Key benchmark indices weakened once again in afternoon trade as European stocks edged lower in early trade there. The barometer index, the S&P BSE Sensex, was currently down 153.22 points or 0.58% at 26,414.77. The market breadth indicating the overall health of the market was negative. Tension at the Indo-Pak border also weighed on sentiment. Asian stocks were mixed. Most bank stocks declined. Cairn India dropped as crude oil prices edged lower. Airliners extended previous sessions' gains after Indian Oil Corporation cut jet fuel price by an average of nearly 3% across cities in India on 30 September 2014.
The stand-off between India and Pakistan is continuing to intensify in Jammu and Kashmir as Pakistani forces continue to target several Indian posts along the Line of Control. Three persons were injured as Pakistan rangers today, 7 October 2014, targeted 40 BSF posts along the International Border in Jammu and Samba districts of Jammu and Kashmir, according to reports.
In overseas markets, European stocks dropped after data showed that industrial output in Germany declined sharply in August. Asian stocks were trading mixed. US stocks edged lower in volatile trade yesterday, 6 October 2014, as investors resorted to profit taking after last week's rally.
Earlier, key indices had trimmed losses in early afternoon trade after losing ground after initial volatility.
In the foreign exchange market, the rupee edged higher against the dollar amid optimism the falling oil price will help narrow the nation's trade deficit.
Brent crude oil prices edged lower as concerns about abundant supply offset the positive boost to prices from the dollar's recent weakness.
At 13:15 IST, the S&P BSE Sensex was down 153.22 points or 0.58% at 26,414.77. The index lost 191.03 points at the day's low of 26,376.96 in mid-morning trade, its lowest level since 26 September 2014. The index rose 2.39 points at the day's high of 26,570.38 in early trade.
The CNX Nifty was down 50.15 points or 0.63% at 7,895.40. The index hit a low of 7,883.35 in intraday trade, its lowest level since 26 September 2014. The index hit a high of 7,943.05 in intraday trade.
The market breadth indicating the overall health of the market was negative. On BSE, 1,439 shares declined and 1,198 shares gained. A total of 122 shares were unchanged.
The BSE Mid-Cap index was down 15.29 points or 0.16% at 9,496.11. The BSE Small-Cap index was up 6.07 points or 0.06% at 10,647.89. Both these indices outperformed the Sensex.
Adani Power declined 1.55%. The company said during market hours that scheme of arrangement among Adani Power and Adani Power Maharashtra (wholly owned subsidiary of the company) and Adani Transmission (India) (wholly owned subsidiary of the company) and their respective shareholders and creditors has been sanctioned by the High Court of Gujarat on 26 September 2014. The scheme provides for demerger and transfer of transmission business of the company and Adani Power Maharashtra into Adani Transmission (India). The company is in process of complying with requisite formalities for making the scheme effective.
Cairn India dropped 3.48% as crude oil prices edged lower. Lower crude oil prices would result in lower realizations from crude sales for oil exploration firms like Cairn India.
Most bank stocks declined. Among private banks, Axis Bank (down 0.03%), IndusInd Bank (down 0.36%), ICICI Bank (down 0.05%), Federal Bank (down 0.04%), HDFC Bank (down 0.82%) and Kotak Mahindra Bank (down 0.65%), edged lower. Yes Bank rose 0.19%.
Among public sector banks, State Bank of India (SBI) (down 1.03%), Syndicate Bank (down 0.6%), Andhra Bank (down 0.23%), Bank of India (down 1.03%), Bank of Baroda (down 2.22%), Dena Bank (down 0.65%), Canara Bank (down 0.13%), and Punjab National Bank (down 1.26%), edged lower. Union Bank of India rose 0.29%.
Financial Services Secretary G.S. Sandhu was quoted by the media as saying on 30 September 2014, that state-run banks will very soon start raising funds from markets as part of government's efforts to infuse capital into banks to meet the Basel III norms.
Airliners extended previous sessions' gains after Indian Oil Corporation cut jet fuel price by an average of nearly 3% across cities in India on 30 September 2014. Jet Airways (up 0.94%) and SpiceJet (up 3.05%) gained. Jet fuel or aviation turbine fuel (ATF) typically makes up almost half of an airline's operating cost. Prices of jet fuel are directly linked to crude oil prices, which have witnessed a sharp slide recently.
