Weakness continued on the bourses in early afternoon trade, with key indices trading sharply lower for the day. The market breadth indicating the overall health of the market was quite weak with more than three losers for every gainer on BSE. The Sensex was currently off 621.83 points or 2.23% at 27,220.49. The BSE Mid-Cap index was off 1.58%. The BSE Small-Cap index was off 1.67%. Indian stocks tumbled today, 6 January 2015, amid a setback in global equities triggered by sharp slide in global crude oil prices.
Shares of oil exploration and production firms declined after a steep decline in global crude oil prices yesterday, 5 January 2015. IT stocks declined.
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 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.
Earlier, the Sensex, and the 50-unit CNX Nifty had, both, tumbled to 1-1/2-week low in mid-morning 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. 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 edged higher after a sharp setback overnight.
At 12:15 IST, the S&P BSE Sensex was down 621.83 points or 2.23% at 27,220.49. The index tumbled 628.95 points at the day's low of 27,213.37 in mid-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 180.65 points or 2.16% at 8,197.75. The index hit a low of 8,193.35 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 167.09 points or 1.58% at 10,380.08. The BSE Small-Cap index was off 188.90 points or 1.67% at 11,131.31. 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 more than three losers for every gainer on BSE. 1,889 shares declined and 596 shares rose. A total of 71 shares were unchanged.
Shares of oil exploration and production (E&P) firms declined after a steep decline in global crude oil prices yesterday, 5 January 2015. ONGC (down 3.84%), Cairn India (down 2.91%), Oil India (down 1.1%) and Reliance Industries (down 2.82%) edged lower. Lower crude oil prices will result in lower realizations from crude sales for oil exploration firms.
IT stocks declined. CMC (down 2.37%), TCS (down 2.24%), Infosys (down 1.94%), Wipro (down 1.59%), Oracle Financial Services Software (down 1.62%), MindTree (down 1.13%), Tech Mahindra (down 1.13%), MphasiS (down 1.05%) and HCL Technologies (down 0.97%) edged lower.
Apollo Hospitals Enterprise fell 1.69% at Rs 1,112. The company during market hours today, 6 January 2015, said that its wholly owned subsidiary Apollo Health and Lifestyle (AHLL), has successfully completed the acquisition of Nova Specialty Hospitals. AHLL is currently present in the secondary care segment through the Day Surgery & Cradle formats. Nova Specialty Hospitals is a chain of 11 short stay surgery centres which are equipped with advanced medical facilities backed by good surgical teams. These centres are designed to provide convenient facilities for patients to undergo planned surgeries. AHLL said that the combined network will clock a turnover between Rs 115 crore to Rs 125 crore for the year ending 31 March 2015 and with the group synergies that Apollo brings to the table, the management is confident of achieving break even in the next 18 to 24 months. The deal size will be in the range of Rs 135-145 crore subject to final closure, Apollo Hospitals said.
Nova Specialty Hospital's existing centres will serve as new centres under the Apollo brand name and will benefit from Apollo's legacy of expertise, clinical excellence and empathy, Apollo Hospitals said. This acquisition fits into the growth strategy of AHLL, providing a larger footprint, including in some markets where the company has no presence currently, Apollo Hospitals said in a statement.
In the foreign exchange market, the rupee edged higher against the dollar. The partially convertible rupee was hovering at 63.35, 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 6 cents at $53.17 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.
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 China, Japan, Hong Kong, Singapore, Taiwan, Singapore, South Korea, and Indonesia were off 0.7% to 3.02%.
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 fall 10 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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