A setback in global equities triggered by sharp slide in global crude oil prices cast its long shadow on Indian stocks as key equity benchmark indices tumbled to 1-1/2-week low in morning trade. The market breadth indicating the overall health of the market was quite weak with more than four losers for every gainer on BSE. The S&P BSE Sensex was currently off 530.06 points or 1.9% at 27,312.26. The BSE Mid-Cap index was off 1.83%. The BSE Small-Cap index was off 1.94%.
Global crude oil prices tumbled yesterday, 5 January 2015. 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.
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.
Cairn India fell after sharp slide in crude oil prices yesterday, 5 January 2015. Bank stocks declined. Telecom stocks edged lower.
Foreign portfolio investors bought shares worth a net Rs 472 crore yesterday, 5 January 2015, as per provisional data.
In overseas markets, Asian stocks were sharply lower after overnight sharp slide in US stocks triggered by another plunge in oil prices. 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 and the S&P with their worst losses since October.
In the foreign exchange market, the rupee edged higher against the dollar.
Brent crude futures edged higher after a sharp setback overnight.
At 10:15 IST, the S&P BSE Sensex was down 530.06 points or 1.9% at 27,312.26. The index tumbled 612.15 points at the day's low of 27,230.17 in morning 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 157.95 points or 1.89% at 8,220.45. The index hit a low of 8,197.30 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 193.21 points or 1.83% at 10,353.96. The decline in the index was lower than the Sensex's decline in percentage terms. The BSE Small-Cap index was off 220.02 points or 1.94% at 11,100.19. The decline in the index was higher than the Sensex's decline in percentage terms.
The market breadth indicating the overall health of the market was quite weak with more than four losers for every gainer. On BSE, 1,620 shares declined and 398 shares rose. A total of 46 shares were unchanged.
Bank stocks declined. Punjab National Bank (down 2.2%), Axis Bank (down 2.57%), ICICI Bank (down 2.7%), Bank of India (down 2.98%), Canara Bank (down 2.11%), Yes Bank (down 1.88%), Bank of Baroda (down 1.61%), IndusInd Bank (down 1.35%), Kotak Mahindra Bank (down 1.59%), State Bank of India (down 1.82%), Federal Bank (down 1.22%), and HDFC Bank (down 0.57%) edged lower.
Telecom stocks edged lower. Bharti Airtel (down 1.26%), Tata Teleservices (Maharashtra) (down 4.74%), Mahanagar Telephone Nigam (down 0.55%) and Idea Cellular (down 0.65%) edged lower. Reliance Communications (up 0.24%) edged higher. The Union Cabinet yesterday, 5 January 2015, approved the proposal of the Department of Telecom (DoT) to proceed with auction in 800, 900 & 1800 MHz bands. The Reserve price approved is Rs 3646 crore pan-India per MHZ in 800 MHz, Rs 3980 crore for 900 MHz band pan India excluding Delhi, Mumbai, Kolkatta, and J&K, and Rs 2191 crore pan India (excluding Maharashtra and West Bengal) in 1800 MHz band. The quantum of spectrum to be put to auction is 103.75 MHz in 800 MHz band in all service areas, 177.8 MHz in 17 LSAs in 900 MHz band and 99.2 MHz in 15 LSAs in 1800 MHz band. Thus a total of 380.75 MHz in 800,900 & 1800 MHz is being put to auction. Payment terms, eligibility criteria and auction objectives shall be as in the previous auction of Februay 2014, a government statement said.
The Union Cabinet also decided that intent to put 2100 MHz to simultaneous auction may be announced along with auction of other bands. Details of this will be announced later on.
Cairn India fell 3.01% at Rs 236.50 as global crude oil prices tumbled overnight. Lower crude oil prices would result in lower realizations from crude sales for oil exploration firms like Cairn India.
Max India fell 2.13% at Rs 385.55. The company after trading hours yesterday, 5 January 2015, announced that Bupa, the international healthcare group, proposes to increase its stake in Max Bupa Health Insurance (Max Bupa) to 49% from current 26%. Following the Insurance Laws Amendment Ordinance 2014 receiving legislative assent in the 2015 Budget Session of Parliament, Bupa, the international healthcare group, proposes to increase its stake in Max Bupa from 26% to 49%, Max Bupa said in a statement issued after trading hours today, 5 January 2015.
Max Bupa, a leading Indian standalone private health insurer, is a joint venture between Max India, which owns 74% of Max Bupa, and Bupa, the UK-headquartered global healthcare group, which owns 26%. Commenting on the decision to increase Bupa's stake in Max Bupa, David Fletcher, Managing Director of International Development Markets at Bupa said that this decision underlines Bupa's commitment to the Indian health insurance market and represents a major milestone in the development of Max Bupa.
Rahul Khosla, Managing Director, Max India said that Bupa's intention to increase its stake in Max Bupa is testimony to the huge opportunity for health insurance in India and Max India's reputation in successfully managing joint ventures. Max Bupa will stand to benefit from Bupa's expertise in areas such as under-writing health risks and product innovation, Khosla said.
In the foreign exchange market, the rupee edged higher against the dollar. The partially convertible rupee was hovering at 63.355, compared with its close of 63.42 during the previous trading session.
Brent crude futures edged higher after a steep slide yesterday, 5 January 2015. Brent for February settlement was up 20 cents at $53.31 a barrel. 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.
HSBC Holdings Plc and Markit Economics will release the HSBC India Services PMI for December 2014 today, 6 January 2015.
Meanwhile, 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 China, Japan, Hong Kong, Singapore, Taiwan, Singapore, South Korea, and Indonesia were off 0.72% to 2.82%.
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.
Trading in US index futures indicated that the Dow could fall 13 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.
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