A bout of volatility was witnessed as key benchmark indices trimmed losses after a sharp slide in mid-afternoon trade. The barometer index, the S&P BSE Sensex, and the 50-unit CNX Nifty trimmed losses after both these indices hit their lowest level in more than a week. The Sensex was currently trading below the psychological 29,000 mark after falling below that level in afternoon trade. The Sensex and the Nifty were both trading with losses of 1.83% each currently. The sharp slide for key indices came amid weakness in global stocks. European stocks fell as Greece worries bubbled to the surface again. Asian stocks fell as strong US jobs data fanned expectations that the US Federal Reserve may raise interest rates sooner than previously thought.
The Sensex was currently off 539.70 points or 1.83% at 28,909.25. Banking and metal stocks led the decline. Index heavyweights ITC, HDFC, HDFC Bank, ICICI Bank, L&T and Reliance Industries dropped. The market breadth indicating the overall health of the market was weak. The BSE Mid-Cap index was off 1.05%.
TCS edged lower after the IT major issued lower-than-expected outlook for Q4 March 2015. HCL Technologies dropped after the company said that Shiv Nadar Foundation sold 56 lakh shares of HCL Technologies in the open market today, 9 March 2015. Infosys fell after reports the company will delay the announcement of its Q4 March 2015 results.
Strong US jobs data for February 2015 has spurred speculation that the US Federal Reserve will bring forward the timing of interest-rate increases. There is a concern that a tighter monetary policy in the US may slow foreign portfolio flows into emerging markets. Higher interest rates will boost returns on US debt and bank deposits, drawing money back from riskier emerging markets.
Foreign portfolio investors (FPIs) bought shares worth a net Rs 79.84 crore on Thursday, 5 March 2015, as per provisional data released by the stock exchanges. Domestic institutional investors (DIIs) sold shares worth a net Rs 193.54 crore on Thursday, 5 March 2015, as per provisional data. The stock market was closed on Friday, 6 March 2015, on account of Holi.
In the foreign exchange market, the rupee edged lower against the dollar on global risk-off sentiment.
Brent crude oil futures edged lower as upbeat US jobs data pushed the dollar higher, outweighing geopolitical tensions and the threat of output cuts in Libya and Iraq. Global crude oil prices have witnessed high volatility recently after a steep slide in prices during the second half of calendar year 2014. Deregulation of diesel price announced by the Indian government in October 2014 and a decline in global crude oil prices will help reduce the government's fuel subsidy burden and help contain its fiscal deficit. The slide in global crude oil prices will also help India in containing its current account deficit and fuel price inflation. 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. India imports 80% of its crude oil requirement.
In overseas markets, European stocks fell as Greece worries bubbled to the surface again. Asian stocks dropped after strong US jobs data fanned expectations that the US Federal Reserve may raise interest rates sooner than previously thought. US stocks fell sharply on Friday, 6 March 2015, after stronger than expected data from the monthly jobs report heightened concerns that the Federal Reserve could raise interest rates by June 2015.
At 14:23 IST, the S&P BSE Sensex was down 539.70 points or 1.83% at 28,909.25. The index slumped 605.47 points at the day's low of 28,843.48, in mid-afternoon trade, its lowest level since 27 February 2015. The index fell 127.89 points at the day's high of 29,321.06 in early trade.
The CNX Nifty was down 163.25 points or 1.83% at 8,774.50. The index hit a low of 8,754.10 in intraday trade, its lowest level since 28 February 2015. The index hit a high of 8,891.30 in intraday trade.
The BSE Mid-Cap index was down 116.38 points or 1.05% at 10,928.70. The BSE Small-Cap index was down 82.54 points or 0.72% at 11,374.31. The decline in both these indices was lower than the Sensex's decline in percentage terms.
The market breadth indicating the overall health of the market was weak. On BSE, 1,818 shares declined and 915 shares rose. A total of 120 shares were unchanged.
IT stocks declined. Tech Mahindra (down 2.87%) and Wipro (down 1.4%) declined.
