Key benchmark indices settled lower after hovering in red for most part of the trading session on weak global cues. The market breadth indicating the overall health of the market was negative. The barometer index, the S&P BSE Sensex, and the 50-unit CNX Nifty, both, hit their lowest closing level in almost a week. The Sensex declined 62.52 points or 0.23% to settle at 26,567.99. Meanwhile, the result of a survey showed slowdown in growth in India's manufacturing sector in September 2014. Foreign portfolio investors (FPIs) sold shares worth a net Rs 441.12 crore into the secondary equity market yesterday, 30 September 2014.
Shares of private banks declined. Shares of public sector banks were mixed. Mahindra & Mahindra (M&M) rose after the company reported good auto and tractor sector sales in September. Most PSU OMCs gained as crude oil prices slumped yesterday, 30 September 2014. IT stocks rose. Capital goods stocks declined. Index heavyweight and cigarette maker ITC fell. Telecom stocks dropped. Realty stocks extended Tuesday's losses. Airliners rose after Indian Oil Corporation cut jet fuel price by an average of nearly 3% across cities in India on Tuesday, 30 September 2014.
Meanwhile, a joint statement issued after Prime Minister Narendra Modi's first bilateral meeting with US President Barack Obama at the White House yesterday, 30 September 2014, stated that the two leaders have pledged to establish an Infrastructure Collaboration Platform convened by the Ministry of Finance and the Department of Commerce to enhance participation of US companies in infrastructure projects in India. The two countries plan to work expeditiously through several joint initiatives to facilitate greater confidence in cross-border trade and investment.
On the macro front, data released after trading hours yesterday, 30 September 2014, showed that the combined growth in production of the eight core industries accelerated to 5.8% in August 2014. Another data released after trading hours yesterday, 30 September 2014, showed that the fiscal deficit during the first five month of the current fiscal year was 74.9% as a proportion of Budget Estimate (BE) for the full year, same as 74.6% in the same period last year.
Key indices languished in red for most of the trading session after moving in a narrow range.
In overseas markets, European stocks edged lower after the latest data showed that activity in the eurozone's manufacturing sector slowed more sharply than first estimated in September and after Italy cut its economic-growth forecasts. Asian stocks fell after consumer confidence in the US unexpectedly declined and Hong Kong braced for bigger protests as Chinese holidays started. US stocks declined yesterday, 29 September 2014, as energy producers sank with the price of oil.
In the foreign exchange market, the rupee edged higher against the dollar in choppy trade.
Brent crude oil prices edged higher as a positive Chinese economic survey helped the crude benchmark start October firmer after it fell to its weakest level since 2012 in the previous session.
The S&P BSE Sensex declined 62.52 points or 0.23% to settle at 26,567.99, its lowest closing level since 25 September 2014. The index lost 82.29 points at the day's low of 26,548.22 in late trade. The index rose 53.19 points at the day's high of 26,683.70 in early trade.
The CNX Nifty dropped 19.25 points or 0.24% to settle at 7,945.55, its lowest closing level since 25 September 2014. The index hit a low of 7,936.70 in intraday trade. The index hit a high of 7,977.50 in intraday trade.
The total turnover on BSE amounted to Rs 2654 crore, lower than Rs 3820.54 crore on Tuesday, 30 September 2014.
The market breadth indicating the overall health of the market was negative. On BSE, 1,636 shares fell and 1,279 shares rose. A total of 96 shares were unchanged.
The BSE Mid-Cap index fell 18.95 points or 0.2% to settle at 9,511.40. The BSE Small-Cap index declined 39.64 points or 0.37% to settle at 10,641.82.
Index heavyweight and cigarette maker ITC lost 1.81% to Rs 364.05. The stock hit high of Rs 370 and low of Rs 363.45.
Telecom stocks dropped. Bharti Airtel (down 0.27%), MTNL (down 1.85%) Tata Teleservices (Maharashtra) (down 1.09%) and Reliance Communications (down 1.92%) declined. Idea Cellular rose 0.48%.
Capital goods stocks declined. Bharat Heavy Electricals (Bhel) (down 0.65%), L&T (down 0.82%), Thermax (down 3.11%) and Siemens (down 1.13%) declined.
ABB India lost 3.01%. The company after trading hours yesterday, 30 September 2014, announced winning an order worth around Rs 55 crore from Tamil Nadu state government entity Tamil Nadu Transmission Corporation to build a new substation in downtown Chennai. The project is scheduled to be completed in 2015.
