Trading for the week started on a weak note, as key benchmark indices tumbled on weak global stocks. The barometer index, the S&P BSE Sensex, and 50-unit CNX Nifty hit their lowest closing levels in 1-1/2-week as these two key benchmark indices extended losses in late trade. The Sensex settled below the psychological 29,000 mark. The Sensex and the Nifty, both, ended with losses of more than 2% each. Banking and metal stocks led the decline on the bourses. In overseas markets, 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 fell 604.17 points or 2.05% to settle at 28,844.78. All the eight index heavyweights -- ITC, Infosys, HDFC, HDFC Bank, ICICI Bank, L&T and Reliance Industries and TCS -- dropped. The market breadth indicating the overall health of the market was quite weak, almost two losers for every gainer on BSE. The BSE Mid-Cap index was off 1.32%.
Jindal Steel & Power jumped after its power generation unit -- Jindal Power won -- the Tara coal block in Chattisgarh for a closing bid of Rs 126 per tonne on the third day of coal auctions for schedule III category mines held on Saturday, 7 March 2015.
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.
The S&P BSE Sensex fell 604.17 points or 2.05% to settle at 28,844.78, its lowest closing level since 26 February 2015. The index slumped 649.19 points at the day's low of 28,799.76, in late trade. The index fell 127.89 points at the day's high of 29,321.06 in early trade.
The CNX Nifty fell 181 points or 2.03% to settle at 8,756.75, its lowest closing level since 26 February 2015. The index hit a low of 8,740.45 in intraday trade. The index hit a high of 8,891.30 in intraday trade.
The BSE Mid-Cap index fell 143.84 points or 1.30% to settle at 10,901.24. The BSE Small-Cap index fell 104.91 points or 0.92% to settle at 11,351.94. 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 quite weak, almost two losers for every gainer on BSE. On BSE, 1,892 shares declined and 976 shares rose. A total of 108 shares were unchanged.
The total turnover on BSE amounted to Rs 4593 crore, higher than turnover of Rs 3647.80 crore during the previous trading session.
Among sectoral indices on BSE, the S&P BSE Healthcare index rose 0.30%. The S&P BSE Consumer Durables index (down 0.28%), the S&P BSE FMCG index (down 0.74%), the S&P BSE Auto index (down 1.08%), the S&P BSE Oil & Gas index (down 1.67%) and the S&P BSE Teck index (down 1.92%), outperformed the Sensex. The S&P BSE IT index (down 2.06%), the S&P BSE Metal index (down 2.4%), the S&P BSE Realty index (down 2.58%), the S&P BSE Capital Goods index (down 2.74%), the S&P BSE Power index (down 2.93%) and the S&P BSE Bankex (down 3.01%), underperformed the Sensex.
Metal & mining stocks declined. Sesa Sterlite (down 5.21%), JSW Steel (down 3.25%), Hindustan Copper (down 2.11%), Tata Steel (down 2.04%), Steel Authority of India (down 1.5%), Bhushan Steel (down 1.41%) and Hindustan Zinc (down 0.96%), edged lower. NMDC rose 0.24%.
Hindalco Industries shed 4.70%. The company won the Dumri coal block in Jharkhand at Rs 2,127 per tonne on the third day of coal auctions for schedule III category mines held on Saturday, 7 March 2015. The Dumri coal block has a total extractable reserve of 40.854 million tonnes.
Jindal Steel & Power jumped 4.77% after its power generation unit Jindal Power won the Tara coal block in Chattisgarh for a closing bid of Rs 126 per tonne on the third day of coal auctions for schedule III category mines held on Saturday, 7 March 2015. The Tara coal block was reserved for the power sector. The Tara coal block has a total extractable reserve of 166.92 million tonnes and was earlier allotted to Chattisgarh Mineral Development Corporation.
Colgate Palmolive (India) rose 1.68%. The company announced after market hours that it has fixed 9 April 2015 as the record date for payment of third interim dividend, that may be declared by the Board of Directors for the Financial Year 2014-15 at their Meeting to be held on 27 March 2015.
Reliance Infrastructure fell 4.61%. With respect to news article titled, "Reliance Infra's power distribution licences revoked in Odisha," Reliance Infrastructure clarified after market hours that the company along with one of its subsidiaries holds only 200 shares each in the equity capital of 6.59 crore equity shares of North Eastern Electricity Supply Company of Odisha, 3.76 crore equity shares of Southern Electricity Supply Company of Odisha and 4.86 crore equity shares of Western Electricity Supply Company of Odisha. None of the other subsidiaries or associates of Reliance Infrastructure holds any shares in these companies. These discoms are board managed companies with their own key managerial personnel. In view of the above, there is no need for the company to make any disclosure in terms of Clause 36 of the Listing Agreement, the company added.
