After extending losses in early afternoon trade, key benchmark indices trimmed losses in afternoon trade. The market breadth indicating the overall health of the market was quite weak with more than two losers for every gainer on BSE. The barometer index, the S&P BSE Sensex, was currently off 531.17 points or 1.91% at 27,311.15. The BSE Mid-Cap index was off 1.44%. The BSE Small-Cap index was off 1.74%. All the 12 sectoral indices on BSE were in the red.
Indian stocks tumbled today, 6 January 2015, amid a setback in global equities triggered by sharp slide in global crude oil prices and concerns about the political situation in Greece.
Metal and mining stocks dropped. Sugar stocks edged higher on renewed buying. Castrol India rose as falling crude oil prices will result in lower raw material costs for the company. Among other side counters, Gujarat State Petronet scaled record high.
Meanwhile, growth at India's service sector activity moderated last month, according to a survey from HSBC Holdings Plc and Markit Economics released today, 6 January 2015.
Global crude oil prices tumbled to 5-1/2-year low. Deregulation of diesel price announced by the Indian government in October 2014 and a sharp decline in global crude oil prices over the past few months will help reduce the government's fuel subsidy burden and help contain its fiscal deficit. The steep slide in global crude oil prices will also help India in containing its current account deficit and fuel price inflation. India imports 80% of its crude oil requirement.
Earlier, the Sensex, and the 50-unit CNX Nifty had, both, tumbled to 1-1/2-week low in early afternoon trade.
Foreign portfolio investors bought shares worth a net Rs 472 crore yesterday, 5 January 2015, as per provisional data.
In overseas markets, Asian stocks tumbled after overnight sharp slide in US stocks triggered by another plunge in oil prices and concerns about the political situation in Greece. US stocks were clobbered yesterday, 5 January 2015, in an indiscriminate sell-off triggered by a renewed plunge in crude oil prices and surging dollar, which left the Dow Jones Industrial Average and the S&P 500 with their worst losses since October.
In the foreign exchange market, the rupee edged higher against the dollar.
Brent crude futures continued to drop after a steep selloff overnight.
At 13:24 IST, the S&P BSE Sensex was down 531.17 points or 1.91% at 27,311.15. The index tumbled 634.68 points at the day's low of 27,207.64 in early afternoon trade, its lowest level since 26 December 2014. The index declined 143.39 points at the day's high of 27,698.93 in early trade.
The CNX Nifty was down 156.95 points or 1.87% at 8,221.45. The index hit a low of 8,192.85 in intraday trade, its lowest level since 26 December 2014. The index hit a high of 8,327.85 in intraday trade.
The BSE Mid-Cap index was off 151.98 points or 1.44% at 10,395.19. The BSE Small-Cap index was off 196.46 points or 1.74% at 11,123.75. The decline in both these indices was lower than the Sensex's decline in percentage terms.
The market breadth indicating the overall health of the market was quite weak with close to three losers for every gainer on BSE. 1,964 shares declined and 705 shares rose. A total of 72 shares were unchanged.
The total turnover on BSE amounted to Rs 1723 crore by 13:15 IST.
Metal and mining stocks dropped. Sesa Sterlite (down 2.66%), JSW Steel (down 2.71%), Tata Steel (down 3.76%), Steel Authority of India (Sail) (down 3.69%), NMDC (down 3.66%), Hindustan Copper (down 1.77%), National Aluminium Company (down 2.61%), Jindal Steel & Power (down 4.08%) and Hindalco Industries (down 1.72%) edged lower. Hindustan Zinc rose 1.15%.
Godrej Consumer Products (GCPL) fell 1.76%. GCPL during market hours today, 6 January 2015, announced that it has entered into an agreement with Frika Hair (Pty), for the acquisition of 100% equity stake in its hair extensions business in South Africa. Frika Hair (Pty) enjoys a premium position in the South African market. It has particular strengths in the Western Cape, Eastern Cape and Gauteng, and is the market leader in key accounts in organised retail. In 2014, net sales of the company was approximately ZAR 73 million. This acquisition helps GCPL in consolidating its presence in the hair extensions market in South Africa, GCPL said in a statement.
Commenting on the acquisition, Vivek Gambhir, Managing Director, GCPL, said that with its quality range of premium hair extensions, the Frika range of hair extensions provides a strong complementary addition to the company's Darling masstige portfolio. He said that this acquisition reflects the company's continued commitment to scaling up its presence in Africa and providing African consumers with a wide range of superior quality products at affordable prices. GCPL's Africa business currently has annualised revenue of $200 million. The acquisition is in line with GCPL's global 3 x 3 strategy, targeting strong regional assets in the emerging world.
Sugar stocks were in demand on renewed buying. Bajaj Hindusthan (up 1.56%), Dhampur Sugar Mills (up 2.95%), Sakthi Sugars (up 5.49%), Balrampur Chini Mills (up 3.81%), Shree Renuka Sugars (up 1.58%), Simbhaoli Sugar Mills (up 0.07%) and Dwarikesh Sugar Industries (up 10.95%) gained.
Castrol India rose 3.08% as falling crude oil prices will result in lower raw material costs for the company.
Jubilant Life Sciences jumped 7.8%. Jubilant Life Sciences after market hours yesterday, 5 January 2015, said that the company has received abbreviated new drug application (ANDA) final approval from the US Food and Drug Administration (US FDA) for Mycophenolate Mofetil USP, 250 milligram (mg) capsules and 500 mg tablets (from its US subsidiary, Jubilant Cadista Pharmaceuticals Inc). The company also received approval for Rizatriptan tablets 5 mg and 10 mg (from its Indian subsidiary, Jubilant Generics).