Most PSU OMCs gained as crude oil prices slumped yesterday, 30 September 2014. HPCL (up 1.16%) and Indian Oil Corporation (IOCL) (up 0.37%) edged higher. BPCL fell 0.11%.
Lower crude oil prices could reduce under-recoveries of PSU OMCs on domestic sale of LPG and kerosene at controlled prices. The government has already freed pricing of petrol.
Indian Oil Corporation on Tuesday, 30 September 2014, cut retail selling price of petrol at Delhi by Rs 0.65/litre (including VAT), with corresponding decrease in other states. Meanwhile, the government has reportedly put off revision in diesel price until the return of Prime Minister Narendra Modi from the US.
Realty stocks extended Tuesday's losses. Housing Development & Infrastructure (HDIL) (down 2.76%), Anant Raj (down 3.99%), Sobha (down 3.46%) and D B Realty (down 2.45%), edged lower. Unitech rose 1.06%.
DLF shed 0.3%. The company after market hours yesterday, 30 September 2014, in a clarification with regard to news item titled "DLF under scanner for service tax evasion", said that the charges referred to in the news report are completely misleading and incorrect and the company denies them outright. DLF and its associates pay a total service tax of more than Rs 500 crore per annum to government of India and there is no question of evading service tax of Rs 30 crore across multiple years as speculated in the said news report, DLF said. The company further said that it has so far not received any finding or observation from any wing of the service tax department with reference to the matter mentioned in the said news report.
IT stocks rose. Wipro (up 3.2%), Tech Mahindra (up 1.39%), TCS (up 1.37%) and HCL Technologies (up 1.43%) gained.
Infosys rose 2.66% after the company before market hours today, 1 October 2014, announced that it is extending its relationship with Oracle to enhance support for a range of innovative solutions and services on new technology platforms. These platforms will enable enterprises to use Oracle products to reshape their business and create new innovative ecosystems, Infosys said in a statement.
Bajaj Auto fell 0.6% to Rs 2,334.90. The stock was volatile. The stock hit high of Rs 2,370 and low of Rs 2,330. The company said during market hours its total sales rose 9% to 3.99 lakh units in September 2014 over September 2013. Motorcycles sales rose 7% to 3.47 lakh units in September 2014 over September 2013. Commercial vehicles sales rose 19% to 52,440 units in September 2014 over September 2013. Exports rose 19% to 1.74 lakh units in September 2014 over September 2013.
Hero MotoCorp rose 1.24% after the company after trading hours yesterday, 30 September 2014, said that the company has clocked sales of 6 lakh units of two-wheelers in the month of September 2014. This is a robust growth of more than 30% over the corresponding month last year, Hero MotoCorp said. As despatches will continue till midnight of 30 September 2014, the final tally for the month is expected to be much higher, Hero MotoCorp said. The company further said that it has clocked over 1.7 lakh units in retail sales during the first six days of Navratri this year, which is a growth of more than 15% over the corresponding period last year. Hero MotoCorp further said that the company has lined up over 10 new product launches, including refreshes and variants, which will reach all dealerships across the country during the current festive season.
Mahindra & Mahindra (M&M) rose 2.07% after the company reported good auto and farm equipment sector sales in September. The company said during market hours its total auto sales rose 4% to 44,911 units in September 2014 over September 2013. Exports declined 8% to 2,503 units in September 2014 over September 2013. Domestic sales rose 5% to 42,408 units in September 2014 over September 2013.
Separately, the company said during market hours that its farm equipment sector's sales rose 8% to 28,739 units in September 2014 over September 2013. Exports jumped 98% to 1,418 units in September 2014 over September 2013. Domestic sales rose 5% to 27,321 units in September 2014 over September 2013.
Maruti Suzuki India declined 3.11%. The company said during market hours that its total sales rose 4.6% to 1.09 lakh units in September 2014 over September 2013. Domestic sales rose 9.8% to 99,290 units in September 2014 over September 2013. Exports declined 28.2% to 10,452 units in September 2014 over September 2013.
Separately, the company announced after market hours on Tuesday, 30 September 2014, that it will proactively inspect and repair the wiring harness fitment of 69,555 diesel vehicles (55,938 units of old Dzire, 12,486 units of old Swift and 1,131 units of Ritz) manufactured between 8 March 2010 and 11 August 2013. This exercise is limited to vehicles within the above specified range and does not pertain to any other vehicle of the company or its exports. This exercise does not pertain to any other model of the company or its exports. The problem was noticed based on feedback monitoring and internal checks by the company. Accordingly proactive action has been initiated in the interest of customers, the company said in a statement.
