A broad based decline was witnessed as Indian stocks fell amid weakness in Asian and European markets. The barometer index, the S&P BSE Sensex, fell below the psychological 28,000 mark. The Sensex hit its lowest closing level in almost six week. The 50-unit CNX Nifty hit 4-1/2 week closing low. The market breadth indicating the overall health of the market was weak, with more than two losers for every gainer on BSE. The Sensex lost 322.39 points or 1.15% to settle at 27,797.01. The BSE Mid-Cap index fell 1.57%. The BSE Small-Cap index declined 1.59%. The decline in both these indices was higher than the Sensex's decline in percentage terms. All the 12 sectoral indices on BSE edged lower.
Bank stocks declined. Shares of power generation and distribution firms also edged lower. GAIL (India) declined in volatile trade. Metal and mining stocks edged lower after Chinese state media reports today, 9 December 2014, said that the Chinese government might cut 2015's economic growth target to as low as 7%, down from the 2014 goal of about 7.5%. Cement stocks edged lower. Capital goods stocks also edged lower.
India's current account deficit (CAD) increased to $10.1 billion or 2.1% of GDP in Q2 September 2014, from $7.8 billion or 1.7% of GDP in Q1 June 2014 and from $5.2 billion or 1.2% of GDP in Q2 September 2013, data released by the Reserve Bank of India (RBI) after trading hours yesterday, 8 December 2014, showed.
After swinging alternately between gains and losses in earlier during the day, key indices drifted lower in mid-morning trade. Key benchmark indices extended losses later, with the Sensex falling below the psychological 28,000 level.
In overseas markets, European stocks edged lower after the latest data showed Germany's exports declined at the start of the fourth quarter in adjusted terms. Chinese stocks led decline in Asian markets after China's securities clearing house yesterday, 8 December 2014, tightened the use of corporate bonds as collateral for short-term financing. US stocks edged lower yesterday, 8 December 2014, as a withering selloff among energy companies, which closely tracked oil's continued price slide, dragged down key benchmark indices.
In the foreign exchange market, the rupee edged lower against the dollar as Indian stocks dropped.
Brent crude oil futures slumped to five-year low yesterday, 8 December 2014, on worries over a deepening supply glut. Deregulation of diesel price announced by the Indian government in October 2014 and a sharp decline in global crude oil prices over the past few months will help reduce the government's fuel subsidy burden and help contain its fiscal deficit. The steep slide 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. However, a weakness in rupee against the dollar will restrict the benefit of falling global crude oil prices to that extent. A weak rupee raises the cost of imports.
The S&P BSE Sensex lost 322.39 points or 1.15% to settle at 27,797.01, its lowest closing level since 30 October 2014. The index lost 355.58 points at the day's low of 27,763.82 in late trade. The index gained 38.13 points at the day's high of 28,157.53 in morning trade.
The 50-unit CNX Nifty lost 97.55 points or 1.16% to settle at 8,340.70, its lowest closing level since 7 November 2014. The index hit a low of 8,330.50 in intraday trade. The index hit a high of 8,444.50 in intraday trade.
The BSE Mid-Cap index fell 163.31 points or 1.57% to settle at 10,206.53. The BSE Small-Cap index fell 180.51 points or 1.59% to settle at 11,194.12. The decline in both these indices was higher than the Sensex's decline in percentage terms.
The market breadth indicating the overall health of the market was weak, with more than two losers for every gainer on BSE. 2,045 shares declined and 897 shares gained. A total of 96 shares were unchanged.
The total turnover on BSE amounted to Rs 3024 crore, lower than Rs 3165.91 crore during previous trading session.
All the 12 sectoral indices on BSE edged lower. The S&P BSE Auto index (down 1.26%), the BSE Bankex index (down 1.28%), the BSE Realty index (down 1.36%), the BSE Oil & Gas index (down 1.53%), the BSE Consumer Durables index (down 2.11%), the BSE Capital Goods index (down 2.29%), the BSE Metal index (down 2.71%) and the BSE Power index (down 2.75%) underperformed the Sensex.