Bank stocks dropped. Among public sector banks, IDBI Bank (down 3.86%), Syndicate Bank (down 3.69%), UCO Bank (down 3.57%), Indian Bank (down 3.37%), Canara Bank (down 3.29%), United Bank of India (down 3.09%), Allahabad Bank (down 2.91%), Bank of India (down 2.85%), Andhra Bank (down 2.73%), Bank of Baroda (down 2.2%), Punjab and Sind Bank (down 2.13%), Bank of Maharashtra (down 1.65%), Corporation Bank (down 1.47%), Punjab National Bank (down 1.47%), Vijaya Bank (down 1.46%), Dena Bank (down 1.2%), Central Bank of India (down 1.16%), State Bank of India (down 1.02%) and Union Bank of India (down 0.93%), edged lower.
Among private sector banks, ICICI Bank (down 4.33%), ING Vysya Bank (down 4.04%), Yes Bank (down 3.88%), Kotak Mahindra Bank (down 3.57%), Federal Bank (down 3.06%), HDFC Bank (down 2.39%), IndusInd Bank (down 2.12%) and City Union Bank (down 0.61%), edged lower.
Axis Bank declined 4.05%. Axis Bank after market hours on Thursday, 5 March 2015, said that the bank has raised $250 million under the Euro 3 billion Medium Term Note Programme through its DIFC branch. The pricing finalization took place on 4 March 2015 and the settlement is scheduled on 11 March 2015. The notes will be consolidated to form a single series with the $500 million, 3.25% Notes due in 21 May 2020 issued on 21 November 2014. The issuance will take the outstanding issue size to a total of $750 million, Axis Bank said.
Index heavyweight Reliance Industries (RIL) declined 1.78% to Rs 868.65. The stock hit high of Rs 891.80 and low of Rs 864.20 during the day.
Index heavyweight and cigarette maker ITC dropped 2.21% to Rs 338.30. The stock hit high of Rs 344.70 and low of Rs 337.10 during the day.
Engineering and construction major, L&T shed 3.43% to Rs 1,762.65. The stock hit high of Rs 1,821 and low of Rs 1,756 during the day.
Cement stocks declined. HeidelbergCement India (down 4.8%), Prism Cement (down 4.06%), UltraTech Cement (down 3.87%), India Cements (down 3.62%), Mangalam Cement (down 2.59%), ACC (down 2.3%), Dalmia Cement (Bharat) (down 2.2%), Birla Corporation (down 2.03%), The Ramco Cement (down 1.89%), JK Cement (down 1.47%) and Shree Cement (down 0.84%), edged lower. Kakatiya Cement (up 0.16%) and JK Lakshmi Cement (up 1.47%), edged higher.
Grasim Industries fell 1.92%. Grasim holds majority stake in UltraTech Cement.
Ambuja Cements declined 3.73%. Ambuja Cements won the Gare Palma IV/8 coal block in Chattisgarh at Rs 2,291 per tonne on the fourth day of coal auctions for schedule III category mines held on Sunday, 8 March 2015. The Gare Palma IV/8 coal block has a total extractable reserves of 11.75 million tonnes.
GAIL (India) fell 4.52% to Rs 385.75. The company announced at the fag end of the previous trading session on Thursday, 5 March 2015, that the Ministry of Petroleum & Natural Gas, Government of India vide letter dated 3 March 2015, informed the company that under recovery burden on GAIL (India) for the financial year 2014-15 is provisionally fixed at Rs 1000 crore. GAIL has been exempted from sharing of under recovery of oil marketing companies (OMCs) for the third and fourth quarter of 2014-15. For the financial year 2015-16, the share of GAIL towards under recovery of OMCs would be reviewed again based on its sales realization, cost of production and under recovery of OMCs on quarterly basis.
Ranbaxy Laboratories rose 1.27% to Rs 815.90. The company 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. The certified true copy of the Order is awaited, the company said.
Sun Pharmaceuticals Industries rose 0.41% at Rs 1,041.65.
In April 2014, Sun Pharma announced the acquisition of Ranbaxy Laboratories in an all-stock deal.
The Sensex has fallen 516.72 points or 1.76% in this month so far (till 9 March 2015). The Sensex has risen 1,345.36 points or 4.89% in this calendar year so far (till 9 March 2015). From a 52-week low of 21,539.44 on 7 March 2014, the Sensex has risen 7,305.34 points or 33.92%. The Sensex is off 1,179.96 points or 3.93% from a record hit of 30024.74 on 4 March 2015.
In the foreign exchange market, the rupee edged lower against the dollar on global risk-off sentiment. The partially convertible rupee was hovering at 62.55, 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 67 cents at $59.06 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 0.16% to 1.31%.
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 1.27%.
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 31 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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