A bout of volatility was witnessed as key benchmark indices weakened once again soon after trimming intraday losses in afternoon trade. The market breadth indicating the overall health of the market was weak. The barometer index, the S&P BSE Sensex, was currently down 117.37 points or 0.43% at 27,089.37. Most auto stocks declined. But, shares of two-wheeler markers gained. PSU OMCs and shares of upstream oil & gas stocks declined. Jewellery stocks extended Monday's gains on hopes of increased demand during upcoming festive season. Foreign portfolio investors (FPIs) sold shares worth a net Rs 186.41 crore yesterday, 22 September 2014. Meanwhile, Food Minister Ram Vilas Paswan reportedly said that the government has no plans to raise grain allocations under its food welfare programme after a newspaper had quoted him calling for an increase in such subsidised handouts.
Meanwhile, the Department of Pharmaceuticals, under the Ministry of Chemicals and Fertilizers, has scrapped guidelines issued on 29 May 2014 that gave the National Pharmaceutical Pricing Authority (NPPA) the powers to fix the prices of drugs that are not on the essential medicines list.
In overseas markets, European stocks fell in early trade as investors awaited manufacturing data in the US and the euro zone. Asian stocks edged lower after a preliminary reading of China's manufacturing sector showed activity making a surprise improvement this month while the subindexes for the flash manufacturing Purchasing Managers' Index (PMI) report painted a mixed picture. US stocks closed sharply lower yesterday, 22 September 2014, on concerns about global growth amid falling commodity prices.
Earlier, key indices had drifted lower after alternately swinging between positive and negative zone in early trade.
Brent crude oil prices rebounded from a one-week low after a survey showed China's factory activity unexpectedly picked up in September. In the foreign exchange market, the rupee edged lower against the dollar on month-end dollar demand from importers to pay month-end bills.
At 13:16 IST, the S&P BSE Sensex was down 117.37 points or 0.43% at 27,089.37. The index lost 141.53 points at the day's low of 27,065.21 in afternoon trade. The index rose 50.13 points at the day's high of 27,256.87 in early trade, its highest level since 9 September 2014.
The CNX Nifty was down 34 points or 0.42% at 8,112.30. The index hit a low of 8,106.20 in intraday trade. The index hit a high of 8,159.75 in intraday trade.
The market breadth indicating the overall health of the market was weak. On BSE, 1,662 shares declined and 1,091 shares rose. A total of 115 shares were unchanged.
The BSE Mid-Cap index was down 50.26 points or 0.51% at 9,834.56. The BSE Small-Cap index was down 51.80 points or 0.46% at 11,196.89. Both these indices underperformed the Sensex.
Tech Mahindra rose 0.38% at Rs 2,480.45 after the company during market hours announced that it has been selected by Ahlstrom to manage its IT operations. With the multi-year, multi-million euro agreement, Ahlstrom aims to increase efficiency, harmonize service levels and lower IT costs, Tech Mahindra said in a statement.
Auto stocks were mostly lower. Ashok Leyland (down 2.08%) and Eicher Motors (down 0.42%) declined.
Mahindra & Mahindra fell 1.94% at Rs 1,344.90. A foreign brokerage has reportedly downgraded M&M stock to neutral from outperform, saying valuations are no longer attractive.
Tata Motors lost 3.11% at Rs 522.65. A foreign brokerage has reportedly upgraded the Tata Motors stock to outperform from neutral, citing abating near-term concerns on factors such as volume. It said shares have under-performed the auto sector recently and the company's long-term story remains promising.
Maruti Suzuki India was up 1.24%.
Shares of two wheeler makers gained. Hero MotoCorp (up 0.71%), Bajaj Auto (up 0.4%) and TVS Motor Company (up 1.4%) rose.
PSU OMCs edged lower. BPCL (down 0.47%), Indian Oil Corporation (IOC) (down 2.51%), and HPCL (down 0.3%) declined.
PSU OMCs have over recovery of 35 paise per litre on sale of diesel for the current fortnight, as per data released by the Petroleum Planning & Analysis Cell on 16 September 2014. PSU OMCs are currently incurring daily under-recovery of Rs 190 crore on the sale of Diesel, PDS Kerosene and Domestic LPG.
Shares of state-run upstream oil and gas companies also declined. ONGC (down 1.32%), GAIL (India) (down 1.02%) and Oil India (down 0.66%) declined.
State run upstream companies share a part of the under recoveries of state-run oil marketing companies (PSU OMCs) by allowing discount in the prices of crude oil, PSD kerosene, and domestic LPG based on the rates of discount communicated by the Ministry of Petroleum and Natural Gas and the Petroleum Planning & Analysis Cell.