The BSE Healthcare index (down 0.22%), the BSE IT index (down 0.25%), the BSE Teck index (down 0.72%) and the BSE FMCG index (down 0.94%) outperformed the Sensex.
Index heavyweight ITC fell 0.77% at Rs 394.80. The stock was volatile. The stock hit a record high of Rs 399.85 in intraday trade. The stock hit low of Rs 392 in intraday trade.
Metal and mining stocks edged lower after Chinese state media reports today, 9 December 2014, said that the Chinese government might cut 2015's economic growth target to as low as 7%, down from the 2014 goal of about 7.5%. China is the world's largest consumer of steel, copper and aluminum. Sesa Sterlite (down 4.94%), Hindalco Industries (down 2.61%), NMDC (down %), Hindustan Copper (down %), Steel Authority of India (Sail) (down 3.58%), National Aluminium Company (down 3.16%), Tata Steel (down 3.48%), Jindal Steel & Power (down 2.15%) and Hindustan Zinc (down 3.38%) declined.
JSW Steel fell 2.46%. JSW Steel during market hours today, 9 December 2014, said its crude steel production rose 3% to 11.07 lakh tonnes in November 2014 over November 2013. Production of long rolled products rose 29% to 1.86 lakh tonnes in November 2014 over November 2013. Production of flat rolled products remained unchanged at 8.31 lakh tonnes in November 2014 when compared to production in November 2013.
Meanwhile, JSW Steel after market hours today, 9 December 2014, clarified that there was no accident at the steel plant at Vijayanagar works of the company today, 9 December 2014. JSW Steel said that a sudden release of pressure resulted in a huge sound at the plant. The company added that the plant is working normally. JSW issued the clarification after media reports suggested that there was an accident at the steel plant at Vijayanagar works of JSW Steel today, 9 December 2014.
Capital goods stocks declined. Thermax (down 5.46%), ABB India (down 2.77%), L&T (down 2.88%), Bharat Heavy Electricals (down 2.94%), Crompton Greaves (down 3.18%) edged lower.
Siemens fell 2.98% at Rs 888.10. The stock hit a high of Rs 927.70 and a low of Rs 884.80. The company during market hours today, 9 December 2014, said that the company will be supplying power transmission technology to Power Grid Kala Amb Transmission, a wholly-owned subsidiary of Power Grid Corporation of India (PGCIL). The equipment to be supplied is for the upcoming 400/220 kV GIS substation at Kala Amb in Himachal Pradesh and is the first GIS substation with FSC awarded in India under the build, own, operate and maintain (BOOM) segment, Siemens said in a statement.
GAIL (India) fell 0.94% at Rs 462.25. The stock hit a high of Rs 470.80 and a low of Rs 459.55. The company during market hours today, 9 December 2014, said that the Uttar Pradesh state government has agreed to constitute a high power committee to provide single window clearance for the pipeline construction activities for the company's Jagdishpur-Haldia natural gas pipeline project in Uttar Pradesh. The committee will help in securing various statutory clearances like forest, environments, PWD, irrigation, industries etc and also give administrative support for the pipeline construction activities, GAIL (India) said in a statement.
GAIL's 2,050 KM Jagdishpur-Haldia natural gas pipeline will serve as the 'Energy Highway' to carry the efficient and environment-friendly fuel to Uttar Pradesh, Bihar, Jharkhand and West Bengal, GAIL (India) said.
ONGC fell 4.25% at Rs 352.50. The stock hit a high of Rs 367.90 and a low of Rs 351. ONGC after market hours yesterday, 8 December 2014, in a clarification with regard to news item ONGC to start KG-D5 block production by mid 2018, said that the company has initiated the process of developments of fields in the KG D5 block. The estimated reserves of Northern Discovery Area (NDA) of the block are 121 MMT of Oil in Place and 78 BCM of initial gas in place and that of Southern Discovery Area of the block are 80.8 BCM of initial gas in place, ONGC said. Considering the vast area for development, it is planned to develop the block in clusters, ONGC said.
