Weakness in global stocks weighed on sentiment as key benchmark indices extended initial losses and hit fresh intraday low in morning trade. Trade data showing weakness on India's external front also hit sentiment on the domestic bourses adversely. The barometer index, the S&P BSE Sensex, hit its lowest level in almost seven weeks. The 50-unit CNX Nifty hit its lowest level more than 6-1/2 weeks. The Sensex was currently off 264.93 points or 0.97% at 27,054.63. The market breadth indicating the overall health of the market was quite weak, with more than three losers for every gainer on BSE. The BSE Small-Cap index was off 1.33%. The fall in the index was higher than the Sensex's decline in percentage terms.
Due to a 6 fold jump in gold imports, India's trade deficit rose sharply to $16.86 billion in November 2014 from $9.57 billion in November 2013, data released by the Ministry of Commerce & Industry after trading hours yesterday, 15 December 2014, showed.
Shares of public sector oil marketing companies rose as global crude oil prices fell.
Foreign portfolio investors sold shares worth a net Rs 455.72 crore yesterday, 15 December 2014, as per provisional data.
In overseas markets, Asian stocks edged lower as oil's slump and weaker-than-estimated Chinese manufacturing stoked concern that the global economy may falter. US stocks fell yesterday, 15 December 2014, amid a continuing slump in oil prices and ahead of a closely watched Federal Reserve meeting. Investors fret that the sharp slide in global crude oil prices since June could be signaling that the global economy is slowing more quickly than data currently suggest.
In the foreign exchange market, the rupee weakened past the 63 mark against the dollar as India's trade deficit rose sharply last month due to a sharp surge in gold imports.
Brent crude futures hovered near 5-1/2 year low as Chinese factory activity slowed and concerns rose over the health of emerging market economies and their currencies.
At 10:17 IST, the S&P BSE Sensex was down 264.93 points or 0.97% at 27,054.63. The index lost 273.33 points at the day's low of 27,046.23 in morning trade, its lowest level since 29 October 2014. The index fell 120.19 points at the day's high of 27,199.37 in early trade.
The CNX Nifty was down 83.65 points or 1.02% at 8,135.95. The index hit a low of 8,135.40 in intraday trade, its lowest level since 30 October 2014. The index hit a high of 8,189.35 in intraday trade.
The BSE Mid-Cap index was off 95.16 points or 0.95% at 9,967.42. The fall in the index was lower than the Sensex's decline in percentage terms. The BSE Small-Cap index was off 146.73 points or 1.33% at 10,851.18. The fall 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 three losers for every gainer on BSE. On BSE, 1,412 shares fell and 466 shares rose. A total of 62 shares were unchanged
HDFC declined 1.97%. The company's advance tax payment reportedly rose 13% to Rs 735 crore in Q3 December 2014 over Q3 December 2013.
Shares of public sector oil marketing companies rose as global crude oil prices fell. BPCL (up 1.06%), Indian Oil Corporation (up 0.93%) and HPCL (up 3.35%) edged higher. Lower crude oil prices could reduce under-recoveries of PSU OMCs on domestic sale of LPG and kerosene at controlled prices. However, a weakness in rupee against the dollar will restrict the benefit of falling global crude oil prices to that extent. A weak rupee raises the cost of imports. The government has already freed pricing of petrol and diesel.
PSU OMCs have cut petrol and diesel prices due to falling global oil prices. Indian Oil Corporation (IOCL) yesterday, 15 December 2014, announced reduction in retail selling price of petrol by Rs 2 per litre at Delhi (including state levies) with corresponding decrease in other states and decrease retail selling price of diesel (retail) by Rs 2 per litre at Delhi (including state levies) with corresponding decrease in other states.
Since the last price changes announced on 30 November 2014, the international prices of both petrol and diesel have continued to be on a downtrend, IOCL said. The rupee-dollar exchange rate has, however, appreciated since the last price change. The combined impact of both these factors warrant a decrease in retail selling prices of both petrol and diesel, IOCL said in a statement.
Motherson Sumi Systems rose 1.67% after the company announced signing of an agreement for purchase of assets of Scherer & Trier group, Germany from its administrator through its step down subsidiaries. The consideration payable is about Euro 36 million for the assets including land and building & inventories along with the shareholding held in Mexican entities. This acquisition includes 2 manufacturing facilities situated at Michelau (Germany) and Puebla, (Mexico), Motherson Sumi Systems said.
Motherson Sumi Systems said that the acquired entity develops and manufactures extrusion profiles, moulded parts made of thermoplastics and hybrid components made of metal and plastic catering to OEMs like Audi, BMW, Daimler, Ford, GM, VW etc. along with other customers. The current turnover of Scherer & Trier is in the range of Euro 240 million, Motherson Sumi Systems said. This acquisition further consolidates Motherson Sumi Systems' polymer business in Europe & North America. The deal is subject to completion of regulatory approvals and is expected to be completed in the month of January 2015, Motherson Sumi Systems said.
