A further slide in global crude oil prices, a sharp rise in Russian interest rates and weakness in Asian stocks triggered by data showing a further slowdown in China's manufacturing sector sent key equity benchmark indices in India tumbling. November trade data showing weakness on India's external front also hit sentiment on the domestic bourses adversely. The barometer index, the S&P BSE Sensex, fell below the psychological 27,000 mark. The Sensex hit its lowest closing level in more than 7 week. The 50-unit CNX Nifty hit 7-week closing low. The Sensex tanked 538.12 points or 1.97% to settle at 26,781.44. Among side counters, quite a few stocks witnessed losses ranging from 5% to 20%.
The market breadth indicating the overall health of the market was quite weak, with more than four losers for every gainer on BSE. The BSE Mid-Cap index fell 2.96%. The BSE Small-Cap index fell 3.36%. The fall in both these indices was higher than the Sensex's decline in percentage terms.
Realty stocks slumped. Index heavyweight and cigarette maker ITC dropped. Metal and mining stocks dropped after weak China manufacturing data.
Global crude oil futures tumbled as market sentiment remained bearish and data showed a further slowdown in China's manufacturing sector. The slump in oil prices over the past three months is having a ripple effect across global financial markets and economies. Russia's blue-chip MICEX index was off 6% after the country's central bank unexpectedly hiked interest rates to 17% from 10.5% yesterday, 15 December 2014, in a bid to stem the ruble's decline. The battered ruble fell to a new record low against the dollar, just hours after the Russian central bank's surprise move overnight to jack up interest rates to 17%. Stocks in Dubai and Qatar fell sharply as global crude oil prices fell.
Meanwhile, due to a sharp jump in gold imports, India's trade deficit rose sharply to $16.86 billion in November 2014 from $9.57 billion in November 2013, data released by the Ministry of Commerce & Industry after trading hours yesterday, 15 December 2014, showed.
Foreign portfolio investors sold shares worth a net Rs 431.51 crore into the secondary equity market yesterday, 15 December 2014.
In overseas markets, European stocks edged higher in choppy trade as the ZEW indicator for economic sentiment in Germany jumped to the highest level since May. Asian stocks edged lower as oil's slump and weaker-than-estimated Chinese manufacturing stoked concern that the global economy may falter. US stocks fell yesterday, 15 December 2014, amid a continuing slump in oil prices and ahead of a closely watched Federal Reserve meeting.
Brent crude futures hit 5-1/2-year low amid speculation that US oil producers may further increase output.
In the foreign exchange market, the rupee weakened past the 63 mark against the dollar as India's trade deficit rose sharply last month due to a sharp surge in gold imports.
Meanwhile, Taliban gunmen reportedly took hundreds of students hostage at a military-run school in the Pakistani city of Peshawar today, 16 December 2014, and at least 18 people were killed, including 16 pupils, according to reports.
The S&P BSE Sensex fell 538.12 points or 1.97% to settle at 26,781.44, its lowest closing level since 27 October 2014. The index plunged 583.33 points at the day's low of 26,736.23 in late trade. The index fell 120.19 points at the day's high of 27,199.37 in early trade.
The CNX Nifty fell 152 points or 1.85% to settle at 8,067.60, its lowest closing level since 28 October 2014. The index hit a low of 8,052.60 in intraday trade. The index hit a high of 8,189.35 in intraday trade.
The BSE Mid-Cap index fell 297.89 points or 2.96% to settle at 9,764.63. The BSE Small-Cap index fell 369.29 points or 3.36% to settle at 10,628.62. The fall 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 quite weak, with more than four losers for every gainer on BSE. On BSE, 2,327 shares fell and 541 shares rose. A total of 89 shares were unchanged.
The total turnover on BSE amounted to Rs 3539 crore, higher than Rs 2924.08 crore on Monday, 15 December 2014.