In the foreign exchange market, the rupee edged higher against the dollar amid optimism the falling oil price will help narrow the nation's trade deficit. The partially convertible rupee was hovering at 61.335, compared with its close of 61.61 during the previous trading session on Wednesday, 1 October 2014. The foreign exchange market was closed from Thursday, 2 October 2014, to Monday, 6 October 2014 for local holidays.
Brent crude oil prices edged lower as concerns about abundant supply offset the positive boost to prices from the dollar's recent weakness. Brent for November settlement was off 1 cent at $92.78 a barrel. The contract had risen 48 cents to settle at $92.79 a barrel yesterday, 6 October 2014.
Meanwhile, the provisional data released by the stock exchanges after trading hours on Wednesday, 1 October 2014, showed that foreign portfolio investors (FPIs) sold shares worth a net Rs 63.24 crore on that day. Indian financial markets were closed from Thursday, 2 October 2014, till Monday, 6 October 2014, for local holidays.
There was a moderate improvement in India's service sector activity during September, as per a latest survey. The headline seasonally adjusted HSBC India Services Business edged up to 51.6 in September from 50.6 in August. A figure above 50 indicates expansion while one below points to a contraction.
The Indian economy is set to grow by 6.4% in fiscal year (FY) 2015/16 after 5.6% growth in FY2014/15, a World Bank report said. India is benefiting from a "Modi dividend", the report said, with economic activity buoyed by expectations from the newly elected government of Prime Minister Narendra Modi. Over the next year or so economic growth should be supported by the recovering US economy that would provide a market for Indian merchandise and service exports, the report said. Private investment is expected to pick up thanks to the government's business orientation, and declining oil prices should boost private sector competitiveness, the report said. But economic reforms will be needed for India to achieve its full long-term growth potential, the report argued.
Meanwhile, indicating a sharp improvement for the second consecutive quarter, the CII Business Confidence Index (CII-BCI) for July-September quarter shot up to 57.4, up from 53.7 in April-June quarter and 49.9 in January-March quarter this year. During the same quarter last fiscal, the index had touched the all-time low value of 45.7. The number 50 is the dividing line on the index between positive and weak business confidence. The result of the 88th Business Outlook Survey based on responses from over 150 industry members was declared on Monday, 6 October 2014.
Cumulative rainfall during this year's monsoon from 1 June 2014 up to 30 September 2014 was 12% below the Long Period Average (LPA), India Meteorological Department said on 1 October 2014. India's farming sector accounts for around 14% of the economy, but two-thirds of the nation's 1.2 billion people depend on farming for a livelihood and more than half of its arable land needs the summer rains.
European stocks declined today, 7 October 2014 after data showed that industrial output in Germany declined sharply in August. Key benchmark indices in France, Germany and UK shed by 0.44% to 0.73%.
The latest data showed that industrial output in Germany declined sharply in August, marking the second consecutive day of rough economic numbers for Europe's largest economy. In adjusted terms, factory output was down 4% in August. Meanwhile, July's figure was downwardly revised to growth of 1.6% from the 1.9% gain originally reported.
Asian stocks were trading mixed today, 7 October 2014. Key benchmark indices in Hong Kong, Indonesia and South Korea were up 0.23% to 0.74%. Key benchmark indices in Japan, Taiwan and Singapore were off 0.3% to 0.67%. China's Shanghai Composite was closed for holiday.
The Bank of Japan today, 7 October 2014, kept its policy unchanged as widely expected, adding no new easing. In his remarks to the parliament, the central bank's governor, Haruhiko Kuroda voiced approval of the yen's relatively weak level and said Japan remained on track to reach its goal of sustained 2% consumer inflation.
Trading in US index futures indicated that the Dow could fall 36 points at the opening bell on Tuesday, 7 October 2014. US stocks edged lower in volatile trade on yesterday, 6 October 2014, as investors resorted to profit taking after last week's rally.
The US Federal Reserve will tomorrow, 8 October 2014, release the minutes of its Sept. 16-17 meeting at which it had decided to cut its monthly bond purchases to $15 billion. Policy makers next begin their two-day meeting on 28 October 2014.
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