Key benchmark indices extended fall in morning trade and hit fresh intraday low. The barometer index, the S&P BSE Sensex, and the 50-unit CNX Nifty, both, hit their lowest level in 1-1/2 weeks. The market sentiment was adversely hit by fall in Asian stocks amid an escalation of violence in Iraq. The S&P BSE Sensex was down 132.67 points or 0.53%, off 172.91 points from the day's high and up 19.22 points from the day's low. The market breadth, indicating the overall health of the market, was weak.
Capital goods stocks dropped. PSU OMCs extended Friday's fall as Brent crude rose above $113 per barrel to near a nine-month high on Monday as Sunni insurgents advanced in Iraq, intensifying concerns over a potential disruption to oil exports from the second-largest OPEC producer.
Crude oil extended gains and tested nine-month highs on fears the insurgency in Iraq could worsen and affect oil exports. Increase in crude oil prices raised concerns of increase in India's current account deficit and fiscal deficit. India imports majority of its crude oil requirements.
Volatility struck bourses in early trade as the key benchmark indices dropped to intraday low after reversing initial fall. The market sentiment was adversely hit by fall in Asian stocks amid an escalation of violence in Iraq. Key benchmark indices extended fall in morning trade and hit fresh intraday low. The barometer index, the S&P BSE Sensex, and the 50-unit CNX Nifty, both, hit their lowest level in 1-1/2 weeks.
Foreign portfolio investors (FPIs) bought shares worth a net Rs 1099.92 crore on Friday, 13 June 2014, as per provisional data from the stock exchanges.
At 10:15 IST, the S&P BSE Sensex was down 132.67 points or 0.53% to 25,095.50. The index lost 151.89 points at the day's low of 25,076.28 in morning trade, its lowest level since 5 June 2014. The index gained 40.24 points at the day's high of 25,268.41 in early trade.
The CNX Nifty was down 46.35 points or 0.61% to 7,495.75. The index hit a low of 7,487.55 in intraday trade, its lowest level since 5 June 2014. The index hit a high of 7,548.60 in intraday trade.
The market breadth, indicating the overall health of the market, was weak. On BSE, 1,580 shares declined and 661 shares rose. A total of 75 shares were unchanged.
The BSE Mid-Cap index fell 163.41 points or 1.83% to 8,772.52. The BSE Small-Cap index declined 183.06 points or 1.89% to 9,491.52. Both these indices underperformed the Sensex.
The total turnover on BSE amounted to Rs 755 crore by 10:15 IST compared to Rs 365 crore by 09:30 IST.
Among the 30-share Sensex pack, 21 stocks declined and rest of them gained.
Tata Power Company (down 3.23%), Tata Steel (down 2.01%) and Coal India (down 2%) edged lower from the Sensex pack.
Capital goods stocks dropped. ABB India (down 3.05% to Rs 965.80), Bharat Heavy Electricals (Bhel) (down 1.49% to Rs 234.15), Crompton Greaves (down 3.1% to Rs 192), L&T (down 2.44% to Rs 1,644.55), Siemens (down 4.6% to Rs 862.15) and Thermax (down 1.54% to Rs 924.10) declined.
PSU OMCs extended Friday's fall as Brent crude rose above $113 per barrel to near a nine-month high on Monday as Sunni insurgents advanced in Iraq, intensifying concerns over a potential disruption to oil exports from the second-largest OPEC producer.
Indian Oil Corporation (IOCL) was down 2.16% to Rs 326. BPCL was down 1.11% to Rs 561.95. HPCL was down 1.98% to Rs 384.50.
Higher crude oil prices will increase under-recoveries of state-run oil marketing companies (PSU OMCs) on domestic sale of diesel, LPG and kerosene at controlled prices. The government has already freed pricing of petrol.
In the foreign exchange market, the rupee edged lower against the dollar as strong demand for the greenback from oil marketing companies weighed after global crude prices surged to nine-month highs on Friday. The partially convertible rupee was hovering at 60.01, compared with its close of 59.76/59.77 on Friday, 13 June 2014.
Brent rose 0.52% to $113.04 per barrel, after touching $114.69 on Friday, its highest since September. Brent added more than $4 last week. Crude extended gains and tested nine-month highs on fears the insurgency in Iraq could worsen and affect oil exports.
On the macro front, the rate of inflation based on the wholesale price index (WPI) is seen accelerating to 5.4% in May 2014, from 5.2% in April 2014, as per the median estimate of a poll of economists carried out by Capital Market. The government will announce data on inflation based on the wholesale price index (WPI) for May 2014 at 12:00 noon today, 16 June 2014. WPI inflation eased to 5.2% in April 2014, from 5.7% in March 2014, helped by a decline in fuel prices.
Asian stocks edged lower on Monday, 16 June 2014 amid an escalation of violence in Iraq. Key benchmark indices in Hong Kong, Japan, Singapore, Indonesia and fell by 0.02% to 1.05%. Key benchmark indices in China and Taiwan rose by 0.14% to 0.18%. South Korea's Seoul Composite index was unchanged.
Trading in US index futures indicated that the Dow could fall 48 points at the opening bell on Monday, 16 June 2014. US stock rose modestly on Friday, 13 June 2014 but trading was choppy with news out of Iraq resulting in price swings in late trade.
In economic news, the University of Michigan/Thomson Reuters sentiment gauge fell in June to 81.2 the lowest level in three months. Separately, government data ahead of the open showed wholesale prices for May fell unexpectedly.
On the global front, the Federal Open Market Committee (FOMC) undertakes monetary policy review at a two-day meeting that begins tomorrow, 17 June 2014. The FOMC after a monetary policy review on 30 April 2014 reduced its monthly debt purchases to $45 billion, its fourth straight $10 billion cut, and said further reductions are likely in "measured steps" if the economy continues to improve. The Fed also said at that time that it will keep the benchmark interest-rate target at almost zero for a "considerable time" after its bond-buying program ends.
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