The S&P BSE Metal index (down 4.17%), the S&P BSE Realty index (down 3.8%), the S&P BSE FMCG index (down 3.08%), the S&P BSE Bankex (down 2.91%), the S&P BSE Healthcare index (down 2.75%), the S&P BSE Consumer Durables index (down 2.42%) and the S&P BSE Power index (down 2.41%) underperformed the Sensex.
The S&P BSE Capital Goods index (down 1.66%), the S&P BSE Auto index (down 1.61%), the S&P BSE Oil & Gas index (down 1.44%), the S&P BSE Teck index (up 1.12%) and the S&P BSE IT index (up 1.66%), outperformed the Sensex.
Tata Consultancy Services (TCS) rose 3.4%. The company announced after market hours today, 16 December 2014, that the company has joined the Industrial Internet Consortium (IIC). The membership provides TCS an opportunity to contribute to the innovation, best practices and transformational opportunities that the Industrial Internet offers. The IIC comprises leading global research universities, organisations and government bodies, and it offers an unparalleled opportunity to coordinate industry-wide efforts around building reference architecture and technology testbeds, TCS said in a statement.
Realty stocks slumped. Unitech (down 10.75%), Housing Development and Infrastructure (down 6.9%), Parsvnath Developers (down 5.56%), Oberoi Realty (down 5.21%), Anant Raj (down 4.37%), D B Realty (down 4.14%), Indiabulls Real Estate (down 4.03%), DLF (down 3.83%), Peninsula Land (down 3.41%), Godrej Properties (down 2.49%), Sunteck Realty (down 1.96%) and Sobha (down 1.38%), edged lower.
Metal and mining stocks dropped after weak China manufacturing data. China is the world's largest consumer of steel, copper and aluminum. Sesa Sterlite (down 7.77%), Hindalco Industries (down 5.67%), JSW Steel (down 5.6%), Bhushan Steel (down 4.65%), Jindal Steel & Power (down 4.14%), Tata Steel (down 2.82%), Hindustan Zinc (down 1.86%) and Steel Authority of India (down 1.02%), edged lower.
Hindalco Industries fell 5.67%. With respect to news titled "Special Court rejects closure & orders CBI to further investigate the coal scam involving Hindalco," Hindalco Industries clarified today, 16 December 2014, that the Central Bureau of Investitaion (CBI) as per the direction of the Supreme Court is investigating coal allocations made to various companies including Hindalco. CBI is directly reporting to the Special Court. While the CBI has given its closure report, the court has asked for further investigation on few specific aspects, Hindalco said. As the matter is between the CBI and the court, and also subjudice, it is inappropriate for the company to comment, Hindalco said.
NMDC declined 2.22%. The company's advance tax payment reportedly fell 11% to Rs 800 crore in Q3 December 2014 over Q3 December 2013.
Index heavyweight and cigarette maker ITC lost 3.14% to Rs 380.50. The stock hit high of Rs 390 and low of Rs 378.
Jaiprakash Associates tumbled 6.35%. Jaiprakash Associates clarified during market hours today, 16 December 2014, that keeping in view the provisions of the new Companies Act, the company has stopped accepting fresh deposits from the public from 1 April 2014. The company has been honouring its obligations to repay the fixed deposits as and when they become due. Minor delays, if any, should not be construed otherwise by any of the investors, Jaiprakash Associates said. The company has maintained its creditworthiness with all its lenders and investors and is committed to do so in future as well, Jaiprakash Associates said.
Apollo Hospitals Enterprise declined 2.78%. With respect to news titled "Apollo Hospitals to invest Rs. 150 cr in K'taka by 2016", Apollo Hospitals Enterprise clarified during market hours today, 16 December 2014, that the sum of Rs 150 crore indicated in the news report would include the capital outlay involving in establishing the hospital apart from recurring capital expenditure in the existing facilities of the company established in Karnataka which is a part of the existing approved expansion plans of the company.
