Volatility ruled the roost in late trade as key benchmark indices once again turned negative after reversing intraday losses. The barometer index, the S&P BSE Sensex, was provisionally down 61.37 points or 0.24%, up 102.87 points from the day's low and off 101.61 points from the day's high. The market breadth indicating the overall health of the market was negative. The market sentiment was edgy as crude oil prices rose and as the rupee fell against the dollar which stoked concerns of fuel price inflation and increase in India's current account deficit and fiscal deficit. The latest showing increase in inflation based on the wholesale price index in May 2014 also weighed on sentiment.
Index heavyweight Reliance Industries declined. Shares of state-run gas transmission and distribution company GAIL (India) surged on buzz that a foreign brokerage has raised the price target on the stock. PSU OMCs reversed intraday fall in volatile trade after the oil ministry said the under-recovery on diesel declined in the fortnight commencing 16 June 2014. Realty stocks edged higher.
As per provisional closing, the S&P BSE Sensex was down 61.37 points or 0.24% to 25,166.80. The index fell 164.24 points at the day's low of 25,063.93 in afternoon trade, its lowest level since 5 June 2014. The index gained 40.24 points at the day's high of 25,268.41 in early trade.
The CNX Nifty was down 16.55 points or 0.22% to 7,525.55. The index hit a low of 7,487.55 in intraday trade, its lowest level since 5 June 2014. The index hit a high of 7,548.60 in intraday trade.
The BSE Mid-Cap index was up 30.95 points or 0.35% at 8,966.88. The BSE Small-Cap index was off 29.81 points or 0.31% at 9,704.39. Both these indices outperformed the Sensex.
The market breadth indicating the overall health of the market was negative. On BSE, 1,570 shares declined and 1,380 shares rose. A total of 119 shares were unchanged.
The total turnover on BSE amounted to Rs 3401 crore, lower than Rs 5272.07 crore on Friday, 13 June 2014.
Among the 30-share Sensex pack, 16 stocks declined and rest of them gained. Axis Bank (down 2.92%), HDFC (down 1.78%) and Tata Motors (down 1.78%) edged lower from the Sensex pack.
Index heavyweight Reliance Industries fell 1.67% to Rs 1,063.90. The stock hit high of Rs 1,085 and low of Rs 1,059.
Shares of state-run gas transmission and distribution company GAIL (India) surged 3.96% to Rs 433.30 on buzz that a foreign brokerage has raised the price target on the stock to Rs 525 from Rs 450 earlier. The brokerage remains optimistic about the performance of the company's key business segments barring the petrochemicals business, as per reports.
PSU OMCs reversed intraday fall in volatile trade after the oil ministry said the under-recovery on diesel declined in the fortnight commencing 16 June 2014.
BPCL gained 3.48% to Rs 588. The stock hit high of Rs 593.75 and low of Rs 555.
HPCL advanced 3.48% to Rs 405.90. The stock hit high of Rs 408.75 and low of Rs 381.30.
Indian Oil Corporation (IOCL) rose 0.9% to Rs 336.20. The stock hit high of Rs 340.55 and low of Rs 323.30.
The oil ministry today, 16 June 2014, said that the under-recovery on diesel applicable for second fortnight of June 2014, effective 16 June 2014, will go down to Rs 1.62 per litre from Rs 2.80 per litre during first fortnight of June 2014. In the case of PDS kerosene and domestic LPG, the under-recoveries for the second fortnight of June 2014 continue to be Rs 32.87 per litre and Rs 432.71 per cylinder respectively, as in the first fortnight of June.
PSU OMCs effective 16 June 2014, are now incurring combined daily under-recovery of about Rs 249 crore on the sale of diesel, PDS kerosene and domestic LPG. This is lower than daily under-recovery of Rs 262 crore during the first fortnight of June 2014. The under-recoveries for the financial year 2014-15 are projected to be Rs 91665 crore while the figure was Rs 139869 crore in 2013-14.
Prime Minister Narendra Modi said on Saturday, 14 June 2014, said that repairing the economy would require unpleasant decisions and tough actions. His comments have triggered speculation that the government may raise fuel prices and/or announce diesel price deregulation to reduce the government's fuel subsidy burden.
Realty stocks edged higher. D B Realty (up 16.96%), Unitech (up 2.33%), Sobha Developers (up 1.51%), Indiabulls Real Estate (up 0.79%) and Godrej Properties (up 0.79%) gained. Housing Development and Infrastructure fell 0.49%.
DLF rose 2.22%. DLF after market hours on Friday, 13 June 2014, said that DLF Promenad, a subsidiary of the company, has successfully placed the commercial mortgage backed security (CMBS) issuance of Rs 375 crore, with a competitive coupon rate of 10.90% per annum and legal maturity of 7.5 years. DLF Promenade owns and operates approximately 4.5 lakh sq. ft luxury mall in New Delhi. The CMBS issue is rated CRISIL AA (SO). This is a 2nd issuance from DLF Group.