Cairn India dropped 1.11% at Rs 254.90 as global crude oil prices slumped to five-year low yesterday, 8 December 2014. The stock hit 52-week low of Rs 252.15 in intraday trade. Lower crude oil prices would result in lower realizations from crude sales for oil exploration firms like Cairn India.
Shares of Indian Oil Corporation (IOCL) rose 1.15%. Minister of State (Independent Charge) for Petroleum & Natural Gas Dharmendra Pradhan informed the Lok Sabha in a written reply yesterday, 8 December 2014, that IOCL has planned to set up Liquefied Natural Gas (LNG) import, storage and regasification terminal with a capacity of 5 MMTPA at Kamrajar Port (formerly Ennore Port) in Tamil Nadu. The terminal is planned to be commissioned by end of 2017-18. IOCL presently does not have any proposal to set up a gas pipeline from Paradip to Vishakhapatnam, Pradhan said.
Auto stocks declined. Maruti Suzuki India (down 1.61%), Tata Motors (down 2.4%), Eicher Motors (down 4.52%), Ashok Leyland (down 2.72%), Bajaj Auto (down 0.28%), Hero MotoCorp (down 1.12%) and TVS Motor Company (down 0.61%) declined. Mahindra & Mahindra (M&M) rose 1.41%.
Bosch fell 0.92% at Rs 20,000. The stock hit a high of Rs 20,500 and a low of Rs 19,521.90. The company during market hours today, 9 December 2014, said that the illegal strike by the union and workmen of Bangalore plant has been called off with effect pursuant to the conclusion of wage settlement for the period 2013-16 between the company and the workmen union. Plant operations resumed from today, 9 December 2014, beginning with the first shift of production, the company said. The estimated drop in sales on account of the strike is approximately 1% during the strike period, Bosch said in a statement.
Bank stocks declined across the board. Among PSU bank stocks, Bank of India (down 3.62%), State Bank of India (down 2.2%), Punjab National Bank (down 2.11%), Bank of Baroda (down 3.32%) and Union Bank of India (down 4.21%) edged lower.
Canara Bank dropped 3.25%. Canara Bank after market hours today, 9 December 2014, said that the bank has cut interest rates on term deposits with effect from 10 December 2014. The bank has reduced the interest rate on term deposits below Rs 1 crore for maturity between 270 days to less than one year to 8.25% from 8.5%. The bank has reduced the interest rate for maturity of one year and above to less than three years to 9% from 9.05%. The bank has reduced the interest rate for maturity of three years and above to less than eight years to 8.75% from 9%.
For term deposits above Rs 1 crore, the bank has also reduced the interest rate on deposits for maturity between 46 days to 90 days to 7.75% from 8%. For deposits above Rs 1 crore for maturity between 91 days to 179 days, the rate has been cut to 8.25% from 8.5%. For deposits above Rs 1 crore for maturity of 180 days to not less than two year, the rate has been cut to 8.5% from 8.75%. For deposits above Rs 1 crore for maturity of two years and above to less than three years, the rate has been cut to 8% from 8.75%. For deposits above Rs 1 crore for maturity of three years and above to ten years, the rate has been cut to 8% from 8.5%.
Oriental Bank of Commerce fell 2.9%. Oriental Bank of Commerce after market hours yesterday, 8 December 2014, said it has reduced the interest rate on domestic term deposits (including NRO deposits) below Rs 1 crore with effect from 9 December 2014. Accordingly, the bank reduced interest rate on term deposits for maturity of one year to less than two years to 8.9% from 9%.
Among private bank stocks, Yes Bank (down 2.59%), Federal Bank (down 2.23%), Axis Bank (down 1.34%), IndusInd Bank (down 1.02%), ING Vysya Bank (down 0.94%), ICICI Bank (down 1.04%), and Kotak Mahindra Bank (down 1.37%) declined. HDFC Bank rose 0.15%.
Power generation and distribution stocks declined. Reliance Power (down 1.75%), Adani Power (down 2.79%), NTPC (down 3.57%), NHPC (down 1.53%), Reliance Infrastructure (down 3.45%), GVK Power & Infrastructure (down 2.67%) and Tata Power Company (down 4.15%) edged lower.