ACC dropped 3.03%. Ambuja Cements lost 3.72%. Cement giants Holcim and Lafarge SA cleared a major hurdle toward their planned $43 billion merger after antitrust authorities in Europe said the deal could go ahead, subject to significant asset sales across the region. The deal, if approved by other global competition regulators, would reshape the global cement industry, spawning a construction-materials juggernaut. The two companies still are awaiting approvals from other parts of the world, including the US, Canada, Mexico, India for the deal to proceed, although authorities in some countries like Russia and South Africa already have already approved the deal.
In India, the Competition Commission of India (CCI) has formed a prima facie opinion that the proposed combination between Holcim and Lafarge SA is likely to have an appreciable adverse effect on competition in India. In India, Holcim is active through its two subsidiaries viz. ACC and Ambuja Cements. Holcim holds 50.39% stake in Ambuja Cements (as per the shareholding pattern as on 30 September 2014). Holcim holds 50.3% stake in ACC (as per the shareholding pattern as on 30 September 2014). Lafarge is active in India through its two unlisted subsidiaries viz. Lafarge India and Lafarge Aggregates & Concrete India.
Shares of oil exploration and production companies declined as global crude oil prices fell. Cairn India (down 2.54%), ONGC (down 2.16%), Reliance Industries (down 1.63%) and Videocon Industries (down 0.41%) edged lower. Oil India, however, rose 0.89%.
Bank stocks dropped. Among PSU bank stocks, Syndicate Bank (down 6.91%), Andhra Bank (down 6.15%), Allahabad Bank (down 5.31%), IDBI Bank (down 4.88%), State Bank of India (down 4.66%), UCO Bank (down 4.63%), Punjab & Sind Bank (down 4.35%), Corporation Bank (down 3.87%), Vijaya Bank (down 3.63%), Indian Bank (down 3.4%), Canara Bank (down 3.23%), Dena Bank (down 3.1%), United Bank of India (down 3.01%), Punjab National Bank (down 2.28%), Central Bank (down 2.23%), Bank of India (down 2.06%), Bank of Maharashtra (down 1.7%) and Union Bank of India (down 0.85%), edgd lower.
State Bank of India (SBI) dropped 4.66%. The bank's advance tax payment reportedly rose 27% to Rs 1420 crore in Q3 December 2014 over Q3 December 2013.
Bank of Baroda shed 4.34%. The bank's advance tax payment reportedly was unchanged at Rs 575 crore in Q3 December 2014 over the corresponding period in the previous year.
Among private sector banks, ICICI Bank (down 4.3%), Federal Bank (down 4.25%), City Union Bank (down 3.16%), Yes Bank (down 2.74%), IndusInd Bank (down 2.4%), Kotak Mahindra Bank (down 1.4%), ING Vysya Bank (down 1.31%) and Axis Bank (down 1.06%), edged lower.
HDFC Bank fell 1.69%. The bank's advance tax payment reportedly rose 10% to Rs 1500 crore in Q3 December 2014 over Q3 December 2013.
The Reserve Bank of India (RBI) yesterday, 15 December 2014, issued a notification allowing commercial banks to flexibly structure existing project loans to infrastructure projects and core industries projects with the option to periodically refinance the loans, subject to certain conditions. Only term loans to projects in which the aggregate exposure of all institutional lenders exceeds Rs 500 crore in the infrastructure sector and in the core industries sector will qualify for such flexible structuring and refinancing, the RBI said. Banks may refinance the project term loan periodically after the project has commenced commercial operations, the RBI notification to commercial banks stated. If the project term loan or refinancing debt facility becomes a non-performing asset (NPA) at any stage, further refinancing should stop and the bank which holds the loan when it becomes NPA would be required to recognise the loan as such and make necessary provisions as required under the extant regulations, the RBI said. Once the account comes out of NPA status, it will be eligible for refinancing, the RBI said.
