Key indices slide on weak Asian stocks

Weakness in Asian stocks and caution ahead of a US Federal Reserve meeting later this week pulled key benchmark indices lower. The barometer index, the S&P BSE Sensex dropped 178.82 points or 0.69% to 25,677.88, as per provisional closing data. The 50-unit CNX Nifty lost 43.15 points or 0.55% at 7,829.10, as per provisional closing data. Metal and auto stocks led the decline for key indices which hovered in negative zone almost throughout the trading session.

The market breadth indicating the overall health of the market was negative. On BSE, 1,519 shares declined and 1,102 shares rose. A total of 103 shares were unchanged. The BSE Mid-Cap index was down 0.77%. The decline in this index was higher than Sensex's decline in percentage terms. The BSE Small-Cap index was down 0.55%. The decline in this index was lower than Sensex's decline in percentage terms.

In overseas markets, Chinese stocks led decline in Asian markets after a recent batch of disappointing Chinese economic data. The Shanghai Composite Index lost 3.52%, adding to a nearly 3% drop during the previous trading session. US stocks edged lower yesterday, 14 September 2015, on caution ahead of a US Federal Reserve meeting later this week that could end with the first rate-increase in nearly a decade. The Fed's policy-making committee holds a two-day meeting on 16 and 17 September 2015. The Fed has held its benchmark short-term interest rate near zero since December 2008.

The total turnover on BSE amounted to Rs 2237 crore, higher than turnover of Rs 1979.79 crore registered during the previous trading session.

In sector trends, metal and mining stocks declined. Hindalco Industries (down 3.05%), Vedanta (down 4.16%), Hindustan Zinc (down 1.1%) and NMDC (down 1.21%) edged lower. National Aluminium Company (up 1.36%) edged higher.

Steel stocks dropped. Jindal Steel & Power (down 2.96%), JSW Steel (down 4.49%), Tata Steel (down 5.22%) and Steel Authority of India (down 3.26%) edged lower. The government after trading hours yesterday, 14 September 2015, issued notification imposing a provisional safeguard duty effective from 14 September 2015 on import of hot-rolled flat products of non-alloy and other alloy steel in coils of a width of 600 mm or more at the rate of 20% ad-valorem for a period of 200 days. The safeguard duty is a global safeguard measure to protect the domestic industry and the levy is applicable on import of the concerned product from all countries.

Shares of coal mining giant Coal India were off 0.91% at Rs 336.15.

Auto stocks declined. Tata Motors (down 3.82%), Hero MotoCorp (down 1.6%), Ashok Leyland (down 2.62%), TVS Motor Company (down 0.58%), Mahindra & Mahindra (down 1.74%), Bajaj Auto (down 0.4%) and Eicher Motors (down 1.66%) edged lower.

Shares of Maruti Suzuki India (MSIL) were unchanged at Rs 4,320. The stock hit a high of Rs 4,415.70 and a low of Rs 4,320 in intraday trade. The Reserve Bank of India (RBI) yesterday, 14 September 2015 notified that foreign institutional investors (FIIs) can now invest up to 40% of the paid up capital of MSIL under the Portfolio Investment Scheme (PIS). RBI further announced that the total FII holding in MSIL has gone below the revised threshold limit and therefore the restrictions placed on the purchase of shares of MSIL have been withdrawn with immediate effect.

Index heavyweight and engineering & construction major L&T was off 3.22% at Rs 1,552.05.

Index heavyweight and housing finance firm HDFC was off 0.69% at Rs 1,176.

On the macro front, the latest data showed that inflation based on the consumer price index (CPI) remained benign last month. The headline CPI inflation eased to 3.66% in August 2015 from 3.69% in July 2015. Among the CPI components, the inflation for food and beverages rose to 2.9% in August 2015 from 2.8% in July 2015. The core CPI inflation declined to 3.8% in August 2015 from 4% in July 2015.

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