The barometer index, the S&P BSE Sensex, provisionally closed marginally higher and the 50-unit CNX Nifty closed marginally lower after witnessing intraday volatility. Key indices staged intraday rebound in late trade after remaining weak in mid-afternoon trade. The Sensex was provisionally up 8.79 points or 0.03% at 26,445.81. The market breadth indicating the overall health of the market was weak. Shares of power generation and power distribution companies extended Monday's losses triggered by a Supreme Court ruling that all coal mining licenses distributed since 1993 are illegal.
Earlier, key indices had moved into negative zone from positive in early afternoon trade. Before that key indices had moved into green after a weak start.
European shares dropped after previous session's sharp gains that were fuelled by prospects of further stimulus measures from the European Central Bank. Asian stocks declined in volatile trade amid concerns over geopolitical development in Ukraine and Iraq. Brent crude oil prices rose for the second day in a row ahead of weekly US oil inventory data from the American Petroleum Institute.
As per provisional figures, the S&P BSE Sensex was up 8.79 points or 0.03% at 26,445.81. The index rose 44.95 points at the day's high of 26,481.97 in morning trade. The index dropped 122.13 points at the day's low of 26,314.89 in mid-afternoon trade, its lowest level since 21 August 2014.
The CNX Nifty was down 1.15 points or 0.01% to 7,905.15, as per provisional figures. The index hit a high of 7,915.45 in intraday trade. The index hit a low of 7,862.45 in intraday trade, its lowest level since 21 August 2014.
The total turnover on BSE amounted to Rs 2781 crore, lower than Rs 2887.96 crore on Monday, 25 August 2014.
The market breadth indicating the overall health of the market was weak. On BSE, 1,824 shares fell and 1,136 shares rose. A total of 114 shares were unchanged.
The BSE Mid-Cap index was down 22.28 points or 0.24% at 9,258.82. The BSE Small-Cap index was down 82 points or 0.8% at 10,173.78. Both these indices underperformed the Sensex.
Shares of power generation and power distribution companies extended Monday's losses triggered by a Supreme Court ruling that all coal mining licenses distributed since 1993 are illegal. GVK Power & Infrastructure (down 2.89%), NTPC (down 0.81%), NHPC (down 0.95%), Adani Power (down 6.91%), Reliance Infrastructure (down 1.1%), and Power Grid Corporation of India (down 1.43%) declined.
Tata Power Company dropped 2.71%. The company said during market hours that the consequences arising from the Supreme Court's verdict on coal blocks will be considered after further hearing by the apex court after the Court has held that all coal block allocations made since 1993 till 2010 have been done in an illegal manner by an "ad-hoc and casual" approach "without application of mind". This ruling by the Supreme Court also includes the Tubed and Mandakini coal blocks allotted to Tata Power Company.
The 120 million tonness (MT) Tubed coal block in the Latehar district in Jharkhand was allotted jointly to Tata Power (40% share of coal) and Hindalco Industries (60% share of coal) in August 2007. The annual yield of the coal block was expected to be 6 MTPA. Tata Power's share of coal from Tubed was to be utilized in the end use power plant being developed at Tiruldih in Jharkhand. The 290 MT Mandakini coal block in Angul district in Odisha was allotted jointly to Tata Power, Monnet Ispat and Jindal Fotofilm, each with a third of the share of coal, in January 2008. The annual yield of the coal block was expected to be 7.5 MTPA. Tata Power's share of coal from Mandakini was to be utilized in the end use power plant at Naraj Marthapur or an alternate end use plant in the state of Odisha, which is under final approval of Government of Odisha.
Separately, Tata Power said before market hours that the Supreme Court has on 25 August 2014 stayed the payment of the compensatory tariff by procurers as was allowed as per Appellate Tribunal for Electricity (APTEL)'s interim order. The apex court has further asked APTEL to expedite the case hearings and take a final decision on the subject matter quickly. As the case is already being heard by the APTEL, the company would await a quick resolution of this issue through the required judicial process, Tata Power.
Haryana as a procurer had filed for stay of the interim order of the Appellate Tribunal for Electricity (APTEL) which upheld that compensatory tariff be payable after March 2014 as per order of Central Electricity Regulatory Commission (CERC).
