Volatility ruled the roost as key benchmark indices alternately swung between positive and negative terrain in mid-morning trade after the Reserve Bank of India (RBI) after its fourth bi-monthly monetary policy review today, 30 September 2014, kept its main lending rate viz. the repo rate unchanged at 8% as was widely expected. The barometer index, the S&P BSE Sensex was currently down 11.84 points or 0.04% at 26,585.29. The market breadth indicating the overall health of the market was positive. Interest rate sensitive auto, bank and realty stocks were mixed after the RBI kept the repo rate unchanged.
The Reserve Bank of India (RBI) after its fourth bi-monthly monetary policy review today, 30 September 2014, also kept cash reserve ratio unchanged at 4% of net demand and time liabilities (NDTL). It has reduced the liquidity provided under the export credit refinance (ECR) facility from 32% of eligible export credit outstanding to 15% with effect from 10 October 2014. RBI Governor Dr. Raghuram Rajan said in his monetary policy statement that future food prices and the timing and magnitude of held back administered price revisions impart some uncertainty to an otherwise improving inflation outlook, where lower oil prices, a relatively stable currency, and a negative output gap continue to put downward pressure. Base effects will also temper inflation in the next few months only to reverse towards the end of the year, the RBI said. The Reserve Bank of India will look through base effects. The central bank said that the full impact of the skewed rainfall distribution carries risks to the future path of food inflation, though vegetable prices have fallen recently after the recent spike.
Mining stocks were mixed as the iron ore price has sunk to a new five-year low overnight in international market. Most steel stocks declined. Tyre stocks rose across the board on persistent fall in rubber prices.
Earlier, key indices had moved into positive zone in morning trade after languishing in negative terrain earlier during the day.
Meanwhile, a Vision Statement for the US-India Strategic Partnership released ahead of Prime Minister Narendra Modi's talks with US President Barack Obama later today, 30 September 2014, stated that the United States and India commit to expand and deepen their strategic partnership in order to harness the inherent potential of the two democracies and the burgeoning ties between people, economies, and businesses of the two nations. Modi is on a five-day visit to the US.
In overseas markets, Asian stocks declined amid concern over tensions in Hong Kong and as a Chinese manufacturing gauge missed estimates. US stocks ended lower yesterday, 29 September 2014, following protests in Hong Kong that added to worries about Chinese growth and after a disappointing forecast from Ford Motor Co.
Brent crude oil prices edged higher as Ukraine's army suffered its highest casualties since signing a truce early this month in new clashes with pro-Russian fighters that are threatening to shatter a cease-fire that brought calm to the six-month old conflict.
In the foreign exchange market, the rupee edged lower against the dollar.
At 11:15 IST, the S&P BSE Sensex was down 11.84 points or 0.04% at 26,585.29. The index rose 62.01 points at the day's high of 26,659.12 in mid-morning trade. The index lost 49.67 points at the day's low of 26,547.44 in early trade.
The CNX Nifty was down 4.60 points or 0.06% at 7,954.30. The index hit a high of 7,977.30 in intraday trade. The index hit a low of 7,943.75 in intraday trade.
The market breadth indicating the overall health of the market was positive. On BSE, 1,286 shares rose and 1,019 shares fell. A total of 84 shares were unchanged.
The BSE Mid-Cap index was up 43.77 points or 0.46% at 9,560.55. The BSE Small-Cap index was up 41.72 points or 0.39% at 10,709.39. Both these indices outperformed the Sensex.
Mining stocks were mixed as the iron ore price has sunk to a new five-year low overnight in international market. The latest fall was driven by rising fears surrounding Chinese demand. Sesa Sterlite rose 0.12%. NMDC fell 0.42%.
Most steel stocks declined. Jindal Steel & Power (down 0.31%), Tata Steel (down 0.76%), and Steel Authority of India (Sail) (down 0.21%) declined. JSW Steel rose 0.26%.
