Weakness continued on the bourses in mid-morning trade, with key indices trading sharply lower for the day. The barometer index, the S&P BSE Sensex, and the 50-unit CNX Nifty, both, hit 1-1/2-week low. The market breadth indicating the overall health of the market was quite weak with more than three losers for every gainer on BSE. The Sensex was currently off 589.49 points or 2.12% at 27,252.83. The BSE Mid-Cap index was off 1.72%. The BSE Small-Cap index was off 1.8%. Indian stocks tumbled today amid a setback in global equities triggered by sharp slide in global crude oil prices.
Realty stocks declined. Bank of Baroda edged lower.
Growth at India's service sector activity moderated last month, according to a survey from HSBC Holdings Plc and Markit Economics released today, 6 January 2015.
Global crude oil prices tumbled yesterday, 5 January 2015. 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.
Foreign portfolio investors bought shares worth a net Rs 472 crore yesterday, 5 January 2015, as per provisional data.
In overseas markets, Asian stocks tumbled after overnight sharp slide in US stocks triggered by another plunge in oil prices. US stocks were clobbered yesterday, 5 January 2015, in an indiscriminate sell-off triggered by a renewed plunge in crude oil prices and surging dollar, which left the Dow Jones Industrial Average and the S&P 500 with their worst losses since October.
In the foreign exchange market, the rupee edged higher against the dollar.
Brent crude futures edged higher after a sharp setback overnight.
At 11:15 IST, the S&P BSE Sensex was down 589.49 points or 2.12% at 27,252.83. The index tumbled 628.95 points at the day's low of 27,213.37 in mid-morning trade, its lowest level since 26 December 2014. The index declined 143.39 points at the day's high of 27,698.93 in early trade.
The CNX Nifty was down 173.95 points or 2.08% at 8,204.45. The index hit a low of 8,193.35 in intraday trade, its lowest level since 26 December 2014. The index hit a high of 8,327.85 in intraday trade.
The BSE Mid-Cap index was off 181.18 points or 1.72% at 10,365.99. The BSE Small-Cap index was off 203.68 points or 1.8% at 11,116.53. The decline in both the indices was lower than the Sensex's decline in percentage terms.
The market breadth indicating the overall health of the market was quite weak with more than three losers for every gainer. On BSE, 1,827 shares declined and 553 shares rose. A total of 62 shares were unchanged.
Realty stocks declined. Anant Raj (down 5.4%), Indiabulls Real Estate (3.93%), Housing Development & Infrastructure (down 3.63%), Mahindra Lifespace Developers (down 2.99%), Oberoi Realty (down 2.42%), DLF (down 1.66%), Godrej Properties (down 1.38%), Prestige Estates Projects (down 1.15%), Sobha (down 0.96%) and Omaxe (down 0.35%) edged lower.
Unitech fell 3.31% at Rs 17.50. With reference to the media reports pertaining to Department of Telecom (DoT) moving Supreme Court for retaining Rs 160 crore bank guarantee given by Unitech Wireless, Unitech after market hours yesterday, 5 January 2015, clarified that Unitech has no economic interest in Unitech Wireless. Unitech has no exposure whatsoever to the telecom business, the company said.
Bank of Baroda fell 1.52% at Rs 1,078.85. The state-run bank during market hours today, 6 January 2015, said it has decided to raise funds by way of private placement of BASEL III compliant AT-1 Bonds of Rs 1000 crore for augmenting Tier-1 capital of the bank.