Mycophenolate Mofetil is the generic version of Cellcept (of Roche), an immunosuppressant which is used to help prevent organ rejection in transplants. The current annualized US market size for Mycophenolate Mofetil USP, 250 mg capsules and 500 mg tablets as per IMS is $245 million. Rizatriptan Tablets 5 mg and 10 mg is the generic version of Maxalt (of Merck), used for the treatment of migraine. The current annualized US market size for Rizatriptan tablets 5 mg and 10 mg as per IMS is $70 million.
Gujarat State Petronet jumped 6.92% to Rs 130.60 after scaling a record high of Rs 135.65 in intraday trade.
SML Isuzu surged 6.5% after the company's sales surged 62.57% to 1,073 vehicles in December 2014 over December 2013. The company announced the monthly sales data after market hours on Monday, 5 January 2015.
PMC Fincorp (down 4.99%), Bajaj Electricals (down 4.83%), Sun TV Network (down 4.68%), HDIL (down 4.6%) and Rasoya Proteins (down 4.46%) were the top losers from the BSE's 'A' group.
In the foreign exchange market, the rupee edged higher against the dollar. The partially convertible rupee was hovering at 63.335, compared with its close of 63.42 during the previous trading session.
Brent crude futures continued to drop after a steep selloff overnight. Brent for February settlement was off 32 cents at $52.79 a barrel. The contact hit 5-1/2-year low of $52.28 a barrel in intraday trade. The contract had lost $3.31 a barrel or 5.9% to settle at $53.11 a barrel yesterday, 5 January 2015, its lowest settlement since 1 May 2009, amid speculation rising global output will exacerbate oil supply glut.
Growth at India's service sector activity moderated last month, according to a survey from HSBC Holdings Plc and Markit Economics released today, 6 January 2015. The seasonally adjusted HSBC India Services PMI Business Activity Index declined to 51.1 in December 2014, from 52.6 in November 2014. Both activity and new orders in India's services sector expanded in December at lower rates compared with November. Except the financial intermediation sub-sector, all other sectors saw an expansion in order books in December 2014. Pranjul Bhandari, Chief India Economist at HSBC said that growth in the financial intermediation sector is key for funding a meaningful pick-up in economic growth. As per the survey, business expectations grew quickly at service providers in December 2014, led by the hotels and restaurants sub-sector. Inflationary pressures from both input and output prices remained modest.
Meanwhile, the Union Cabinet yesterday, 5 January 2015, approved the proposal of the Department of Telecom to proceed with auction in 800, 900 & 1800 MHz bands in February 2015. A government statement said that the estimated revenues from the auction is Rs 64840 crore of which Rs 16000 crore is expected to be realized in the current financial year.
The Prime Minister's Office (PMO) after trading hours yesterday, 5 January 2015, said that Prime Minister Narendra Modi has appointed economist Arvind Panagariya as Vice Chairman of NITI Aayog (National Institution for Transforming India). Economist Bibek Debroy and former secretary of defence research and development V.K. Saraswat have been appointed as two full-time members of NITI Aayog. The government had last week announced the setting up of NITI Aayog as replacement for the Planning Commission.
Asian markets were sharply lower today, 6 January 2015, after stocks on Wall Street declined overnight following the relentless fall in oil prices. Key indices in Japan, Hong Kong, Singapore, Taiwan, Singapore, South Korea and Indonesia were off 0.81% to 3.02%. China's Shanghai Composite index rose 0.03%.
The HSBC China services purchasing managers index rose to 53.4 in December from 53 in November, HSBC Holdings PLC said today, 6 January 2015, pointing to economic resilience outside the nation's factory sector. A reading above 50 indicates month-over-month expansion while a level below that points to contraction.
The HSBC Hong Kong Purchasing Managers Index rose to the expansion mode of 50.3 in December, the first time in five months, signaling a slight improvement in the city's operating conditions. HSBC today, 6 January 2015, said that December's manufacturing PMI rose from 48.8 in November, helped by the increase of new business and output, despite the continued fall of new orders from China. A reading below 50 indicates a contraction in manufacturing, while a reading above that indicates an expansion. December's reading is the first month the PMI is above 50 since July, when it was 50.4.
Trading in US index futures indicated that the Dow could rise 14 points at the opening bell today, 6 January 2015. US stocks fell sharply yesterday, 5 January 2015, with the S&P 500 extending losses into a fourth session, as energy companies took it on the chin as the price of oil fell to its lowest since April 2009.
The Fed will release minutes of the Federal Open Market Committee (FOMC) meeting held on 16 and 17 December 2014 tomorrow, 7 January 2015. The Fed minutes may shed light on policy makers' views on the appropriate timing of the first interest-rate increase since 2006 and the conditions that would prompt them to tighten policy. At the two-day meeting in December, the FOMC had said it would be patient on the timing of an increase, replacing an earlier pledge to keep borrowing costs low for a "considerable time".
The US Labor Department reports monthly payroll data for December 2014 on Friday, 9 January 2015.
In Europe, uncertainties over the status of Greece including a possible exit from the eurozone are likely to persist until the early election 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. A radical left opposition party is leading in opinion polls ahead of the vote on promises to raise wages, increase government jobs and persuade the euro area to write off some Greek debt.
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