment would follow later. The Supreme Court had on 25 August 2014 held that the allocation of coal blocks to various firms between 1993 and 2009 was illegal. Following that, the government asked the court to spare 40 producing and six soon-to-be-operational blocks from cancellation, and instead impose penalties on the operators for any wrongdoing while procuring them.
Meanwhile, as per a statement issued by White House on Monday, 8 September 2014, India's Prime Minister Narendra Modi will meet US President Barack Obama at the White House on 29-30 September 2014. The two leaders will discuss a range of issues of mutual interest in order to expand and deepen the US-India strategic partnership. They will discuss ways to accelerate economic growth, bolster security cooperation, and collaborate in activities that bring long-term benefits to both countries and the world.
European stocks edged lower in choppy trade today, 9 September 2014, amid concern US interest rates may rise faster than investors anticipated. Key benchmark indices in Germany, France and UK were off 0.08% to 0.11%.
Bank of England Governor Mark Carney said today, 9 September 2014, officials may increase their benchmark rate from a record low in spring next year as wage gains accelerate and the recovery gains momentum. The BOE governor spoke at the annual Trades Union Conference in Liverpool.
The French trade deficit fell less-than-expected in July, industry data showed today, 9 September 2014. In a report, Ministry of Finance said that French trade deficit was at 5.5 billion euros, from 5.6 billion euros in the prior month whose figure was revised from 5.4 billion euros.
Asian stocks were trading higher today, 9 September 2014, with Japanese shares gaining on a weak yen. Key benchmark indices in Singapore, Japan and Taiwan were up 0.23% to 0.29%. Indonesia's Jakarta Composite fell 0.94%. China's Shanghai Composite was flat. Stock markets in Hong Kong and South Korea are closed for a holiday.
Trading in US index futures indicated that the Dow could gain 7 points at the opening bell on Tuesday, 9 September 2014. Most US stocks fell on Monday, 8 September 2014, as declining oil prices sent shares of energy companies lower.
A research report released yesterday, 8 September 2014, by the Federal Reserve Bank of San Francisco, fueled expectations for an earlier rate hike by the US Federal Reserve. Ahead of next week's FOMC policy meeting, which will be scrutinized for clues on the timing of the decision to raise interest rates, the report said that evidence based on surveys, market expectations, and models shows that the public seems to expect a more accommodative policy than do the Federal Open Market Committee (FOMC) participants.
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