Reliance Power slumped 7.17%. The company said during market hours that the fifth 660 megawatts (MW) unit of the 3,960 MW Sasan Ultra Mega Power Plant (UMPP) has commenced power generation thus making 3,300 MW capacity operational at the project. The last unit is in advanced stages of construction and will be commissioned over the next few months. Reliance Power's generation capacity has increased to 5,185 MW which includes 5,100 MW of thermal capacity and 85 MW of renewable energy based capacity. Coal production has already commenced from the 20 million tonnes Moher and Moher-Amlohri coal mines associated with the power project.
Mahindra & Mahindra (M&M) lost 0.77%. M&M proposes to appeal against the Competition Commission of India's order before the appropriate forum. The Competition Commission of India (CCI) on Monday, 25 August 2014, levied a total penalty of Rs 2544.64 crore on 14 car makers at the rate of 2% of the average turnover after it found them to be in contravention of the provisions of the Competition Act, 2002. The amount of penalty imposed on M&M is Rs 292.25 crore.
L&T declined 1.33%. The company said during market hours that Bangladesh Power Development Board (BPDB) and L&T have signed a contract to set up a 225 megawatts, gas based power plant in Sikalbaha, Chittagong in Bangladesh. The contract, which was valued at about $200 million, was secured by L&T in May 2014.
Jindal Steel & Power dropped 6.16%, with the stock extending Monday's steep losses triggered by a Supreme Court ruling that all coal mining licenses distributed since 1993 are illegal.
The stock market may remain volatile in the near future as traders roll over positions in the futures & options (F&O) segment from the near month August 2014 series to September 2014 series. The near-month August 2014 F&O contracts expire on Thursday, 28 August 2014.
Foreign portfolio investors (FPIs) bought shares worth a net Rs 127.33 crore on Monday, 25 August 2014, as per provisional data from the stock exchanges.
The Supreme Court on Monday, 25 August 2014, deemed all coal block allocations made since 1993 as illegal. The allocations had no objective criteria and no fair and transparent procedure was followed, the Court said, adding they were impermissible. The quashing of these allocations still remains to be decided in further hearings. The court suggested the appointment of a panel of retired apex court judges to help the court in this matter. The case will be heard on 1 September next.
Brent crude prices rose for the second day in a row ahead of weekly US oil inventory data from the American Petroleum Institute. Brent for October settlement was up 16 cents at $102.81 a barrel. The contract rose 36 cents to settle at $102.65 a barrel on Monday, 25 August 2014.
The presidents of Ukraine and Russia will meet in Minsk, Belarus later today, 26 August 2014. Meanwhile, the US and its European allies have condemned escalating violence in Libya after Islamist militias took control of an international airport in Tripoli.
In the foreign exchange market, the rupee edged higher against the dollar. The partially convertible rupee was hovering at 60.49, compared with its close of 60.565 on Monday, 25 August 2014.
European shares were in red today, 26 August 2014, trimming the previous session's sharp gains that were fuelled by prospects of further stimulus measures from the European Central Bank. Key benchmark indices in Germany and France were off 0.06% to 0.38%. UK stocks rose, catching up with a rally in other European markets yesterday, when London was closed for a bank holiday. The FTSE 100 index was up 0.21%.
Asian stocks declined in volatile trade today, 26 August 2014. Key benchmark indices in Indonesia, Japan, Singapore, Hong Kong and China fell 0.22% to 0.99%. Key benchmark indices in South Korea and Taiwan rose 0.04% to 0.35%.
Trading in US index futures indicated a flat opening of US stocks on Tuesday, 26 August 2014. US stocks gained on Monday, 25 August 2014, with S&P 500 index closing at a record high and moving above 2,000 mark in intraday trade for the first time, buoyed by deal activity and hints of more stimulus from the European Central Bank.
The pace of new-home sales in US fell to the slowest in four months in July. Purchases unexpectedly declined 2.4% to a 412,000 annualized pace, Commerce Department data showed on Monday, 25 August 2014. June purchases were revised up to a 422,000 rate after a May gain that was also bigger than previously estimated.
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