A bout of volatility was witnessed in early trade as key benchmark indices slipped into the red after opening higher as weakness in Asian stocks weighed on sentiment. The barometer index, the S&P BSE Sensex was currently down 99.63 points or 0.36% at 27,358.75. The market breadth indicating the overall health of the market was positive. Metal, auto and bank stocks edged lower.
In overseas markets, most Asian stocks edged lower amid concern Europe's stimulus plans may not solve the euro region's economic woes and after an unexpected drop in American wages clouded the outlook for US interest rates. US stocks fell on Friday, 9 January 2015, following a two-day rally as December's jobs report gave a mixed view of the economy, with financial shares leading the way lower.
Foreign portfolio investors sold shares worth a net Rs 297.99 crore on Friday, 9 January 2015, as per provisional data.
At 9:21 IST, the S&P BSE Sensex was down 99.63 points or 0.36% at 27,358.75. The index declined 125.30 points at the day's low of 27,333.08 in early trade. The index rose 81.17 points at the day's high of 27,539.55 in early trade.
The CNX Nifty was down 26.50 points or 0.32% at 8,258. The index hit a low of 8,245.60 in intraday trade. The index hit a high of 8,292.30 in intraday trade.
The BSE Mid-Cap index was currently unchanged at 10,425.60. The BSE Small-Cap index was up 20.73 points or 0.19% at 11,219.07. Both these indices outperformed the Sensex.
The market breadth indicating the overall health of the market was positive. On BSE, 772 shares advanced and 585 shares declined. A total of 68 shares were unchanged.
HDFC Bank dropped 0.52%. The finance ministry on Friday, 9 January 2015, said a proposal related to foreign investment in HDFC Bank has been recommended for consideration of the Cabinet Committee on Economic Affairs (CCEA). HDFC Bank has sought approval from the government for issue of equity shares of the bank aggregating to an amount of Rs 10000 crore to NRIs/FIIs/FPIs subject to the aggregate foreign shareholding not exceeding 74% of the post issue paid up capital. Currently, there is a ban on purchases of shares of HDFC Bank by foreigners. The Reserve Bank of India (RBI) had 16 Dec 2013 notified that foreign share holding through foreign institutional investors (FIIs)/Non Resident Indian (NRI)/Persons of Indian Origin (PIO)/foreign direct investment (FDI)/ADR/Global Depository Receipt (GDR) in HDFC Bank had crossed the overall limit of 49% of the bank's paid-up capital. Therefore, no further purchases of share of HDFC Bank would be allowed through stock exchanges in India on behalf of FII/NRI/PIO/FDI/ADR/GDRs, the RBI had said.
Tata Steel declined 0.46%. The company announced after market hours on Friday, 9 January 2015, that hot metal production rose 2.8% to 2.38 million tonnes in Q3 December 2014 over Q3 December 2013. Crude Steel production rose 5.6% to 2.29 million tonnes in Q3 December 2014 over Q3 December 2013. Saleable steel production was higher by 3.3% to 2.22 million tonnes in Q3 December 2014 over Q3 December 2013, Sales increased by 3.05% to 2.13 million tonnes in Q3 December 2014 over Q3 December 2013.
On the macro front, data to be released today, 12 January 2015, is expected to show industrial production growth remaining muted in November 2014 and consumer price inflation accelerating in December 2014. Industrial production is seen rising 1.6% in November 2014, as per the median estimate of a poll of economists carried out by Capital Market. The government will unveil industrial production data for November 2014 after trading hours today, 12 January 2015. Industrial production had witnessed a surprise contraction of 4.2% in October 2014.
The rate of inflation based on the consumer price index (CPI) is seen accelerating to 5.4% in December 2014 from 4.4% in November 2014, as per the median estimate of a poll of economists carried out by Capital Market. The government will release the data on CPI inflation for December 2014 after trading hours today, 12 January 2015.
The Reserve Bank of India (RBI) aims to limit consumer-price gains to 8% by January 2015 and 6% by January 2016. Over the longer term, the RBI aims to limit consumer-price gains to 4%, within a 2% band.
The rate of inflation based the wholesale price index (WPI) is projected at 0.5% for December 2014, as per the median estimate of a poll of economist carried out by Capital Market. WPI inflation stood at zero in November 2014. The government will release data on WPI for December 2014 at 12 noon on Wednesday, 14 January 2015.
The seventh annual Vibrant Gujarat Summit, a global investor conference was inaugurated by Prime Minister Narendra Modi on Sunday, 11 January 2015. The Summit ends tomorrow, 13 January 2015.
Most Asian stocks edged lower amid concern Europe's stimulus plans may not solve the euro region's economic woes and after an unexpected drop in American wages clouded the outlook for US interest rates. Key indices in Hong Kong, South Korea, Indonesia, China and Taiwan were off 0.01% to 2.12%. Singapore's Straits Times was flat. Japanese stock market remained close for a holiday.
US stocks fell on Friday, 9 January 2015, following a two-day rally as December's jobs report gave a mixed view of the economy, with financial shares leading the way lower.
US job growth increased briskly in December, but wages posted their biggest decline in at least eight years in a sign the tightening labor market has yet to give much of a boost to workers. Nonfarm payrolls increased by 252,000 last month after an upwardly revised jump of 353,000 in November, the Labor Department said. The jobless rate fell 0.2 percentage point to a 6-1/2-year low of 5.6%, but that was mainly because people left the labor force.
The drop in labor participation and a surprise five-cent, or 0.2 percent, decrease in average hourly earnings, which nearly erased November's gains, took some shine off the otherwise upbeat report.
Meanwhile in Europe, the uncertainties over the status of Greece including its possible exit from the eurozone are likely to persist until the early election in the country later this month. Greece is set to hold snap elections on 25 January 2015 after it failed to elect a new president in a third round of voting late last year. The Greek leftist opposition party Syriza leads opinion polls ahead of national elections on 25 January 2015. Syriza has demanded debt relief from the eurozone and promised to roll back the austerity and reform measures that the country has undertaken in exchange for the international bailout that the government negotiated in 2012.
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