The RBI said that banks can also provide longer loan amortisation to existing project loans to infrastructure and core industries projects which are classified as 'non-performing assets'. However, such an exercise would be treated as 'restructuring' and the assets would continue to be treated as 'non-performing asset', the RBI notification said.
State Bank of India reported highest turnover of Rs 93.64 crore on BSE. Reliance Industries (Rs 8.06 crore), Godrej Consumer Products (Rs 76.34 crore), Jet Airways (India) (Rs 67.30 crore) and Reliance Capital (Rs 54.77 crore), were the other turnover toppers on BSE in that order.
SpiceJet recorded highest volumes of 3.62 crore shares on BSE. Luminaire Technologies (1.42 crore shares), Unitech (1.19 crore shares), VKS Projects (81.66 lakh shares) and Yantra Natural Resources (78.32 lakh shares), were the other volume toppers on BSE in that order.
Key indices fell for the fourth day in a row today, 16 December 2014. The Sensex has declined 1,049.66 points or 3.77% in four trading sessions from a recent high of 27,831.10 on 10 December 2014. The Sensex has declined 1,912.55 points or 6.67% in this month so far (till 16 December 2014). The Sensex has gained 5,610.76 points or 26.50% in calendar year 2014 so far (till 16 December 2014). From a record high of 28,822.37 struck on 28 November 2014, the Sensex has fallen 2,040.93 points or 7.08%. From a 52-week low of 19,963.12 on 4 February 2014, the Sensex has risen 6,818.32 points or 34.15%.
In the foreign exchange market, the rupee weakened past the 63 mark against the dollar as India's trade deficit rose sharply last month due to a sharp surge in gold imports. The partially convertible rupee was hovering at 63.46, compared with its close of 62.945 during the previous trading session.
Brent crude futures hit 5-1/2-year low amid speculation that US oil producers may further increase output. Brent for January settlement, which expires today, 16 December 2014, was off $1.59 a barrel at $59.47 a barrel. The contract had lost 79 cents settle at $61.06 a barrel during the previous trading session. Brent for February settlement was off $1.43 a barrel at $59.79 a barrel.
United Arab Emirates' oil minister Suhail Al Mazrouei said yesterday, 15 December 2015, that the Organization of the Petroleum Exporting Countries won't call for an emergency meeting of the oil cartel unless something drastic happens in the oil market. He said the cartel won't cut its production level for now as the move would only provide a temporary fix to the price drop. The refusal of OPEC and its core members to balance oil markets has caused much of the recent oil price slump, but the US shale revolution has also contributed to the global oil surplus.
India's merchandise exports rose 7.27% to $25.96 billion in November 2014 over November 2013, data released by the Ministry of Commerce & Industry after trading hours yesterday, 15 December 2014, showed. Imports jumped 26.79% at $42.82 billion in November 2014 over November 2013. Oil imports dropped 9.7% at $11.72 billion in November 2014 over November 2013. Non-oil imports jumped 49.6% at $31.10 billion in November 2014 over November 2013. The trade deficit rose sharply to $16.86 billion in November 2014, from $9.57 billion in November 2013.
Finance Minister Arun Jaitley yesterday, 15 December 2014, said that various welfare programmes of the government for vulnerable sections of the society are essential and working well. In this regard he mentioned about food security and education for all programmes among others. The Finance Minister made those comments while speaking to the students of Stanford University, USA when they called on him in his office yesterday, 15 December 2014.
Meanwhile, investors are closely monitoring if the government's key legislative reform bills are passed during the ongoing winter session of the parliament. The government may table the constitutional amendment bill to facilitate the levy of goods & services tax (GST) during the ongoing winter session of the parliament. The constitutional amendment Bill will provide the legal framework for rolling out the levy, giving states power to tax both goods and services. As of now only the central government can impose service tax. The amendment Bill will also create a GST council, a body that will have representatives of the states and the Centre that will take decisions on the tax after it is rolled out.