Minister of state for Power, Coal & New and Renewable Energy (Independent Charge) Piyush Goyal said in a written reply to a question in the Rajya Sabha yesterday, 8 December 2014, that CIL has been impressed upon to enhance production of domestic coal in the country and power utilities have also been advised to enhance import of coal to meet the shortfall in domestic availability of coal. Goyal further stated that during April 2014 to October 2014, there has been a growth of 15.4% in coal-based generation over the corresponding period of last year. Coal supply from CIL sources to power utilities in the country has improved, Goyal said. With a view to monitor coal supplies to power utility sector, an Inter-Ministerial Sub-Group comprising representatives of Ministry of Power, Ministry of Coal and Ministry of Railways has been constituted. This Sub-Group takes various operational decisions for meeting any contingent situations relating to power sector including critical coal stock position, Goyal said.
In reply to another question on the exercise of coal rationalization, Goyal said in a written reply in the Rajya Sabha that the exercise of coal rationalisation is expected to optimize overall materialisation of coal at thermal power plants and one of the benefits will be increased power generation and reduction in power shortages in the country. KPMG has submitted a draft report on coal rationalisation to the government, Goyal said. However, figures of savings in transportation cost are dynamic and subject to acceptance and implementation of the proposal in part or totality by all the participating stakeholders, Goyal said.
Coal India lost 0.91% at Rs 361. The stock hit a high of Rs 365 and a low of Rs 356.45.
Sun Pharmaceutical Industries rose 1.05% at Rs 837.50. Ranbaxy Laboratories rose 3.06% at Rs 644.30. The Ministry of Corporate Affairs after trading hours yesterday, 8 December 2014, announced that the Competition Commission of India (CCI) in its meeting held on 5 December 2014 approved the proposed merger between Sun Pharmaceutical Industries and Ranbaxy Laboratories, subject to the parties inter alia carrying out the divestiture of their products relating to seven relevant markets for formulations. The CCI also directed that the proposed merger shall not take effect before the parties have carried-out the divestiture of the products so specified as per the order of the CCI. Sun Pharma and Ranbaxy in a joint statement issued after trading hours yesterday, 8 December 2014, said that these products constitute less than 1% of the combined entity's revenue in India. The two companies said they are looking forward to progressing towards the completion of the transaction and will comply with the conditions laid down by the CCI within the specified time.
Cadila Healthcare lost 0.63% at Rs 1,576.05. The stock hit a high of Rs 1,595 and a low of Rs 1,559.20. The company during market hours today, 9 December 2014, said it has launched world's first biosimilar of Adalimumab - the world's largest selling therapy. Developed by the researchers at the Zydus Research Centre, the biosimilar has been approved by the Drug Controller General of India and will be marketed under the brand name, Exemptia to treat auto immune disorders such as rheumatoid arthritis, juvenile idiopathic arthritis, psoriatic arthritis and Ankylosing Spondylitis, Cadila Healthcare said in a statement.
HCL Technologies lost 0.04% at Rs 1,561.60. The stock hit a high of Rs 1,575.65 and a low of Rs 1,548.45. The company during market hours today, 9 December 2014, said that the company has signed an agreement with Washington Gas, which distributes natural gas to about 1.1 million residential, commercial and industrial customers in the District of Columbia, Maryland and Virginia. HCL Technologies has been engaged to perform an application modernization for Washington Gas' legacy mainframe customer care and billing software, leveraging HCL's customer engagement expertise, the company said in a statement.
Cement stocks edged lower. Ambuja Cements (down 2.12%), ACC (down 3.04%), UltraTech Cement (down 0.8%) declined. Shree Cement rose 0.04%.
Grasim Industries was off 2.13% at Rs 3,366.25. Grasim has exposure to the cement sector through its subsidiary UltraTech Cement.
Reliance Communications (RCom) fell 3.43% at Rs 95.65. The stock hit a high of Rs 100.55 and a low of Rs 95.20. With respect to media reports titled "Rcom signs deal with Ericsson" Reliance Communications after market hours yesterday, 8 December 2014, said that as a routine ongoing business, the company has realigned some of its outsourced activities between existing vendors and signed managed service contract with Ericsson on a pan-India basis.