Bhushan Steel was locked at 5% upper circuit at Rs 117.95 on BSE after the company said that its vice chairman and managing director Neeraj Singal has been released on bail from judicial custody on 27 September 2014. The Central Bureau of Investigation (CBI) had on 7 August 2014 arrested Singal in the bribery scandal involving Syndicate Bank's suspended chairman S K Jain.
Hindalco Industries dropped 1.22%. The government has reportedly cancelled approvals of nine special economic zones, including that of Hindalco Industries, Essar and Adani as no "satisfactory" progress was made to execute the projects. The decision was taken in the meeting of the Board of Approval (BoA) headed by commerce secretary Rajeev Kher on 18 September 2014. The developers have to refund the duty benefits availed by them, media report said. Hindalco Industries had proposed to set up an aluminium product SEZ in Orissa.
Tyre stocks rose across the board on persistent fall in rubber prices. Apollo Tyres (up 5.05%), JK Tyre & Industries (up 5.74%), MRF (up 4.27%) Goodyear India (up 4.02%), and CEAT (up 7.25%) gained. Rubber is a key raw material in manufacture of tyres
As per reports, rubber price, which ruled around Rs 220 per kg in January 2011, has now touched a low of Rs 123 per kg in the domestic market due to lower demand for the commodity in the wake of general economic slowdown and lower price in international market.
In the foreign exchange market, the rupee edged lower against the dollar. The partially convertible rupee was hovering at 61.685, compared with its close of 61.53 during the previous trading session.
Brent crude oil prices edged higher as Ukraine's army suffered its highest casualties since signing a truce early this month in new clashes with pro-Russian fighters that are threatening to shatter a cease-fire that brought calm to the six-month old conflict. Brent for November settlement was up 11 cents at $97.31 a barrel. The contract had risen 20 cents to settle at $97.20 a barrel yesterday, 29 September 2014.
Finance Secretary Dr Arvind Mayaram said at a function in Chennai yesterday, 29 September 2014, that that the government is committed to an early roll-out of the goods and services tax (GST), providing gainful employment to its youth through its skill development programme, fast tracking work on industrial corridors and bringing in the requisite amendments in the Land Acquisition Act to expedite project clearances.
Asian stocks declined today, 30 September 2014, amid concern over tensions in Hong Kong and as a Chinese manufacturing gauge missed estimates. Key benchmark indices in South Korea, Hong Kong, Japan, and Singapore were off 0.49% to 1.2%. Key benchmark indices in China, Indonesia and Taiwan rose 0.02% to 0.15%.
Activity in China's vast factory sector showed signs of steadying in September as export orders climbed, a private survey showed today, 29 September 2014, easing fears of a hard landing but pointing to a still-sluggish economy facing considerable risks. The final HSBC/Markit Manufacturing Purchasing Managers' Index (PMI) hovered at 50.2 in September, unchanged from the August reading which was a three-month low, but lower than a preliminary reading of 50.5. A sub-index measuring new export orders, a gauge of external demand, expanded to a 4-1/2-year-high of 54.5, though domestic demand appeared soft. The 50 mark separates expansion from contraction in activity on a monthly basis.
China will release its official factory PMI tomorrow, 1 October 2014.
Small numbers of protesters reportedly continued to block roads in central Hong Kong in the fifth day of pro-democracy demonstrations today, 30 September 2014, as leaders warned the standoff would escalate if their demands are not met. Protest organizers are insisting that the city's top political figure, Chief Executive Leung Chun-ying, resign and that the government in Beijing drops plans to control who gets to run as Leung's successor in 2017.
Trading in US index futures indicated that the Dow could gain 9 points at the opening bell on Tuesday, 30 September 2014. US stocks ended lower on Monday, 29 September 2014, following protests in Hong Kong that added to worries about Chinese growth and after a disappointing forecast from Ford Motor Co.
Data on Tuesday showed US consumer spending rose by 0.5% last month, after being little changed in July, adding to signs the world's largest economy is on a stronger footing.
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