Key benchmark indices languished in negative zone early afternoon trade as oil and gas stocks fell after the government's decision to defer revision in gas prices by three months. The barometer index, the S&P BSE Sensex, was down 148.10 points or 0.59%, off close to 145 points from the day's high and up about 35 points from the day's low. The market breadth indicating the overall health of the market turned negative from positive in early afternoon trade. The market sentiment was hit adversely as the government's decision to defer revision in gas prices by three months came contrary to market expectations that the new government will quickly take business-friendly decisions aimed at economic revival. Prime Minister Narendra Modi is perceived as a business friendly leader.
PSU OMCs edged lower after Oil Minister Dharmendra Pradhan reportedly said on Wednesday, 25 June 2014, evening that there is no proposal to raise kerosene or LPG prices. Shares of air conditioner makers and capital good stocks edged higher after the government on Wednesday, 25 June 2014, announced extension of concessional excise duty on some capital goods and consumer durables by six months up to 31 December 2014.
At 12:20 IST, the S&P BSE Sensex was down 148.10 points or 0.59% to 25,165.64. The index shed 184.68 points at the day's low of 25,129.06 in morning trade, its lowest level since 24 June 2014. The index fell 4.41 points at the day's high of 25,309.33 in early trade.
The CNX Nifty was down 41.45 points or 0.55% to 7,527.80. The index hit a low of 7,514.65 in intraday trade, its lowest level since 23 June 2014. The index hit a high of 7,570.20 in intraday trade.
The market breadth indicating the overall health of the market turned negative from positive in early afternoon trade. On BSE, 1,321 shares fell and 1,288 shares rose. A total of 106 shares were unchanged.
The BSE Mid-Cap index was down 6.33 points or 0.07% at 9,202.33. The BSE Small-Cap index was down 21.86 points or 0.22% at 9,990.93. Both these indices outperformed the Sensex.
PSU OMCs edged lower after Oil Minister Dharmendra Pradhan reportedly said on Wednesday, 25 June 2014, evening that there is no proposal to raise kerosene or LPG prices. Media reports had recently suggested that the Oil Ministry is mulling a staggered monthly price hike for LPG and kerosene, as is being done for diesel, in a bid to reduce the government's fuel subsidy burden. PSU OMCs have been raising diesel prices by 50 paise per litre every month after the Congress led United Progressive Alliance (UPA) government in January 2013 allowed PSU OMCs to increase the retail selling price within a small range every month.
HPCL (down 3.95% to Rs 399.70), Indian Oil Corporation (IOCL) (down 3.25% to Rs 330.55) and BPCL (down 3.42% to Rs 561) declined.
GAIL (India) fell 1.39% to Rs 460.90. The company clarified during market hours that apart from participation in Carrizo's Eagle Ford asset in 2011, GAIL (India) has so far not acquired any shale gas asset in US.
Shares of capital goods stocks gained after the government on Wednesday, 25 June 2014, announced extension of concessional excise duty on capital goods by six months up to 31 December 2014. L&T (up 1.31% to Rs 1,672), Bharat Heavy Electricals (Bhel) (up 1.08% to Rs 252.60) and Siemens (up 1.32% to Rs 899) gained.
Crompton Greaves (CG) rose 1.72% to Rs 200.85 after the company said after market hours on Wednesday, 25 June 2014, that along with the other consortium partners Fabricom and Iemants, the company has been selected by Van Oord, for the offshore wind project Gemini in the Netherlands. The volume of the order for the consortium is in excess of 150 million. CG's scope of the order covers approximately 30% of the overall contract. The project is expected to start in the second quarter of 2014 and likely to be completed in 2016. CG will design, deliver and install 2 high voltage offshore substations and 1 HV onshore substation.
Shares of air conditioner makers edged higher after the government on Wednesday, 25 June 2014, announced extension of concessional excise duty on consumer durables by six months up to 31 December 2014. Blue Star (up 3.34% to Rs 295.10), Whirlpool India (up 0.87% to Rs 313), Hitachi Home & Life Solutions (up 0.19% to Rs 282.70) gained. Voltas (down 0.52% to Rs 219.80), and Panasonic Appliances India (down 4.13% to Rs 99.90) declined.
A bout of volatility was witnessed as key benchmark indices trimmed losses after a weak opening. A sudden slide took key benchmark indices lower in morning trade. The Sensex languished in negative terrain in early afternoon trade.
Indian stocks may remain volatile today, 26 June 2014, as traders roll over positions in the futures & options (F&O) segment from the near month June 2014 series to July 2014 series. The near-month June 2014 F&O contract expire today, 26 June 2014.
In the foreign exchange market, the rupee edged lower against the dollar. The partially convertible rupee was hovering at 60.145, compared with its close of 60.125/135 on Wednesday, 25 June 2014.
The government on Wednesday, 25 June 2014, announced extension of concessional excise duty on automobiles, capital goods and consumer durables by six months up to 31 December 2014. It may be recalled that the Congress led United Progressive Alliance (UPA) government had in Interim Budget for 2014-15 in February this year had reduced excise duty on small cars, two wheelers, scooters and commercial vehicles to 8% from 12%. Excise duty on sports utility vehicles (SUVs) was cut to 24% from 30% and that on mid and large cars was cut to 24/20% from 27/24%. At that time, the reduction is excise duty was restricted till 30 June 2014 as an interim relief measure for the auto sector.
Similarly, excise duty was cut to 10% from 12% for a period up to 30 June 2014 for capital goods and consumer durable falling under chapter 84 and chapter 85 of the Schedule to the Central Excise Tariff Act. The chapter 84/85 includes products like boiler, turbine, transformers, motors, air conditioners, toaster, oven, switches, switchgears etc.
Asian stocks rose on Thursday, 26 June 2014, amid optimism the US economy is emerging from a worse-than-estimated contraction last quarter. Key benchmark indices in Japan, China, Indonesia, Singapore, Hong Kong, South Korea and Taiwan rose by 0.27% to 0.92%.
Trading in US index futures indicated that the Dow could gain 14 points at the opening bell on Thursday, 26 June 2014. US stocks gained for the first time in three days on Wednesday, 25 June 2014, as investors speculated the economy is recovering from a first-quarter contraction and Monsanto Co. announced a $10 billion stock buyback plan.
A report showed that US gross domestic product shrank 2.9% in the first quarter, the worst reading since 2009. Orders for business equipment climbed in May, a sign that corporate investment is helping revive the economy after slumping at the start of the year.
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