Hindalco Industries declined 1.05%. The company after trading hours yesterday, 30 September 2014, clarified that the company has not obtained any benefit under the SEZ Scheme and hence, there is no financial obligation on the company arising from cancellation of SEZ. Hindalco issued the clarification after media reports stated that the government has cancelled approvals of nine special economic zones, including that of Hindalco Industries, as no satisfactory progress was made to execute the projects. Hindalco said that the company had initiated setting up of two aluminium projects, viz., Aditya Aluminium in Orissa and Mahan Aluminium in Madhya Pradesh under SEZ Scheme. Subsequently, it was observed that establishing the projects under Domestic Tariff Area (DTA) was more attractive for the company. Accordingly, the company decided to exit from the SEZ Scheme and established the projects under DTA.
IDFC fell 0.8%. The Reserve Bank of India (RBI) yesterday, 30 September 2014, notified decrease in the ceiling for purchase of equity shares and convertible debentures by Foreign Institutional Investors (FIIs)/Registered Foreign Portfolios Investors (RFPIs) in IDFC from 50% to 48%. RBI said that IDFC has passed resolutions at the Board of Directors' level and a special resolution by the shareholders agreeing for decreasing the limit for investment in the company by FIIs/RFPIs. RBI further said that IDFC will remain included in the ban list for FIIs/RFPIs as the 48% ceiling has been reached.
Shares of private banks declined. IndusInd Bank (down 2.97%), Yes Bank (down 0.17%), ICICI Bank (down 0.57%), Federal Bank (down 1.75%), HDFC Bank (down 0.53%) and Kotak Mahindra Bank (down 0.28%), edged lower. Axis Bank rose 0.71%.
Shares of public sector banks were mixed. Bank of India (up 0.32%), Union Bank of India (up 0.93%), Dena Bank (up 0.69%), Canara Bank (up 1.36%), edged higher. Bank of Baroda declined 0.5%.
Financial Services Secretary G.S. Sandhu was quoted by the media as saying on Tuesday, 30 September 2014, that state-run banks will very soon start raising funds from markets as part of government's efforts to infuse capital into banks to meet the Basel III norms.
State Bank of India (SBI) fell 0.96%. The bank announced before market hours it has decided to reduce retail term deposit interest of 7 days to 45 days tenure to 6% from 7% with effect from 7 October 2014. For the other tenures retail deposit rates has been kept same as earlier.
Punjab National Bank declined 0.43%. The bank after trading hours yesterday, 30 September 2014, said that the bank is raising Rs 1000 crore Tier-II (Basel III compliant) Capital Bonds at an annual coupon rate of 9.25% on private placement basis.
Airliners rose after Indian Oil Corporation cut jet fuel price by an average of nearly 3% across cities in India on Tuesday, 30 September 2014. Jet Airways (up 1.8%) and SpiceJet (up 1.14%) gained. Jet fuel or aviation turbine fuel (ATF) typically makes up almost half of an airline's operating cost. Prices of jet fuel are directly linked to crude oil prices.
The Sensex lost 7.60 points or 0.03% in September 2014. The Sensex has gained 5,397.31 points or 25.49% in calendar year 2014 so far (till 1 October 2014). From a record high of 27,354.99 on 8 September 2014, the Sensex has declined 787 points or 2.87%. From a 52-week low of 19,264.72 on 1 October 2013, the Sensex has risen 7,303.27 points or 37.91%.
In the foreign exchange market, the rupee edged higher against the dollar in choppy trade. The partially convertible rupee was hovering at 61.6425, compared with its close of 61.76 during the previous trading session.
Brent crude oil prices edged higher as a positive Chinese economic survey helped the crude benchmark start October firmer after it fell to its weakest level since 2012 in the previous session. Brent for November settlement was up 23 cents at $94.90 a barrel. The contract had fallen $2.53 or 2.6% to settle at $94.67 a barrel yesterday, 30 September 2014.
The Reserve Bank of India is not biased towards either raising or cutting interest rates, and its monetary policy stance will depend only on inflation data, Governor Raghuram Rajan reportedly told analysts in a conference call today, 1 October 2014. The RBI kept its key policy repo rate unchanged at 8% yesterday, 30 September 2014, and said it will refrain from cutting interest rates until it is confident that consumer inflation can be reduced to a target of 6% by January 2016.
