Key benchmark indices extended losses in early afternoon trade after data released by the government showed that the annual rate of inflation based on the wholesale price accelerated in May 2014. The barometer index, the S&P BSE Sensex, was down 108.79 points or 0.43%, off 149.03 points from the day's high and up 43.10 points from the day's low. The market breadth, indicating the overall health of the market, was weak. The market sentiment was hit adversely by increase in crude oil prices which stoked concerns of fuel price inflation and increase in India's current account deficit and fiscal deficit.
Shares of private sector banks were mixed. Yes Bank reversed intraday fall in volatile trade after the bank paid higher advance tax in Q1 June 2014. PSU bank stocks declined. Shares of infrastructure developers edged lower. Among auto ancillary stocks, shares of Motherson Sumi Systems scaled record high.
At 12:18 IST, the S&P BSE Sensex was down 108.79 points or 0.43% to 25,119.38. 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 39.75 points or 0.53% to 7,502.35. 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, 1,653 shares declined and 959 shares rose. A total of 101 shares were unchanged.
The BSE Mid-Cap index was off 58.40 points or 0.65% at 8,877.53. The BSE Small-Cap index was off 79.60 points or 0.82% at 9,594.98. Both these indices underperformed the Sensex.
The total turnover on BSE amounted to Rs 1743 crore by 12:15 IST compared to Rs 1292 crore by 11:15 IST.
Among the 30-share Sensex pack, 20 stocks declined and rest of them gained.
Mahindra & Mahindra (down 2.16%), Tata Steel (down 1.86%) and Reliance Industries (down 1.77%) edged lower from the Sensex pack.
Private sector bank stocks were mixed. Among private sector banks, ICICI Bank (down 0.77%), Kotak Mahindra Bank (down 0.59%) and Axis Bank (down 1.46%) declined. HDFC Bank rose 0.17%.
IndusInd Bank rose 1.66%. The stock turned ex-dividend today, 16 June 2014, for dividend of Rs 3.50 per share for the year ended 31 March 2014 (FY 2014).
Yes Bank rose 1.78% to Rs 536.75, with the stock reversing intraday fall in volatile trade. The stock hit high of Rs 537 and low of Rs 508.10 so far during the day. Yes Bank's advance tax payment rose 20.19% to Rs 125 crore in Q1 June 2014 over Q1 June 2013. Indian companies are required to pay not less than 15% of estimated tax liability for the full year on or before 15 June every year which is the first advance tax installment.
PSU bank stocks declined. State Bank of India (SBI) (down 1.2%), Canara Bank (down 2.9%), Union Bank of India (down 0.69%), Bank of India (down 1.05%), Bank of Baroda (down 0.28%) and Punjab National Bank (down 0.79%) declined.
Shares of infrastructure developers edged lower. L&T (down 2.31%), Punj Lloyd (down 0.99%), IVRCL (down 4.94%), GVK Power Infrastructure (down 2.06%), Lanco Infratech (down 4.87%), and IRB Infrastructure Developers (down 1.75%) declined. Jaiprakash Associates rose 1.61%.
Prime Minister Narendra Modi on Saturday, 14 June 2014, said the government would lay targeted focus on the areas of infrastructure, entrepreneurship and skill development.
GMR Infrastructure fell 2.87%. Kalindee Rail Nirman Engineers fell 2.87%. GMR Infrastructure during market hours today, 16 June 2014, said that a consortium led by GMR Infrastructure has won three construction packages of rail line doubling of Multi Modal Transport System (MMTS) - Phase II works on Secunderabad Division of South Central Railway in the State of Andhra Pradesh. Rail Vikas Nigam has issued the Letter of Award to the GMR consortium on 11 June 2014.
The total contract is valued at approximately Rs 389 crore of which GMR's share of work is about Rs 207 crore. The work includes Construction of Roadbed, Major & Minor bridges, Track Linking, Outdoor Signal & Telecom (S&T) Works, Over Head Electrification (OHE), Traction Sub Station (TSS) & General Electrical works for MMTS - Phase II.
GMR is the lead member of the consortium with TATA Projects & Kalindee Rail Nirman as the partner for OHE and Track works, S&T works respectively. The project is scheduled to commence by middle of July 2014, with a completion period of 30 months.
Motherson Sumi Systems rose 1.61% to Rs 322.40 after hitting a record high of Rs 327 in intraday trade.
The sentiment on the domestic bourses was hit adversely by increase in crude oil prices which stoked concerns of fuel price inflation and increase in India's current account deficit and fiscal deficit. India imports majority of its crude oil requirements.
Brent crude oil futures rose to near nine-month high today, 16 June 2014, on fears the insurgency in Iraq could worsen and affect oil exports. Brent crude oil futures for August delivery were up 71 cents at $113.17 a barrel.
Volatility struck the bourses in early trade as the key benchmark indices dropped to intraday low after reversing initial fall. 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 1-1/2-week low. A bout of volatility was witnessed in mid-morning trade as the key benchmark indices weakened once again after staging recovery from lower levels. Key benchmark indices extended losses in early afternoon trade after data released by the government showed that the annual rate of inflation based on the wholesale price accelerated in May 2014.
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, 13 June 2014. The partially convertible rupee was hovering at 60.07, compared with its close of 59.76/59.77 on Friday, 13 June 2014.
The annual rate of inflation based on the monthly wholesale price index (WPI) accelerated to 6.01% (provisional) for the month of May 2014, from 5.2% in April 2014, data released by the government today, 16 June 2014, showed. The WPI inflation for March 2014 was revised upwards to 6%, from 5.7% reported earlier. Build up inflation rate in the financial year so far was 0.78% compared to a build up rate of 0.76% in the corresponding period of the previous year. Non-food manufacturing inflation edged up to 3.8% in May 2014, from 3.4% in April 2014.
Prime Minister Narendra Modi on Saturday, 14 June 2014, said setting the economy on the right track would require unpleasant decisions and tough actions. He added that he was confident that the people would support these decisions, as they would be in the national interest. The Prime Minister said that the government would lay targeted focus on the areas of entrepreneurship, skill development and infrastructure, to harness the talent and energy of India's youth.
Modi called for two movements to be pursued in mission mode. He called for Swachh Bharat - Clean India, to be achieved by the 150th birth anniversary year of Mahatma Gandhi, in 2019. He also called for providing a home with basic amenities of water, power and sanitation, to all families by the 75th anniversary of Indian independence, in 2022. These missions would also build infrastructure and boost employment, the Prime Minister said. The Prime Minster was speaking at in a meeting with leaders from various walks of life in Goa.
Asian stocks edged lower on Monday, 16 June 2014 amid an escalation of violence in Iraq. Key benchmark indices in Hong Kong, Japan, Singapore and Indonesia fell by 0.03% to 1.09%. Key benchmark indices in China, South Korea and Taiwan rose by 0.07% to 0.73%.
Trading in US index futures indicated that the Dow could fall 31 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.
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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