ING Vysya Bank fell 2.35% at Rs 851.10. Shares of Kotak Mahindra Bank were off 2% at Rs 1,238.45. In its clarification to a news item captioned "ING Vysya staff worry about merger", ING Vysya Bank during market hours today, 6 January 2015, said that there has been some misreporting in certain sections of the media where Kotak Mahindra Bank management has been inaccurately quoted stating that in the merged entity ING Vysya Bank employees would get pension but this would not be linked to dearness allowance. ING Vysya Bank further said that Kotak Mahindra Bank has stated that all protection related to employees has already been captured in the scheme of amalgamation involving the proposed merger of Kotak Mahindra Bank and ING Vysya Bank, which upon approval by RBI, Kotak Mahindra Bank shall fully standby and is obliged to comply with including sections related to employees' job security, wages, pension including dearness allowance linked adjustments, provident fund, gratuity etc. Kotak would like to start with a good faith constructive approach that secures all employees and creates growth for all stakeholders including employees after the RBI order.
In the foreign exchange market, the rupee edged higher against the dollar. The partially convertible rupee was hovering at 63.3725, compared with its close of 63.42 during the previous trading session.
Brent crude futures edged higher after a steep slide yesterday, 5 January 2015. Brent for February settlement was up 18 cents at $53.29 a barrel. The contract had lost $3.31 a barrel or 5.9% to settle at $53.11 a barrel yesterday, 5 January 2015, its lowest settlement since 1 May 2009, amid speculation rising global output will exacerbate oil supply glut.
Growth at India's service sector activity moderated last month, according to a survey from HSBC Holdings Plc and Markit Economics released today, 6 January 2015. The seasonally adjusted HSBC India Services PMI Business Activity Index declined to 51.1 in December 2014, from 52.6 in November 2014. Both activity and new orders in India's services sector expanded in December at lower rates compared with November. Except the financial intermediation sub-sector, all other sectors saw an expansion in order books in December 2014. Pranjul Bhandari, Chief India Economist at HSBC said that growth in the financial intermediation sector is key for funding a meaningful pick-up in economic growth. As per the survey, business expectations grew quickly at service providers in December 2014, led by the hotels and restaurants sub-sector. Inflationary pressures from both input and output prices remained modest.
Meanwhile, the Union Cabinet yesterday, 5 January 2015, approved the proposal of the Department of Telecom to proceed with auction in 800, 900 & 1800 MHz bands in February 2015. A government statement said that the estimated revenues from the auction is Rs 64840 crore of which Rs 16000 crore is expected to be realized in the current financial year.
The Prime Minister's Office (PMO) after trading hours yesterday, 5 January 2015, said that Prime Minister Narendra Modi has appointed economist Arvind Panagariya as Vice Chairman of NITI Aayog (National Institution for Transforming India). Economist Bibek Debroy and former secretary of defence research and development V.K. Saraswat have been appointed as two full-time members of NITI Aayog. The government had last week announced the setting up of NITI Aayog as replacement for the Planning Commission.
Asian markets were sharply lower today, 6 January 2015, after stocks on Wall Street declined overnight following the relentless fall in oil prices. Key indices in China, Japan, Hong Kong, Singapore, Taiwan, Singapore, South Korea, and Indonesia were off 0.46% to 2.85%.
The HSBC China services purchasing managers index rose to 53.4 in December from 53 in November, HSBC Holdings PLC said today, 6 January 2015, pointing to economic resilience outside the nation's factory sector. A reading above 50 indicates month-over-month expansion while a level below that points to contraction.
Trading in US index futures indicated that the Dow could fall 16 points at the opening bell today, 6 January 2015. US stocks fell sharply yesterday, 5 January 2015, with the S&P 500 extending losses into a fourth session, as energy companies took it on the chin as the price of oil fell to its lowest since April 2009.
The Fed will release minutes of the Federal Open Market Committee (FOMC) meeting held on 16 and 17 December 2014 tomorrow, 7 January 2015. The Fed minutes may shed light on policy makers' views on the appropriate timing of the first interest-rate increase since 2006 and the conditions that would prompt them to tighten policy. At the two-day meeting in December, the FOMC had said it would be patient on the timing of an increase, replacing an earlier pledge to keep borrowing costs low for a "considerable time".
The US Labor Department reports monthly payroll data for December 2014 on Friday, 9 January 2015.
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