The government's intension is to implement a nationwide GST from 1 April 2016. GST is a major indirect tax reform. GST will subsume central indirect taxes such as excise duty and service tax at the central level and value added tax at the state level besides other local levies such as octroi and entry tax.
Meanwhile, the Indian government intends to get the Insurance Laws (Amendment) Bill, 2008 passed in both the Houses of Parliament in this week. The Union Cabinet, last week, approved the official amendments to the Insurance Laws (Amendment) Bill, 2008. The Parliamentary Select Committee in its report tabled in Rajya Sabha on 10 December 2014 agreed a composite cap of 49% on foreign investment in the insurance sector, which includes all types of foreign investment as opposed to the 26% foreign direct investment (FDI) allowed at present. Finance Minister Arun Jaitley had said in his maiden budget speech in July that the composite cap in the insurance sector should be increased to 49% from the current level of 26%, with full Indian management and control.
It also remains to be seen if the government will be to find support for the Coal Mines (Special Provisions) Bill, 2014 in the Rajya Sabha where it's in a minority. The Lok Sabha last week passed the Coal Mines (Special Provisions) Bill, 2014. The bill allows the government to enforce rules and guidelines for auction/allocation of 204 coal blocks cancelled by the Supreme Court in September this year.
European stocks edged higher in choppy trade today, 16 December 2014, as the ZEW indicator for economic sentiment in Germany jumped to the highest level since May. Key indices in Germany, France and UK were up 0.45% to 0.91%.
Data released today, 16 December 2014, showed, Eurozone business activity grew at a slightly faster rate in December, but the pace of expansion was still one of the weakest seen over the past year. The Markit Eurozone PMI rose from November's 16-month low of 51.1 to 51.7 in December, signalling a modest upturn in the rate of growth. However, the reading was the second-lowest seen over the past year and failed to prevent the average reading for the fourth quarter from falling to the lowest since the third quarter of 2013.
The data showed a mixed batch of PMI data out of Germany, with multi-month lows for the services and composite PMIs, but the manufacturing PMI rose to 2-month high. France's manufacturing PMI fell to a four-month low.
Asian stocks edged lower today, 16 December 2014, as oil's slump and weaker-than-estimated Chinese manufacturing stoked concern that the global economy may falter. Key indices in Hong Kong, Singapore, Indonesia, South Korea, Taiwan, and Japan were off 0.39% to 2.4%. China's Shanghai Composite rose 2.31%.
China's flash manufacturing purchasing managers' index (PMI) from HSBC Holdings Plc and Markit Economics fell to 49.5 for December, from 50 last month. It's the first time since May that the gauge has slipped below 50, the threshold between expansion and contraction. The preliminary reading, which is usually issued about one week before the final PMI reading, was released more than two weeks before the final estimate for December due to the year-end holidays. The final reading is due on 2 January 2015.
Indonesia's Finance Minister Bambang Brodjonegoro will reportedly meet Bank Indonesia and financial regulator Otoritas Jasa Keuangan today, 16 December 2014, to discuss a policy response to the weakening currency.
Meanwhile, heavily armed Australian police reportedly stormed a Sydney cafe early on Tuesday morning and freed hostages being held there at gunpoint, in a dramatic end to a 16-hour siege in which two captives and the attacker were killed.
Trading in US index futures indicated that the Dow could gain 72 points at the opening bell today, 16 December 2014. US stocks fell Monday, 15 December 2014, amid a continuing slump in oil prices and ahead of a closely watched Federal Reserve meeting.
Among economic data, US manufacturing output recorded its largest increase in nine months in November as production expanded across the board, pointing to underlying strength in the economy. Factory production rose 1.1% after advancing 0.4% in October, the Federal Reserve said on Monday.
A two-day meeting of Federal Open Market Committee (FOMC) to discuss monetary policy review begins today, 16 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. It remains to be seen whether Federal Reserve officials would signal a rate hike by dropping their assurance that rates will stay low for a considerable time.
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