Key indices register small losses after seeing high intraday volatility

Key benchmark indices provisionally settled with small losses after witnessing high volatility triggered after the Supreme Court in its verdict announced during mid-afternoon today, 24 September 2014, scrapped all but 4 of the coal blocks allocated between 1993 and 2010 it had already declared illegal due to irregularities in the allocation of the blocks. Key indices reversed intraday losses after a sharp slide post the court ruling. Benchmark indices once again slipped into the red later. The 50-unit CNX Nifty provisionally settled just a tad above the psychological 8,000 level, having alternately moved above and below that mark in intraday trade. The barometer index, the S&P BSE Sensex, was provisionally down 35.03 points or 0.13% at 26,740.66. The market breadth was weak. Foreign portfolio investors (FPIs) sold shares worth a net Rs 1185.17 crore yesterday, 23 September 2014, as per provisional data. The BSE Mid-Cap index was off 1.19%. The BSE Small-Cap index was off 1.62%. Bank stocks declined on concerns of bad loans due to their exposure to coal mines after the Supreme Court's verdict on coal block allocation. Shares of Coal India jumped.

The Supreme Court in its final verdict has given six months' breathing time for the blocks to wind up operations. The Supreme Court said that it saw no reason to save the blocks as the allocations were arbitrary. Allottees have been asked to pay a fine of Rs. 295 per tonne from the time the coal was mined. The government is now free to auction or allot the blocks to central firms. The 4 coal blocks which are exempt from the verdict are run by the Central government with no joint venture with the private sector.

Meanwhile, Prime Minister Narendra Modi leaves for a five-day visit to the United States tomorrow, 25 September 2014, hours after the launch of the "Make in India" campaign in Delhi.

In overseas markets, Most European stocks edged lower after data showed German business confidence fell for a fifth month in September. Chinese shares led gains for Asian stocks after better-than-anticipated Chinese manufacturing data announced yesterday, 23 September 2014. US stocks declined for the third straight session yesterday, 23 September 2014, as a weak report on Europe's economy fueled more investor jitters about global growth.

Earlier, the Sensex and the 50 unit CNX Nifty had recovered after the two indices hit their lowest level in almost a week in morning trade.

Brent crude oil prices edged lower in choppy trade ahead of weekly US oil inventory data from US Energy Information Administration.

In the foreign exchange market, the rupee edged higher in choppy trade against the dollar.

As per provisional figures, the S&P BSE Sensex was down 35.03 points or 0.13% at 26,740.66. The index lost 215.69 points at the day's low of 26,560 in mid-afternoon trade, its lowest level since 18 September 2014. The index rose 69.01 points at the day's high of 26,844.70 in mid-morning trade.

The CNX Nifty was down 15.30 points or 0.19% at 8,002.25, as per provisional figures. The index hit a low of 7,950.05 in intraday trade, its lowest level since 18 September 2014. The index hit a high of 8,042.05 in intraday trade.

The market breadth indicating the overall health of the market was weak. On BSE, 1,929 shares fell and 1,027 shares rose. A total of 104 shares were unchanged.

The BSE Mid-Cap index was down 115.32 points or 1.19% at 9,580.83. The BSE Small-Cap index was down 177.86 points or 1.62% at 10,791.44. Both these indices underperformed the Sensex.

Share of Coal India jumped 4.92% after the Supreme Court's ruling on illegal coal blocks.

Bank stocks declined on concerns of bad loans due to their exposure to coal mines after the Supreme Court's verdict on coal block allocation. Among PSU bank stocks, Canara Bank (down 5.73%), Union Bank of India (down 1.79%), Bank of Baroda (down 2.55%), Bank of India (down 5.79%), Punjab National Bank (down 4.96%) Syndicate Bank (down 3.7%), Indian Overseas Bank (down 0.92%), Andhra Bank (down 1.27%), Oriental Bank of Commerce (down 4.32%), Dena Bank (down 1.82%), State Bank of India (SBI) (down 3.06%), and Indian Bank (down 0.33%), declined.

Shares of private sector banks also dropped. ICICI Bank (down 1.34%), IndusInd Bank (down 1.26%), Yes Bank (down 2.91%), Kotak Mahindra Bank (down 0.2%) and Axis Bank (down 1.06%), declined. HDFC Bank (up 0.56%) and Federal Bank (up 0.73%), gained.

Power finance companies rose. Power Finance Corporation (PFC) (up 0.44%) and Rural Electrification Corporation (REC) (up 0.45%) rose.