Infosys fell 3.03% after reports the company will delay the announcement of its Q4 March 2015 results to give its chief executive officer Vishal Sikka more time to fine-tune a strategy roadmap that promises to turn the firm into a next-generation service company. Infosys will reportedly declare its Q4 March 2015 results on 24 April 2015. The company is yet to officially announce the date of the announcement of the results for the fourth quarter. Over the last five years, the company has announced Q4 March 2015 results by the middle of April.
HCL Technologies dropped 0.68%. The company said during market hours that the Shiv Nadar Foundation sold its entire holding of 56 lakh shares of HCL Technologies in the open market today, 9 March 2015. On BSE, so far 60.49 lakh shares were traded in the counter, compared with an average volume of 66,239 shares in the past one quarter. Governance, tax and legal regulations required the Foundation to sell its holding in HCL Technologies by 31 March 2015, the Shiv Nadar Foundation said. The sale of shares took place to fulfill these conditions, it said. The proceeds of this sale will be used to realise various objectives and initiatives of the Foundation, it said. This transaction was concluded at one go at a discount to the last closing price of HCL Technologies to avoid any overhang in the market for shareholders of HCL Technologies, the Shiv Nadar Foundation said.
TCS edged lower after the IT major after market hours on Thursday, 5 March 2015, issued lower-than-expected outlook for Q4 March 2015. The stock was off 1.68%. TCS after market hours on Thursday, 5 March 2015, said in a copy of the presentation to analysts at conference call scheduled on that day that the company's revenue in Q4 March 2015 is expected to be in-line with last year trend. Retail, manufacturing and Hi-Tech segments are recovering from muted Q3 December 2014 quarter, TCS said. TCS said there will be continued weakness in Diligenta, insurance, and energy businesses. The company expects European business to grow better than average. Strength in ITIS continues, TCS said. The company said it is likely to see a currency impact of negative 275 basis points (bps) to constant currency revenue in rupee terms and negative impact of 200 bps to constant revenue in dollar terms in Q4 March 2015. TCS has kept its target EBIT margin band unchanged.
Ranbaxy Laboratories rose 1.55% to Rs 818.10. Ranbaxy and Sun Pharmaceuticals Industries, separately announced during trading hours that the High Court of Punjab & Haryana has orally pronounced the Order today, 9 March 2015, approving the Scheme of Arrangement involving merger of Ranbaxy Laboratories with Sun Pharmaceutical Industries.
Sun Pharmaceuticals Industries was up 0.42% at Rs 1,041.70. The stock hit high of Rs 1,049.30 and low of Rs 1,009 so far during the trading session.
In April 2014, Sun Pharma announced the acquisition of Ranbaxy Laboratories in an all-stock deal.
In the foreign exchange market, the rupee edged lower against the dollar on global risk-off sentiment. The partially convertible rupee was hovering at 62.60, compared with its close of 62.17 during the previous trading session on Thursday, 5 March 2015. India's financial markets were closed on Friday, 6 March 2015, on account of Holi.
Brent crude oil futures edged lower as upbeat US jobs data pushed the dollar higher, outweighing geopolitical tensions and the threat of output cuts in Libya and Iraq. Brent for April settlement was off 29 cents at $59.44 a barrel. The contract had declined 75 cents or 1.24% to settle at $59.73 a barrel during the previous trading session.
Minister for Commerce & Industry Nirmala Sitharaman on Saturday, 7 March 2015, said that exports play a key role in ensuring success of the Make in India initiative. Speaking at the ECGC Dun & Bradstreet Export Performance Award ceremony in Mumbai, Sitharaman reiterated government's commitment to 'ease of doing business' and assured the gathering that similar measures will be extended to the export sector as well. For this purpose, the Minister said, she is planning to constitute of a committee, that can suggest thrust areas and key measures which can yield quick results as well as help formulate a long term export strategy.
