A range bound movement was witnessed as key benchmark indices retained positive zone in afternoon trade. The 50-unit CNX Nifty was currently a tad above the psychological 8,000 mark, having alternately moved above and below that mark in intraday trade. The index had reclaimed that mark in opening trade. The barometer index, the S&P BSE Sensex, was currently up 45.38 points or 0.17% at 26,798.28. The market breadth indicating the overall health of the market turned negative from positive in afternoon trade. Brent crude oil prices extended its decline to a third day. Falling crude oil prices augur well for India as the country imports 80% of its crude oil requirement. However, a slide in rupee against the dollar will restrict the benefit of falling crude oil prices.
Shares of public sector oil marketing companies rose across the board. Hotel stocks were also in demand.
Meanwhile, Japanese telecommunications company SoftBank Corp. and Indian e-retailer Snapdeal today, 28 October 2014, announced definitive agreements under which the SoftBank Group will become the largest investor in Snapdeal, through a total investment of $627 million. Separately, SoftBank Corp. and ANI Technologies -- which runs the popular Ola Cabs taxi booking service in India -- announced a definitive agreement under which SoftBank Group will lead an investment of $210 million in Ola along with existing investors. Both Snapdeal and ANI Technologies are not listed on the bourses.
The Indian government issued a statement today, 28 October 2014, stating that Chairman and CEO of SoftBank, Mr. Masayoshi Son told the Minister for Communications and Information Technology and Law & Justice Mr. Ravi Shankar Prasad that SoftBank would like to invest approximately $10 billion in India in the coming years. Son met Prasad in New Delhi last evening. Son placed it on record that India is the top most priority for SoftBank. He further expressed immense faith in the great eCommerce potential of India. He estimated it to become a $0.5 trillion business in the next 10 years, the Ministry of Communications & Information Technology said in a statement.
In overseas markets, Asian stocks fell after American data from home sales to manufacturing fell short of estimates and investors awaited a Federal Reserve decision on its stimulus program.
In the foreign exchange market, the rupee edged lower against the dollar.
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Brent crude oil prices extended its decline to a third day on ample global oil supplies.
Indian stocks may remain volatile this week as traders roll over positions in the futures & options (F&O) segment from the near month October 2014 series to November 2014 series. The near month October 2014 derivatives contract expire on Thursday, 30 October 2014.
At 13:15 IST, the S&P BSE Sensex was up 45.38 points or 0.17% at 26,798.28. The index jumped 112.21 points at the day's high of 26,865.11 in morning trade. The index rose 11.25 points at the day's low of 26,764.15 in early afternoon trade.
The CNX Nifty was up 14.95 points or 0.19% at 8,006.65. The index hit a high of 8,020.80 in intraday trade. The index hit a low of 7,995.05 in intraday trade.
The BSE Mid-Cap index was off 2.06 points or 0.02% at 9,590.03, underperforming the Sensex. The BSE Small-Cap index was up 38.17 points or 0.36% at 10,680.86, outperforming the Sensex.
The market breadth indicating the overall health of the market turned negative from positive in afternoon trade. On BSE, 1,282 shares fell while 1,267 shares rose. A total of 120 shares were unchanged.
Among the 30 Sensex shares, 16 fell and the remaining shares rose.
Hero MotoCorp (down 2.19%), Bharti Airtel (down 1.89%), Hindustan Unilever (down 1.65%), Bharat Heavy Electricals (down 1.59%), Bajaj Auto (down 1.48%), Dr Reddy's Laboratories (down 1.22%), Reliance Industries (down 0.96%), Maruti Suzuki India (down 0.87%) and ONGC (down 0.73%) edged lower from the Sensex pack.
GAIL (India) (up 2.18%), State Bank of India (up 1.69%), Sun Pharmaceuticals Industries (up 1.55%), Tata Power (up 1.52%), ICICI Bank (up 1.50%), Mahindra & Mahindra (up 1.35%) and Cipla (up 1.25%), edged higher from the Sensex pack.
Hotel stocks were in demand. Indian Hotels Company (up 3.73%), EIH (up 3.20%), Hotel Leela Venture (up 2.80%) and Taj GVK Hotels & Resorts (up 1.29%), edged higher.
Shares of public sector oil marketing companies rose across the board. BPCL (up 1.97%), Indian Oil Corporation (up 1.40%) and HPCL (up 1.22%) edged higher.
The government on 18 October 2014 announced deregulation of diesel prices. Soon after the announcement, Indian Oil Corporation (IOCL) on that day announced a reduction in diesel price by Rs 3.37/litre (including VAT) in Delhi with corresponding decrease in other price in other states from the midnight of 18/19 October 2014. The movement of prices in international oil market and rupee dollar exchange rate shall continue to be closely monitored and developing trends of the market will be reflected in future price changes in diesel prices, IOCL said at that time.
In the foreign exchange market, the rupee edged lower against the dollar. The partially convertible rupee was hovering at 61.3275, compared with its close of 61.31 during the previous trading session.
Brent crude oil prices extended its decline to a third day on ample global oil supplies. Brent crude for December delivery was off 23 cents at $85.60 a barrel. The contract had lost 30 cents to settle at $85.83 a barrel during the previous trading session.
The government's decision this month to decontrol diesel prices and a sharp decline in global crude oil prices recently will help India in containing its fiscal deficit. The fall 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. A slump in Brent crude since the end of June contributed to consumer-price index slowing to 6.46% last month, the least since 2012.
However, a slide in rupee against the dollar will restrict the benefit of falling crude oil prices.
Asian stocks fell today, 28 October 2014, after American data from home sales to manufacturing fell short of estimates and investors awaited a Federal Reserve decision on its stimulus program. Key benchmark indices in Indonesia, South Korea, Singapore and Japan were off 0.33% to 0.50%. Key benchmark indices in China, Hong Kong and Taiwan were up 1.65% to 2.07%.
Data from China's statistics bureau showed profit at China's industrial companies grew 0.4% last month, compared with a 0.6% drop in August.
Trading in US index futures indicated that the Dow could gain 43 points at the opening bell today, 28 October 2014. US stocks ended mostly higher on Monday, 27 October 2014, with gains limited by weak economic data.
Data yesterday, 27 October 2014, indicated uneven economic growth in the US. Contracts to purchase previously owned homes rose less than forecast in September, showing housing will take time to gain momentum. Another release showed growth in services activity slowed this month, while the Dallas Fed's gauge of regional manufacturing fell.
A two-day meeting of the Federal Open Market Committee (FOMC) on US monetary policy review begins today, 28 October 2014. The Fed is expected to announce the end of quantitative easing after the meeting. Investors will be looking to see if the Fed drops the "considerable period" language in referencing its plans keeping rates low, at the two-day policy meeting, which concludes tomorrow, 29 October 2014. As several Fed officials have come out with dovish comments recently, investors largely expect that guidance to be reiterated.
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