DLF fell 0.69% at Rs 159.05. The stock hit a high of Rs 162.40 and a low of Rs 157.25. The company before market hours today, 9 December 2014, said that DLF Home Developers (a wholly subsidiary of the company) has just been made aware of the Order passed on 8 December 2014 by Single Bench of High Court regarding its "Riverside Project" at Chilavanoor, Vyttila, Cochin. This order comes as a result of a writ filed by a private individual in 2012 when company's applications for CRZ and MoEF clearance were under consideration by concerned authorities, (which approvals were subsequently granted in December 2013 by State Environment Impact Assessment Authority, a body constituted under the aegis of MoEF, Govt. of India), DLF said. The company awaits the full text of the order so as to get a detailed understanding of the matter after which it will take appropriate remedial measures in consultation with its legal counsel, DLF said.
DLF said that the company is a highly compliance oriented company which takes all necessary approvals to complete construction formalities. In case of Riverside project also, all required approvals like Building Permit, NOC from Pollution Control Board, Fire & Rescue Department, Naval Airport and also final orders of Environment cum CRZ clearance have been taken, DLF said. DLF said that according to a High Court order dated 19 August 2014, the High Court had clarified that the state government and Chief Secretary have no jurisdiction over approvals granted by SEIAA/MoEF, and any observations by the state government could be treated as for information purpose only. On the same day, another High Court order was passed by a two member bench dismissing a writ filed by another private individual seeking action against the company on basis of the state government/Chief Secretary's report, DLF said.
The Sensex fell for the third day in a row today, 9 December 2014. The Sensex lost 765.81 points or 2.68% in three trading days from a recent high of 28,562.82 on 4 December 2014. The Sensex has declined 896.98 points or 3.12% in this month so far (till 9 December 2014). The Sensex has gained 6,626.33 points or 31.29% in calendar year 2014 so far (till 9 December 2014). From a record high of 28,822.37 struck on 28 November 2014, the Sensex has fallen 1,025.36 points or 3.55%. From a 52-week low of 19,963.12 on 4 February 2014, the Sensex has risen 7,833.89 points or 39.24%.
In the foreign exchange market, the rupee edged lower against the dollar as Indian stocks dropped. The partially convertible rupee was hovering at 61.9025, compared with its close of 61.845 during the previous trading session.
Brent crude oil futures rebounded after closing at the lowest price in more than five years amid competition between OPEC's largest members, Iraq and Saudi Arabia. Brent for January settlement was up 28 cents a barrel at $66.47 a barrel. The contract had lost $2.88 a barrel to settle at $66.19 during the previous trading session, its lowest closing level since September 2009.
India's current account deficit (CAD) increased to $10.1 billion or 2.1% of GDP in Q2 September 2014, from $7.8 billion or 1.7% of GDP in Q1 June 2014 and from $5.2 billion or 1.2% of GDP in Q2 September 2013, data released by the Reserve Bank of India (RBI) yesterday, 8 December 2014 showed. The increase in CAD was primarily on account of higher trade deficit contributed by both a deceleration in export growth and increase in imports, the RBI said in a statement. On balance of payments (BoP) basis, merchandise imports jumped 8.1% in Q2 September 2014 as against a decline of 4.8% in Q2 September 2013, largely due to a sharp rise in gold imports, the RBI said. In the financial account, net flows through foreign direct investment were stable in Q2 September 2014, the RBI said.
Lower trade deficit coupled with a marginal rise in net services receipts moderated the CAD to $17.9 billion in H1 of 2014-15 or 1.9% of GDP, from $26.9 billion in H1 of 2013-14 or 3.1% of GDP. With a relatively higher growth in merchandise exports and marginal rise in merchandise imports, India's trade deficit narrowed to $73.2 billion in H1 of 2014-15, from $83.8 billion in H1 of 2013-14.