Meanwhile, proceedings in parliament during the ongoing Budget session of Parliament are being closely watched. The government seeks to have the Bills replacing the six Ordinances passed by both the Houses of Parliament before 20 March 2015 when the first part of the Budget session of parliament concludes. The Lok Sabha has already passed five Bills seeking to replace five Ordinances relating to Amending the Citizenship Act, introduction of e-rikshaws, allocation of coal mines through open bidding, increase in foreign investment ceiling in the insurance sector to 49% from 26% and allocation of non-coal mineral resources through auction. The Parliament is scheduled to be reconvened on 20 April 2015 for the second part of the Budget session while the six Ordinances will lapse on 5 April 2015 as per the provisions of the Constitution.
Two key pending Bills yet to be passed in Rajya Sabha relate to hiking foreign investment ceiling in the insurance sector and allocation of coal blocks through open bidding.
Government business in the Lok Sabha for the current week includes consideration and passing of the Right to Fair Compensation and Transparency in Land Acquisition. Eight hours have been allocated for discussion on the LARR (Amendment) Bill, 2015 in the Lok Sabha.
On the macro front, the government will unveil industrial production data for January 2015 on Thursday, 12 March 2015. The government will release the combined consumer price index (CPI) data (rural/urban) for February 2015 on the same day.
European stocks dropped today, 9 March 2015, falling in line with lower Asian stocks as strong US jobs data fanned expectations that the Federal Reserve will consider hiking rates in June 2015. Key indices in France, Germany and UK dropped by 0.43% to 1.17%.
The European Central Bank (ECB) is set to begin its long-awaited 1.1 trillion euro ($1.2 trillion) quantitative easing programme today, 9 March 2015, to stimulate growth and ward off deflation across the eurozone. The programme calls for the eurozone central bank to buy around 60 billion euros of public and private bonds each month -- a policy it will apply until at least September 2016.
The ECB on Thursday, 5 March 2015, left its main rate, the one that it charges on its regular bank loans, at a record low of 0.05%. It also kept its deposit rate at minus-0.2%, meaning that banks pay to park excess cash at the central bank. The Bank of England also on Thursday, 5 March 2015, kept interest rates on hold, marking the sixth anniversary of ultra-loose monetary policy.
Meanwhile, Greece may reportedly hold a referendum on whether to accept terms from the European Union over further aid to the country. Euro-zone finance officials are scheduled hold their regular monthly meeting in Brussels today, 9 March 2015. The Greek situation expected to dominate talks at the meeting.
Last month, Greece struck an agreement with its creditors to extend its current euro 240 billion ($263 billion) bailout by another four months.
Asian stocks dropped today, 9 March 2015, after strong US jobs data fanned expectations that the US Federal Reserve may raise interest rates sooner than previously thought. Key indices in Hong Kong, Japan, South Korea, Indonesia, Taiwan and Singapore were off 0.17% to 1.53%.
In mainland China, the Shanghai Composite was up 1.89%. China's exports picked up in the first two months of 2015, propelled by February's exceptionally strong performance that was inflated by the timing of Lunar New Year, while a slide in imports pointed to persistent weakness in the economy. Data released by the General Administration of Customs on Sunday, 8 March 2015, showed that China posted a record trade surplus of $60.6 billion last month. February exports jumped 48.3% from a year earlier, the strongest rise since May 2010 and comfortably beat market expectations, but customs office cautioned about reading too much into the figure given seasonal distortions. A 20.5% slide in February imports was the sharpest since the global financial crisis.
Meanwhile, the China Securities Regulatory Commission is reportedly studying the issue of letting banks apply for brokerage licenses
In Japan, the latest revised data showed that the nation's gross domestic product rose an annualised 1.5% in the October-December quarter, less than the preliminary reading of a 2.2% increase as capital expenditure weakened. On a quarter-on-quarter basis, the economy grew 0.4% in the fourth quarter, the Cabinet Office data showed.
Trading in US index futures indicated that the Dow could fall 29 points at the opening bell today, 9 March 2015. US stocks fell sharply on Friday, 6 March 2015, after stronger than expected data from the monthly jobs report heightened concerns that the Federal Reserve could raise interest rates by June 2015.
The US Labor Department said employers added 295,000 workers in February, beating forecasts. It was the longest run of 200,000-plus increases since 1994. The jobless rate dropped to 5.5% from 5.7% in January.
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