Volatility continued as key benchmark indices pared losses soon after hitting fresh intraday low in afternoon trade. The barometer index, the S&P BSE Sensex, was currently down 74.31 points or 0.29% at 25,833.70. Earlier, key indices had extended losses and hit fresh intraday low after erasing most of the intraday losses in early afternoon trade. Key indices have been in red since the beginning of the trading session on weak Asian stocks and after drop in US stocks on Tuesday, 5 August 2014. The market breadth indicating the overall health of the market was positive. Bank stocks witnessed selling pressure. Shares of most pharmaceutical companies gained as the rupee edged lower against the dollar. Bhushan Steel was locked in 20% lower circuit, with the stock resuming fall after a seeing a small recovery on Tuesday, 5 August 2014.
At 13:15 IST, the S&P BSE Sensex was down 74.31 points or 0.29% to 25,833.70. The index declined 164.68 points at the day's low of 25,743.33 in afternoon trade. The index fell 6.33 points at the day's high of 25,901.68 in morning trade.
The CNX Nifty was down 24.15 points or 0.31% to 7,722.40. The index hit a low of 7,694.25 in intraday trade. The index hit a high of 7,740.95 in intraday trade.
The market breadth indicating the overall health of the market was positive. On BSE, 1,534 shares rose and 1,192 shares fell. A total of 110 shares were unchanged.
The BSE Mid-Cap index was down 1.70 points or 0.02% at 9,270.84. The BSE Small-Cap index was up 46.31 points or 0.46% at 10,157.58. Both these indices outperformed the Sensex.
Among the 30 Sensex shares, 20 declined and the remaining shares rose. Tata Motors (down 2.05%), Bharti Airtel (down 1.86%), ONGC (down 1.73%), ITC (down 1.55%), Hindalco Industries (down 1.54%), Sesa Sterlite (down 1.26%), Tata Steel (down 1.01%), TCS (down 0.81%), Hero MotoCorp (down 0.56%) and Maruti Suzuki India (down 0.56%), edged lower from the Sensex pack.
Infosys (up 1.92%), Bharat Heavy Electricals (up 1.78%), Hindustan Unilever (up 0.72%), Reliance Industries (up 0.55%), Mahindra & Mahindra (up 0.51%), Coal India (up 0.48%), Larsen & Toubro (up 0.36%), NTPC (up 0.28%) and Bajaj Auto (up 0.23%), edged higher from the Sensex pack.
Shares of most pharmaceutical companies gained as the rupee edged lower against the dollar. Biocon (up 3.30%), Strides Arcolab (up 1.70%), Cadila Healthcare (up 1.21%), Wockhardt (up 0.99%), Divi's Laboratories (up 0.89%), Aurobindo Pharma (up 0.57%), IPCA Laboratories (up 0.40%), GlaxoSmithKline Pharmaceuticals (up 0.19%) and Lupin (up 0.16%), edged higher.
Sun Pharmaceutical Industries (down 1.24%), Cipla (down 1.03%), Ranbaxy Laboratories (down 0.93%), Dr. Reddy's Laboratories (down 0.71%) and Glenmark Pharmaceuticals (down 0.22%), edged lower.
A lower rupee boosts the value of overseas earnings in local terms. Pharma companies derive substantial revenue from exports.
Banks witnessed selling pressure. ICICI Bank (down 1.82%), Bank of India (down 1.76%), Punjab National Bank (down 1.76%), Yes Bank (down 1.38%), State Bank of India (down 1.33%), Axis Bank (down 1.24%), Bank of Baroda (down 1.24%), IDBI Bank (down 1.15%), Canara Bank (down 1.01%), Kotak Mahindra Bank (down 0.65%), HDFC Bank (down 0.62%), IndusInd Bank (down 0.51%) and Federal Bank (down 0.25%), edged lower. However, Union Bank of India (up 0.05%), edged higher.
Bhushan Steel was locked in 20% lower circuit at Rs 304.60, with the stock resuming fall after a seeing a small recovery on Tuesday, 5 August 2014.
Shares of Bhushan Steel had dropped 4.23% to Rs 378.15 on Monday, 4 August 2014, after the Central Bureau of Investigation (CBI) on Saturday, 2 August 2014, arrested the now-suspended Chairman-cum-Managing Director of Syndicate Bank SK Jain after he had allegedly demanded a bribe of Rs 50 lakh from Bhushan Steel to not convert the company's outstanding loan into a Non Performing Asset (NPA). As per reports, Bhushan Steel had taken a loan of Rs 100 crore from Syndicate Bank while Prakash Industries had taken a loan of Rs 120 crore. Both companies were desperate to avoid their loans being declared NPAs for default in repayments.
Meanwhile, CBI Director Ranjit Sinha has reportedly ordered an internal inquiry after his team did not arrest Bhushan Steel vice-chairman Neeraj Singhal during searches at his residence in the Syndicate Bank bribery case, despite clear instructions to pick him up. Neeraj Singhal is on the run from the time of the raid and the CBI has been trying to trace him since, so that he can be arrested, reports added. Neeraj Singhal has filed an anticipatory bail application in a local court which will come for hearing today, 6 August 2014.
In the foreign exchange market, the rupee edged lower against the dollar. The partially convertible rupee was hovering at 61.2225, compared with its close of 60.84 on Tuesday, 5 August 2014.
European indices were trading lower in early trade today, 6 August 2014. Key benchmark indices in UK, France and Germany were down by 0.75% to 1.28%.
German factory orders dropped by the most in more than 2 1/2 years in a sign that geopolitical tension with Russia is leaving its mark on Europe's largest economy. Orders, adjusted for seasonal swings and inflation, slid 3.2% in June from May, when they fell a revised 1.6%, the Economy Ministry in Berlin said today.
Poland's foreign minister yesterday, 5 August 2014, warned that a renewed buildup of Russian troops on Ukraine's border may signal an invasion as Russian President Vladimir Putin ordered a response to US and European sanctions. Putin is showing no sign of backing down over Ukraine since the US and the European Union tightened sanctions last week, with Russia amassing forces on its neighbor's border in the biggest military buildup since troops were withdrawn from the area in May.
Asian stocks dropped today, 6 August 2014, after US stocks fell yesterday, 5 August 2014, amid escalating tensions in Ukraine. Key benchmark indices in China, Japan, Indonesia, Hong Kong, Singapore, and South Korea were off 0.11% to 1.05%. However, Taiwan's Taiwan Weighted index rose 0.03%.
Trading in US index futures indicated that the Dow could gain 10 points at the opening bell on Wednesday, 6 August 2014. US stocks fell on Tuesday, 5 August 2014, as energy shares tumbled and concern increased over escalating tensions in Ukraine.
Service industries in the US expanded in July at the fastest pace since December 2005, according to data from the Institute for Supply Management, indicating the economy was building more momentum at the start of the second half of 2014. Another release showed factory orders rose 1.1% in June, which was higher than market expectations.
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