The government plans to introduce the Coal Mines (Special Provisions) Bill, 2014 to replace the Coal Mines (Special Provisions) Ordinance, 2014 in Lok Sabha this week. The government is also likely to introduce the constitutional amendment bill for the goods & services tax during the ongoing winter session of parliament. The government also plans to bring the MMDR Amendment Bill, 2014 during the ongoing session of parliament.
The government also intends to get the Insurance Laws Amendment Bill that seeks to enhance FDI limit in capital starved insurance sector passed during the ongoing winter session of parliament. Finance Minister Arun Jaitley yesterday, 8 December 2014, said that he is hopeful that the insurance market expansion would take place once the Insurance Amendment Bill is passed by the Parliament. The Finance Minister expressed his sense of satisfaction over the recommendations made by the Parliamentary Select Committee with regard to the Insurance Amendment Bill referred to it. Jaitley was speaking when Jerry Gimstone, Chairman, Standard Life, UK and Uday Kotak, Executive VC and MD, Kotak Mahindra Bank, both Co-Chair of India UK Financial Partnership called on the Finance Minister in his office yesterday, 8 December 2014.
The government will unveil industrial production data for October 2014 on Friday, 12 December 2014. Industrial production growth improved to 2.5% in September 2014, from a revised 0.5% growth in August 2014.
The government will release annual rate of inflation based on the combined consumer price indices (CPI) for urban and rural India for November 2014 on Friday, 12 December 2014. CPI for urban and rural India eased to 5.52% in October 2014, from 6.46% in September 2014.
The government will release the inflation data based on wholesale price index (WPI) for November 2014 on 15 December 2014. WPI eased to 1.77% in October from 2.38% in September 2014.
European shares edged lower today, 9 December 2014, after the latest data showed Germany's exports declined at the start of the fourth quarter in adjusted terms. Key indices in UK, Germany, and France were off 0.73% to 1.01%.
Germany's exports declined at the start of the fourth quarter in adjusted terms. In seasonally-adjusted terms, exports decreased by 0.5% on the month in October. Imports, however, decreased at a sharper pace, falling by 3.1%.
In UK, industrial production unexpectedly shrank in October, with the headline number slipping 0.1% month-on-month, according to data released by the Office for National Statistics today, 9 December 2014.
Chinese stocks led decline in Asian markets today, 9 December 2014, after China's securities clearing house yesterday, 8 December 2014, tightened the use of corporate bonds as collateral for short-term financing. Key indices in Japan, Taiwan, South Korea and Indonesia were off 0.4% to 0.68%. In Singapore, the Straits Time index was up 0.67%. In China, the Shanghai Composite index dropped 5.43%. In Hong Kong, the Hang Seng index fell 2.34%.
China's securities clearing house yesterday, 8 December 2014, said lower-rated bonds can no longer be used as collateral for some short-term loans. The nation's clearing agency for exchanges has stopped accepting new applications for repurchase agreements that involve bonds rated below AAA or sold by issuers graded lower than AA. The rule is an attempt to rein in risky debt issuances from struggling companies and local governments, according to reports.
Meanwhile, Chinese state media reports today, 9 December 2014, said that the government might cut 2015's economic growth target to as low as 7%, down from the 2014 goal of about 7.5%. China's top leadership convened today, 9 December 2014, for the annual Central Economic Work Conference in Beijing. China's official growth target numbers usually aren't publically announced until the national legislature convenes in the spring.
Trading in US index futures indicated that the Dow could fall 57 points at the opening bell today, 9 December 2014. US stocks slid from records yesterday, 8 December 2014 amid continued selling of energy producers as crude oil sank to a five-year low.
Federal Reserve Bank of Atlanta President Dennis Lockhart said yesterday, 8 December 2014 that he's sticking with his long-held view that the US central bank should hold off on raising rates until the middle of next year or later. The momentum I perceive in the economy gives me confidence that the Federal Open Market Committee can consider beginning to normalize interest rates in 2015, Mr. Lockhart reportedly said.
The Federal Open Market Committee (FOMC) next undertakes monetary policy review at a two-day meeting on 16-17 December 2014. The policy meeting will be keenly watched for any hints on the timing of interest rate increases in the world's biggest economy.
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