Meanwhile, the results of a survey showed that growth in the Indian manufacturing sector slowed in September 2014 to slowest since December 2013. Adjusted for seasonal factors, the headline HSBC India Purchasing Managers' Index dropped from 52.4 in August to 51 in September. Manufacturing output and new orders grow at weaker rates, the survey showed. On the flip side, Indian manufacturers saw robust expansion in new export business during the month. Inflationary pressures from both inputs and outputs eased further in September.
Data released by the government after trading hours on Tuesday, 30 September 2014, showed that eight core industries, comprising nearly 38% of the weight of items included in the index of industrial production (IIP), grew 5.8% in August 2014 up from 2.7% growth posted in July 2014. Meanwhile, the growth figure for August 2013 has been revised upwards to 4.7% from 3.8% reported earlier.
The fiscal deficit in April-August for the fiscal year ending 31 March 2015 (FY 2015) stood at Rs 397929 crore, which was 74.9% as a proportion of Budget Estimate (BE) same as 74.6% in the same period last year. The Budget has set the fiscal deficit target at 4.1% of GDP for fiscal 2015, down from 4.6% the previous fiscal.
Meanwhile, a joint statement issued after Prime Minister Narendra Modi's first bilateral meeting with US President Barack Obama at White House yesterday, 30 September 2014, stated that the two leaders have pledged to establish an Infrastructure Collaboration Platform convened by the Ministry of Finance and the Department of Commerce to enhance participation of US companies in infrastructure projects in India. The two countries plan to work expeditiously through several joint initiatives to facilitate greater confidence in cross-border trade and investment. Noting that two-way trade has increased five-fold since 2001 to nearly $100 billion, the two leaders committed to facilitate the actions necessary to increase trade another five fold. In order to raise investment by institutional investors and corporate entities, the leaders pledged to establish an Indo-US Investment Initiative led by the Ministry of Finance and the Department of Treasury, with special focus on capital market development and financing of infrastructure.
Indian financial markets remain closed tomorrow, 2 October 2014, on account of Mahatma Gandhi Jayanthi and again on Friday, 3 October 2014, on account of Dussehra.
European stocks edged lower today, 1 October 2014, after the latest data showed that activity in the eurozone's manufacturing sector slowed more sharply than first estimated in September and after Italy cut its economic-growth forecasts. Key benchmark indices in UK and France were off 0.38% to 0.45%. Germany's DAX was up 0.13%.
Markit Economics said today, 1 October 2014, the eurozone manufacturing sector slowed closer to stagnation in September, as inflows of new orders contracted for the first time since June 2013. Input costs and selling prices were both lower than in August. The final seasonally adjusted Markit Eurozone Manufacturing PMI fell to a 14-month low of 50.3, below the earlier flash estimate of 50.5 and August's reading of 50.7. The average PMI reading for the third quarter as a whole (50.9) was also the lowest since the same quarter of last year.
Meanwhile, the Italian government today, 1 October 2014, said the country's gross domestic product will shrink 0.3% this year, compared with its April prediction of an increase of 0.8%. It also forecast a slower-than-expected recovery in 2015, with GDP expanding 0.6% compared with a previous estimate of 1.3%
Asian stocks declined today, 1 October 2014, after consumer confidence in the US unexpectedly declined and Hong Kong braced for bigger protests as Chinese holidays started. Key benchmark indices in South Korea, Japan and Singapore were off 0.39% to 1.41%. Key benchmark indices in Indonesia and Taiwan rose 0.06% to 0.26%. Hong Kong is closed today and tomorrow for holidays, while mainland China's markets are shut through 7 October 2014.
Hong Kong's Chief Executive Leung Chun-ying faces a deadline to respond to demands for his resignation and for free elections in the city as pro-democracy protests entered a sixth day.
Growth in China's manufacturing sector held up in September as large state factories benefitted from steady domestic demand, welcome news for investors a day after China cut mortgage rates for the first time since 2008 to lift its flagging economy. The official Purchasing Managers' Index (PMI) hovered at 51.1, the National Bureau of Statistics said today, 1 October 2014. A PMI reading above 50 indicates growth on a monthly basis, and a reading below that points to contraction.
Property restrictions in China were eased for the first time since the global financial crisis yesterday, 30 September 2014.
Trading in US index futures indicated that the Dow could fall 6 points at the opening bell today, 1 October 2014. US stocks declined on Tuesday, 30 September 2014, as energy producers sank with the price of oil.
Confidence among US consumers fell to a four-month low in September as Americans' views of the labor market deteriorated. The Conference Board's index decreased to 86 last month. A separate report indicated home prices in 20 US cities rose in the year ended in July at the slowest pace in almost two years.
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