Volatility continued as key benchmark indices weakened once again after recouping entire intraday losses in early afternoon trade. The losses for key inidces were small. The market breadth indicating the overall health of the market was negative. The barometer index, the S&P BSE Sensex, was currently down 47.87 points or 0.18% at 26,420.49. Foreign portfolio investors (FPIs) sold shares worth a net Rs 851.24 crore yesterday, 25 September 2014, as provisional data. Asian stocks were weak after a steep slide in US stocks overnight.
Most PSU bank stocks extended recent losses triggered by concerns of bad loans due to their exposure to coal mines after the Supreme Court's decision on Wednesday, 24 September 2014, cancelling most coal block allocations since 1993. Most pharma stocks gained on weak rupee. IT stocks were mixed.
Earlier, key indices had alternately swung between positive and negative zone near the flat line after bouncing back from initial slide.
In overseas markets, Asian stocks dropped after steep losses for US stocks overnight. US stocks fell sharply yesterday, 25 September 2014, on a report that Russian lawmakers are drafting legislation that would allow the government to seize foreign assets in response to sanctions by US and the European Union imposed on account of Russia's aggression in Ukraine.
In the foreign exchange market, the rupee extended losses against the dollar on month-end dollar demand from importers for paying month-end import bills.
Brent crude oil prices edged lower in choppy trade as hefty supplies capped price gains and outweighed concerns that rising tensions in the Middle East could disrupt supply.
At 12:15 IST, the S&P BSE Sensex was down 47.87 points or 0.18% at 26,420.49. The index jumped 110.19 points at the day's high of 26,578.55 in morning trade. The index lost 117.09 points at the day's low of 26,351.27 in early trade.
The CNX Nifty was down 18.95 points or 0.24% at 7,892.90. The index hit a high of 7,952.95 in intraday trade. The index hit a low of 7,884.85 in intraday trade.
The market breadth indicating the overall health of the market was negative. On BSE, 1,410 shares fell and 1,136 shares rose. A total of 84 shares were unchanged.
The BSE Mid-Cap index was down 34.32 points or 0.37% at 9,316.40. The BSE Small-Cap index was down 31.62 points or 0.3% at 10,413.17. Both these indices underperformed the Sensex.
Most pharma stocks gained on weak rupee. Lupin (up 0.93%), Ranbaxy Laboratories (up 6.36%), Divi's Laboratories (up 1.4%), Strides Arcolab (up 1.05%), Wockhardt (up 1.34%) and Sun Pharmaceutical Industries (up 4.94%) gained. Dr Reddy's Laboratories fell 0.87%. Weakness in rupee could boost sales of pharma companies in rupee terms as pharma firms derive substantial revenue from exports.
Cipla fell 0.75% to Rs 603.80. The stock hit high of Rs 616.90 and low of Rs 601 in intraday trade. The Medicines Patent Pool (MPP) announced six new sub-licences with Aurobindo, Cipla, Desano, Emcure, Hetero Labs and Laurus Labs to allow generic manufacture of TAF for 112 developing countries. MPP's announcement comes one day after Gilead released positive results on two of its TAF Phase III studies, suggesting that the medicine has the potential to play a large role in the international community's efforts to scale-up HIV treatment, the statement from MPP and Cipla said after trading hours yesterday, 25 September 2014.
IT stocks were mixed. Tech Mahindra (down 0.73%), TCS (down 0.65%) and Infosys (down 0.15%) declined. HCL Technologies (up 0.06%) and Wipro (up 1.05%) gained.
Most PSU bank stocks extended recent losses triggered by concerns of bad loans due to their exposure to coal mines after the Supreme Court's decision on Wednesday, 24 September 2014, cancelling most coal block allocations since 1993. Union Bank of India (down 1.11%), Bank of India (down 0.31%), Punjab National Bank (down 2.63%) Syndicate Bank (down 0.84%), Dena Bank (down 0.35%), and Indian Bank (down 0.73%), declined. Canara Bank (up 0.69%), Indian Overseas Bank (up 1.99%), Andhra Bank (up 0.08%), and Oriental Bank of Commerce (up 0.63%) gained.
State Bank of India (SBI) fell 0.45% to Rs 2,366.90. The stock hit high of Rs 2,413.60 and low of Rs 2,355 in intraday trade. Arundhati Bhattacharya, Chairman of the bank was quoted by the media as saying that she does not believe that the entire exposure to companies that will be impacted by the recent Supreme Court judgement quashing 214 coal blocks will be written off. The bank reportedly has more than Rs 4000 crore exposure to companies that will be impacted by the recent Supreme Court judgement quashing 214 coal blocks. On upcoming Reserve Bank policy on 30 September 2014, she is expecting a status quo, with maybe some tweaking on the CRR side, report said.
The Supreme Court in its verdict Wednesday, 24 September 2014, cancelled the allocation of 214 out of 218 coal blocks it had already declared illegal due to irregularities in the allocation of the blocks. Of these, licenses for 172 coal blocks which weren't in production stand canceled immediately, while licenses for 42 blocks which were producing coal or were close to starting production would stand canceled after six months, the court said. The six months' time has been allowed to ensure coal supplies don't get affected until the government comes out with a fresh policy for auctioning the canceled coal blocks. Coal India will take over operations of the cancelled coal blocks until they are re-auctioned.
The court also slapped a penalty of Rs 295 per tonne on operating coal blocks for coal already extracted from the blocks.
In the foreign exchange market, the rupee edged lower against the dollar on month-end dollar demand from importers for paying month-end import bills. The partially convertible rupee was hovering at 61.575 compared with its close of 61.34 during the previous trading session.
Brent crude oil prices were a tad lower as hefty supplies capped price gains and outweighed concerns that rising tensions in the Middle East could disrupt supply. Brent for November settlement was down 4 cents at $96.96 a barrel. The contract had risen 5 cents a barrel or 0.05% to settle at $97 a barrel yesterday, 25 September 2014.
Prime Minister Narendra Modi will reach the United States today, 26 September 2014, for a five-day official visit. The Indian Prime Minister will meet US President Barack Obama at the White House on 29-30 September 2014. The two leaders will discuss a range of issues of mutual interest in order to expand and deepen the US-India strategic partnership. They will discuss ways to accelerate economic growth, bolster security cooperation, and collaborate in activities that bring long-term benefits to both countries and the world.
Asian stocks dropped today, 26 September 2014, after steep losses for US stocks overnight. Key benchmark indices in Indonesia, Japan, South Korea, Hong Kong, Taiwan and Singapore were off 0.07% to 1.62%. China's Shanghai Composite was up 0.08%.
Japan's annual core consumer inflation eased in August, in another sign that the Bank of Japan could be forced into additional easing steps to meet its 2% price goal sometime next fiscal year.
Trading in US index futures indicated that the Dow could gain 24 points at the opening bell on Friday, 26 September 2014. US stocks fell sharply on Thursday, 25 September 2014, on a report that Russian lawmakers are drafting legislation that would allow the government to seize foreign assets in response to sanctions by US and the European Union imposed on account of Russia's aggression in Ukraine.
In Germany, a sentiment survey released today, 26 September 2014, showed that consumer confidence in Europe's biggest economy is expected to deteriorate for a second consecutive month in October. The monthly survey of GfK market research group showed consumer confidence falling to 8.3 points for October from an unrevised 8.6 points in September. Nonetheless, confidence remains "at a good level," GfK said.
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