Nitesh Estates surged 4.88% after the company said it has signed up a joint development pact for development of a gated community in an area of 12 acres to accommodate 440 units. The announcement was made on Saturday, 14 June 2014. The project located at prime Hennur Main Road will have easy access to the international airport, outer ring road and major office complexes. The project will give total revenue of Rs 375 crore to the company and will have significant improvement in the profitability over next 36 months, Nitesh Estates said. The project will be launched shortly, the company said.
Volatility struck the bourses in early trade as the key benchmark indices dropped to intraday low after reversing initial fall. Key benchmark indices extended fall in morning trade and hit fresh intraday low. The barometer index, the S&P BSE Sensex, and the 50-unit CNX Nifty, both, hit 1-1/2-week low. A bout of volatility was witnessed in mid-morning trade as the key benchmark indices weakened once again after staging recovery from lower levels. Key benchmark indices extended losses in early afternoon trade after data released by the government showed that the annual rate of inflation based on the wholesale price accelerated in May 2014. The Sensex trimmed losses after hitting fresh intraday low in afternoon trade. Key benchmark indices languished in a narrow range in negative zone in mid-afternoon trade. Volatility ruled the roost in late trade as key benchmark indices once again turned negative after reversing intraday losses.
In the foreign exchange market, the rupee edged lower against the dollar as strong demand for the greenback from oil marketing companies weighed after global crude prices surged to nine-month highs on Friday, 13 June 2014. The partially convertible rupee was hovering at 60.11, compared with its close of 59.76/59.77 on Friday, 13 June 2014.
Increase in crude oil price and fall in rupee has stoked concerns of fuel price inflation and increase in India's current account deficit and fiscal deficit. Brent crude oil futures rose to near nine-month high today, 16 June 2014, on fears the insurgency in Iraq could worsen and affect oil exports. Brent crude oil futures for August delivery were up 27 cents at $112.73 a barrel. India imports majority of its crude oil requirements.
The annual rate of inflation based on the monthly wholesale price index (WPI) accelerated to 6.01% for the month of May 2014, from 5.2% in April 2014, data released by the government today, 16 June 2014, showed. The WPI inflation for March 2014 was revised upwards to 6%, from 5.7% reported earlier. Non-food manufacturing inflation edged up to 3.8% in May 2014, from 3.4% in April 2014.
Prime Minister Narendra Modi on Saturday, 14 June 2014, said setting the economy on the right track would require unpleasant decisions and tough actions. He added that he was confident that the people would support these decisions, as they would be in the national interest. The Prime Minister said that the government would lay targeted focus on the areas of entrepreneurship, skill development and infrastructure, to harness the talent and energy of India's youth.
Modi called for two movements to be pursued in mission mode. He called for Swachh Bharat - Clean India, to be achieved by the 150th birth anniversary year of Mahatma Gandhi, in 2019. He also called for providing a home with basic amenities of water, power and sanitation, to all families by the 75th anniversary of Indian independence, in 2022. These missions would also build infrastructure and boost employment, the Prime Minister said. The Prime Minster was speaking at in a meeting with leaders from various walks of life in Goa.
European stock markets dropped for a second day on Monday, 16 June 2014, as rising tensions and violence in Iraq hampered investors' risk appetite and drove oil prices to a nine-month high. Key benchmark indices in UK, France and Germany were off 0.22% to 0.63%.
Asian stocks were mixed on Monday, 16 June 2014. Key benchmark indices in Hong Kong, Japan, Singapore and Indonesia were off 0.08% to 1.09%. Key benchmark indices in China, South Korea and Taiwan were up 0.07% to 0.74%.
Trading in US index futures indicated that the Dow could fall 47 points at the opening bell on Monday, 16 June 2014. US stock rose modestly on Friday, 13 June 2014, but trading was choppy with news out of Iraq resulting in price swings in late trade.
In economic news, the University of Michigan/Thomson Reuters sentiment gauge fell in June to 81.2 the lowest level in three months. Separately, government data ahead of the open showed wholesale prices for May fell unexpectedly.
The Federal Open Market Committee (FOMC) undertakes monetary policy review at a two-day meeting that begins tomorrow, 17 June 2014. The FOMC after a monetary policy review on 30 April 2014 reduced its monthly debt purchases to $45 billion, its fourth straight $10 billion cut, and said further reductions are likely in "measured steps" if the economy continues to improve. The Fed also said at that time that it will keep the benchmark interest-rate target at almost zero for a "considerable time" after its bond-buying program ends.
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