Jewellery makers were mostly higher extending Monday's gains on hopes of increased demand during upcoming festive season and as fall in gold prices could lure customers for more purchases. Titan Company (up 2.37%), Tribhovandas Bhimji Zaveri (up 0.76%) and Tara Jewels (up 3.27%) gained. Gitanjali Gems (down 2.73%) and PC Jeweller (down 3.58%) declined.
IIFL Holdings lost 2.73% at Rs 151.30 as the stock turned ex-dividend today, 23 September 2014, for interim dividend of Rs 3 per share for the year ending 31 March 2015.
Indian stocks may remain volatile this week as traders roll over positions in the futures & options (F&O) segment from the near month September 2014 series to October 2014 series. The near-month September 2014 F&O contracts expire on Thursday, 25 September 2014.
Provisional data released by the stock exchanges after trading hours on Monday, 22 September 2014, showed that foreign portfolio investors (FPIs) sold shares worth a net Rs 186.41 crore on that day.
In the foreign exchange market, the rupee edged lower against the dollar on month-end dollar demand from importers to pay month-end bills. The partially convertible rupee was hovering at 60.90, compared with its close of 60.825 during the previous trading session.
Brent crude oil prices rebounded from a one-week low after a survey showed China's factory activity unexpectedly picked up in September, helping brighten the demand outlook in a market that has been weighed by a supply glut. Brent for November settlement was up 22 cents at $97.19 a barrel. The contract had fallen $1.1 a barrel or 1.12% to settle at $96.97 a barrel yesterday, 22 September 2014, the lowest close since 15 September 2014.
Meanwhile, Food Minister Ram Vilas Paswan reportedly said that the government has no plans to raise grain allocations under its food welfare programme after a newspaper had quoted him calling for an increase in such subsidised handouts. Paswan had said in a newspaper interview published today, 23 September 2014, that the monthly entitlement of 5 kg foodgrain per person under food security law was meagre and that the government intends to increase the monthly entitlement to 7 kg.
Prime Minister Narendra Modi is scheduled to launch the ambitious 'Make in India' campaign on Thursday, 25 September 2014. The initiative is one of the several steps which government has announced in order to improve ease of doing business in India and attract investments to boost manufacturing in the country. In his maiden independence day address, Modi invited the global business community to set up manufacturing facilities in India, giving the slogan 'come, make in India'.
European stocks edged lower in early trade today, 23 September 2014, as investors awaited data that may show manufacturing in the US and the euro area. Key indices in Germany, London and France were off 0.38% to 0.56%.
The latest flash PMI data from Markit Economics today, 23 September 2014, indicated a fifth consecutive monthly decline in French private sector output during September. At 49.1, down from 49.5 in August, the seasonally adjusted Markit Flash France Composite Output Index, based on around 85% of normal monthly survey replies, was at its lowest level in three months, albeit signalling a marginal rate of contraction. Flash manufacturing PMI climbed to a 4-month high of 48.8 in September, from 46.9 in August. Service sector activity fell for the first time in three months during September, offsetting a slower decline in manufacturing output, the latest data showed.
Asian stocks edged lower today, 23 September 2014, after a preliminary reading of China's manufacturing sector showed activity making a surprise improvement this month while the subindexes for the flash manufacturing Purchasing Managers' Index (PMI) report painted a mixed picture. Key benchmark indices in Indonesia, Hong Kong, Taiwan, and South Korea were off 0.37% to 0.61%. Key benchmark indices in China and Singapore were up 0.23% to 0.87%. Japanese markets were shut for a holiday.
A Chinese manufacturing gauge unexpectedly increased this month. The preliminary Purchasing Managers' Index from HSBC Holdings Plc and Markit Economics was at 50.5, up from August's final reading of 50.2. The data was released today, 23 September 2014. Subindexes for the flash PMI report painted more of a mixed picture, however, with new export orders and overall new orders both showing gains at a faster rate than in August, but with the employment subindex falling at a faster rate. Likewise, prices for both inputs and outputs saw further weakness. HSBC chief China economist Hongbin Qu said in remarks accompanying the PMI data that economic activity in the manufacturing sector showed signs of stabilization in September. However, overall, the data still point to modest expansion, he said.
Trading in US index futures indicated that the Dow could fall 17 points at the opening bell on Tuesday, 23 September 2014. US stocks closed sharply lower on Monday, 22 September 2014, with the S&P 500 index suffering its biggest one-day decline since early August, as the latest housing data came in much weaker than expected, raising new concerns about the rate of growth in the economy. Sales of existing homes unexpectedly declined in August, for the first time in five months, the National Association of Realtors (NAR) reported. NAR attributed the drop to fewer all-cash sales to investors.
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