In the foreign exchange market, the rupee weakened past the 63 mark against the dollar as India's trade deficit rose sharply last month due to a sharp surge in gold imports. The partially convertible rupee was hovering at 63.39, compared with its close of 62.945 during the previous trading session.
Brent crude futures hovered near 5-1/2 year low as Chinese factory activity slowed and concerns rose over the health of emerging market economies and their currencies. Brent for January settlement, which expires today, 16 December 2014, was off 28 cents at $60.78 a barrel. The contract had lost 79 cents settle at $61.06 a barrel during the previous trading session. Brent for February settlement was off 38 cents at $60.83 a barrel.
India's merchandise exports rose 7.27% to $25.96 billion in November 2014 over November 2013, data released by the Ministry of Commerce & Industry after trading hours yesterday, 15 December 2014, showed. Imports jumped 26.79% at $42.82 billion in November 2014 over November 2013. Oil imports dropped 9.7% at $11.72 billion in November 2014 over November 2013. Non-oil imports jumped 49.6% at $31.10 billion in November 2014 over November 2013. The trade deficit rose sharply to $16.86 billion in November 2014, from $9.57 billion in November 2013.
Finance Minister Arun Jaitley yesterday, 15 December 2014, said that various welfare programmes of the government for vulnerable sections of the society are essential and working well. In this regard he mentioned about food security and education for all programmes among others. The Finance Minister made those comments while speaking to the students of Stanford University, USA when they called on him in his office yesterday, 15 December 2014.
Meanwhile, investors are closely monitoring to see if the government's key legislative reform bills are passed during the ongoing winter session of the parliament. The government may table the constitutional amendment bill to facilitate the levy of goods & services tax (GST) during the ongoing winter session of the parliament. The constitutional amendment Bill will provide the legal framework for rolling out the levy, giving states power to tax both goods and services. As of now only the central government can impose service tax. The amendment Bill will also create a GST council, a body that will have representatives of the states and the Centre that will take decisions on the tax after it is rolled out.
The government's intension is to implement a nationwide GST from 1 April 2016. GST is a major indirect tax reform. GST will subsume central indirect taxes such as excise duty and service tax at the central level and value added tax at the state level besides other local levies such as octroi and entry tax.
Meanwhile, the Indian government intends to get the Insurance Laws (Amendment) Bill, 2008 passed in both the Houses of Parliament in this week. The Union Cabinet, last week, approved the official amendments to the Insurance Laws (Amendment) Bill, 2008. The Parliamentary Select Committee in its report tabled in Rajya Sabha on 10 December 2014 agreed a composite cap of 49% on foreign investment in the insurance sector, which includes all types of foreign investment as opposed to the 26% foreign direct investment (FDI) allowed at present. Finance Minister Arun Jaitley had said in his maiden budget speech in July that the composite cap in the insurance sector should be increased to 49% from the current level of 26%, with full Indian management and control.
It also remains to be seen if the government will be to find support for the he Coal Mines (Special Provisions) Bill, 2014 in the Rajya Sabha where it's in a minority. The Lok Sabha last week passed the Coal Mines (Special Provisions) Bill, 2014. The bill allows the government to enforce rules and guidelines for auction/allocation of 204 coal blocks cancelled by the Supreme Court in September this year.
Asian stocks edged lower today, 16 December 2014, as oil's slump and weaker-than-estimated Chinese manufacturing stoked concern that the global economy may falter. Key indices in Hong Kong, Singapore, Indonesia, South Korea, and Japan were off 0.53% to 1.87%. Key indices in China and Taiwan rose 0.23% to 0.74%.
China's flash manufacturing purchasing managers' index from HSBC Holdings Plc and Markit Economics fell to 49.5 for December, from 50 last month. It's the first time since May that the gauge has slipped below 50, the threshold between expansion and contraction.
Meanwhile, heavily armed Australian police reportedly stormed a Sydney cafe early on Tuesday morning and freed hostages being held there at gunpoint, in a dramatic end to a 16-hour siege in which two captives and the attacker were killed.
Trading in US index futures indicated that the Dow could gain 42 points at the opening bell today, 16 December 2014. US stocks fell Monday, 15 December 2014, amid a continuing slump in oil prices and ahead of a closely watched Federal Reserve meeting.
Among economic data, US manufacturing output recorded its largest increase in nine months in November as production expanded across the board, pointing to underlying strength in the economy. Factory production rose 1.1% after advancing 0.4% in October, the Federal Reserve said on Monday.
A two-day meeting of Federal Open Market Committee (FOMC) to discuss monetary policy review begins today, 16 December 2014. The policy meeting will be keenly watched for any hints on the timing of interest rate increases in the world's biggest economy. It remains to be seen whether Federal Reserve officials would signal a rate hike by dropping their assurance that rates will stay low for a considerable time.
Meanwhile, Russia's central bank, which has been trying to stem the currency's tumble through intervention, yesterday, 15 December 2014, raised the key rate to 17% from 10.5%, the largest single increase since 1998, when Russian rates soared past 100% and the government defaulted on its debt.
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