Jindal Steel & Power tumbled 10%. The coal ministry had allocated Jindal Steel and Power captive coal blocks for its end-use for plants in Odisha and Jharkhand.

Hindalco Industries fell 0.48% to Rs 156.30 in volatile trade after the Supreme Court's verdict. The stock hit high of Rs 162.30 and low of Rs 148.80.

Reliance Power (up 5.34%), NTPC (up 0.91%) gained. Steel Authority of India (SAIL) fell 2.89%. Supreme Court in its verdict spared coal blocks of Reliance Power, SAIL, NTPC from cancellation.

Tech Mahindra rose 0.4%. With regards to news reports that "Geometric is being acquired by Tech Mahindra", the company clarified during market hours it is not in negotiation for acquisition of Geometric.

The market may remain volatile tomorrow, 25 September 2014, as traders roll over positions in the futures & options (F&O) segment from the near month September 2014 series to October 2014 series. The near-month September 2014 F&O contracts expire tomorrow, 25 September 2014.

Provisional data released by the stock exchanges after trading hours on Tuesday, 23 September 2014, showed that foreign portfolio investors (FPIs) sold shares worth a net Rs 1185.17 crore on that day.

In the foreign exchange market, the rupee edged higher in choppy trade against the dollar. The partially convertible rupee was hovering at 60.945, compared with its close of 60.955 during the previous trading session.

Brent crude oil prices edged lower in choppy trade ahead of weekly US oil inventory data from US Energy Information Administration. Brent for November settlement was off 31 cents at $96.54 a barrel. The contract had fallen 12 cents a barrel or 0.12% to settle at $96.85 a barrel yesterday, 23 September 2014.

The US and its Arab allies that have joined the fight against Islamic State launched airstrikes into Syria, in the first major expansion of a campaign to defeat the militants.

Meanwhile, NATO said Russia has embarked on a significant withdrawal of its forces from Ukraine, adding to signs that a truce is taking hold.

India made history today, 24 September 2014, by successfully placing its spacecraft, Mangalyaan, in orbit around Mars, becoming the first country in the world to succeed in such an inter-planetary mission in the maiden attempt itself.

Prime Minister Narendra Modi is scheduled to launch the ambitious 'Make in India' campaign tomorrow, 25 September 2014. The initiative is one of the several steps which government has announced in order to improve ease of doing business in India and attract investments to boost manufacturing in the country. In his maiden independence day address, Modi invited the global business community to set up manufacturing facilities in India, giving the slogan 'come, make in India'.

Modi leaves for a five-day visit to the United States tomorrow, 25 September 2014, hours after the launch of the "Make in India" campaign in Delhi. The Indian Prime Minister will meet US President Barack Obama at the White House on 30 September 2014. The two leaders will discuss a range of issues of mutual interest in order to expand and deepen the US-India strategic partnership. They will discuss ways to accelerate economic growth, bolster security cooperation, and collaborate in activities that bring long-term benefits to both countries and the world.

European stocks edged lower today, 24 September 2014, after data showed German business confidence fell for a fifth month in September. Key indices in Germany and UK were off 0.9% to 0.25%. France's CAC 40 rose 0.2%.

German business confidence fell for a fifth month even after the European Central Bank stepped up plans to revive the faltering euro-area recovery. The Ifo institute's business climate index, based on a survey of 7,000 executives, dropped to 104.7 in September from 106.3 in August.

Chinese shares led gains for Asian stocks today, 24 September 2014, after better-than-anticipated Chinese manufacturing data announced yesterday, 23 September 2014. Key benchmark indices in China, Hong Kong, Indonesia, Taiwan, and South Korea rose by 0.15% to 1.47%. Key benchmark indices in Indonesia, Japan and Singapore were off 0.16% to 0.27%.

Trading in US index futures indicated that the Dow could gain 20 points at the opening bell on Wednesday, 24 September 2014. US stocks declined Tuesday, 23 September 2014, as a weak report on Europe's economy fueled more investor jitters about global growth.

In economic news, US manufacturing activity hovered at a near 4-1/2-year high in September and factory employment surged, supporting views of sturdy economic growth this quarter. The growth picture was also boosted by other data showing an acceleration in services industry growth this month. Markit said its preliminary or flash US Manufacturing Purchasing Managers Index was at 57.9, unchanged from August's reading when it touched its highest level since April 2010. A reading above 50 signals expansion in manufacturing. Factory employment increased for a second straight month, with a gauge of labor market conditions touching its highest level since March 2012. Separately, the Federal Reserve Bank of Philadelphia said its general activity index for non-manufacturing firms jumped to 35.7 this month from 27.3 in August.

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